ICBA, the Independent Bankers Association of Texas, Texas Bankers Association, Amarillo Chamber of Commerce, American Bankers Association, U.S. Chamber of Commerce, and Longview Chamber of Commerce filed a lawsuit against the federal banking regulators for exceeding their statutory authority with their recent Community Reinvestment Act final rule.

About the Filing: Filed in the Northern District of Texas, the complaint asks the court to vacate the final rule and seeks a preliminary injunction to pause the rule while the court decides the merits of the case. The complaint explains how the new rule will limit future bank lending and identifies how the regulatory agencies exceeded their statutory authority in violation of the Administrative Procedure Act.

Impact of New Rules: In a national news release, ICBA President and CEO Rebeca Romero Rainey said that while ICBA and community banks support agency efforts to modernize CRA rules, the unnecessarily complex evaluation could force banks to close branches or reduce product offerings. She said in a separate message to community bankers that the final rule disregards the need for tiered regulation and ignores many of the concerns ICBA raised in its comment letter to the agencies, which is why ICBA must continue the fight.

Background: Released in October 2023, the CRA final rule is largely scheduled to take effect in April, requiring bank compliance by Jan. 1, 2026. In a news release responding to the final rule in October, ICBA said the rule does not sufficiently differentiate between community banks and the nation’s largest institutions.

Outlook: Information and resources on the lawsuit are available on ICBA’s CRA webpage. ICBA will provide updates on the case as it proceeds.