10/14/26

The OBL has joined 45 state bankers associations in urging federal banking regulators to preserve the core framework of the Community Reinvestment Act (CRA) while making targeted changes to improve regulatory clarity, better tailor examinations and reduce unnecessary compliance burdens.

In a joint letter to the FDIC and the Office of the OCC, the associations outlined recommendations for revising CRA regulations to ensure the framework remains effective, practical and responsive to the diverse business models of financial institutions.

The letter responds to a July proposal from the FDIC and OCC to amend CRA regulations, marking the agencies’ third attempt in eight years to update the rules. While the associations support many elements of the existing framework, they encouraged regulators to incorporate longstanding guidance and interpretations into the final rule, provide greater certainty for banks and maintain an appropriate focus on meeting community credit needs.

The associations also expressed support for the agencies’ efforts to reduce regulatory burden and emphasized the importance of evaluating banks’ lending activities rather than placing unnecessary emphasis on deposit products.

Key Recommendations for CRA Reform

The joint letter outlines several recommendations designed to strengthen the CRA framework while ensuring regulatory expectations remain proportionate to a bank’s size, business model and community lending activities.

Among the recommendations, the associations urged regulators to:

• Establish a clear, durable framework. Adopt a final rule that provides consistent expectations and minimizes the uncertainty and disruption caused by repeated regulatory changes.

• Increase asset-size thresholds. Raise the thresholds for small and intermediate banks to $1 billion and $10 billion, respectively, and index them to nominal gross domestic product (GDP) to account for economic growth over time.

• Preserve flexible examination options. Maintain evaluation approaches that reflect the different business models and activities of banks.

• Focus on material lending activity. Ensure retail lending evaluations emphasize a bank’s significant lending activities.

• Maintain a broad community development framework. Support a wide range of qualifying community development activities while providing banks with greater certainty about CRA eligibility.

• Keep retail service evaluations focused on credit. Ensure assessments remain centered on meeting community credit needs.

• Preserve assessment area flexibility. Maintain requirements that allow banks to appropriately define the communities they serve.

• Minimize unnecessary data and compliance burdens. Ensure data collection and implementation requirements support effective examinations without imposing excessive costs on banks.

Allowing Banks Time to Adapt

The associations also stressed the importance of a predictable transition to any new requirements. They recommended that large banks receive at least two years before becoming subject to new data collection and reporting obligations.

For banks that move into a different asset-size classification, the letter recommends allowing institutions to transition to the applicable framework on Jan. 1 of the following calendar year or complete their current evaluation period under the existing rules. For other institutions, examinations should not shift between regulatory frameworks in the middle of an evaluation cycle.

These transition provisions would help banks plan for operational changes, allocate compliance resources and avoid unnecessary disruption during implementation.

Supporting Effective CRA Oversight

The Community Reinvestment Act is intended to encourage banks to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking practices.

The OBL supports a CRA framework that advances this mission while recognizing the differences among financial institutions and providing clear, consistent regulatory expectations. Thoughtful revisions can help ensure CRA examinations remain focused on meaningful lending and community development outcomes without creating unnecessary compliance burdens.

The associations’ recommendations call on the FDIC and OCC to deliver a practical, lasting framework that provides greater certainty for banks and supports their continued efforts to serve their customers and communities.

Read the joint letter.