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4w ago

Federal Regulators to Rescind 2023 Community Reinvestment Act Rule

The decision reflects legal challenges, regulatory caution, and opposition from banking groups over compliance costs.

People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

Overview

  • Federal banking regulators announced plans to withdraw the 2023 CRA rule and revert to pre-2023 standards.
  • The move is driven by concerns over pending litigation and the legal defensibility of the rule following recent court rulings.
  • The 2023 rule aimed to modernize assessment areas to account for online and mobile banking but faced criticism from banking groups over increased compliance costs.
  • The rescission aligns with a broader rollback of Biden-era financial regulations, including recent actions against other regulatory initiatives.
  • No timeline has been provided for the rescission process, with Federal Reserve Chair Jerome Powell previously signaling delays in major regulatory changes pending new agency leadership.