Joint NPR to Update CRA Regulations

By: Kyle Tucker, Financial Institution Specialist

The Community Reinvestment Act (CRA) requires financial institutions to help meet the credit needs of the communities in which they do business. This rule, enacted in 1977, encourages lending to low- and moderate-income neighborhoods. A joint proposal has been developed by the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board (FRB), and Office of the Comptroller of the Currency (OCC) which is open for comment until August 5, 2022.

On May 5th, 2022, a Notice of Proposed Rulemaking (NPR) was issued that would amend regulations that were last updated in 1995. The updates include:

• Expanding access to credit, investment, and basic banking services in low– and moderate–income (LMI) communities, which are CRA’s core goals;
• Adapting to changes in the banking industry, including mobile and internet banking by modernizing assessment areas while maintaining a focus on branch–based areas;
• Providing greater clarity, consistency, and transparency in the application of the regulations through the use of standardized metrics as part of CRA evaluation and clarifying eligible CRA activities focused on LMI communities and under–served rural communities;
• Tailoring CRA rules and data collection to bank size and business model; and
• Maintaining a unified approach among the regulators.

For more information on the proposed rulemaking please visit the link below:

https://www.fdic.gov/news/financial-institution-letters/2022/fil22018.html