Key takeaways: 

• Federal regulators on Thursday suggested substantial changes to the Community Reinvestment Act, which handles fair housing practices.
• The changes offer more explicit policies and public benchmarks for evaluation while letting fewer banks continue operating under the ex rules.
• The bid aims for public comment through Aug. 5.

Bank regulators on Thursday offered the first sweeping differences in almost 25 years to a controversial law that sought to increase lending to low- and moderate-income communities.

The changes would tailor the Community Reinvestment Act’s path to ensuring banks are not hiring in “redlining” or declining to put money in places often populated by minorities and lower-wage earners.

In 1977, the act was painful among some banks, particularly more prominent lenders, who complained regarding the prices and reporting burdens. 

However, reasonable housing advocates say the CRA has been critical in providing equal housing options.

“The CRA is one of our most essential tools to enhance financial inclusion in communities across America, so it is necessary to bring reform right,” said Lael Brainard, the Federal Reserve vice-chair. “It considers bank engagement across geographies and activities to provide the CRA effectively keeps a strong and inclusive financial services industry.”

Since the previous CRA revisions, online and mobile banking has become a significant part of the finance industry without more detailed procedures for how they will be evaluated under fair housing guidelines.