On 9/21/2020, the Federal Reserve Board issued an Advance Notice of Proposed Rulemaking (ANPR) and invited public comment on an approach to modernize CRA regulations. The ANPR is looking for feedback on “ways to evaluate how banks meet the needs of low- and moderate-income (LMI) communities and address inequities in credit access.” This rule, of course, comes a few months after the OCC issued a final rule that requires financial institutions regulated by the OCC to comply with by October 1, 2020, January 1, 2023, or January 1, 2024. Therefore, it appears that this ANPR would only apply to financial institutions regulated by the Federal Reserve. The FDIC has not yet announced their intentions for CRA revisions, though they had originally issued the the proposal jointly with the OCC, but have not yet finalized the same rule as the OCC.
In their release, the Federal Reserve explains that public comment will assist the Federal Reserve in refining CRA modernization proposals to:
Strengthen CRA's core purpose of meeting the wide range of LMI banking needs and addressing inequities in financial services and credit access
Address changes in the banking industry
Promote financial inclusion by including special provisions for activities in Indian Country and underserved areas, and for investments in Minority Depository Institutions and Community Development Financial Institutions
Bring greater clarity, consistency, and transparency to performance evaluations that are tailored to local conditions
Tailor performance tests and assessments to account for differences in bank sizes and business models
Clarify and expand eligible CRA activities focused on LMI communities
Minimize data burden and tailor data collection and reporting requirements
Recognize the special circumstances of small banks in rural areas
Create a consistent regulatory approach
Comments will be accepted for 120 days after publication in the Federal Register, which was on 10/19/20. Therefore, comments are due by 2/16/2021.
The Fed’s ANPR can be found here.
For reference, the OCC’s final CRA rule can be found here.
The Federal Register publication can be found here.
