It has been 27 years since the federal bank regulatory agencies have overhauled the Community Reinvestment Act (CRA) regulations. Right now major revisions are unfolding after several false starts over the past four years. On May 5, 2022, the agencies jointly issued a proposal to strengthen and modernize regulations implementing the CRA. The agencies accepted comments on the 619-page proposal until August 5, 2022. Now the agencies are thrashing through the comments letters. Soon we will see what the multi-year revision process has wrought.
The new regulations will be effective on the first day of the first calendar quarter that begins at least 60 days after the publication date of the final rules. The effective dates for certain sections are delayed for one or two years after publication of the final rule.
This program provides a review of the agencies’ new proposed rule, and comparisons to the existing and prior proposed rules. The direction of the final rule is becoming clearer. Participants will better be able to start planning implementation of the rules once final.
Participants receive a detailed manual that serves as a handbook long after the program is completed.
Upon completion of the program, participants will understand the new rule and the comments submitted on various aspects of the proposal, including:
- Bank size categories (small (< $600 million), intermediate (≥$600 million and < $2 billion) and large (≥ $2 billion)) are clearly divided, with no overlaps.
- Large bank exams have evolved substantially. Large banks receive the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test. Small bank are examined using the current process but have the option to use a Retail Lending Test. Intermediate banks are subjected to a Retail Lending Test, and either community development performance standards or a Community Development Financing Test.
- Assessment areas will be defined using a facilities–based assessment area (similar to the current method), a new retail lending assessment area (for large banks), and areas for eligible community development activity.
- The agencies will maintain a publicly available illustrative list of non-exhaustive examples of community development activities that qualify for CRA consideration.
- The agencies will use different performance tests and standards to assess a bank’s CRA performance:
- The Retail Lending Test for large and intermediate banks. The test also includes screens and metrics.
- The Retail Services and Products Test for large and intermediate banks.
- The Community Development Financing Test for large and intermediate banks. The test includes metrics and benchmarks.
- The Community Development Services Test for large banks. The test includes metrics.
- The Community Development Financing Test for Wholesale or Limited Purpose Banks.
- The small bank performance standards.
- The intermediate bank community development performance standards.
- Standards in a strategic plan.
- Data collection and reporting continues to be required for large banks.
The program is designed for loan officers, compliance officers, CRA officers, loan department staff, bank counsel and auditors. Whether new to the requirements of the CRA and its regulations or a seasoned veteran, this program provides a comprehensive review of the rapidly changing requirements of the CRA.