NY Extends State CRA to Non-Depository Mortgage Lenders

New York has passed a law which will extend its state-level Community Reinvestment Act (NYCRA) to non-depository mortgage lenders, effective November 1, 2022.

The existing NYCRA is a state statute—modeled after the federal Community Reinvestment Act—which requires the New York Department of Financial Services (NYDFS) to consider a bank’s record of meeting the credit needs of its entire community, including low and moderate income neighborhoods, when determining whether to grant certain applications submitted by the bank or to approve certain types of business transactions involving the bank.  The state legislature has now amended the NYCRA to create a similar obligation with respect to non-depository mortgage lenders (who are not covered by the federal Community Reinvestment Act).

The statute also requires NYDFS to regularly examine these non-depository mortgage lenders to evaluate their compliance with the NYCRA and consider various factors which might indicate whether these lenders are in fact meeting the credit needs of their entire communities.  The records and results of these NYCRA examinations are made publicly available, unlike with most supervisory examinations.