The administration announced a major overhaul of the Community Reinvestment Act to streamline bank lending requirements.
The administration announced a new set of regulations for the Community Reinvestment Act, the first major revision in nearly 30 years. The proposed changes aim to simplify how regulators evaluate bank lending in low-to-middle income neighborhoods. Under the new rules, the number of banks required to comply with the law will decrease by 800, as the definition of a small bank will increase from $412 million to $1 billion in assets. Bank examiners will now place more weight on actual lending activity rather than the number of branches or deposits. Additionally, the administration announced that banks will be able to more narrowly select community development groups to receive grants, ensuring funds are not diverted to activist causes. Jesse Van Tol, CEO of the National Community Reinvestment Coalition, noted that the changes might discourage banks from making grants in rural areas. The proposal is now entering a 60-day comment period before being finalized.