The Trump administration kicked off plans to revamp lending rules in lower-income communities with a proposal that would make it easier for banks to comply with a decades-old law that has long confounded the industry, the Wall Street Journal reported. The Treasury Department, in a memo released Tuesday, said the 1977 Community Reinvestment Act (CRA) hasn’t kept pace with the evolving banking sector. The law, which was passed to stop “redlining,” a form of lending discrimination, is enforced by a complicated series of regulations. Treasury Secretary Steven Mnuchin and Comptroller of the Currency Joseph Otting, who both dealt with the law as executives at OneWest Bank, now a part of CIT Group Inc., have said altering the rules is a priority. Under the proposed changes, banks would be held to more objective, numbers-based standards for complying with the law, compared with the current approach in which large parts of the exam hinge on regulators’ subjective judgments. The changes also would make it easier for banks to meet certain lending requirements and lower penalties for compliance problems.
