On December 12, 2019, the US Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency together proposed extensive updates to their Community Reinvestment Act (“CRA”) regulations (85 Fed. Reg. 1204 (Jan. 9, 2020)). In their joint notice of proposed rulemaking (“Proposal”), the agencies identified four objectives: (1) clarify and expand the types of activities that qualify for CRA credit; (2) update and expand the areas in which qualifying activities receive credit; (3) provide a more objective and transparent method to measure and evaluate CRA performance; and (4) revise data collection, recordkeeping and reporting requirements to improve consistency. With these goals in mind, the agencies propose to maintain and publish a running list of the types of activities that qualify for CRA credit. They would also modernize the CRA by redefining bank “assessment areas,” getting away from a strictly brick-and-mortar focus to account for advancements in technology and changes in how consumers choose to bank.
In this Legal Update, we expand on an earlier blog post by describing the changes the Proposal would make to CRA qualifying activities, explaining how the Proposal changes a bank’s assessment areas and CRA performance measurements and identifying key changes to data collection and reporting requirements.