It may seem like a dry rulemaking process, but billions of dollars are at stake for community development organizations that serve low- and moderate-income households. Use your voice to comment on the proposed rollback of Community Reinvestment Act rules by October 13!

The Community Reinvestment Act (“CRA”) was enacted in 1977 as a response to discriminatory lending practices, known as redlining. This act requires banks to lend to low- and moderate-income communities, ensures other fair lending practices, and incentivizes investment by banks in critical affordable housing tools (such as the Low-Income Housing Tax Credit). Many nonprofits, including HDC members, rely on CRA-driven investments.

The first update to CRA rules since 1995 happened in 2023; this garnered broad support from community development organizations across the country. The 2023 CRA update reflected the modernization of online banking and the decline of brick-and-mortar lending access. It also brought long-overdue reforms to accountability, benchmarks, and increased investment incentives in low- and moderate-income communities.

In July 2025, federal bank regulators announced plans to rescind the 2023 rules and revert back to the previous CRA framework. We are joining others around the country to urge regulators and lawmakers to uphold the CRA’s statutory intent: expanding fair credit access and sustaining investment in underserved communities. Rolling back this progress risks weakening a cornerstone of community development. Read this statement from the Community Opportunity Alliance with more information on the proposed changes and expected impacts.

In Washington State alone, 8.9% of banks would lose community development obligations under the CRA. Of large banks, 28.1% would lose their “large bank” status which would mean eliminating separate investment and service tests into a single evaluation meant to ensure fair investment in communities of need. Ultimately, this would diminish community development obligations and scrutiny.

What can you do?

1. Sign your organization on to the Community Opportunity Alliance letter by October 2nd.
   • Sign-on to the letter directly through this COA link (10/2 deadline)
2. Submit your organization’s comment letter on the notice of proposed rulemaking by October 13.
   • Comment directly through Regulations.gov (10/13 deadline)
     • Need help getting started? COA’s CRA toolkit includes a worksheet to help build your comment letter. (see: “Build Your CRA Comment Letter” on pages 12-13). We advise that you focus on: your expertise, 1-3 specific proposed changes, concrete evidence of likely negative consequences, and recommendations for what the agencies should retain, revise, withdraw, or add.
     • Primarily, we are making the following advocacy asks:  
       • Banks should earn CRA credit based on a project’s demonstrated impact on community need, not simply because activity fits a regulator’s preferred category, size, or purpose.
       • CRA responsibility must follow modern banking activity and capture a bank’s meaningful market activity beyond just brick and mortar bank branches.
       • Re-classifying bank asset thresholds would significantly reduce community development responsibility and take us backward.
       • Adding grant restrictions and documentation requirements would escalate regulatory costs and could threaten access to lending for community-based organizations.
       • The CRA cannot address redlining if the link between redlining, race, and income isn’t clear. The low- and moderate-income (LMI) neighborhood measure doesn’t necessarily capture racial disparities in access to credit and investment.
       • The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Federal Reserve Board (FRB) should develop a consistent interagency framework to avoid inconsistency and confusion. The Federal Reserve did not join the current proposal. 

Thank you for using your organization’s voice and experience to comment on the proposed changes to CRA rules. This is an important moment to ensure we can continue to turn capital into affordable homes, services, and stronger neighborhoods. 
Please reach out to Brady if you have any questions ([email protected]).