I know what I will be doing all this week. Right of the bat, I observe that the reporting threshold would rise to banks with assets greater than $10 billion. For the year 2024 (the latest year for which CRA data is currently available (July 31, 2025) 731 financial institutions reported CRA activity and only 157 had assets exceeding $10 billion.
This is a major mistake.
It means the only public data available will be the activity of the largest banks. Consequently, since examiners compare a lender's lending to other reporting lenders within the examined institution's assessment area(s), the performance of only the largest banks will drive the benchmark data.
The other CRA-regulated banks will be judged in comparison to the activity of banks hundred or more times larger than they are. Does anyone think this is a fair comparison? And what about the community banks who want to be judged in comparison to their peers? That won't be possible because only the mega institutions will report their CRA activity.
Not only does the proposed reporting threshold hurt banks that want to be compared to their peers, it discourages banks from actually collecting their CRA activities. This has been a big problem for decades. Of the roughly 4,300 banks in the US only 731 reported their lending activity for 2024 (including about 60 or so that voluntarily report their CRA lending). I've been advising hundreds of banks since 1994 regarding CRA. Based on my experience most non-reporting banks don't bother to collect and monitor their CRA activities until an exam is imminent. This makes the CRA Officer's job more difficult because management is reluctant to spend anything more than necessary on regulatory compliance. Ironically, the FFIEC offers free CRA data collection software. This “out of sight, out of mind” mentality will be exacerbated by the extended exam schedule with 5 or more years between exams and no data collection requirements (you don't have to report, so many bankers think they don't have to collect and they don't need to monitor their CRA activity), but all institutions must perform under CRA.
The drastic reduction in reporting lenders really hurts the institutions it is supposed to help.
The 2023 CRA Rule was way to confusing (convoluted is a more appropriate term). I haven't read all 407 pages of the proposed new rule, but it looks to me like regulators may be going in exactly the opposite direction and making CRA too superficial to be meaningful.
