The Community Reinvestment Act final rule issued last fall is unnecessarily complex and would impose disproportionate regulatory burdens on community banks, Federal Reserve Governor Michelle Bowman said.

CRA Remarks: Speaking in Miami, Bowman said:

  • The CRA final rule applies the same regulatory expectations for small banks as it does for the largest institutions, radically departing from other regulations.

  • This intentional blurring of commonly accepted regulatory standards will constrain the resources that community banks can devote to supporting their communities.

  • The rule would increase regulatory requirements without a data-supported analysis that justifies such a recalibration.

Additional Concerns: During Bowman’s remarks, she also said:

  • The Fed’s proposal to lower the maximum interchange fee for debit card transactions could reduce access to banking services.

  • Regulators should evaluate the merger review process to promote efficiency and fairness.

  • Interagency climate risk principles targeting institutions with at least $100 billion in assets state that “all financial institutions, regardless of size, may have material exposures to climate-related financial risks.”

ICBA Views:

  • ICBA and other groups have filed a lawsuit against federal regulators for exceeding their statutory authority with their recent CRA final rule.

  • ICBA has expressed deep concerns about the impact of the debit card interchange proposal on community banks and the communities they serve.

  • ICBA has repeatedly urged regulators to consider competition from credit unions and other nonbank institutions as they reconsider policies on bank mergers, including in comment letters to the FDIC and the Justice Department.

  • ICBA has said it is troubled by the impact the climate principles may ultimately have on community banks.