US Bank Regulators Split on Proposed CRA Rule Overhaul
The OCC and FDIC have proposed revised Community Reinvestment Act rules, but the Federal Reserve's refusal to join the effort could create a bifurcated compliance regime.
The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have jointly issued a notice of proposed rulemaking to amend regulations under the Community Reinvestment Act (CRA). The Federal Reserve Board, however, has not joined the proposal, creating the potential for a fragmented regulatory landscape.
The proposed changes would significantly increase the asset-size thresholds for classifying banks as small, intermediate, or large, which would reduce the compliance burden for a substantial number of institutions. The proposal also seeks to narrow the focus of CRA evaluations to a bank’s core credit services and major product lines, while tightening the criteria for community development grants to prevent what some critics see as politically motivated donations to advocacy groups.
For sophisticated counsel and their banking clients, this divergence among top regulators is a critical development. If finalized, the proposal would subject national banks and FDIC-supervised institutions to different rules than state-chartered banks in the Federal Reserve System. This could complicate compliance strategies, particularly for institutions considering mergers or acquisitions. Counsel should monitor the public comment period, which closes October 13, 2026, and watch for the Federal Reserve’s anticipated separate action.