Federal Regulators to Rescind 2023 Community Reinvestment Act Rule
The decision reflects legal challenges, regulatory caution, and opposition from banking groups over compliance costs.
- 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.