After a multi-year process, in 2023 the three federal agencies that examine banks for CRA compliance – the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) – issued the 2023 final rule for the Community Reinvestment Act.
However, on July 16th, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) issued a Notice of Proposed Rulemaking to rescind the 2023 Community Reinvestment Act final rule and replace it with the prior CRA regulations originally adopted by the regulators in 1995, with certain technical amendments. If adopted, the proposal would restore certainty in the CRA framework for stakeholders in light of pending litigation and limit regulatory burden on banks, while ensuring that banks continue to serve their communities.
For the news release, see External LinkAgencies issue joint proposal to rescind 2023 Community Reinvestment Act final rule. For the actual Notice of Proposed Rulemaking issued on July 16, see External LinkFR Notice: Community Reinvestment Act Regulations.
What is the current situation for CRA regulation?
Today, the previous CRA regulation – more recently referred to as the legacy CRA regulation from 1995 – stands. Banks will continue to be assessed under that existing regulation. As such, bankers with CRA responsibilities will continue to seek appropriate loans, investments/grants, and community development services that make sense for their financial institution and community under the existing CRA regulation.
Bankers will also continue to have at their disposal resources and programming developed by the Federal Reserve Bank of Kansas City and the other Reserve Banks along with our regulatory partners at the FDIC and OCC. You’ll find links to resources below. As always, bankers have their examiners as a point of contact and resource when questions arise.
Quick Reference Guide and Q&As available
For bankers new to the space or seasoned bankers looking for a refresh, there are two “go to” resources I recommend. Both are linked in CRA OneSource, and address the issues of certainty and clarity, along with the question of whether something qualifies.
- The first is External LinkA Banker’s Quick Reference Guide to CRA from the Dallas Fed.
- The second resource is the "External LinkInteragency Questions and Answers Regarding Community Reinvestment" (Q & As) released by the Board of Governors of the Federal Reserve System, FDIC, and OCC on July 15, 2016, to provide guidance to financial institutions and the public. Yes, it’s 51 pages and three columns of copy in the Federal Register.
Assessing your CRA portfolio?
As you review your current CRA portfolio and prepare for your next set of activities, take the opportunity to identify any gaps that may exist. Are you too concentrated in any specific area of focus or geography? Where are you missing opportunities to be high-impact and innovative? We have resources you can use to assess your portfolio.
We recently completed Investment Connection programs in Missouri, Nebraska and New Mexico. External LinkFollow links to the events to find possible connections. The organizations that presented might not be the right fit for your organization, but the idea is to get you thinking about opportunities in your own market/assessment area. Be on the lookout, too, for upcoming events.
You can also use the External LinkInvestment Connection funder portal to identify opportunities in your assessment area. With CRA opportunities that are so numerous and varied, you will never be tempted to tell your examiner there are no CRA-eligible opportunities in your community.
This is also your opportunity to see if your bank is leveraging federal and state lending programs that may expand your lending, such as the State Small Business Credit Initiative (SSBCI), or the numerous programs offered by USDA – Rural Development and your state economic development offices, to name a few. You can find an extensive listing in the External LinkCommunity Development Investment Resource Guide in CRA OneSource.
Are you connected?
We want to make sure you receive information for upcoming training and resource events. Please External Linksubscribe to “community development” to assure that you’re in our database. Stay connected with us and participate in training programs provided by the agencies. They are there to make you and your bank’s CRA program successful.
Resources:
External LinkCRA OneSource guides and publications. Explore CRA resources, including guides and publications, mapping and search tools, community development and regulator resources.
External LinkInvestment Connection can help you identify CRA-related proposals in your assessment areas. Just ask if you’d like a demonstration or assistance with using the External Linkfunder portal.
Comments or questions?
- Comments on the Notice of Proposed Rulemaking to rescind the 2023 CRA rule can be directed to: External LinkFederal Reserve Board - Proposals For Comment. Comments are due on or before August 18.
- For questions or for more information on the 1995 CRA rules and/or related resources, contact Ariel.Cisneros@kc.frb.org