Community Reinvestment Act

What’s the Issue?

Banks care about the vibrancy and vitality of their communities, and they support the goals of the Community Reinvestment Act. Designed to be broad, flexible, and responsive to changes within communities, the law established guidelines to ensure banks serve the needs of their local communities. Unfortunately, the objectives of the CRA statute are being undermined by outdated implementing regulations.

CRA was established more than 40 years ago, and current regulations do not reflect significant changes that have occurred in the banking sector – especially the advances in technology that have enhanced how banks serve communities.

How Can CRA Be Improved?

Regulators are looking at updating CRA to reflect how banking has evolved. CRA reform should accurately reflect and measure all banking activities and help align resources with community needs.

To improve its effectiveness, regulators should modernize CRA to:

  • Recognize where technology is serving customers, not just physical locations
  • Make regulatory standards clear and transparent
  • Tailor requirements to different bank business models and geographies

Happening Now

The FDIC and OCC proposed major changes to the regulations implementing the Community Reinvestment Act.

As regulators work to modernize CRA and improve its effectiveness, it is critical that that they hear firsthand from bankers about how the proposal will affect the communities you serve. When drafting your comments, remember: one example makes an impact. A comment letter does not need to respond to every piece of the proposal; even one or two paragraphs responding to one component of the proposal is worthwhile. 

Need more information about what’s in the proposal? Check out this summary of key points of the proposal.  Comments on the proposal must be submitted by April 8.

Learn more in-depth about CRA here.