Banking and Finance Law Daily Wrap Up, COMMUNITY DEVELOPMENT—ABA, NCRC offer opposing views on CRA regs in comments on EGRPRA review, (Oct 28, 2025)

By Lauren Bikoff, MLS

Federal regulators are currently undertaking an EGRPRA review of regulations regarding banking operations, capital, and the CRA.

The American Bankers Association (ABA) and the National Community Reinvestment Coalition (NCRC) have provided comments to the Federal Deposit Insurance Corporation, Federal Reserve Board, and the Office of the Comptroller of the Currency on the regulatory burden review required under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). The ABA encouraged the agencies to provide “meaningful regulatory relief” for banks, including moving forward with the proposed repeal of 2023 Community Reinvestment Act (ACA) rule and replacing it with the 1995 framework. On the other side, NCRC supports keeping the 2023 rule in place, while proposing making “common-sense” reforms.

EGRPRA requires federal regulators to review regulations every 10 years to identify any outdated or otherwise unnecessary regulatory requirements for their supervised institutions. The regulations currently under review relate to banking operations, capital, and the CRA.

CRA. In July 2025, the agencies proposed to amend the CRA regulations by: (i) rescinding the CRA final rule previously adopted by the Fed in October 2023 (the 2023 CRA Final Rule); and (ii) replacing the 2023 CRA Final Rule with the CRA framework that existed prior to the 2023 CRA Final Rule (the 1995 framework) (see Banking and Finance Law Daily, July 16, 2025). These actions would, according to regulators, “alleviate the uncertainty around the CRA regulatory framework,” “limit overall regulatory burden for banks,” allow financial institutions “to maintain their current policies and procedures,” and provide different methods than the 2023 CRA Final Rule “to evaluate a bank’s CRA performance depending on bank asset size and business strategy.”

The NCRC believes that the agencies should “reverse their plan to repeal the 2023 regulations, as these updates made the CRA more relevant to modern banking.” For the CRA to stay relevant, “it must account for how banks offer loans and services, which for an increasing number of institutions is outside of branch networks,” wrote Jesse Van Tol, NCRC President and CEO. “The agencies should take no actions to weaken CRA regulations given its many benefits and low compliance costs.”

In its comments, the ABA stressed that it supports the repealing of the 2023 CRA Final Rule and replacing it with the 1995 framework. “While the modernization effort was unsuccessful, it highlighted the strengths of the legacy rule as well as areas where targeted updates are needed,” wrote Tyler Mondres, ABA’s Senior Director, Prudential Regulation. “After the 1995 framework is reinstated, we also request that the agencies resume meeting with trade associations and bankers to discuss CRA topics and address banker questions. This dialogue will be especially important as more banks pursue a hybrid business strategy that combines online lending, traditional bank branches, and non-branch funding sources.”

Banking operations, capital. While the NCRC solely focused on the CRA, the ABA comments also touched on the EGRPRA review of banking operations and capital requirements. The group recommends that the Fed rescind its rule implementing Regulation II, which sets standards for debit card interchange fees; and reform Regulation CC, which regulates leverage ratio requirements, stress tests, long-term debt requirements and more. “We encourage the agencies to … identify broader rules and requirements that hinder, rather than help, banks in effectively serving their customers,” Mondres concluded.

Companies: American Bankers Association; National Community Reinvestment Coalition

RegulatoryActivity: BankingOperations CapitalBaselAccords CommunityDevelopment CreditDebitGiftCards DepositInsurance FederalReserveSystem FinancialStability Loans Mortgages PrudentialRegulation