Board of Governors of the Federal Reserve System

I support today's proposal to rescind the Board's 2023 Community Reinvestment Act (CRA) final rule. As I noted at the time, the 2023 final rule likely exceeded the statutory authority of the agencies and was unnecessarily complex, overly prescriptive, and contained disproportionately greater costs than benefits, adding significantly greater regulatory burden for all banks, but especially for community banks.¹ The rule was premised on an assumption that banks were not doing enough to meet the credit needs of their communities. Yet, banks have a deep commitment to supporting their communities and continue to meet the letter and spirit of the CRA statute.

Today's proposal to return to the CRA framework that existed before the 2023 final rule (the 1995 CRA rule) will provide banks with certainty and clarity regarding CRA expectations.

1. See dissenting statement, "Statement on the Community Reinvestment Act Final Rule by Governor Michelle W. Bowman," news release, October 24, 2023. Return to text