☷Agencies issue joint proposal to strengthen and modernize Community Reinvestment Act Regulations
Federal Reserve System ( By Press Release office)
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Federal bank regulatory agencies today jointly issued a proposal to strengthen and modernize regulations implementing the Community Reinvestment Act ( CRA ) to better achieve the purposes of the law . CRA is a landmark law enacted 45 years ago to encourage banks to help meet the credit needs of their local communities , including low - and moderate - income ( LMI ) neighborhoods , in a safe and sound manner . Building on feedback from stakeholders and research , the agencies invite public comment on their joint proposal , which has the following key elements:Expand access to credit , investment , and basic banking services in low - and moderate - income communities . Under the proposal , the agencies would evaluate bank performance across the varied activities they conduct and communities in which they operate so that CRA is a strong and effective tool to address inequities in access to credit . The proposal would promote community engagement and financial inclusion . It would also emphasize smaller - value loans and investments that can have high impact and be more responsive to the needs of LMI communities . Adapt to changes in the banking industry , including internet and mobile banking . The proposal would update CRA assessment areas to include activities associated with online and mobile banking , branchless banking , and hybrid models . Provide greater clarity , consistency , and transparency . The proposal would adopt a metrics - based approach to CRA evaluations of retail lending and community development financing , which includes public benchmarks , for greater clarity and consistency . It also would clarify eligible CRA activities , such as affordable housing , that are focused on LMI , underserved , and rural communities . Tailor CRA evaluations and data collection to bank size and type . The proposal recognizes differences in bank size and business models . It provides that smaller banks would continue to be evaluated under the existing CRA regulatory framework with the option to be evaluated under aspects of the new proposed framework . Maintain a unified approach . The proposal reflects a unified approach from the bank regulatory agencies and incorporates extensive feedback from stakeholders . Comments on the attached proposal will be accepted on or before August 5 , 2022 . Comments: Submit | View Fact sheet ( PDF ) Board memo ( PDF ) Federal Register notice ( PDF ) Statement on Community Reinvestment Act Proposal by Governor Lael BrainardStatement on Community Reinvestment Act Proposal by Governor Michelle W . Bowman
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