Critics: Critical bank law is softened under Trump proposal

WASHINGTON (AP) — The Community Reinvestment Act has over the past four decades spurred hundreds of billions of dollars in lending to low- and middle-income communities. But it’s out of date and in need of an overhaul.

Now, the Trump administration is proposing changes that some community advocates say will make it easier for banks to meet the law’s criteria without making the types of loans that are most beneficial to the communities they serve.

CRA’s current regulations reward banks that make mortgages and small business loans in their communities. Under the administration’s new proposal, banks could get credit for other types of lending to low-income customers like credit cards and personal loans — a move that would greatly benefit the largest of the country’s banks because they already dominate these lines of business.

The regulations would also give banks credit, under certain circumstances, for loans they make to build or improve facilities such as sports stadiums and hospitals.

It’s the broadening of what would qualify under CRA that has community groups upset.

Democrats are likely to express some of those concerns when the regulator overseeing the changes to the Community Reinvestment Act appears before Congress. Joseph Otting, the Comptroller of the Currency, will testify before the House Financial Services Committee on Wednesday, beginning at 10 a.m.