U.S. Board of Governors of the Federal Reserve System Governor Lael Brainard spoke at the Federal Reserve Bank of Richmond Baltimore Community Development Gathering regarding efforts to modernize the Community Reinvestment Act. Governor Brainard provided a brief summary of the history and importance of the CRA, noting that the current CRA regulations date back to 1995 and are in need of update to better reflect how banks currently operate and the customer base they serve, given structural and technological changes in the banking industry. Governor Brainard referenced the CRA outreach effort recently completed by the U.S. Department of the Treasury, and noted the Federal Reserve Board is looking forward to working with the U.S. Office of the Comptroller of the Currency and U.S. Federal Deposit Insurance Corporation with respect to CRA-modernization rulemaking. Governor Brainard discussed five areas that should be a focus of the CRA modernization initiative: revision of the definition of assessment areas to better reflect advances in technology and changes in consumer preferences, without losing focus on serving the local community; regulations that encourage financial institutions to seek out opportunities in underserved areas; regulations that are appropriately tailored to reflect the differing characteristics of financial institutions and the communities they serve; a need for greater consistency and transparency with respect to examination and ratings; and reinforcing the CRA’s role as one of many complementary regulations working in concert to promote an inclusive, fair and non-discriminatory financial services industry.
View full text of Governor Brainard’s speech.
