Consumer Compliance Outlook: Fourth Issue 2023

Compliance Alert: Interagency Overview of the Community Reinvestment Act Final Rule


On October 24, 2023, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Board), and the Federal Deposit Insurance Corporation (FDIC) issued a final rule to strengthen and modernize regulations implementing the Community Reinvestment Act (CRA) to better achieve the purposes of the law. The CRA is a landmark law enacted in 1977 to address systemic inequities in access to credit. The CRA encourages federally insured banks to help meet the credit needs of the communities in which they do business, especially low- and moderate-income (LMI) communities, consistent with safe and sound operations.

To facilitate compliance, the agencies jointly published this summary. They have also hosted a webinar that explains the rule. The final rule and other supporting materials (including a press release and fact sheet) can be found on the OCC, Board, and FDIC websites.


The agencies recognize that the CRA regulations must evolve to address the significant changes in the banking industry that have taken place since the last comprehensive interagency update in 1995.

Building on feedback from stakeholders and research, the final rule updates the CRA regulations to achieve the following eight key objectives:

1. Strengthen the achievement of the core purpose of the statute

The rule seeks to ensure that the CRA continues to be a strong and effective tool to address inequities in access to credit. To achieve this objective, the rule

2. Adapt to changes in the banking industry, including the expanded role of mobile and online banking

The rule recognizes the significant changes in bank business models and how banking services are delivered, including through the use of internet and mobile banking and hybrid models that combine physical footprints with online lending. To achieve this objective, the rule

3. Provide greater clarity and consistency in the application of the regulations

The rule addresses feedback on the need for more clarity and consistency in the application of the CRA regulations. To achieve this objective, the rule

4. Tailor performance standards to account for differences in bank size, business models, and local conditions

The rule recognizes differences in bank size and business models. To achieve this objective, the rule


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5. Tailor data collection and reporting requirements and use existing data whenever possible

The rule seeks to strike an appropriate balance between minimizing unnecessary burden on community banks and providing greater clarity and consistency in how large banks are assessed by establishing the use of standardized metrics for certain banks and tailoring the associated data collection, maintenance, and reporting requirements. To achieve this objective, the rule

6. Promote transparency and public engagement

The rule recognizes that transparency and public engagement are fundamental aspects of the CRA evaluation process. To achieve this objective, the rule

7. Confirm that CRA and fair lending responsibilities are mutually reinforcing

The rule affirms that, in meeting the credit needs of their entire communities, banks must do so in a fair and equitable manner. The rule

8. Promote a consistent regulatory approach that applies to banks regulated by all three agencies

The rule recognizes the importance of consistency across the three agencies. The rule

The agencies will continue their interagency work to ensure consistent implementation of a final rule through examiner and industry training, interagency examination procedures, and joint publication of an illustrative list of eligible CD activities.


Based on an analysis of comment letters and further agency review, the final rule includes the following key changes from the proposed rule:

1. Reduces complexity and data requirements while providing a consistent and comprehensive approach to evaluating banks under the Retail Lending Test

2. Adjusts retail lending performance ranges while maintaining high standards; also increases weighting of CD financing activities

3. Retains evaluation of banks with significant retail lending outside of branches while increasing tailoring of the retail lending assessment area approach

4. Adds metric and impact factor to evaluate bank CD investments under the CD Financing Test

5. Provides additional flexibility under the strategic plan option while continuing to meet the credit needs of communities

6. Addresses feedback on the need to have additional time for banks to implement the new rule

7. Retains and clarifies the provision on CRA ratings downgrades

8. Ensures consideration of certain small business loans under the economic development category of community development

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