Friday’s joint proposal from the OCC and FDIC moves the CRA’s asset line from $412 million to $1 billion, exempting hundreds more banks from community development requirements outright. A new “intermediate” tier extends the lighter exam track to banks holding up to $10 billion in assets.
The old yardstick measured nearly every bank with real community lending exposure. The new one measures far fewer. Under the OCC and FDIC’s proposal, large banks documenting community development grants must show recipients keep overhead costs at 15% or less, aimed at groups the agencies label “activist.” Exams also drop deposit services from the retail-services review and focus purely on credit.
I’ve watched this rulemaking pendulum swing since the OCC’s failed 2020 solo attempt, which advocates called “awkward, disjointed and rushed.” Biden-era regulators rescinded it in 2021, wrote their own version, then watched state banking groups sue in 2024. The OCC and FDIC dropped their appeal in that suit last month, clearing the runway for this rewrite. The Fed didn’t sign Friday’s proposal, meaning successive administrations have tried and failed to get all three CRA regulators on one page.
NCRC’s Jesse Van Tol called it a proposal that “dramatically weakens banks’ obligations to invest in working-class communities,” landing two weeks after new affordable-housing measures became law. Comments are open for 60 days.
Worth reading the grant-overhead language closely if your bank funds community partners: the 15% threshold will decide who still qualifies for CRA credit.
Rebecca Lauren