OTS Strikes Again

By Alan Mallach

Last year the federal Office of Thrift Supervision weakened the responsibilities of many mid-sized banks under the Community Reinvestment Act by redefining them as small banks. Now OTS has redefined community development to benefit more middle-income people. The agency says banks should get credit for serving “distressed or underserved, nonmetropolitan middle-income geographies.” OTS received over 4,000 comments from consumer groups who said the new language could encourage banks to serve affluent neighborhoods in rural areas rather than low-income people. But the agency acted on positive feedback from about 200 thrifts. (NLIHC)

Alan Mallach, senior fellow of the National Housing Institute, is the author of many works on housing and planning, including Bringing Buildings Back and Building a Better Urban Future: New Directions for Housing Policies in Weak Market Cities. He served as director of housing and economic development for Trenton, N.J. from 1990 to 1999. He is also a fellow at the Center for Community Progress and the Brookings Institution.

Published by the National Housing Institute