Federal Banking Agencies try to dissolve the CRA rule from 2023
“The agencies will continue to work together to promote a consistent regulatory approach to their implementation of the CRA,” the agencies wrote.
The final rule of October 2023 was the first major revision of the 1977 anti-redline law in almost three decades. The original rule forced American banks to work with and financial community groups and borrowers with a low income to reverse the effects of RedLining.
The revised rule tried, among other things, to modernize the CRA by including mobile and online banking in reviews and services. It would also have reduced the number of product lines that was evaluated under a retailing test into closed-end home loans, small business loans and small farm loans.
The step of the agencies to withdraw the rule follows a lawsuit of industrial groups that wanted to block the updated legislation. A federal judge in Texas gave a provisional order to stop the changes shortly before they would have come into force in April – although most of the provisions under the revised CRA would apply on January 1, 2026.
