On September 21, 2020, the Federal Reserve Board announced that it is seeking public input as it considers how to update the regulations that implement the Community Reinvestment Act (CRA) by strengthening, clarifying, and tailoring them to reflect the current banking landscape and better meet the core purpose of the CRA. The Board is specifically seeking feedback about ways to evaluate how banks meet the needs of low- and moderate-income (LMI) communities and address inequities in credit access.

“By releasing a thoughtful and balanced [Advanced Notice of Proposed Rulemaking (ANPR)] and providing a long period for comment, the Federal Reserve is hoping to build a foundation for the banking agencies to come together on a consistent approach to CRA that has the broad support of the intended beneficiaries as well as banks of different sizes and business models,” said Federal Reserve Board Chair Jerome H. Powell.

Congress enacted the CRA in 1977, as part of several landmark pieces of legislation enacted in the wake of the civil rights movement intended to address inequities in the credit markets. The Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have broad authority and responsibility for implementing the statute, which provides the agencies with a crucial mechanism for addressing persistent structural inequity in the financial system for LMI and minority individuals and communities. The statute and its implementing regulations also provide the agencies, regulated banks, and community organizations with the necessary structure for facilitating and supporting a vital financial ecosystem that supports LMI- and minority-focused community development.

Aspects that public comment will influence include:

• Strengthening CRA’s core purpose of meeting the wide range of LMI banking needs and addressing inequities in financial services and credit access
• Clarifying and expand eligible CRA activities focused on LMI communities
• Recognizing the special circumstances of small banks in rural areas

Comments on the ANPR will be accepted up to 120 days after publication in the Federal Register. Comments submitted online should reference requests for feedback by question number, and be identified by Docket No. R-1723 and RIN 7100- AF94.