The October 2023 final rule represented the first significant update to the Community Reinvestment Act (CRA) since its inception in 1977. It aimed to modernize the law by incorporating assessments of mobile and online banking practices. Additionally, it proposed narrowing the retail lending test to focus on specific product lines like home loans and small business loans. However, the rule faced a legal challenge from industry groups leading to its withdrawal after a federal judge issued a temporary injunction, delaying the implementation of many changes originally scheduled for 2026.
The agencies will continue to work together to promote a consistent regulatory approach on their implementation of the CRA, the agencies wrote.
The October 2023 final rule was the first major revision to the 1977 anti-redlining law in nearly three decades.
Among other things, the revised rule sought to modernize the CRA by including mobile and online banking in assessments of products and services.
The agencies' move to withdraw the rule follows a lawsuit from industry groups that sought to block the updated legislation.
#community-reinvestment-act #regulatory-changes #anti-redlining #banking-regulations #legal-challenges
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