Regulators need to revamp their proposal to overhaul the Community Reinvestment Act now that the coronavirus outbreak has created unforeseen financial needs.
Minorities are often hit harder financially during a crisis, but if regulators move forward on revamping the Community Reinvestment Act, they’ll only make matters worse.
Community advocates would like to see changes to the 1977 Community Reinvestment Act, but say regulators should suspend such efforts until the coronavirus pandemic has passed.
Lenders and community groups say it's a mistake for the banking agencies to move forward during a national crisis. But Comptroller of the Currency Joseph Otting says updated Community Reinvestment Act rules would speed relief to neighborhoods and small businesses.
The ICBA chief’s plea for a six-month halt to regulations not related to the pandemic followed similar calls by community groups and a key Senate Democrat.
The agencies said banks could receive Community Reinvestment Act credit for activities addressing the virus fallout, and clarified earlier guidance encouraging banks to dip into their capital buffers.
Groups often will oppose mergers on Community Reinvestment Act grounds. But the proposal would tighten standards for when the agency includes “adverse comments” in the process.
The OCC and FDIC’s proposal for modernizing the community reinvestment law would give banks below $500 million of assets the option to keep the current regime. But bankers and industry representatives say that threshold should be higher.
The banking regulators have announced that they are postponing next week’s National Interagency Community Reinvestment Conference because of growing health concerns about the virus outbreak.
