U.S. Banks to Get Community Lending Credit for Virus Aid Efforts

(Bloomberg) -- U.S. banks can gain community-lending credit for stepping in to fund efforts that help communities deal with fallout from the coronavirus pandemic, their regulators said Thursday.

Lenders will get Community Reinvestment Act credit for lending that’s “responsive to the needs of low- and moderate-income individuals, small businesses and small farms affected by COVID-19,” the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. said in a statement. Expansion of CRA credit has been used before, including for banks that helped Puerto Rico in the aftermath of Hurricane Maria.

Because a national emergency has been declared, banks can also get CRA credit for community-development activity that supports local services, according to the statement. The offer for banks will be effective for six months after the emergency declaration is lifted, unless a decision is made to extend it, the agencies said.

The regulators’ move follows a series of actions meant to free banks to keep lending through the virus-caused economic crisis. This latest effort taps CRA at a time when the two of the agencies are trying to finish a major overhaul of the 1970s rule that would pre-set a list of common activities to be given lending credit.

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