New proposals ensure minority- and women-owned businesses have fair access to credit

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A cash transaction at a bank (Nexstar, file)

(NEWS10) – The New York State Department of Financial Services (DFS) proposes new practices to evaluate how well New York-regulated banks serve their communities. The proposal will enable the DFS to evaluate the extent of fair credit access to minorities, including low- and moderate-income neighborhoods and minority and women-owned businesses.

According to the DFS, a previously issued Industry Letter was sent to alert N.Y. banking institutions it would make changes to the amendment of the New York State’s Community Reinvestment Act in the examination of data processed by banks. The DFS proposed regulations seek to ensure banking institutions’ records are in performance of evolving to best serve their communities, by protecting against redlining and fair lending violations.

“People of color and minority- and women-owned businesses historically have struggled to access credit, and banking institutions play a critical role in underserved communities,” said Acting Superintendent of Financial Services Adrienne Harris. “This proposed amendment will guarantee DFS has the necessary data” 

The provisions proposed would regulate details of how institutions must collect and submit the necessary data to DFS. The DFS says banks will be required to ask whether a business applying for a loan or credit is a minority or women-owned. Institutions will submit details of applications, such as the date, type of credit applied for, and whether the application was approved or denied DFS said.

The DFS says the proposed regulation is subject to a 60-day comment period followed by publication in the State Register. The Department of Financial Services will then review all received comments and issue a revised proposal or a notice of the adoption of the final regulation. 

Check out the proposal here:

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