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 Unfortunately, the objectives of the CRA statute are being undermined by outdated implementing regulations.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

What’s Next For CRA?

Efforts to revamp the CRA are ongoing.

The Office of the Comptroller of the Currency (OCC) announced that it would repeal the CRA regulations it unilaterally issued in May 2020.

Now the OCC intends to work with the other two regulators responsible for overseeing the Community Reinvestment Act – the Federal Reserve and the Federal Deposit Insurance Corp. – to issue one joint rulemaking to modernize the country’s outdated CRA rules. The joint proposal is expected in 2022.

Learn more in-depth about CRA here.