Have you read the new best-seller co-authored by the FDIC, the Federal Reserve and the OCC? It’s been as slow as molasses but it’s finally here, so put on your bifocals.

The publication is making us wonder if early retirement might be a better option than reading and implementing those 1,466 pages of the final rule on CRA modernization. I’m here to help you make that determination based on some of the main components discussed in the quite lengthy time.


First, decide which set of requirements fits your bank’s asset size. The rule states that small banks are defined as those with assets of less than $600 million and they can either choose to be examined under the existing Lending Test or opt-in to the new Retail Lending Test.

If you decide to remain under the existing test, then it’s business as usual for you, and there’s no need to think about the tax implications of an early retirement. If you opt-in to the Retail Lending Test, then you should prepare to have your home mortgage, small business and small farm lending evaluated under a rigorous new quantitative framework where bank performance is compared to localized benchmarks to establish presumptive ratings.

For those banks whose assets are $600 million but less than $2 billion, you will be examined under the new Retail Lending Test and the existing Community Development Test, or you can opt-in to the Community Development Financing Test. Each test will carry equal weight and is designed to assess whether your bank is making sufficient home mortgage, small business and small farm loans in your assessment area(s). Early retirement could be a possible option for those CRA officers in this category, but please continue reading so that you can make a more informed decision.

Banks that have assets of $2 billion or more will be examined under all tests and the kitchen sink! This includes the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test and the Community Development Services test.

The Retail Lending test will be weighted at 40%, the Retail Services and Products Test will be 10%, the Community Development Financing Test will be 40% and the Community Development Services Test will be weighted at 10%. Those banks with assets over $10 billion will also be evaluated on their digital delivery systems, as well as their deposit and grant products under the Retail Services and Products Test. Additionally, these banks will be required to report their Community Development Investments at the institution level.

Large banks that originate or purchase more than 20% of their retail loans outside of their facility-based assessment areas will also be required to delineate new Retail Lending Assessment Areas (RLAAs) when they have reported at least 150 closed-end home mortgage loans in each year of the prior two calendar years or at least 400 small business loans in each year of the prior two calendar years outside of their facility-based assessment areas.

For those CRA Officers in the large bank category under $10 billion, you should continue reading. For those $10 billion and over, please begin making a list of things you could sell to build up your retirement savings.


As previously mentioned, the Retail Lending Test will apply to both intermediate and large banks and will assess the bank’s level of home mortgage, small business and small farm lending within its assessment area(s).

In addition, banks whose lending includes more than 50% automobile lending will be evaluated under that category, or a bank may opt-in to have their auto loans evaluated. Optionally, a bank may elect to report originated and purchased credit card loans and other secured and unsecured consumer loans. If your bank elects to report these consumer loans, please continue the list of sellable items, as well as make a list of to-do items to ensure you stay busy during retirement.


Though the book has its scary moments, there are also some good things. Large banks with 80% or more retail lending within their facility-based assessment areas are exempt from the Retail Lending Assessment Area requirement. All others must make 150 closed-end home mortgage loans and 400 small business loans to fall under the Retail Lending Assessment Area requirement.

Another positive aspect is there are certain small business loans that, if they meet a size and purpose test, can now be counted under both the Retail Lending Test and the Community Development Financing Test in the Economic Development category.

Banks will also be able to receive consideration for all community development activities conducted nationwide. The activity does not have to be conducted inside an assessment area.

Additionally, the regulatory agencies will publish and update periodically a list of community development activities that will be eligible for CRA consideration. Banks can submit activities to the agency to receive preapproval of CRA qualification and the agency’s response will include a written response.

Though the highlights of the book are few, they can have an impact, so CRA officers, please consider these factors when making your career decision.


The effective date of the Final Rule is expected to be April 1, 2024, or the first day of the first calendar quarter at least 60 days after publication in the Federal Register. Most definitions, assessment area requirements and other general provisions will become applicable on Jan. 1, 2026. Reporting requirements will become applicable on Jan. 1, 2027, with data being reported by April 1, along with data collection and maintenance for operations subsidiaries, affiliates and third-party community development loans and investments.


If you decide that you want to read the Cliffs Notes® of the final rule and not the entire beast, I recommend starting on page 1,039. You can skip over the proposed rules, recommendations, etc., though these do provide context and rationale for the final rules.

Though this summary does not encompass all the requirements of the final rule, it should help you determine your future as a CRA officer. Keep in mind the mission of the CRA — ensuring we are serving all segments of the community. The rule may be cumbersome, but your efforts will have an impact on your communities and ultimately, that’s who we serve.