A national bank regulator is touring the country to sell his plans to modify lower-income lending requirements and overcome resistance from other regulators, banks and community advocates, the Wall Street Journal reported. Comptroller of the Currency Joseph Otting, who took office in 2017, has made it a priority to revamp rules implementing the 1977 Community Reinvestment Act, which requires banks to serve borrowers of all income levels who reside near their branches. The law was intended to combat the practice of redlining, or banks carving out poor and minority neighborhoods from their lending and investment plans. But at a time when many banking services are provided online there is growing consensus that the rules implementing CRA should be updated. Otting is seeking to judge banks’ CRA performance by giving them dollar targets based on how many deposits they hold in different areas. Currently, banks are graded on the amount and quality of loans, investments and services they provide to poorer neighborhoods near their branches. Bad performance can bar banks from merging with or acquiring other banks.
