Community Reinvestment Act Modernization
This Tuesday, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) released a final rule to "strengthen and modernize their regulations implementing the Community Reinvestment Act (CRA)."
While the revisions remain complex, and are certain to be controversial, several changes are positive for CDFI-certified banks and their communities. These include the following:
- Specific nationwide "community development" consideration for activities conducted with CDFIs, including CDFI banks. This includes activities conducted by CDFI banks with other CDFI depositories, minority depositories (MDIs), low income credit unions (LICUs) and woman-owned depositories (WDIs). Previously, the rule only specified MDIs, WDIs, and LICUs.
- Specific consideration for activities conducted with CDFIs, including CDFI banks, as "responsive" under the Retail Services and Products Test.
- Special Purpose Credit Programs (SPCPs) are also specifically "responsive" under the Retail Services and Products Test.
- Increased thresholds for bank size standards: Large: $2 billion or more. Intermediate: $600 million to $2 billion. Small: under $600 million.
- Small banks will have the option to remain under the existing lending test.
- Deposit data reporting requirements for "large banks" will only apply to a subset with assets greater than $10 billion.
CDBA will work over the coming days to provide a comprehensive summary of changes with particular relevance to CDFI banks and their communities.