BOSTON — The Partnership for Financial Equity (PFE) is urging federal banking regulators to reconsider proposed changes to the Community Reinvestment Act (CRA), warning that the proposal could weaken accountability, reduce community investment, and create unnecessary uncertainty for banks and the communities they serve.

In a comment letter submitted to the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC), PFE called for a CRA framework that is “modern, strong, and stable” while maintaining the law’s fundamental purpose of ensuring that banks help meet the credit needs of the communities they serve.

“We support thoughtful modernization of the CRA. We do not support weakening it.”

PFE is calling on regulators to more fully examine how the proposed changes could affect bank behavior and the level of lending, investment, and banking services reaching lower-income communities. The organization is also inviting federal regulators to participate in a New England listening tour in 2027 to hear directly from community organizations and financial institutions about the impact of CRA.

PFE’s concerns include the proposal to substantially increase the asset thresholds that determine which banks receive comprehensive CRA evaluations. In Massachusetts alone, PFE estimates that 46 banks would move into different asset categories under the proposed framework.

“Changing a bank’s asset classification is not simply a technical or administrative adjustment,” PFE wrote. “It can influence the scope of its CRA examination, the data it must collect, the compliance systems it maintains, and the resources it devotes to community development.”

The comment letter also raises concerns about weakening the CRA service test, which PFE says remains particularly important for lower-income households that rely on branches, financial education, affordable accounts, and other community-based services.

“Banking services matter,” PFE wrote, noting that its 2025 Trust in Banking survey found that nearly one in five unbanked low-income Massachusetts residents said a physical branch in their neighborhood would encourage them to open an account.

PFE also urged regulators to preserve the community partnerships that have made CRA effective, arguing that overly restrictive rules governing nonprofit grants could discourage banks from supporting organizations responding to changing community needs.

“The CRA framework should encourage meaningful, flexible partnerships while maintaining appropriate accountability,” PFE said.

Finally, PFE called for assessment areas to reflect how banking actually works today, including digital banking and lending beyond traditional branch footprints. The organization cautioned against locking the CRA into a framework based on the banking system of 1995.

“The CRA should evolve with the banking system,” PFE concluded. “But modernization should strengthen its effectiveness – not reduce the number of institutions meaningfully accountable under the law.”

“We should be building on the success of CRA, not retreating from it,” PFE wrote.