On January 9, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) (together known as the Banking Agencies) published proposed rules in the Federal Register that are designed to make the regulatory framework related to the Community Reinvestment Act (CRA) more “objective, transparent, consistent, and easy to understand” (Proposal). The last major revisions to the CRA were made in 1995.

The Banking Agencies’ goals in connection with the issuance of the Proposal are wide-ranging but include reducing CRA deserts, reducing activity uncertainty, increasing small business and small farm lending and encouraging long-term commitment to community reinvestment.

To accomplish these goals, the Proposal focuses on four key areas: (1) clarifying and expanding what qualifies for CRA credit to encourage banks to more readily engage in innovative projects that have positive impacts on communities; (2) expanding where CRA activity counts through the creation of “deposit-based” assessment areas, where banks have a significant amount of retail deposits; (3) providing an objective method to measure CRA activity based upon a bank’s size; and (4) revising data collection, recordkeeping and reporting that would have various benefits, including timelier and more efficient CRA evaluations.

More information is available here.

Comments are due on or before March 9.