Regulators need to revamp their proposal to overhaul the Community Reinvestment Act now that the coronavirus outbreak has created unforeseen financial needs.
Minorities are often hit harder financially during a crisis, but if regulators move forward on revamping the Community Reinvestment Act, they’ll only make matters worse.
Community advocates would like to see changes to the 1977 Community Reinvestment Act, but say regulators should suspend such efforts until the coronavirus pandemic has passed.
Lenders and community groups say it's a mistake for the banking agencies to move forward during a national crisis. But Comptroller of the Currency Joseph Otting says updated Community Reinvestment Act rules would speed relief to neighborhoods and small businesses.
Regulators point to traditional financial institutions as well-positioned to meet short-term credit needs during the coronavirus pandemic, but there are still a host of questions about whether the industry should try to compete with high-cost lenders.
The ICBA chief’s plea for a six-month halt to regulations not related to the pandemic followed similar calls by community groups and a key Senate Democrat.
Regulators are allowing banks that implemented the loan-loss standard to forestall any capital hits until 2022.
The joint statement said examiners will not impede banks’ responsible efforts to offer open lines of credit, closed-installment loans or other products to borrowers dealing with fallout from the pandemic.
Accommodations for borrowers affected by the coronavirus pandemic, such as payment delays and fee waivers, are "positive and proactive actions that can manage or mitigate adverse impacts," the regulators said.
The Ohio Democrat argued that the public wouldn't be able to meaningfully provide feedback on rules given the stressful circumstances related to the outbreak.