Comment on Proposed CRA Changes

October 5, 2026

Chief Counsel’s Office
Attention: Comment Processing
Office of the Comptroller of the Currency
400 7th Street, SW, Suite 3E-218
Washington, DC 20219

COMMENT ON THE PROPOSED COMMUNITY REINVESTMENT ACT (CRA) REGULATORY CHANGES

To: Office of the Comptroller of the Currency & Federal Deposit Insurance Corporation

On behalf of the board, staff, and constituencies of the Louisville Urban League–residents of Jefferson County, Kentucky, and the many surrounding counties we serve–I urge that any changes to the Community Reinvestment Act strengthen, rather than dilute, the impact on communities it was designed to serve. Attached to this letter is a detailed list of problematic proposed changes and recommendations to adopt instead. 

Title VIII of the Housing and Community Development Act provided a powerful platform for financial institutions, local governments, and developers to work together to expand investment in the nation’s small businesses, workforce, and housing infrastructure. Billions of dollars have been directed to highly leveraged projects that have revitalized thousands of neighborhoods and local economies. 

By raising asset size thresholds, the proposed changes to the CRA would significantly reduce the expectations and accountability placed on banks to invest in and serve low- and moderate-income communities. The reclassification of hundreds of financial institutions into lower-rigor examination categories will result in fewer banks being subject to CRA requirements, reduced community development investment, fewer incentives for banks to maintain branches in underserved neighborhoods, and less reporting on how banks are meeting their community reinvestment obligations.

These changes will directly affect affordable housing, small-business lending, community development, financial education, and access to banking services. Nonprofit organizations could also face reduced access to CRA-supported grants, with additional restrictions on how grant funds can be used, including limitations on administrative and indirect costs.

At the Louisville Urban League, we see the impact of CRA-supported grants firsthand. Last year, we provided homebuyer education to 161 participants and helped 80 new homeowners access over $15 million in mortgages. Our Center for Entrepreneurship served 675 business owners and helped participants access more than $400,000 in loans and grants. These outcomes demonstrate what is at stake.

Reduced CRA requirements will weaken accountability for banks and make it more difficult for communities to demonstrate when banks are not adequately reinvesting in the neighborhoods where they collect deposits. This could disproportionately affect communities that already experience limited access to capital, particularly low- and moderate-income communities and communities of color.

From the perspective of many local and national organizations, the proposed changes will ultimately mean fewer resources for programs that help families purchase homes, build financial stability, support small businesses, develop affordable housing, and create generational wealth. They will have a direct downstream impact on the resources, services, and economic opportunities available to the communities we serve. Our collective responsibility is to protect the progress we have made, safeguard our communities, and work together to ensure that every community continues to have access to the investment and opportunities needed to thrive. The Louisville Urban League is committed to doing our part to protect that progress, and we urge Federal regulators to do the same and withdraw these regressive proposals.

Respectfully submitted,

Lyndon Pryor
President & CEO

CONCERNING PROVISIONS IN THE PROPOSED CRA REGULATORY CHANGES

The following items outline significant issues with the proposed regulatory changes.

Drastic Reduction in Bank Accountability and Reporting Transparency

The reclassification of hundreds of financial institutions into lower-rigor examination categories will result in fewer banks being subject to CRA requirements, reduced community development investment, and less reporting on how banks are meeting their community reinvestment obligations:

• Small Bank Threshold Expansion: Increases the small bank threshold from $412 million to $1 billion in assets.

• Intermediate Bank Threshold Expansion: Increases the intermediate bank threshold from $1.649 billion to $10 billion in assets.

• Large Bank Threshold Expansion: Elevates the large bank threshold to institutions with over $10 billion in assets.

• Loss of Community Development Duties: Over 800 banks with less than $1 billion in assets would no longer have any community development responsibilities.

• Exemption from Full Large-Bank Tests: Over 400 banks between $1 billion and $10 billion would no longer face full, rigorous large-bank examinations.

• Elimination of Data Collection and Reporting: Banks with $10 billion or less in assets would no longer collect or report CRA data on small-business, small-farm, or community development loans.

• National Data Loss: Eliminating data collection for banks under $10 billion removes approximately 11% of small-business lending data nationwide, and nearly 25% of available data across six states.

