WASHINGTON – The Federal Reserve Monday kicked off its own effort to update community lending standards for banks.
The move by the central bank to solicit input on potential rule changes for the Community Reinvestment Act comes after other U.S. bank regulators already put forward separate rule updates. The Fed is soliciting feedback on how to update the rules to ensure lower-income communities are still supported by banks while reflecting the ways technology has changed banking in recent years.
The proposed rules would expand the act and clarify the aspects of the act that support minority depository institutions, community development financial institutions (CDFIs), women-owned financial institutions and low-income credit unions, Fed governor Lael Brainard said in remarks prepared for a webinar organized by the Urban Institute on Monday.
“Given the disproportionate impact of COVID-19 on communities of color, it is important to support the institutions that have a mission to serve the families, entrepreneurs, and homeowners in these communities,” Brainard said.