Jim Williams analyzes a new regulatory framework that could reduce compliance requirements for some banks while changing how CRA performance is evaluated. The following is an excerpt:
A new Community Reinvestment Act framework is taking shape. On July 31, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued a joint proposal to amend their CRA regulations.
While the proposal would largely keep the CRA framework that has historically governed examinations, it would reduce the number of banks that must collect CRA-related data, place more weight on lending, tighten the treatment of community development grants and seek to make the strategic plan alternative more viable.
Banks should determine how the proposal would change their evaluation category and consider using the comment period to address provisions that would materially affect their CRA programs.
Background
CRA
Congress enacted the CRA in 1977 to encourage banks to help meet the credit needs of the communities in which they are chartered, consistent with a bank's safe and sound operations.
The CRA requires the banking agencies to examine a bank's records of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods. While not a fair lending law per se, the CRA is often discussed alongside fair lending laws because both focus on access to credit in historically underserved communities.
The OCC, FDIC and Federal Reserve issued a new CRA rule in October 2023, but the U.S. District Court for the Northern District of Texas enjoined that rule in 2024 in Texas Bankers Association v. Office of the Comptroller before it took effect.
At a high level, the 2023 CRA rule would have broadly reworked CRA examinations through new performance tests, metrics and lending-based assessment areas. In March 2025, the banking regulators announced their intent to rescind the 2023 final rule.
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