Ready or Not, CRA Modernization Is at the Door

Banks could receive many more failing grades from their regulators under a recently proposed overhaul of the Community Reinvestment Act (CRA).

That’s partly because, according to a joint notice of proposed rulemaking from bank regulators on Thursday, banks’ performance would be judged by where they lend, not just where they have branches. Doing so would result in 32% of examined lenders receiving a “Needs to Improve” score, compared to the 16% earning that mark for their retail performance from 2017 to 2019, bank regulators estimated.