Inclusion: Community Reinvestment Act Proposal

May 2022

The federal banking agencies (FRB, OCC, FDIC) have been working to update and modernize the CRA regulations for several years, both independently and collectively, making many aspects of this proposed rule expected. The proposal recognizes the changes in the banking industry, such as the expanded role of mobile and online banking, while also reflecting the Administration’s ESG-related priorities regarding equity and inclusion and climate-related risks (including disaster preparedness and climate resiliency.) Expansion of the rule to nonbanks would require Congressional action and is not addressed in the rule. It is interesting that even as the regulators suggest the proposal would provide banks greater clarity and consistency for compliance, expand the areas and activities that could be considered for CRA credit, and incentivize certain types of investments/activities, they also note that the proposal “raises the bar” for institutions to achieve an “outstanding” rating.