Why Proposed Changes to the Community Reinvestment Act Matter for Utah

The Community Reinvestment Act has played an important role for decades in encouraging banks to meet the credit needs of the communities they serve, including low- and moderate-income neighborhoods. Today, proposed changes from the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) could significantly change how banks are evaluated for that work.

The agencies say the proposal is intended to reduce regulatory burden, particularly for community banks, while focusing CRA evaluations more closely on lending. Among other changes, the proposal would raise the threshold for a “small bank” from $412 million to $1 billion in assets and the threshold for a “large bank” from approximately $1.65 billion to $10 billion. Banks with $10 billion or less in assets would also be exempt from certain CRA data collection and reporting requirements.

For Utah’s housing and community-development sector, these changes deserve serious attention.

The National Community Reinvestment Coalition (NCRC) estimates that the new thresholds would eliminate community-development evaluations for roughly 814 banks and reduce the level of examination for hundreds more. NCRC argues that this could reduce incentives for investments supporting affordable housing, community development, small businesses and services in low- and moderate-income communities.

The proposal would also change how community-development grants are treated. For larger banks, qualifying grants would generally need to be connected to a specific project or program, with limits related to administrative and indirect expenses. Community organizations have raised concerns that these restrictions could make flexible operating support more difficult to obtain.

Another area receiving scrutiny is CRA strategic plans. NCRC’s analysis found proposed benchmarks substantially below historical community-development activity for some banks, raising questions about whether future standards could encourage lower levels of investment. The organization describes its estimates as modeling scenarios rather than predictions of actual reductions.

Housing affordability requires strong partnerships among government, financial institutions, developers, nonprofits and communities. Changes to CRA can affect how capital reaches affordable housing and underserved communities, making public participation in this rulemaking especially important.

We encourage Utahns to learn about the proposal, contact their U.S. Senators and Representative to share their views, and submit comments directly to federal regulators. Public comments on the proposed CRA rule are currently due October 13, 2026.

Our communities should have a meaningful voice in decisions that shape access to housing, credit and community investment.