OCC And FDIC Propose A New—but More Familiar—CRA Framework

On July 31, the Office of the Comptroller of the Currency (“OCC”) and Federal Deposit Insurance Corporation (“FDIC”) proposed targeted revisions to their respective Community Reinvestment Act (“CRA”) regulations. The proposal would retain the basic structure of the CRA rules that have been in place since 1995, while materially revising the asset thresholds, lending tests and standards for community development activities. The Federal Reserve did not join the proposal, creating the possibility that CRA requirements could diverge based on a bank’s charter and primary federal regulator.

The proposal is the latest chapter in the agencies’ prolonged effort to modernize the CRA regulations. In October 2023, the OCC, FDIC and Federal Reserve adopted a substantially more ambitious rule that, among other things, introduced retail lending assessment areas for banks conducting significant lending outside their branch-based assessment areas. The 2023 rule would have replaced the longstanding CRA framework with a significantly more complex and data-intensive regime.

Banking trade associations challenged the 2023 rule, arguing, among other things, that the agencies had exceeded their statutory authority by evaluating lending conducted outside the geographic areas surrounding a bank’s deposit-taking facilities and by treating deposit products as part of a bank’s record of meeting community credit needs. In March 2024, the U.S. District Court for the Northern District of Texas preliminarily enjoined the rule before its principal provisions became applicable. The agencies therefore continued to examine banks under the legacy CRA regulations.

The agencies subsequently announced that they would rescind the 2023 rule and, in July 2025, jointly proposed to replace it with the legacy framework, subject principally to technical and conforming amendments. That proposal wasn’t finalized.

The OCC and FDIC have now decided not to finalize the July 2025 rescission-and-replacement proposal. Instead, they have moved beyond a simple restoration of the old rule by proposing targeted substantive revisions described below. The OCC and FDIC also dismissed their appeal of the preliminary injunction against the 2023 rule and are seeking a final judgment that would have the result of constraining future CRA rules from assessing retail lending outside branch-based communities or assessing deposit products. The Federal Reserve Board did not join those actions or this new proposal.

Because bank size drives how complex a bank’s CRA program is, the most immediate relief for current bank CRA programs would come through substantially increased bank-size thresholds. A “small bank” generally would now have assets of $1 billion or less, while a new “intermediate bank” category would cover banks with more than $1 billion but no more than $10 billion. Only banks with more than $10 billion in assets would be treated as large banks. The agencies estimate that only 86 of the approximately 3,577 banks they supervise for CRA purposes would qualify as large banks, although those banks hold more than 85% of industry assets.

Small banks would remain subject to a tailored lending test. Intermediate banks would be evaluated under lending and community development tests, but—unlike intermediate small banks today—would need a satisfactory rating only on the lending test to receive an overall satisfactory rating of their CRA programs. Large banks would continue to be evaluated under separate lending, investment and service tests and remain subject to the associated data requirements. The proposal therefore would provide significant burden relief to most of the 636 banks that would become “intermediate banks” because the current large-bank threshold started at $1.649 billion and that threshold, under this proposed rule, has moved all the way to $10 billion.

The proposal also would preserve the existing branch-oriented assessment-area framework. Unlike the 2023 rule, it would not require retail lending assessment areas based on lending outside a bank’s facility-based footprint for banks of any size. Retail lending evaluations generally would focus on a bank’s “major product lines,” although the agencies propose alternative methods for identifying those lines. As a general benchmark, 30 loans in an assessment area would be sufficient for a meaningful evaluation, but examiners could consider fewer loans when appropriate.

Consistent with the agencies’ reading of the CRA as principally a lending statute, the large-bank service test would consider the availability of credit services, but not deposit products. The proposal also would revise the treatment of discriminatory or other illegal credit practices. CRA examiners would consider such issues through referencing both violations cited in public federal or state enforcement actions or judicial orders and, closer to existing practice, also would permit consideration of violations identified through non-public supervisory or enforcement actions.

The community development provisions contain both clarifications and new constraints. The proposal would retain the familiar categories of affordable housing, services to low- and moderate-income individuals—renamed “civic assistance”—economic development, and revitalization or stabilization. Each agency would maintain a nonexclusive list of qualifying activities and offer an optional confirmation process through which a bank could seek advance confirmation that an activity qualifies for CRA consideration.

Banks could continue to receive consideration for certain community development activities outside their assessment areas, but only after demonstrating an adequate level of activity within their assessment areas. The proposal offers alternative quantitative and qualitative methods for making that determination. Importantly, however, a bank would not be required to undertake activities outside its assessment areas to receive a satisfactory or outstanding CRA rating.

Community development grants would receive particular scrutiny. Grant proceeds would have to be used directly for a qualifying community development purpose. Large banks also would need written commitments and supporting documentation from recipients, and grants generally would not qualify if the recipient’s indirect administrative costs exceeded 15% of the grant. These requirements appear intended to ensure that CRA-motivated contributions reach the relevant communities rather than principally supporting intermediary organizations.

Finally, the proposal attempts to make strategic plans a more usable alternative by permitting preliminary agency feedback, clarifying completeness determinations and generally deeming a technically complete plan approved if the agency does not act within 60 days. Public-file requirements also would be modernized by requiring online availability rather than physical files at offices and branches.

The proposal is less a revival of the 2023 overhaul than a recalibration of the 1995 framework. It would meaningfully reduce burdens for community and regional banks, reinforce a branch-based and lending-focused interpretation of the CRA, and tighten the nexus between community development activities and local credit needs. The notable complication is the Federal Reserve’s absence: unless the agencies ultimately converge, similarly situated banks could face different CRA frameworks depending on their regulator. Comments on the proposed rule are due October 13, 2026.