Federal banking agencies have extended the implementation
period for certain provisions of their modernized Community Reinvestment Act
(CRA) rules. Covered entities will have until Jan. 1, 2026, to align their CRA
compliance policies and procedures with the revised rules, which had an
original applicability date of April 1 of this year.
The Federal Reserve, Office of the Comptroller of the
Currency and the Federal Deposit Insurance Corp. issued a joint press release
announcing the supplemental rule, which enacts the extension and makes
technical changes to the revised CRA rules finalized in October 2023. The
agencies also used the release to solicit public comments on certain elements
of the supplemental rule.
The applicability extension will give banks an extra 21
months to update their facility-based assessment areas and public files to
align with the updated CRA requirements.
By extending the applicability deadline, the agencies hope “to
promote greater stability and certainty for banks and other stakeholders in
transitioning to the provisions of the 2023 CRA Final Rule,” and “eliminate
potential confusion resulting from evaluating banks according to different
facility-based assessment area delineation standards within a single year.”
The extension aligns the applicability of all substantive provisions
of the revised CRA rules on the same date, including those regarding where
banks are evaluated.
Fed Governor Michelle Bowman said in a statement she
believes the agencies would have been better off reproposing the revised CRA
rules, rather than issuing amendments and extending applicability via
supplemental rulemaking.
“[T]he CRA final rule is unnecessarily complex and
extraordinarily lengthy,” Bowman said. “In my view, the
appropriate approach to address the changes considered by these amendments, and
the other more substantive issues with the final rule, would have been a
reproposal. Now, less than six months after voting on the final rule, we have
already identified at least one significant issue that warrants changing the
finalized regulation. I am concerned that this change will not be the only
significant issue that will require further consideration given the length and
complexity of the final rule as the agencies continue to work toward
implementation of the changes.”
In addition to the deadline extensions, the agencies issued
technical, non-substantive amendments to the CRA final rule and related
regulations referencing it. Among these technical amendments is one clarifying
that banks have more time before they need to change their public notices.
“Amending the applicability date for the public notice
provision facilitates compliance by clarifying that banks may continue to use
the CRA notice in the agencies’ legacy CRA regulations until appendix F (of the
revised rules) becomes applicable on Jan. 1, 2026,” the supplemental rule
states. “The agencies therefore find that public comment regarding this
amendment is impracticable, unnecessary, or contrary to the public interest.”
Comments on the extended applicability date must be received
45 days after the rule is published in the Federal Register.