Severe Capital Reductions and Lost Branch Access in LMI Neighborhoods

The proposed changes establish benchmark targets that significantly lower the standard for acceptable community reinvestment, risking a massive collapse of capital in underserved neighborhoods:

• Drastic Benchmark Reductions: The proposal sets passing benchmark targets as low as 0.625% of Tier 1 Capital (or 0.12%–0.24% of assets), compared to current bank activity levels averaging 0.6%–1.0% of assets.

• Collapse in CD Lending: Annual community development lending would drop from $59.1 billion to $7.44 billion, representing an 87.4% decrease.

• Collapse in Qualified Investments: Annual qualified investments would fall from $42.9 billion to $7.44 billion, representing an 82.7% decrease.

• Total Capital Loss: Combined annual community development financing would collapse from $102.0 billion to $14.88 billion (an $ 87.14 billion loss).

• Risk to LMI Branches: Over 5,000 branches in LMI census tracts (30% of all LMI branches nationwide) would lose CRA incentives to stay open.

• Risk to Branches in Communities of Color: Over 4,000 branches in majority-people-of-color census tracts (23% of all such branches) would lose CRA branch presence incentives.

• Long-Term Economic Impact: Branch closures depress local small-business lending for up to six years and undermine investments in Low-Income Housing Tax Credit (LIHTC) projects that support housing choice voucher holders, families with children, and communities of color.

Onerous Restrictions on Community Nonprofits and Grantmaking

Nonprofit organizations, fair housing agencies, and community development entities face major administrative hurdles that restrict operational sustainability and direct community assistance:

• 15% Indirect Cost Cap: For banks over $10 billion, CRA credit for grants to community nonprofits would cap administrative and indirect cost support at 15%.

• Project-Specific Mandates: Grants would need to be tied directly to specific projects or programs, eliminating essential general operating support.

• Pre-Clearance and Public Databases: Rules would require public reporting of funded nonprofits, allow confidential “pre-clearance” of grants without public oversight, or consider eliminating CRA credit for nonprofit grants entirely.

• Disproportionate Harm: These limitations create severe hardship for smaller nonprofits, newer grassroots organizations, and groups serving hard-to-reach populations.

Weakened Protections Against Redlining and Civil Rights Violations

The proposed rule undermines protections against redlining and consumer harm, shielding institutions from accountability:

• Exclusion of Redlining Penalties: Subtle language changes exclude redlining violations from automatically downgrading a bank’s CRA performance rating.

• Exclusion of Private Litigation: Regulators would only consider formal federal or state enforcement actions—ignoring private litigation—at a time when federal enforcement has significantly decreased.

• Omission of Special Purpose Credit Programs: The proposal fails to award CRA credit for Special Purpose Credit Programs (SPCPs), despite universal stakeholder support in prior rulemakings.

• Stripped Consumer Protections: The rule eliminates consideration of key Truth in Lending Act protections and ignores the severity, root cause, duration, and pervasiveness of consumer violations.

RECOMMENDATIONS FOR THE PROPOSED CRA REGULATORY CHANGES

To safeguard economic opportunity, affordable housing, and fair access to credit in Kentucky and across the nation, regulators must incorporate the following core demands:

1. Maintain CRA Rigor Below $10 Billion: Retain current asset thresholds to ensure small and intermediate banks continue to meet explicit community development, service, and reporting obligations.
2. Reject Restrictive Grant Rules: Eliminate the proposed 15% administrative cap and project-specific mandates, preserving flexible general operating support for community nonprofits and fair housing organizations.
3. Maintain Strong Fair Lending Penalties: Ensure that findings of redlining, civil rights violations, consumer protection breaches, and private litigation explicitly result in a downgrade of banks’ CRA performance ratings.
4. Incorporate Special Purpose Credit Programs: Provide explicit CRA credit for SPCPs to expand credit access in LMI neighborhoods and communities of color.
5. Protect Branch Incentives and Data Transparency: Preserve strong regulatory incentives to maintain physical branches in LMI areas and maintain mandatory data collection for small-business, small-farm, and CD loans.

About the Louisville Urban League
The Louisville Urban League assists Black people and those at the margins in attaining social and economic equality and stability through direct services and advocacy. For more information, visit lul.org or follow us on Facebook, Instagram, or Threads.