Small banks can now use a simpler plan to show they invest in their communities

US banking regulators are making it easier for small banks to prove they are investing in their local communities. This means these banks can use a simplified plan to meet federal requirements, rather than a complex one.

The Community Reinvestment Act requires banks to lend and invest in the areas where they take deposits, especially in low- and moderate-income neighborhoods. For smaller banks, creating a detailed plan to show this compliance has been a major administrative burden. This change means more community banks might actually use the strategic plan option, rather than just following the standard, often less flexible, assessment methods.