Federal regulators yesterday proposed an overhaul of rules governing how banks lend hundreds of billions of dollars in low-income neighborhoods, setting up a potential break with the Federal Reserve, the Wall Street Journal reported. The overhaul is a priority for Comptroller of the Currency Joseph Otting, who says that it will boost lending under the Community Reinvestment Act and make existing requirements more transparent and consistent. The act requires banks to serve borrowers of all income levels in their communities. The plan is backed by a second regulator, the Federal Deposit Insurance Corp., but not by the Fed, which is considering a separate overhaul, according to people familiar with the central bank’s thinking. Community groups have also objected to the plan. Officials at all three regulators say they hope they can ultimately agree on a plan.
