In a victory for banks nationwide, the Federal banking regulators announced their intention to withdraw the Community Reinvestment Act (CRA) final rule issued in October of 2023 and reinstate the CRA framework that existed prior to that final rule. Regulators cited the industry lawsuit from IBAT, ICBA and other trade associations as the reason for the decision to vacate the rule.
“Biden-era regulators defined overreach with the 2023 revision to CRA,” said IBAT President and CEO Christopher Williston. “The rule created a framework that disincentivized and even punished growth. It subjected banks to performance evaluation against a nationwide standard, rather than a truly considering the actions they have taken in their communities of service. This rule needed to go.”
With the announcement, it is likely that the court will dismiss the trade associations’ lawsuit in the coming weeks. While this conserves resources in the short term, it also leaves open the legal questions at the heart of our challenge to the rule, as well as the potential for a future group of regulators to issue a rule with the same framework. For today, we’ll take the win for common sense.
