On November 28th, the Federal Reserve declared its support for Indian County Development through the reformed Community Reinvestment Act. This move is aimed at encouraging federally insured banks to fulfill the credit needs of the communities where they operate.
According to a statement released by Michael Barr of the Federal Reserve, The Community Reinvestment Act (CRA) motivates federally insured banks to assist their business communities in meeting their credit requirements. Over the past several years, enhancements have been made to the CRA by the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC). On October 24th, these entities announced final regulations aimed at bringing CRA implementation up-to-date. Public participation with CRA has increased, with Center for Indian Country Development playing a crucial role in seeking input from Native community members. As per Michael Barr's statement, Native community members pushed for stronger financial institution partnerships, development collaborations with Native Community Development Financial Institutions (CDFIs), and expansion of mortgage lending opportunities.
Michael Barr holds office as Vice Chairman for Supervision in the Federal Reserve. The exploration of credit access that CRA could offer has been prioritized by both the Federal Reserve and Barr himself. With collaboration from colleagues within FDIC and OCC among others from within his own organization, significant strides towards aiding Native Indian community have been accomplished. During panel discussions with community bankers, common topics included expanding capital and financial services in Indian Country along with leveraging federal housing resources more effectively.
Barr stated that modernized regulations under CRA introduced noteworthy changes into the CRA framework with goals of clearer recognition and definition of community development activities within Native communities. An updated rule redefines "Native Land Area" and eligible activities therein while affording special consideration for investment and community development efforts. It also allows banks to get credit for qualifying activities beyond their assessment regions which means even those institutions whose assessment areas don't fall under Native Land Areas can receive CRA credit. This will help widen investment opportunities in Native areas. The implementation of a community development category that includes CRA credit for activities performed with Certified Community Development Institutions (CDICs), including Native CDFIs, is also underway. These modifications pave way for new opportunities in supporting community development activities within Indian Country, ensuring greater consistency in the application of these regulations.
