Regulators' Community Lending Overhaul Crosses Finish Line

Randy Benjenk’s commentary was included in a Law360 article examining updates to bank regulations in the 1977 Community Reinvestment Act (CRA). Randy commented on how the new rules will affect banks’ lending practices.

Randy observed that while final rules are structurally "quite similar" to last year's proposal, regulators have gone back and made a "substantial number of changes. [There are] in fact probably more changes than most people in the industry thought there would be.” Randy also said many banks could be challenged by the sheer amount of data collection and reporting contemplated by the final rules. The tougher grading built into the calibration of the rules and the expansion in potential assessment areas could also be friction points for banks, he said.

"It's hard to improve performance where a bank does not have physical presence and boots on the ground," Randy said. "That will be especially concerning to internet-based banks, but I think even others will have some concern over that."

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