Academic journal article Federal Reserve Bulletin

Request for Comments on Proposed Revisions to Regulations Implementing the Community Reinvestment Act

Academic journal article Federal Reserve Bulletin

Request for Comments on Proposed Revisions to Regulations Implementing the Community Reinvestment Act

Article excerpt

The Federal Reserve Board invited public comment on February 25, 2005, on proposed revisions to its regulations implementing the Community Reinvestment Act (CRA) that are intended to reduce regulatory burden on community banks while making CRA evaluations more effective in encouraging banks to meet community development needs.

The Board's notice of proposed rulemaking is identical to proposals approved by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation on February 22, 2005. The proposal would introduce the following:

* Exempt banks with assets between $250 million and $1 billion, referred to as intermediate-small banks, from the data reporting obligations the current CRA regulations imposed on banks with assets larger than $250 million.

* Subject intermediate small banks to a two-part test (retail lending and community development) instead of the current three-part test (lending, investment, and service). For intermediate-small banks, a satisfactory community development rating, as well as a satisfactory retail lending rating, would be necessary for an overall rating of "satisfactory. …

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