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The Federal Reserve Monday issued an advance notice of proposed rulemaking (ANPR) seeking public feedback on how to modernize the Community Reinvestment Act (CRA). While credit unions are not subject to the CRA, NAFCU has worked to ensure CRA requirements are not extended to credit unions and has advocated that all credit unions be allowed to add underserved areas to their fields of membership.

The Office of the Comptroller of the Currency (OCC) earlier this year released its final rule to make changes to banks' requirements under the CRA. NAFCU had called on the OCC to reconsider and postpone its rulemaking in light of the coronavirus pandemic, and also flagged concerns with the proposed CRA changes. The rule is set to take effect Oct. 1.

The Fed's ANPR indicates that the central bank is interested in providing a clearer description of qualifying CRA activities that support minority depository institutions (MDIs), community development financial institutions (CDFIs) and low-income credit unions. It specifically asks for ways to reduce burdens on smaller banks and also provides small banks in rural areas "greater clarity and flexibility" as it relates to tailoring the facility-based assessment area definition.

Fed Gov. Lael Brainard Monday gave a speech further detailing the CRA ANPR and the Fed's efforts to "strengthen, clarify, and tailor the CRA regulation to better meet the law's core purpose."

NAFCU will review the ANPR and provide feedback to ensure unbanked and underserved communities have access to financial services.

In 2018, the Treasury Department published a list of recommendations for CRA improvements that, as a result of NAFCU's advocacy, did not include extending the law to credit unions. NAFCU has consistently opposed congressional efforts that would extend the law and a policy report from the Cato Institute last year reinforced the association's position.

NAFCU will continue to advocate in the best interest of credit unions and against expanding the CRA or CRA-like requirements to the industry.