Fed panel: 2023 CRA rule helped rural access but was vacated; banks and community lenders still crucial

During audience Q&A, David Lipsitz of the Housing Assistance Council asked how CRA enforcement could be adjusted to steer affordable capital toward rural places rather than concentrating it near branches.

A Federal Reserve representative answered on behalf of the System, saying that the final 2023 CRA rule had "made enormous progress in integrating the needs, the challenges, the experiences of rural America," but that banking trade groups sued and the rule was set aside by a district court in the Fifth Circuit, requiring the System to operate under the 1995 rule for the moment. The representative added that the Fed has not forgotten rural needs and that there are ways to work within the existing framework to "acknowledge that special kind of role."

Panelists elaborated on practical barriers in getting capital to small places. Tom and Anna noted that grant writing, matching‑fund requirements and reporting burdens make it difficult for small towns to absorb large federal funds; Susan and Phil described projects that required assembling many funding sources and the central role of community and regional banks in creating workable financing stacks. Anna emphasized that community banks' relationship lending and local knowledge can overcome formal barriers, but she and others warned that bank branch closures are creating "banking deserts" in some rural areas.

The panel did not announce regulatory changes; instead, it framed the issue as a combination of policy and capacity: both clearer incentives and more local administrative capacity are needed to move capital into smaller communities.