Banking Groups Sue Regulators Over CRA Rules

Several banking groups recently filed a complaint and motion for a preliminary injunction against the OCC, Federal Reserve, and FDIC, alleging that the regulators exceeded their rulemaking authority and violated the Administrative Procedure Act in their recently published Final Rules issued pursuant to the Community Reinvestment Act.  WBK previously covered the CRA Final Rules here.

According to the complaint, the agencies exceeded their rulemaking authority by assessing banks on their responsiveness to credit needs outside of their geographic deposit-taking footprint and by assessing banks on their deposit products rather than only the credit needs of communities.  The complaint further alleges that the agencies’ actions were arbitrary and capricious because the agencies failed to give banks reasonable notice of the areas and products that would be assessed and the market benchmarks against which their performance would be evaluated; failed to conduct an adequate cost-benefit analysis; and failed to consider the real-world consequences of the Final Rules.  The banking groups seek to enjoin the Final Rules, a declaration that the Final Rules violate the CRA and APA, and attorneys’ fees.