Prudential Banking Regulators Will Rescind 2023 Revisions to CRA Regulations

The OCC, FDIC, and the Federal Reserve announced that they intend to rescind a 2023 final rule which significantly revised the regulations governing the Community Reinvestment Act (CRA).

The CRA obliges depository institutions to meet the credit needs of their entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations.  The 2023 amendments to the regulations were intended to provide greater clarity and consistency in CRA compliance expectations and to address the significant changes to the banking industry that had taken place since the last comprehensive update to the regulations in 1995.  After the recission is finalized, the CRA regulations which were in place prior to the 2023 amendments will return into effect.

The new regulations were challenged in court by industry trade groups shortly after their adoption, and the court preliminarily enjoined their implementation.  The banking regulators’ announcement of their intention to rescind the rule noted that the decision was made in part due to this ongoing litigation.