Banking industry trade groups have sued federal regulators over an update to the law meant to reverse the effects of redlining, The New York Times reported.

The suit, filed in the U.S. District Court for the Northern District of Texas by the American Bankers Association, the Independent Community Bankers of America and the U.S. Chamber of Commerce, aims to stop the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency from implementing a new rule under the Community Reinvestment Act (CRA).

In October, the regulators imposed new frameworks for assessing whether banks are abiding by the 1977 law that requires banks to do business in neighborhoods made up largely of racial minorities or low-income households that banks had previously avoided. At the time, the regulators stated that the final rule would “strengthen and modernize regulations implementing the Community Reinvestment Act to better achieve the purposes of the law.”

The  plaintiffs argue that the rule is “a complicated and burdensome regime” and might “ultimately result in reduced lending to the very populations that the CRA was designed to benefit.” They also claim that the banking regulators exceeded their authority by requiring banks’ activities to come under scrutiny even if they were far away from a physical branch.

While banks said they did not oppose the law itself, they objected to what they perceived as regulators’ exceeding their authority with the new rule.

“We strongly support and appreciate the goals of the Community Reinvestment Act, but in this exceedingly complex rulemaking, the agencies have created a CRA evaluation framework that unlawfully exceeds what Congress authorized and fails to recognize banks’ demonstrated commitment to fully serving their communities,” said American Bankers Association President and CEO Rob Nichols in a statement. He added, "Even more troubling, the Final Rules risk undermining the very goals of CRA by creating disincentives for banks to offer certain products or lend in geographies outside of their branch network. Given federal regulators’ failure to respond to public comments and fix significant flaws in this rulemaking, we were left with no choice but to reluctantly file this lawsuit.”

The groups, which represent almost all U.S. banks, were able to file the federal case in Texas by being joined as plaintiffs by the Texas Bankers Association, the Amarillo Chamber of Commerce, and the Independent Bankers Association of Texas. The court has previously ruled against the regulators in other cases, according to the Times.

“The banking industry is showing its true colors,” wrote Jesse Van Tol, president of the National Community Reinvestment Coalition, which works with banks to help them meet their CRA requirements, in an email. “Nobody should believe them when they say they care about lending to working-class people and people of color.”