The Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) formally adopted changes to modernize the Community Reinvestment Act (CRA). The new rules include several changes that were championed by NAR as adopted in NAR’s Community Reinvestment Act Modernization policy. The new rules must be adopted by January 1st of 2026.
The CRA applies only to depository banks and not mortgage lenders. Banks are evaluated on their ability to meet their CRA obligations each year and it affects their ability to merge as well as media reports and thus their value among other things.
The final rule was developed cooperatively among the three regulators and is less calculation dependent than a draft adopted in 2020 by the OCC before being subsequently rescinded. It was viewed as too complex.
The new rule makes several significant changes that align with NAR policy including:
- Expands the assessment to include banks’ activities nationwide and not just in the areas where they take deposits. This includes online business.
- Looks at retail lending, retail services, community development financing and community development servicing.
- Expands the number of metrics to evaluate performance.
- Updates asset size thresholds for small, intermediate, and large banks to account for changes in the banking industry:
- (1) small banks: <$600M (from <$376M);
- (2) intermediate banks: $600M–<$2B (from $376M–$1.503B); and
- (3) large banks: ≥$2B (from ≥$1.503B), adjusted annually for inflation.
- Utilizes community and market benchmarks that reflect differences in local conditions.