Top U.S. regulators proposed overhauling how banks lend hundreds of billions of dollars annually in lower-income communities, the first major revamp to the standards in more than two decades as lenders increasingly offer financial services online. The proposal to modernize rules for the 1977 Community Reinvestment Act aims to ensure lending to lower-income individuals and small businesses is distributed more evenly where banks do business.
“Today’s proposal seeks to expand access to credit, investment, and banking services in [low- and middle-income] communities,” said incoming Federal Reserve Vice Chairwoman Lael Brainard, in a written statement. The Fed is one of three regulators rewriting the lending rules.