Climate Risk Stumps Bank Regulators Updating Anti-Redlining Plan

Financial regulators updating anti-redlining rules face a conundrum: how to increase lending in lower-income neighborhoods prone to climate disasters while also getting banks to better account for climate risks.

Some climate mitigation efforts, such as investing in green jobs or building improvements to withstand floods and fires, have always counted under Community Reinvestment Act rules that measure bank lending to underserved communities.

But regulators are treading carefully as they look to modernize the CRA’s rules and possibly expand the types of climate projects that would count in assessments of bank performance.

Traditional investments in housing, small business, job creation and ...