Landmark 1977 Fair Lending Law To Join Digital Era

Advocates say an update to the 1977 Community Reinvestment Act is long overdue

Couple shakes hands with a banker

iStock / Getty Images Plus

Rules enforcing the Community Reinvestment Act, a 1977 law encouraging bank lending to low- and moderate-income neighborhoods, are woefully behind the times, according to regulators.

Three banking agencies on Thursday jointly proposed a host of changes intended to modernize and strengthen the landmark law, which was enacted to prevent redlining and ensure banks serve all segments of the communities where they operate, regardless of race or income. Among other things, the new rules would reflect the age of mobile and branchless banking, evaluating larger banks on how well they serve all segments in all areas where they do business, even if there isn’t a physical branch or ATM. 

“It has been 27 years since the government made a meaningful effort to keep Community Reinvestment Act rules up to date with the convulsions of technology, financial industry consolidation and other key changes to how Americans work and live,” said Jesse Van Tol,  CEO of the National Community Reinvestment Coalition, which promotes fair credit access for underserved communities. “We’ve seen how much harm such lags can do as economic chasms of race and class have persisted and even expanded.”

Under the CRA, the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency evaluate banks based on how well they meet the needs of the low-to-moderate income neighborhoods they serve, and take that rating into account when determining whether banks should be allowed to merge, acquire other banks, or open new branches. 

Regulators are accepting comments on the draft rules through Aug. 5, after which they will be finalized and go into effect.

Have a question, comment, or story to share? You can reach Diccon at

Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Office of the Comptroller of Currency. "Acting Comptroller Issues Statement on Interagency Proposal to Modernize the Community Reinvestment Act."

  2. Office of the Comptroller of the Currency. "Notice of Proposed Rulemaking Community Reinvestment Act."

  3. National Community Reinvestment Coalition. "Historic Overhaul Of Lending Equity And Community Reinvestment Act Rules Presents Crucial Opportunity To Heal National Divides."

Related Articles