On October 24, a final ruling concerning regulations implementing the Community Reinvestment Act was issued by the three major governing bodies of the United States banking system, namely the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC). This report comes directly from Ballard Spahr LLP’s recent communication.
Although the effective date of the final rule is set for April 1, 2024, compliance with the majority of the ruling’s provisions is not required until January 1, 2026. This lengthy implementation period demonstrates the complexity and significance of the rule itself.
The Community Reinvestment Act (CRA), initially enacted in 1977, was designed to encourage commercial banks and savings associations to help meet the needs of the local communities in which they are chartered, with a particular emphasis on low- and moderate-income neighborhoods.
The newly issued final rule illustrates these regulators’ ongoing commitment to the goals and principles of the CRA while ushering in changes tailored to the evolving dynamics of the modern banking system.
As experienced legal professionals, understanding these changes and the possible implications for your corporation or law firm is critical. While discussions often center around federal laws, regulatory changes like this act as keen reminders of how systemic financial policy can impact our everyday practice.
With such in-depth and consequential changes being proposed, it is recommended that all involved professionals keep close tabs of further updates, as fine details may yet be subject to adjustment.