Banking and Finance Law Daily Wrap Up, COMMUNITY DEVELOPMENT—Coalition asks Connecticut DOB for climate financing CRA credit, (Sep 1, 2026)

By Charles A. Menke, J.D.

The groups say the department could act through guidance or an industry letter, without amending the state’s Community Reinvestment Act or otherwise adding requirements for covered institutions.

Sixteen organizations have asked the Connecticut Department of Banking (DOB) in an Aug. 31, 2026, letter to make climate mitigation and adaptation financing eligible for positive consideration under Connecticut’s Community Reinvestment Act (CRA). The letter proposed that the department issue guidance or an industry letter, saying that amendments to the state’s CRA are not required.

Connecticut’s CRA examinations cover state-chartered banks and credit unions and assess how institutions meet community credit needs, the letter noted. The coalition said the requested clarification would give covered institutions more detail about the activities they can pursue for CRA credit without imposing new requirements.

The coalition tied its request to what it described as disproportionate climate impacts on low- and moderate-income communities. They argued that climate-related financing in those communities should qualify for CRA credit because “bluelining”—defined in the letter as limiting credit creation and investment in climate-vulnerable areas—can worsen credit barriers. The groups also said worsening climate impacts threaten financial-service availability and argued that institutional withdrawal from vulnerable communities can deprive them of services needed to build resilience and risk fair-lending violations.

The request divides the financing into two categories: climate mitigation financing that reduces greenhouse gas emissions, with solar and energy-efficiency upgrades among the examples, and climate adaptation financing that makes property and communities more resilient, including flood mitigation and home hardening.

The groups pointed to Connecticut’s directive that the DOB assess community-reinvestment performance using the applicable federal CRA methodology. They said federal CRA regulations in place since 1995 already provide multiple ways for banks to receive positive consideration for climate mitigation and adaptation financing. The signatories therefore asserted that clarifying the eligibility of those activities falls within the department’s authority.

The coalition also cited New York and Illinois, where it said climate-related investments in low- and moderate-income communities already qualify under state CRA programs. It argued that comparable treatment in Connecticut would support the state’s emissions-reduction and climate-resilience goals and encourage investment in low- and moderate-income communities and communities of color affected by climate change.

Companies: Americans for Financial Reform Education Fund; Building Neighborhoods Together; Center for International Environmental Law; Connecticut Citizen Action Group; CT Coalition for Economic and Environmental Justice; Greater Bridgeport Community Enterprises; National Community Reinvestment Coalition; Natural Resources Defense Council; Neighborhood Housing Services of New Haven; NEST; New London Homeless Hospitality Center; North Hartford Partnership; Public Citizen; Sierra Club Connecticut Chapter; The Greenlining Institute; Third Act CT

RegulatoryActivity: BankingOperations CommunityDevelopment ConnecticutNews ESGNews FinancialStability GCNNews Loans IllinoisNews NewYorkNews StateBankingLaws