The Federal Reserve, FDIC and the Office of the Comptroller of the Currency today issued a joint proposal to rescind the Community Reinvestment Act final rule adopted in 2023. If rescinded, the agencies would reimplement the prior CRA regulations that were originally adopted in 1995, with certain technical amendments.
Because the 2023 final rule is subject to legal action and has not taken effect, the agencies continue to apply the 1995 regulations to banks, according a statement. Comments on the proposal are due 30 days after date of publication in the Federal Register.
In a separate statement, Fed Vice Chair for Supervision Michelle Bowman said she supports rescinding the rule.
“As I noted at the time, the 2023 final rule likely exceeded the statutory authority of the agencies and was unnecessarily complex, overly prescriptive and contained disproportionately greater costs than benefits, adding significantly greater regulatory burden for all banks, but especially for community banks,” Bowman said. “The rule was premised on an assumption that banks were not doing enough to meet the credit needs of their communities. Yet, banks have a deep commitment to supporting their communities and continue to meet the letter and spirit of the CRA statute.”
