NYDFS proposes expanding CRA to support minority- and women-owned businesses
On November 3, NYDFS issued proposed changes to the state’s Community Reinvestment Act (New York CRA) to guarantee the department “has the necessary data to ensure banks are evolving to best serve their communities and protect against redlining and fair lending violations.” The proposed regulation further specifies the type of communities the New York CRA plans to support and will enable NYDFS to evaluate the extent to which minority- and women-owned businesses are offered and provided credit. In June 2020, NYDFS issued an industry letter (covered by InfoBytes here) to alert regulated entities that it planned to make changes to its CRA examination process in response to an amendment to the New York CRA, which required NYDFS to consider “several aspects of banking institutions’ activities with respect to minority- and women-owned businesses.” Among other things, the proposed regulation outlines data collection and submission requirements, including (i) asking whether a business applying for a loan or credit is minority- or women-owned or both; (ii) reporting application details such as the date, type of credit applied for and amount, and whether the application was approved or denied; and (iii) reporting a business’s size and location. Comments will be accepted for 60 days following publication in the State Register.
The New York CRA has undergone several expansions recently. As previously covered by InfoBytes, the New York governor signed legislation on November 1 expanding the New York CRA to cover non-depository lenders. Under the amendments, nonbank mortgage providers’ lending and investment in low- and moderate-income communities will be subject to NYDFS review.