#2023-19, August 25, 2023

American Bankers Association (ABA), Bank Policy Institute (BPI) Caution Against Community Reinvestment Act (CRA) Rule Changes

Shared in the ABA Banking Journal’s Newsbytes on Wednesday, ABA and BPI submitted a joint letter to federal banking regulators urging caution as they consider policy changes to raising capital requirements for large and midsize banks and to implementing Section 1071 of the Dodd-Frank Act.

As you know, a federal judge recently granted an injunction delaying the compliance dates for the CPFB Section 1071 final rule while the Supreme Court hears a separate case – involving the same parties - weighing the constitutionality of the CFPB’s funding structure. The injunction is limited to members of ABA and TBA and allows member institutions belonging to either Association to have the option of delaying their Section 1071 implementation until the funding structure case is decided.

The Massachusetts Bankers Association recently joined the ABA and 49 other state bankers associations in a letter to CFPB Director Rohit Chopra urging him to delay Section 1071 implementation for all FDIC-insured banks, not just those with memberships to ABA and TBA.

Furthermore, with the Supreme Court’s final decision in the CFPB constitutionality case not likely until the first half of 2024, the CFPB is also now expected to be required to recalculate new Section 1071 compliance dates for those institutions that opt to delay their implementation -- to allow for the same amount of time to comply in recognition of the order.

For more information on the injunction click the links below:

• ABA - BPI Joint Letter to Federal Banking Regulators - August 22, 2023
• ABA/TBA Letter to CFPB on 1071 Injunction | American Bankers Association - August 3, 2023
• Federal judge delays Section 1071 compliance dates; temporary relief applies only to ABA, TBA members | ABA Banking Journal
• Joint Statement – ABA and TBA
• Read the ABA staff analysis.

The Association continues to closely monitor this issue and will provide members with updates as they develop. In the meantime, please do not hesitate to reach out to us if you have any questions.

Update: Washington Update

August is typically a slow month at the U.S. Capitol with few formal legislative sessions scheduled and as legislators conduct business in their districts. As such, there may not be a Washington Update As always, don’t hesitate to reach out to us directly with any questions.