ICBA Urges Regulators to Ensure CRA Reform Minimizes New Community Bank Reporting Burdens

ICBA Press Release Banner 2020

Washington, D.C. (Dec. 1, 2022) — With FDIC Acting Chairman Martin Gruenberg testifying before Congress that he expects regulators to release a final rule modernizing Community Reinvestment Act regulations during the early part of next year, the Independent Community Bankers of America (ICBA) reiterated its call for the federal banking agencies to issue a uniform rule that minimizes new data collection and reporting burdens for community banks.

“ICBA and the nation’s community banks support agency efforts to modernize Community Reinvestment Act regulations, though policymakers should recognize that any major regulatory overhaul will inevitably create disproportionate implementation costs for community banks,” ICBA President and CEO Rebeca Romero Rainey said. “Regulators should continue working to tailor CRA modernization, simplify compliance for community banks, and ensure their final rule meets the needs of all community banks and the communities they serve—as ICBA advocated in its August comment letter.”

In its formal comment letter earlier this year, ICBA called on regulators to:

  • Allow institutions with less than $10 billion in assets to opt into new CRA tests or to retain their current exam framework.

  • Raise the asset thresholds for small and intermediate banks to $750 million and $2.5 billion, respectively, to keep pace with inflation and industry consolidation.

  • Create a qualifying activities list and confirmation process to increase certainty of what counts for credit.

  • Finalize a provision allowing banks to receive credit for community development credit outside their assessment areas.

  • Raise the loan volume thresholds for delineating Retail Lending Assessment Areas, which are designed primarily to evaluate large, internet banks and are not appropriate for community banks.

  • Grant credit for activities conducted in partnership with minority depository institutions, women-owned depository institutions, and certified community development financial institutions.

  • Apply heightened scrutiny to credit union acquisitions of community banks due to tax-exempt credit unions’ exemption from CRA rules.

ICBA looks forward to continuing to work with regulators as the CRA rule is finalized.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.