Regulation

Federal Reserve Chair Jerome Powell said bank regulators still aim to write a universal rule updating the Community Reinvestment Act, despite years of disagreement between the agencies on how to proceed.

The Alabama company is instead on the hunt for nonbank acquisition candidates as well as employees or clients it could lure away from regional banks that have announced merger deals recently, John Turner says.

Lost in the debate about whether to make fintechs comply with the Community Reinvestment Act is that many of them already partner with banks to make loans in low-income neighborhoods.

Chair Jerome Powell told a congressional panel that the Federal Reserve is weighing whether to extend temporary relief from the “supplementary leverage ratio” — meant to help banks lend more during the pandemic — beyond March 31.

If policymakers are serious about revitalizing low-income communities, they should require all fintechs and other nonchartered lenders to adhere to the Community Reinvestment Act.

The five-year pledge, tied to the company's pending acquisition of CIT Group, earmarks nearly $6 billion for small-business lending and $3.2 billion for affordable housing.

The sale has revived a long-running feud between former chairmen Mark McWatters and Rodney Hood, who tweeted, "Credit unions deserve better stewardship of agency resources.”

The Boston-based bank said the Office of the Comptroller of the Currency gave it the highest grade possible on its most recent Community Reinvestment Act examination. Santander had received a “needs to improve” grade in 2017 and a “satisfactory” rating in 2018.

Todd Harper, chairman of the National Credit Union Administration, said new assessments are likely needed because of an influx of deposits, but industry groups and other board members say the agency should wait to see if the reserve ratio recovers on its own.

Federal Reserve Gov. Lael Brainard said "scenario analysis" is distinct from traditional regulatory tools to assess capital strength, but can measure the long-term impact of weather events and the transition to a greener economy.