Fed official suggests reforms to tackle ‘credit deserts’
Brainard advocates greater geographical flexibility in banks’ obligations; FDIC chair appears to agree
More flexible regulations under the Community Reinvestment Act (CRA) could potentially make capital available for credit “deserts” that lie outside normal lending and investment areas, Federal Reserve governor Lael Brainard said in a speech on March 12.
Rather than banks competing for investments in their assessment area to satisfy their CRA obligations, a modification could enable more lending to areas that are starved of capital outside of their usual assessment areas.
“We have been
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