Bloomberg Joseph Otting, comptroller of the U.S. currency, speaks after being sworn in during a ceremony at the U.S. Treasury in Washington, D.C., on Nov. 27, 2017.
A national banking regulator took the first step Tuesday toward rewriting rules for lending in lower-income neighborhoods, an effort that could allow institutions to redirect billions of dollars spent on loans and investments.
In a release seeking feedback from the public, the Office of the Comptroller of the Currency proposed new approaches to evaluating banks on their reinvestment activities. One controversial idea in the proposal would reduce the emphasis on loans and investments made locally, and instead create a ratio to measure total low-income spending by bank size.
“There are thousands of communities across America in need of lending, investment and financial literacy,” Comptroller Joseph Otting said in a phone call with reporters. Mr. Otting has made a priority of overhauling rules under the 1977 Community Reinvestment Act. The policy paper “starts the process of that discussion, of how we can bring more to those communities.”
The OCC’s paper drew a positive response from banks, which support making the rules more flexible.
An expanded version of this report appears at WSJ.com
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