CRA Final Rule-Changes Effective April 1, 2024
After decades in the making, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Federal Reserve issued a final rule that purports to modernize the Community Reinvestment Act to address significant changes in the banking industry that have taken place since the last comprehensive interagency update in 1995.1
Per the agencies, the final rule will accomplish eight key objectives:
- Strengthen the achievement of the core purpose of the statute.
- Adapt to changes in the banking industry, including the expanded role of mobile and online banking.
- Provide greater clarity and consistency in the application of the regulations.
- Tailor performance standards to account for differences in bank size, business models and local conditions.
- Taylor data collection and reporting requirements and use existing data whenever possible.
- Promote transparency and public engagement.
- Confirm that CRA and fair lending responsibilities are mutually reinforcing.
- Promote a consistent regulatory approach that applies to all banks regardless of regulator.
MANDATORY COMPLIANCE DATES
While most requirements in the final rule take effect Jan. l, 2026, there are a few provisions that are effective April 1, 2024 – just a few short months away. Most of the changes involve the CRA public file contents. Each bank’s CRA Public File must include the following (changes appear in italics):
- All written comments received by the public for the current and each of the prior two calendar years that relate to the bank’s CRA performance. However, the final rule now requires banks to update these comments on a quarterly basis.
- A copy of the public section of the bank’s most recent CRA Performance Evaluation.
- A list of bank branches, their street addresses and census tracts (formerly referred to as geographies).
- A list of branches opened or closed by the bank for the current year and each of the prior two calendar years, including their street addresses and their census tracts (formerly referred to as geographies). This list too must now be updated quarterly.
- A list of retail banking services, including hours of operation, available loan and deposit products, and transaction fees, generally offered at the bank’s branches and a description of material differences in the availability or cost of services at particular branches, if any. At its option, the bank may include information regarding the availability of alternative systems for delivering retail banking services (now referred to as mobile or online banking, loan production offices, and bank-at-work or mobile branch programs).
- A map of each facility-based assessment area showing boundaries of the area and identifying the census tracts (formerly referred to as geographies), either on a map or in a separate list.
- For CRA reporters: Written notice that the bank’s CRA Disclosure Statement pertaining to the bank, its operations and operating subsidiaries, and any other affiliates, may be obtained on the Federal Financial Institutions Examination Council’s website.
- For HMDA reporters: A written notice that the bank’s HMDA Disclosure Statement may be obtained on the CFPB’s website. Also include, if the bank’s regulator considered the home mortgage lending of the bank’s operations subsidiaries, operating subsidiaries or affiliates; the names of each operations subsidiary, operating subsidiary or affiliate; and a written notice that their HMDA Disclosure Statements are also available on the CFPB’s website.
- For banks considered Small:2 The bank’s loan-to-deposit ratio for each quarter of the prior calendar year and, at its option, additional data on Its loan-to-deposit ratio.
- For banks approved to be evaluated under a strategic plan: A copy of the strategic plan.
- For a bank with less than a Satisfactory CRA Rating: A description of its current efforts to Improve its performance, updated quarterly.
The IBA has updated the 2024 CRA Public File checklist to reflect these changes.
in addition to these minor changes to the CRA Public File contents, the final rule makes a significant change to the location of the bank’s Public File. Effective April 1, 2024, each bank that has a public-facing website is required to have their full CRA Public File available for public inspection on their website. For banks that don’t have a public-facing website, the current rules apply. As a reminder, in this case, the bank must maintain the full public file at its main office and at least one interstate branch. A modified public file must be located at each branch which includes a copy of the public section of the bank’s most recent CRA Performance Evaluation and a list of services provided by the branch. The rule retains the requirement to make copies available upon request, in either paper or digital form acceptable to the requester, at no charge. The rule does allow for a reasonable fee not to exceed the cost of copies and mailing if provided in a paper format.
While the final rule states that each bank must update its CRA lobby notice, the regulators have indicated that banks can continue to use the existing lobby notices until Jan. 1, 2026, as Appendix B, which includes the model notice language, has not yet been updated to include the revised language.
The other major change that is effective April 1, 2024, applies only to Large Banks.3 The final rule states that, when drawing the bank’s assessment areas(s), a Large Bank must use full counties. Only banks not considered Large Banks can continue to use partial counties in drawing their assessment area as long as they use full census tracts, and the assessment area does not reflect illegal discrimination.
2A Small Bank is a bank that, as of Dec. 31 of either of the prior two calendar years, has assets of less than $1.564 billion (2024 threshold). This includes both small banks and intermediate small banks. Threshold is subject to change annually.
3A Large Bank is a bank that, as of Dec. 31 of both of the prior two calendar years, has assets of $1.564 billion or more (2024 threshold). Threshold is subject to change annually.
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