# Proposed Banking Rule Rewrite Alters Community Reinvestment Thresholds for Banks

- URL: https://stocks.freetheai.org/news/proposed-banking-rule-rewrite-alters-community-reinvestment-thresholds-for-banks-04f626
- Published: 2026-10-12T11:53:00Z
- Category: regulation; sentiment: neutral; impact: medium
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Federal regulatory agencies have proposed changes to the Community Reinvestment Act, altering how banks are categorized for local investment requirements. The joint proposal from the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency raises the asset threshold for small banks from $412 million to $1 billion, and increases the large bank threshold from $1.6 billion to $10 billion.

Proponents argue the reform lightens regulatory burdens, allowing smaller institutions to expand more easily and drive economic development. However, opponents contend the revision could undermine rural housing growth. Under the rule, small banks would no longer be subject to community development mandates, which critics warn could put up to $87 billion per year in community development funding and affordable housing capital at risk.

Attention now turns to the regulatory timeline as the public comment window ends on Oct. 13. Community groups are seeking an extension to review the plan, while several Democratic lawmakers have urged regulators to pull the proposal. A Federal Reserve official has also noted concerns over the proposed changes.

## Key points

- Federal regulators proposed raising the asset threshold for small banks to $1 billion and large banks to $10 billion under the Community Reinvestment Act.
- Small banks would no longer be subject to community development requirements under the proposed framework.
- Critics estimate up to $87 billion annually in community development and affordable housing financing could be impacted.
- Supporters state the rule changes would ease regulatory burdens and provide banks with greater growth flexibility.
- The public comment period for the proposal is scheduled to close on Oct. 13.

## Questions and answers

### What changes are proposed for Community Reinvestment Act bank thresholds?

The proposal increases the asset threshold for small banks from $412 million to $1 billion and raises the large bank definition from $1.6 billion to at least $10 billion.

### How would the proposed CRA rule affect small banks?

Small banks would no longer be required to meet community development obligations, leaving them subject only to retail lending rules.

### When does the public comment period for the CRA proposal end?

The public comment period is scheduled to end on Oct. 13, though community development groups are requesting an extension.