Banking Agencies Finalize Community Reinvestment Act Rules
On October 24, 2023, the Board of Governors of the Federal
Reserve Board, the Office of the Comptroller of the Currency, and
the Federal Deposit Insurance Corporation (collectively, the
Agencies) approved long-awaited final rules to modernize the
Community Reinvestment Act (CRA) regulations. The CRA was enacted
to address illegal redlining and evaluate banks' performance
in serving the credit needs of their entire communities, including
low- and moderate-income (LMI) people and neighborhoods. The new
regulations maintain the existing CRA ratings (Outstanding,
Satisfactory, Needs to Improve, and Substantial Noncompliance) but
completely overhaul the evaluation framework and potentially make
the achievement of Satisfactory and Outstanding ratings more
difficult. This client alert provides a summary of the most
significant changes.
