Fed’s Brainard Outlines ABA-Favored Ideas for CRA Reform

As the federal banking agencies work together on plans to revise the Community Reinvestment Act regulations and supervisory framework, Federal Reserve Governor Lael Brainard articulated several “outcomes that we will work toward” that align closely with the American Bankers Association’s advocacy on CRA reform. “I believe the time is ripe for a refresh to make it even more relevant to today’s challenges,” she said.

Speaking at an event in Baltimore today, Brainard said that regulators would work to modernize the definition of assessment areas, tailor CRA regulations based on a variety of bank characteristics and provide greater consistency in exams and ratings across and within agencies.

Specifically, she noted that technology and consumer preferences have limited the usefulness of the CRA regulatory concept of assessment areas. “Treasury’s recommendation that the agencies revisit the regulations to allow CRA consideration for a bank’s activities in its assessment area, as currently delineated around branches and deposit-taking automated teller machines, as well as in low- and moderate-income areas outside that branch footprint, is a reasonable place to start our interagency discussions,” Brainard said.