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Community Highlights

Richmond Fed Holds CRA Listening Sessions

The Richmond Fed joined other Banks across the Federal Reserve System in spreading the word last fall and through early this year about an opportunity to offer feedback on proposed revisions to the Community Reinvestment Act.

The Federal Reserve Board began the first step of modifying the Community Reinvestment Act (CRA) by issuing an Advance Notice of Proposed Rulemaking (ANPR) in September 2020. Created in 1977 to encourage financial institutions to help meet the credit needs of the communities they serve, including low- and moderate-income neighborhoods, the CRA remains a central piece of legislation. This current review will lead to the first revision in 25 years, making the ANPR comment period vitally important.

To support the ANPR’s written comment period, which ended in February, the Community Development department and the Supervision, Regulation and Credit department of the Richmond Fed hosted five virtual listening sessions. More than 75 community-based organizations and financial institutions throughout the Fifth District participated and shared their perspectives about the proposed modernization. Additionally, the public was invited to provide written comments. The ANPR precedes the Notice of Proposed Rulemaking — or NPR — and then finally the implementation of a final rule.

“Community-based organizations play an important role in our District,” said Christy R. Cleare, the Richmond Fed’s assistant vice president and Community Affairs Officer. “The listening sessions provided an opportunity for them to share their perspectives on specific changes that could further strengthen their communities.”

Brent Hassell, an assistant vice president in the Bank’s SRC department, said the comment period also provided a critical opportunity for financial institutions to weigh in.
“Given the important role that banks play in serving their communities, getting input from financial institutions provided valuable insight about how modernization could positively impact their ability to serve the communities where they operate.”

During the sessions, stakeholders provided input on the following CRA modernization goals:

  • Modernize assessment areas to reflect changes in the banking industry, including internet and mobile banking, while maintaining a focus on branches;
  • Tailor evaluation framework to bank size and business model;
  • Evaluate impact of activities through qualitative process, and increase clarity, consistency and transparency through use of quantitative measures;
  • Increase certainty about what counts for CRA consideration and retain focus on activities that benefit low- and moderate-income communities;
  • Increase clarity, consistency and transparency by encouraging activity in all assessment areas and by reflecting any illegal credit practices in ratings; and
  • Increase clarity, consistency and transparency while minimizing data collection and reporting burden.

More information about the CRA and CRA modernization efforts can be found in a series of blog posts on www.fedcommunities.org.

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