OCC, FDIC Tighten CRA Grant Rules, Exempting Banks Under $10 Billion
Updated
Updated · POLITICO · Aug 3
OCC, FDIC Tighten CRA Grant Rules, Exempting Banks Under $10 Billion
3 articles · Updated · POLITICO · Aug 3
Summary
Friday’s proposal would force banks to scrutinize community-development grants more closely under the Community Reinvestment Act, with large lenders required to verify recipients keep overhead and indirect costs at 15% or less.
The OCC and FDIC said the rewrite would stop CRA from serving as a funding channel for “activist” groups, while also easing compliance for smaller banks by raising the asset threshold for certain reporting exemptions to $10 billion from about $1.65 billion.
The plan also seeks to narrow how CRA can be applied: the agencies asked a Texas court to strike down their parts of the 2023 Biden-era rule and bar CRA reviews of lending outside banks’ physical footprints or of deposit products.
The Federal Reserve did not join the rewrite and told an appeals court it is close to simply repealing the 2023 rule, raising the prospect of divergent standards depending on a bank’s regulator.
Democrats, led by Sen. Elizabeth Warren, said the changes would weaken anti-redlining and housing-investment efforts; the proposal now enters a 60-day comment period in a fight affecting billions in lower-income community lending and investment.