The Democratic members of the House Financial Services Committee today warned banking regulators against “weakening” the Community Reinvestment Act and requested more time for public comment on proposed changes to rules implementing the law.
In July, the FDIC and Office of the Comptroller of the Currency proposed a series of amendments to CRA regulations to refocus on the law’s objective of getting banks to meet the credit needs of their communities, including narrowing the list of qualifying activities for CRA credit to exclude deposit services and certain grants to programs run by nonprofit organizations. Notably, the Federal Reserve did not join the two agencies in issuing a proposal, a change from when the banking agencies last revised CRA regulations in 2023.
The lawmakers warned in a joint letter to the FDIC and OCC that the proposed changes could “significantly change how banks are held accountable for serving their communities,” according to a statement.
“Taken together, the proposed revisions likely will significantly impact which institutions are encouraged to meet the credit needs of their communities through activities that extend beyond lending, such as community development activities,” the lawmakers wrote.
They also requested the public comment period be extended an additional 120 days “to give members of the public more time for substantive review and comment on this sweeping proposal.”
