The federal bank regulatory agencies (FDIC, Federal Reserve Board, and OCC) announced their intent to rescind the Community Reinvestment Act (CRA) final rule issued in October 2023.
The agencies cited pending litigation as their reason.
- Several banking associations and Chambers of Commerce sued to block the 2023 final rule, arguing, among other things, that the agencies exceeded their statutory authority.
- On March 29, 2024, a federal court stayed the implementation of the new CRA Regulations.
Why it matters: About 85 percent of LIHTC investments are CRA-motivated.
What’s next:
- Due to the federal court stay on implementation, the banking community has largely operated under the prior CRA framework and will continue to do so.
- We expect the agencies to undertake new rulemaking and will be heavily involved in the process.
Go deeper: In the Loper Bright Enterprises v. Raimondo 2024 decision, the Supreme Court overturned the “Chevron deference doctrine,” a legal principle established in 1984 that instructed courts to give federal agencies wide leeway when implementing ambiguous or vague statutes enacted by Congress. Given this, the CRA plaintiffs were more likely to succeed in their lawsuit against the agencies.
