With April 1, 2024, the effective date for the new CRA rule fast approaching, every bank is asking what must we do on April 1? Here are the answers.

There are 3 sections of the new CRA that are banker’s responsibility and become effective on April 1, 2024.

§_.16 Facility-based assessment areas

§_.43 Content and availability of the public file

§_.44 Public notice by banks

There are other sections effective April 1, that are the responsibility of the regulators:

§_.31 Effect of CRA on applications

§_.45 Publication of the planned examination schedule

§_,46 Public engagement

This article focuses on the first 3 items.

Facility-based assessment areas

The new facility-based assessment areas are effective on April 1, and pertain to all banks, regardless of size. Essentially, the rules governing the FBAAs are the same rules that have been in effect since 1995 with one very important exception that has very big implications. What I am referring to is the requirement that all FBAAs for “large” banks must consist of entire counties. Small banks and Intermediate-smart banks retain the flexibility to adjust their assessment areas to the areas they can “reasonably be expected to serve.” I have written about this provision in several other articles. All I will say about this is that the rigidity of the new rule will have very negative consequences for many large banks and will invalidate the “objective” performance measurements, rendering the scores and conclusions meaningless if not misleading.

See GeoDataVision to make the most informed decision about your Assessment Area configuration under the new Rule

The content and availability of the public file

The content and availability of the public file would seem to have straightforward clear responsibilities, but like much in the new CRA, nothing is simple. The key aspects of the new public file provisions require:

1. Maintenance of the public file on a bank’s public website if it has such a website.
2. Quarterly updates in the current calendar year for any public comments received plus maintenance of public comments received for each of the prior two calendar years.
3. A list of branches opened and closed during the current year and each of the two prior calendar years.
4. A copy of the public section of the most recent CRA performance evaluation
5. A list of retail banking services including hours of operation, available loan and deposit products, and transaction fees
6. A map of each Facility-based Assessment Area (and, after January 1, 2026, Retail Lending Assessment Areas) with tracts identified (no need to show anything else, but make it the entire 11-character tract.) on the map or in a separate list.
7. A bank subject to reporting under CRA – a written notice of the CRA Disclosure Statement
8. A bank subject to reporting under HMDA – a written notice of the HMDA Disclosure Statement 
9. Banks with less than satisfactory ratings – a description of its current efforts to improve its performance helping to meet the credit needs of the entire community to be updated each calendar quarter (until the bank receives a satisfactory performance rating)
10. Small banks – the loan-to-deposit ratio for each quarter of the prior calendar year and, at its option additional data on its loan-to-deposit ratio
11. Banks with Strategic Plans must maintain a copy of the Plan in the public file for as long as the Plan is in effect.
12. Additional information the bank chooses

All items above are to be maintained for the previous 3 years calendar years and the current year except those items cited with different retention periods (items 2, 3, 9, and 11)

Public Notice by banks

This obligation has caused much confusion. The reason is that the regulation reads that whatever sections are not assigned “applicable” dates on January 1, 2026, or January 1, 2027, will be applicable on April 1, 2024. The public notice requirement was not listed in the sections effective for either 2026 or 2027, so the logic would be that §_.44 would be effective on April 1, 2024, however the agencies issued a “clarification” in their January 10, 2024, webinar in which they announced that the new Public Notice is not effective until January 1, 2026.

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