On March 28, the Federal Reserve, FDIC, and OCC jointly announced plans to rescind 2023 revisions to the Community Reinvestment Act (CRA) regulations. The agencies stated they would return to the previous regulatory framework existing before the 2023 revisions (See our prior discussion here).
The 2023 revisions to the CRA, finalized under the Biden administration, sought to modernize the CRA framework in response to digital banking trends. However, many banks criticized these changes on the grounds that the revised rules exceeded the boundaries of the CRA, imposed enormous costs on banks, and were more likely to reduce lending to low- and moderate-income borrowers. (See our discussion here on challenges to the rule.)
The rules were set to take effect on April 1, with staggered compliance deadlines through January 2026. In announcing their plans to rescind the changes, the regulators emphasized their commitment to a “consistent interagency approach” to implementation of CRA standards moving forward.
Putting It Into Practice: The agencies’ announcement reflects a broader shift toward unwinding Biden-era regulations (previously discussed here). Financial institutions that had begun preparing for compliance with the 2023 CRA rule should anticipate a return to the pre-2023 regulatory framework and reassess their CRA programs accordingly. Although the agencies have not yet published a formal rescission proposal, banks should continue monitoring developments closely, particularly any new interagency guidance or rulemakings.
