New York's financial regulator is pushing the state's banks to assist minority- and women-owned businesses that are struggling to access credit during the coronavirus pandemic.
The New York State Department of Financial Services issued a letter Tuesday reminding lenders of amendments to the state's Community Reinvestment Act, under which banks are evaluated on how they meet the credit needs of businesses owned by women and minorities.
"Reports have shown people of color and minority- and women-owned businesses struggle to access credit and this is especially true during a global pandemic," Superintendent Linda A. Lacewell said in a statement.
Banks will be asked for information on lending as part of CRA exams later this year, according to the letter. The department issued a second letter Tuesday outlining circumstances in which institutions can receive CRA credit for activities in response to the pandemic, including lending through the federal Paycheck Protection Program.
Banks can receive one of four CRA ratings, ranging from "outstanding" to "substantial noncompliance," based on their performance in low- and moderate-income communities. While New York's CRA, which mirrors the federal version of the law, doesn't contain punitive measures, firms may be barred from expanding through mergers or adding bank branches for poor performance.
