Banking Agencies Approve Changes to the Community Reinvestment Act

Housing Finance
Contact: Michelle Kitchen
Senior Director, Multifamily Finance
(202) 266-8352

Federal banking agencies today issued a final rule to strengthen and modernize the regulations implementing the Community Reinvestment Act (CRA). The CRA encourages federally insured banks to help meet the credit needs of the communities in which they do business, especially low- and moderate-income communities.

NAHB commented on numerous versions of proposed revisions to the CRA rule beginning in 2018. The final rule contains provisions NAHB requested that will provide greater clarity for bank examiners to evaluate a bank’s community development investments and recognize the important affordable housing and community development contributions of the Low-Income Housing Tax Credit and New Markets Tax Credit investments.

The final rule, issued by the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, updates CRA regulations to achieve the following key goals:

  • Encourage banks to expand access to credit, investment and banking services in low- to moderate-income communities;
  • Adapt to changes in the banking industry, including mobile and online banking;
  • Provide greater clarity and consistency in the application of the CRA regulations; and
  • Tailor CRA evaluations and data collection to recognize differences in bank size and business models.

The rule will take effect April 1, 2024. However, the majority of the provisions will become applicable on Jan. 1, 2026, or later.

For more details on the rule change, view this interagency overview.

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