In a recent virtual address to the National Community Reinvestment Coalition (NCRC), Vice Chair for Supervision Michael S. Barr emphasized the importance of the Community Reinvestment Act (CRA) in advancing economic opportunities for underprivileged communities. The Federal Reserve is working closely with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to release a final rule for the CRA.
Barr outlined four key priorities for CRA reform:
- Advance the core purpose of the statute – the CRA was designed to tackle inequities in access to credit and encourage community engagement and financial inclusion for low- and moderate-income communities.
- Address significant changes in the banking sector – the new CRA rule should take into account the rapid evolution of online and mobile banking, branchless banking, and hybrid models since the regulations were last revised over 25 years ago.
- Provide greater clarity, consistency, and transparency – the public, community groups, and banks should be able to understand what qualifies for CRA consideration and how a bank’s rating is determined.
- Align evaluations and data collection to bank size and type – the modern CRA must accommodate banks of various sizes and business models, ensuring that smaller banks are not burdened with the same requirements as larger institutions.
Barr assured attendees that all three agencies are working diligently to finalize the new CRA rule, which will help create more impactful bank lending, investing, and services for the communities served by NCRC members and partner organizations.