Federal Regulatory Agencies Issue Final Rule to Modernize Community Reinvestment Act Regulations
Final rule updates include evaluating digital banking services, adopting a metrics-based approach to lending, providing greater clarity on eligible activities, and tailoring regulations based on bank size and type, with full implementation expected by January 2027.
- The final rule to modernize the Community Reinvestment Act (CRA) regulations encourages banks to expand access to credit, investments, and banking services in communities with low and moderate income, providing greater financial inclusion.
- The CRA regulations will adapt to the changes in the industry, such as online and mobile banking, and will consider lending outside traditional assessment areas due to the growth of non-branch delivery systems.
- A new metrics-based approach will be adopted for evaluating retail lending and community development financing, thus providing greater clarity and consistency in the application of CRA regulations.
- The CRA evaluations are being tailored to bank size and business models. Small banks are those with assets below $600 million, intermediate banks have assets between $600 million to $2 billion, and large banks have assets of $2 billion or more.
- From January 1, 2026, most of the rule's requirements will be applicable, and the remaining requirements, including new data reporting requirements, will be in effect from January 1, 2027.
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