ABA Supports Return to 1995 CRA Framework
The American Bankers Association ("ABA") urged federal banking regulators to rescind the 2023 Community Reinvestment Act ("CRA") Rule and reinstate the 1995 CRA framework.
On July 18, 2025, the FDIC, the Federal Reserve Board and the Treasury Department proposed to rescind the 2023 rule and reestablish the 1995 standards with updated asset thresholds and technical corrections. (See coverage.)
As previously described, the 2023 Rule covers activities such as the origination and purchase of home mortgage loans, multifamily loans, small business loans, and small farm loans, as well as automobile lending. It also applies to community development loans, investments, and services and classifies banks by size so they can be evaluated on their performance in meeting the credit needs of their communities.
In a comment letter endorsing the proposed rulemaking, the ABA argued that the 2023 Rule:
- Exceeded Statutory Authority by improperly expanding assessment areas beyond branch and deposit-taking locations and evaluating deposit products, contrary to the CRA’s statutory focus on credit;
- Violated the Administrative Procedure Act ("APA") as arbitrary and capricious because the process lacked fair notice on evaluation metrics, established an unreasonable comparative testing methodology, and failed to adequately consider potential negative impacts such as disincentivizing lending in certain areas;
- Created Unnecessary Complexity through an overly complicated framework that undermines the original goal of CRA modernization—clarity, consistency, and transparency.
The ABA argued that returning to the 1995 rule would better align with Congressional intent behind the CRA, would provide a workable structure for banks, and would allow regulators to pursue measured improvements without risking statutory or APA conflicts. The ABA also proposed several improvements that do not require regulatory changes, including: (i) making internal agency guidance publicly available, (ii) increasing transparency in how "performance context" is analyzed in examinations, (iii) creating a cumulative and searchable list or database of CRA-qualifying activities, (iv) establishing a "pre-clearance process" to confirm CRA eligibility for new or innovative activities, and (v) standardizing documentation requirements across agencies.