The Federal Reserve, FDIC and Office of the Comptroller of the Currency today announced they intend to rescind the 2023 Community Reinvestment Act final rule “in light of pending litigation.” They will instead reinstate the CRA framework that was in place before the rule.
The agencies first proposed the rule in 2022 as part of a long-planned overhaul of the CRA framework. They finalized the rule the following year, although the Fed and FDIC board votes were not unanimous. The American Bankers Association, U.S. Chamber of Commerce and five national and state associations later sued the banking agencies in federal court, arguing that regulators exceeded their statutory authority. A federal judge last year issued a preliminary injunction against enforcing the rule.
In a brief statement, the three banking agencies said they will “continue to work together to promote a consistent regulatory approach on their implementation of the CRA.” They did not provide a timeline for when the Fed and FDIC boards plan to vote on rescinding the rule.
ABA and the other plaintiffs welcomed the announcement. “As we have shown in our ongoing legal challenge, the 2023 effort to modernize the rules around CRA exceeded the agencies’ statutory authority and would have created disincentives for banks to invest in their communities,” they said in a joint statement. “Given the strength of our case and the court’s rulings to date, rescinding the rule is the right decision.
“The co-plaintiffs look forward to learning more about the agencies’ plan to rescind the rule,” they added. “In the meantime, the nation’s banks remain committed to complying with the Community Reinvestment Act and achieving our shared goal of supporting local communities and expanding economic opportunities for all Americans.”
