HousingWireHousingWire
Three federal banking regulators announced their intent to issue a proposal that would rescind the Community Reinvestment Act (CRA) final rule issued in October 2023.
Friday’s announcement involves the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC). The agencies plan to reinstate the CRA framework that existed before October 2023.
“The agencies will continue to work together to promote a consistent regulatory approach on their implementation of the CRA,” the agencies wrote.
The October 2023 final rule was the first major revision to the 1977 anti-redlining law in nearly three decades. The original rule obligated U.S. banks to partner with and finance community groups and low-income borrowers to reverse the effects of redlining.
Among other things, the revised rule sought to modernize the CRA by including mobile and online banking in assessments of products and services. It also would have reduced the number of product lines evaluated under a retail lending test to closed-end home loans, small-business loans and small farm loans.
The agencies’ move to withdraw the rule follows a lawsuit from industry groups that sought to block the updated legislation. A federal judge in Texas issued a preliminary injunction to halt the changes shortly before they would have gone into effect last April — although most provisions under the revised CRA would have applied on Jan. 1, 2026.
