The American Bankers Association today expressed support for rescinding the 2023 Community Reinvestment Act final rule and reinstating the 1995 rule, saying that while the older rule isn’t perfect, “it is more closely aligned with congressional intent and is more workable than the 2023 rule.”
The Federal Reserve, FDIC and the Office of the Comptroller of the Currency in July issued a joint proposal to rescind the 2023 CRA rule. In a letter to the agencies, ABA said that while it agreed the CRA rule needed to be updated to reflect changes in consumer behavior and technology, the 2023 regulatory change were not consistent with the CRA statute. ABA, the U.S. Chamber of Commerce and five national and state associations sued banking agencies last year for exceeding their statutory authority in implementing the rule.
“In addition, the rule’s complexity was a pronounced departure from the original goal of CRA modernization, which was to clarify — not complicate or overhaul — the CRA regulatory framework,” ABA said.
ABA instead offered several recommendations to improve the CRA examination and supervision process. They include making public internal agency “guidance” for bank examiners, more transparency in the bank examination process, and creating a list or database of CRA-qualifying activities to take out the guesswork for banks.
“We reiterate our support of the proposed rescission and recodification of the 1995 rule and urge the agencies to implement the process improvements described above as part of the transition back to the 1995 framework,” ABA said.
