Federal bank regulators are appealing the recent injunction against the final Community Reinvestment Act final rule.
The Office of the Comptroller of the Currency, Federal Reserve and FDIC filed the appeal April 18 in the Northern District of Texas after Judge Matthew Kacsmaryk blocked implementation of the update on March 29. Kacsmaryk ordered the final rule be delayed until a lawsuit the agencies face for allegedly exceeding their authority in issuing the rule is resolved.
Numerous trade groups sued the regulatory agencies over the CRA update in February, including the American Bankers Association, Independent Community Bankers of America, U.S. Chamber of Commerce and three Texas-based business associations. In issuing the injunction, Kacsmaryk found the plaintiffs would likely prove regulators exceeded their authority by evaluating lending beyond banks’ deposit-taking footprint nationwide to low- and moderate-income consumers. He extended implementation dates for each day the injunction continues, pending resolution of the lawsuit.
Looking to account for the rise in mobile banking, the CRA update would require community banks with more than $2 billion in assets to comply with the same CRA evaluation standards as the largest banks. That includes undergoing a new retail lending test, facing expanded assessment areas and undertaking more rigorous data and reporting obligations.
In March, federal regulators delayed the provisions covering where banks are evaluated until 2026.