Even before President Trump was sworn into office on January 20, 2025, the banking community and community activists were abuzz about the Trump Administration’s announced intentions to relax regulatory enforcement. One of the primary manifestations of the Administration’s approach is reflected in the announcement by bank regulators of their intention to rescind the 2023 Community Reinvestment Act Rule and revert to the 1995 Rule. While the formal rescission has not been officially ratified as of 10/31/2025 it is expected to be approved before the end of 2025. In the meantime, CRA exams have been conducted as usual through the first 9 months of the year. If there is any regular and reliable indicator of regulatory enforcement it is the performance ratings assigned to banks examined under the CRA and which are published monthly by the bank regulators. Do those exams provide any indication of relaxed enforcement of the Community Reinvestment Act (“CRA”)?
A review of the 863 CRA exam results published by the agencies through September 2025, shows that 16, or 1.9% of those exams resulted in a “Needs to Improve” performance rating and none with a “Substantial Noncompliance” rating. How do those results compare to historical averages?
A review of CRA performance ratings from 2000 to 2025 shows that 40,386 public performance ratings were issued by the bank regulators for that time and 671 were rated “Needs to Improve” and another 88 were rated “Substantial Noncompliance”, translating into exam percentages of 1.66% and 0.22% for those performance ratings respectively. In other words, the failure rate for CRA examinations published in 2025 appears to be consistent with the experience of the prior 24 years.
It may be too soon to tell, but the anxiety regarding “relaxed” regulatory enforcement articulated by community activists and the comfort expressed by bankers about regulatory relief may be premature insofar as the Community Reinvestment Act is concerned. Continued monitoring of the monthly CRA performance ratings is warranted and should be a good indicator of how regulatory compliance enforcement is actually practiced in the field.
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