Trump administration plans major overhaul of civil rights-era banking rules

Key Points:

• The Trump Administration proposed significant changes to the Community Reinvestment Act (CRA), reducing the number of banks required to fully comply by raising the small bank asset threshold from $412 million to $1 billion, thereby exempting about 800 banks from parts of the law.
• The revisions would shift regulatory focus more toward lending in specific communities rather than branch openings or deposit levels, and reclassify banks with $1 billion to $10 billion in assets as intermediate banks.
• New rules would restrict the types of community development groups banks can fund, emphasizing local over national organizations, and require banks to provide detailed information on grant recipients to increase transparency.
• Critics, including the National Community Reinvestment Coalition, argue these changes politicize grant-making and may reduce bank support for low-to-middle income and rural communities, potentially undermining the CRA’s original intent to combat redlining.
• The proposal, announced by the OCC and FDIC without the Federal Reserve's participation, will undergo a 60-day public comment period before finalization, marking the first major CRA update in nearly 30 years.