Community Reinvestment Act: Final Regulations and What Banks Need to Know Now

The Community Reinvestment Act (CRA) was enacted to confront redlining and encourage banks to help meet the credit needs of their communities, especially low- and moderate-income neighborhoods. On October 24, 2023, the Federal Reserve, OCC and FDIC jointly promulgated regulations that significantly overhaul the way they enforce the CRA. Characterized as “modernization,” the New Rule replaces the regulatory scheme implemented in the mid-1990s and will significantly impact CRA compliance.

In conjunction with the Mortgage Bankers Association, Orrick attorneys Warren Traiger and Victoria Freitag held an in-depth discussion on November 28 on the effects of the New Rule. This discussion covered compliance and enforcement issues,
including:  

• What Retail Lending Assessment Areas and Outside Retail Lending Areas are and how they are created
• How banks will be evaluated under the rule, including a breakdown of scoring under the new four-part assessment mechanism
• How “major product lines” are determined and assessed under the Retail Lending Test
• How the rule impacts consideration of home mortgages and mortgage-backed securities
• How community development activities are assessed and how impact and responsiveness are considered
• The timeframe for data collection, benchmarks and metrics, reporting, and performance evaluations 

View the presentation materials

To read more about the New Rule, read The Community Reinvestment Act: 9 Things Financial Institutions Should Know About a New Regulatory Framework.