The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation on Friday proposed targeted amendments to their Community Reinvestment Act rules that would narrow the range of activities banks can count toward their CRA obligations and ease reporting requirements for smaller banks, according to the agencies’ joint announcement.
The Community Reinvestment Act requires banks to help meet the credit needs of the communities where they take deposits, including low- and moderate-income neighborhoods, and regulators evaluate bank performance against those obligations as part of the exam process. Under the newly proposed rule, banks with $10 billion or less in total assets would be exempted from certain CRA data collection, maintenance and reporting requirements and would face more flexible supervision. The proposal would also narrow what counts toward a bank’s CRA retail banking services evaluation to credit services only, excluding deposit services, and would tighten scrutiny of community development grants to ensure funds “reach the communities they are intended to benefit instead of being diverted to other activities or excessive operating costs,” the agencies said in their announcement.
The proposal would largely retain the CRA framework the agencies have applied since 1995, rather than adopting the more expansive framework the agencies finalized in October 2023. That 2023 rule never took effect: banking and business groups sued to block it, arguing regulators exceeded their statutory authority, and the U.S. District Court for the Northern District of Texas enjoined the rule before its effective date. The Federal Reserve, OCC and FDIC subsequently proposed rescinding the 2023 rule entirely in July 2025. Friday’s proposal from the OCC and FDIC goes a step further, layering targeted amendments — including the new asset-threshold exemption and narrower services test — onto the pre-2023 framework rather than simply reinstating it unchanged.
The agencies will accept public comment on the new proposal for 60 days after it is published in the Federal Register. The Federal Reserve was not listed as a party to the OCC and FDIC’s announcement, though it joined those two agencies in last year’s proposal to rescind the 2023 rule; it is not yet clear whether the Fed will issue a parallel proposal narrowing CRA rules for the state member banks it supervises.
What it means: The CRA has long functioned as a lever pushing banks toward mortgage lending, small-business credit and community development investment in lower-income neighborhoods, including financing for affordable housing projects; narrowing what counts toward CRA credit and exempting more community banks from reporting requirements could reduce some of that regulatory pressure, particularly at smaller institutions. The proposal lands alongside other recent bank-lending developments RealtyWire has tracked, including big banks’ return to commercial real estate lending in the second quarter and continued legal fights over federal housing-related funding, such as fair housing groups’ lawsuit against HUD over a separate funding overhaul. Because the rule remains a proposal subject to a 60-day comment period, its final form — and its practical effect on bank financing for affordable housing and community development — will not be settled for months.
