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Since 1977 the Community Reinvestment Act has steered trillions of dollars into neighborhoods across our country helping to reinvigorate those communities by meeting their credit needs and investing in vital community development projects. Today’s joint proposal will help ensure CRA remains an effective and relevant tool to encourage more lending, investment, and services in the communities banks serve, including low- and moderate-income (LMI) neighborhoods.

Today’s proposal is an important step toward making CRA work better for everyone and reflects more than 18 months of work by dozens of dedicated staff at the federal banking agencies and thousands of stakeholders who have advocated for improvements in the current framework that was last updated in 1995.

The proposed rule would improve the CRA rules for everyone through four basic improvements. First, the proposed rule would clarify what counts for CRA credit by articulating clear standards and requiring agencies to publish an illustrative list of qualifying activities. We can eliminate the guessing by community members and banks as to what counts for CRA credit. Second, the proposal preserves assessment areas in the local areas around branches and would require banks that draw a large portion of their deposit outside of their facilities-based assessment areas to designate additional assessment areas wherever they have significant concentrations of deposits. Third, the proposal would evaluate CRA performance more objectively by assessing what portion of a bank’s retail lending is targeted to LMI individuals and areas as well as measuring the impact of that activity by comparing the value of a bank’s CRA qualifying activity with its deposits in each assessment area and at the overall bank level. This approach considers the units of activity in each major retail business line and the dollars the bank is committing to CRA activities in the communities it serves. Fourth, the proposal would improve the transparency and timeliness of reporting. Better reporting will allow stakeholders to gauge banks’ performance throughout the evaluation cycle and will help speed up regulatory decision making.

The proposal would also allow small banks the option to be evaluated under the existing framework or opt in to the proposed evaluation method.

I want to thank all of the stakeholders, advocates, academics, bankers, and staff who contributed to the development of this proposal. We have heard firsthand the concerns raised and fears expressed regarding potential changes to the CRA regulations. The proposal published today reflects many changes responsive to those concerns.

I also want to thank the Honorable Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation for her leadership and collaboration throughout this rulemaking process.

We encourage all stakeholders to read the proposal carefully and provide comment that the agencies will consider in developing a final rule.