Regulators Propose Major Overhaul to Community Reinvestment Act
Regulators in the United States, specifically the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, have proposed significant changes to the Community Reinvestment Act (CRA). This act, established in 1977, requires banks to lend to…
Miami Fort Lauderdale, FL, July 31, 2026 —
Federal regulators have put forth significant proposed changes to the Community Reinvestment Act (CRA), a landmark piece of legislation enacted in 1977. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) are spearheading this overhaul, which aims to modernize the act’s framework for evaluating how banks serve low- and middle-income communities.
Under the proposed revisions, the number of banks subject to the full extent of CRA requirements could be reduced by approximately 800. This reduction is largely attributed to an increase in the asset threshold for small banks, which would rise from $412 million to $1 billion. This adjustment is intended to streamline regulatory burdens for smaller institutions.
A key shift in the proposed changes involves the evaluation criteria for CRA compliance. The focus is moving away from metrics such as the number of bank branches and deposit volumes. Instead, the revisions prioritize the actual lending activities undertaken by banks within specific communities. This would mark a significant departure from previous evaluation methods, emphasizing direct financial investment and lending outcomes.
Furthermore, the proposed modifications seek to narrow the scope of community development groups that are eligible to receive funding from banks under the CRA. Critics of this aspect of the proposal suggest that such a change could potentially discourage lending in rural areas. Concerns have also been raised that these revisions might disproportionately impact national organizations that support community development initiatives across a broader geographic range.
The Community Reinvestment Act was originally established to combat discriminatory lending practices and ensure that banks reinvested in the communities where they operate and from which they accept deposits. The current proposals represent one of the most substantial efforts to update the act since its inception, reflecting evolving banking practices and economic conditions.
Story summarized from the original created by AP on apnews.com, see more information here.
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