Rather than reversing new fair-lending rules, Congress should instead completely repeal the Community Reinvestment Act


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Today, House Democrats plan to use the Congressional Review Act to overturn recent actions taken by the Office of the Comptroller of the Currency (OCC) to modernize fair-lending rules under the Community Reinvestment Act. The comptroller proposed the reforms in December 2019 and finalized them this May. The reforms are the most significant update to low-income lending rules for U.S. banks in a quarter-century.

CEI Policy Analyst Matthew Adams explained that fair-lending rules have done more harm than good:

“While imperfect, the reforms implemented by the comptroller were a step towards modernizing outdated rules under the Community Reinvestment Act. It’s disappointing to see House Democrats attempt to get rid of these reforms, especially at a time when we need to ensure a safe and steady flow of credit.

“The Community Reinvestment Act led to decreased access to credit, increased risk, and increased costs for small lenders, as a 2008 CEI study showed. If legislators want to increase lending in low- and middle-income communities, Congress should do away with the law entirely or at least make compliance voluntary.”