Banks Brace for Tougher Rules Under Biden on Consumer Protection, Fair Lending
By Andrew Ackerman and Orla McCaffrey
After the 2008 financial crisis, regulatory reform efforts sought to make the system safer. This time, the goal will be to make it fairer. In keeping with President Biden’s focus on helping minorities and people with low and moderate incomes—groups hit hardest by the coronavirus-induced downturn—financial regulators are expected to emphasize racial equity as they focus on consumer protection and expanding access to financial services. “Obama looked at how to make the financial system stable,” said Karen Petrou, head of Federal Financial Analytics, a regulatory advisory firm. “Biden is looking at, ‘How do we make the banking system just?’ That’s very different.” In practice, that will translate into tougher rules on payday lenders—who charge high rates of interest on short-term loans—and stronger enforcement of fair-lending requirements, an administration official said. Biden’s team will also push to establish a government-backed consumer credit firm as an alternative to the companies that create credit reports, the official said.