CRA Reform Proposal to Target Mortgage Activity
Banking regulators last week unveiled a sweeping plan to modernize the Community Reinvestment Act, including major changes to how mortgage lending activity is qualified. The move has some community lending groups unsettled.
The proposal, issued jointly by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., would block banks from getting CRA “credit” from originating loans to middle- and upper-income borrowers residing in low- and moderate-income neighborhoods. The regulators would only assess banks’ distribution of mortgage lending to LMI borrowers.