WASHINGTON — Regulators should give banks and thrifts Community Reinvestment Act credit for shifting worthy subprime borrowers to the prime market, Treasury Deputy Assistant Secretary Michael S. Barr said Wednesday.

Mr. Barr said the agency has found evidence that too many lower-income borrowers are ending up with subprime loans when they could qualify for a mortgage on better terms.

“Banks and thrifts should have in place procedures to ‘upstream’ these borrowers with good credit histories into their prime mortgage units,” Mr. Barr said at a National Association of Attorneys General conference on predatory lending in Portland, Maine.

He said regulators should endorse granting banks and thrifts CRA credit for helping these borrowers in an interagency policy statement on predatory lending, which is expected by early next year.

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