Three federal bank regulators will propose to rescind the Community Reinvestment Act final rule due to pending litigation, they announced Friday morning.
The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. also plan to reinstate the CRA framework that existed prior to the final rule, which was issued in October 2023.
“The agencies will continue to work together to promote a consistent regulatory approach on their implementation of the CRA,” according to a joint announcement.
The October 2023 final rule was the first major revision to CRA regulations, which were established in 1977, in nearly three decades.
Michael Barr, who was the Fed’s vice chair for supervision at the time the rule was finalized, called the final rule a “win-win for all” when it was announced.
“Fair lending is safe and sound lending, and the CRA regulations we promulgate today will help make the financial system safer and fairer,” he said at the time.
But updates drew ire and legal action from industry groups and were also blocked by a Texas judge. Regulators postponed their implementation until 2026.
Spokespeople for the agencies did not immediately respond to requests for comment.
