The OCC’s and FDIC’s Proposed Amendments to the Community Reinvestment Act Regulations: Five Things Banks Should Know Now

On July 31, 2026, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) issued a joint notice of proposed rulemaking to revise their regulations implementing the Community Reinvestment Act (CRA) (the Proposed Rule).¹ This is the fourth significant rulemaking effort in less than a decade to revise some or all of the federal regulatory framework implementing the CRA, and none of the prior efforts resulted in a new framework that remains in effect today.²

However, the Proposed Rule is considerably more modest than the agencies’ 2023 rulemaking. Rather than redesigning the CRA from the ground up, the OCC and FDIC are proposing targeted revisions to the framework that essentially has been in place since 1995, most notably by raising asset thresholds in ways that would reduce CRA testing and reporting obligations for many banks.

Below are five things banks should know about the Proposed Rule.

1. The Federal Reserve did not join the Proposed Rule, but a permanent divergence is unlikely.

The Federal Reserve did not join the Proposed Rule and has not publicly explained its absence. The agency is proceeding separately with respect to the agencies’ still-pending 2025 proposal to rescind the 2023 CRA rule.³ It remains unclear whether the Federal Reserve’s absence from the Proposed Rule reflects a preference to resolve the status of the 2023 rule before considering further CRA amendments, disagreement with particular provisions of the Proposed Rule, or a decision to take a different approach to CRA modernization. The OCC and FDIC are also seeking to resolve the litigation over the 2023 rule through a final judgment that the Federal Reserve has not joined,⁴ another indication that the agencies are currently proceeding on different tracks.

Notwithstanding the above, a final OCC/FDIC rule without corresponding Federal Reserve action would represent a significant departure from the agencies’ historically coordinated approach to the CRA’s implementing regulations. Although regulatory and supervisory differences among the federal banking agencies are not unprecedented, we would not expect different CRA regimes to become a permanent feature of federal bank regulation. If the OCC and FDIC ultimately finalize the Proposed Rule, our expectation is that the Federal Reserve would likely take action to avoid a lasting split in the CRA standards applicable to federally supervised banks.

2. The Proposed Rule would substantially modify asset-based thresholds, materially reducing compliance obligations for many banks reclassified as small or intermediate banks.

The OCC and FDIC describe the Proposed Rule as targeted and note that much of the existing CRA architecture would remain, including the basic performance tests and the largely branch-based assessment-area framework.⁵ What would change significantly is which banks are subject to which requirements. The Proposed Rule would (1) raise the small-bank threshold from less than $412 million to less than $1 billion, (2) replace the current intermediate-small-bank category with an “intermediate bank” category covering banks from $1 billion through $10 billion, and (3) define a “large bank” as a bank with more than $10 billion in assets.⁶ As a result, under the Proposed Rule, nearly 80% of OCC- and FDIC-supervised banks would be treated as small banks, while only approximately 2.4% would be treated as large banks.⁷ Of note, the Proposed Rule also entertains the possibility of higher thresholds, including a “large bank” threshold of $30 billion⁸ that would align with recent agency policies using $30 billion as a threshold for certain community-bank supervisory approaches. 

Under the Proposed Rule, small banks would continue to be evaluated solely under the tailored small-bank lending test. Banks reclassified from the current intermediate-small-bank category into the small-bank category would therefore no longer be subject to the community development test. Intermediate banks would remain subject to both a tailored lending test and a tailored community development test. Only large banks would remain subject to the more comprehensive lending, investment, and service tests.⁹ The Proposed Rule would also exempt small and intermediate banks from the CRA data collection, maintenance, and reporting requirements that apply to large banks.¹⁰ For banks that would move from the large-bank category to the intermediate-bank category under the Proposed Rule, these changes could materially reduce the resources required to administer their CRA compliance programs.

3. The Proposed Rule would place greater emphasis on more specific lending standards — and less on deposit services — for performance evaluation purposes.

The Proposed Rule would make several changes to how CRA performance is evaluated. These changes generally are intended to increase the focus of the CRA performance evaluation on lending activities. Most notably, the agencies propose to narrow the retail-banking-services component of the service test to focus on credit services and the availability and distribution of retail banking facilities, rather than deposit services.¹¹

The proposal would also establish more specific standards for determining which lending products examiners evaluate. The agencies propose to limit lending-test evaluations to a bank’s “major product lines,” but request comment on two methods for identifying those products: one would use bank-level loan volume and count to identify the two largest product lines; the other would permit major product lines to vary by assessment area based on both quantitative measures and factors such as the bank’s business strategy, lending capacity, and role in meeting local credit needs.¹² Under either approach, consumer lending generally would be evaluated only if consumer loans constitute more than 50% of the bank’s retail lending by both dollar volume and loan count, unless the bank elects to have consumer lending considered.¹³ The agencies would establish 30 loans as presumptively sufficient to conduct a “meaningful” lending analysis, while preserving examiner discretion to evaluate smaller samples where appropriate.¹⁴

These changes could affect not only examination methodology but also how banks allocate CRA-related resources. The OCC itself acknowledges that the proposal could shift CRA-motivated activity toward lending and credit services and away from certain community development activities — particularly grants — and away from deposit services.¹⁵

4. Community development would become more prescriptive, particularly for grants.

The Proposed Rule would also revise how community development activities qualify for CRA consideration and how those activities are evaluated. 

Among other changes, the proposal would codify a new “responsiveness” standard that consolidates several qualitative factors currently considered in CRA examinations — including complexity, innovativeness, flexibility, and impact — and would also consider the quality of an activity, including its success in meeting an identified credit or community development need.¹⁶ The proposal would also establish an optional process through which banks could seek agency confirmation regarding whether particular loans, investments, grants, or services qualify for CRA consideration.¹⁷

The Proposed Rule would narrow the circumstances in which community development grants receive CRA consideration. A qualifying grant generally would need to be used directly by the recipient for a program, project, or initiative with a primary purpose of community development and, subject to specified exceptions, benefit the bank’s assessment area. In particular, large banks would generally receive CRA credit for a community development grant only if the recipient’s indirect costs for administering the grant do not exceed 15%. Banks would also be required to document how grant proceeds are used and, for large banks, the recipient’s indirect costs.¹⁸

5. Strong opposition from community groups could increase litigation risk if the Proposed Rule is finalized substantially as written. 

Several community organizations have already signaled substantial opposition to the Proposed Rule.¹⁹ That opposition, together with the recent history of litigation over CRA rulemakings, signals the possibility that community groups may seek to challenge any final OCC and FDIC rules that retain the Proposed Rule’s key provisions. 

Next Steps

Comments on the Proposed Rule are due by October 13, 2026. We expect that many banks — particularly those that would move into a less burdensome asset-based category — may consider submitting comments in support of the Proposed Rule, just as many community and consumer advocacy organizations may submit comments opposing the agencies’ approach in the Proposed Rule. The Federal Reserve’s next steps also will be watched closely, and may have a material impact on the timing and substance of any final rule that the OCC and FDIC may pursue.

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We will continue to review the Proposed Rule closely. Please reach out to any of the authors or your current Arnold & Porter contact with any questions regarding the Proposed Rule.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.