Phoenix, January 6, 2026
Phoenix is on the brink of significant changes as updated asset-size thresholds for the Community Reinvestment Act (CRA) will take effect in 2026. These updates, announced by the Federal Reserve Board and the FDIC, will affect local community banks, highlighting the balance of regulatory oversight and economic growth. With the act’s focus on fair lending practices and local credit needs, Phoenix’s small businesses and entrepreneurs must navigate these changes to ensure continued economic vitality.
Phoenix, Arizona – A dynamic city renowned for its entrepreneurial spirit and consistent economic expansion, Phoenix stands at a crucial juncture as nationwide regulatory adjustments for financial institutions take effect. The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) recently announced updated asset-size thresholds for the Community Reinvestment Act (CRA), which are set to begin in 2026. These adjustments, while national in scope, hold significant implications for Phoenix AZ business, community banks, and the broader Arizona AZ entrepreneurs ecosystem, underscoring the delicate balance between robust oversight and the flexibility needed for growth.
The updated thresholds serve as a reminder of the evolving financial landscape and the continuous effort to ensure that banks remain integral to the health and development of their local communities. For a region like Phoenix, where small-business resilience and innovation are key drivers of prosperity, understanding these changes is vital.
Understanding the Community Reinvestment Act and 2026 Thresholds
The Community Reinvestment Act (CRA), a United States federal law enacted in 1977, was designed to encourage commercial banks and savings associations to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods. The Act aimed to address historic inequities in access to credit, such as “redlining,” by promoting fair lending practices.
Nationwide, federal regulatory agencies examine banking institutions for CRA compliance, considering their record when approving applications for new branches, mergers, or acquisitions.
The Federal Reserve Board and the FDIC annually adjust the asset-size thresholds that define “small bank” and “intermediate small bank” under their CRA regulations. For 2026, these thresholds have been updated. A small bank will be defined as an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.649 billion. An intermediate small bank is defined as a small institution with assets of at least $412 million as of December 31 of both of the prior two calendar years and less than $1.649 billion as of December 31 of either of the prior two calendar years.
These adjustments are based on the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a nationwide measure of inflation. The CPI-W for the period ending in November 2025 saw a 2.51 percent increase, leading to these updated thresholds.
Implications for Community Banks
These new nationwide thresholds, effective from January 1, 2026, or the date of their publication in the Federal Register, whichever is later, and lasting through December 31, 2026, could significantly impact community banks across the nation, including those serving the Phoenix metropolitan area.
Community banks are often cornerstones of local economies, and their classification under CRA regulations dictates the specific examination procedures they undergo. For instance, banks meeting the small and intermediate small bank asset-size thresholds are not subject to the same reporting requirements as large banks, unless they opt for evaluation under the large bank criteria.
Nationwide, these thresholds are more than just numbers; they influence a bank’s lending practices and community services, and performance under CRA examinations can have significant implications for institutions.
Fostering Local Investment and Economic Growth in Phoenix
The CRA’s fundamental objective is to encourage federally insured banks to help meet the credit needs of the communities they serve. For Phoenix, this means a continued focus on supporting local entrepreneurs, Phoenix small business ventures, and broader economic growth.
The CRA encourages financial institutions to provide credit for projects that create affordable housing, make loans to low- and moderate-income individuals for homeownership, and extend financing to small-business owners who rely on such capital to grow and create jobs. Between 2009 and 2020, financial institutions nationwide made more than $42.3 billion in home loans to low- and moderate-income (LMI) borrowers or in LMI Arizona census tracts. During the same period, $4.7 billion in loans were made to small businesses in Arizona LMI census tracts.
Phoenix’s robust growth has attracted new investment, startups, and merger and acquisition activity. An expanding population in Phoenix creates both demand and intellectual capital to foster innovation and new startups. Local governments in Arizona have actively supported policies that promote growth and innovation, further enhancing Phoenix’s appeal.
Navigating the Regulatory Landscape
The adjustments to CRA thresholds reflect an adaptive approach by regulators to ensure the law remains relevant in a changing financial sector. Nationwide, trade associations representing banks of all sizes have urged federal banking regulators to prioritize the indexing of supervisory asset thresholds. This ongoing dialogue between industry and regulators is crucial for fostering a predictable and efficient regulatory environment.
While regulation is essential for maintaining stability and fairness in financial markets, the effectiveness and scope of regulations are continuously debated. Some research suggests that an increase in federal regulations can be associated with fewer small business start-ups and fewer new jobs. Conversely, strong regulation can also protect small businesses by preventing anti-competitive behavior and creating opportunities for new market entrants and innovation.
The City of Phoenix actively supports its small business community, with over 95% of businesses in the city employing fewer than 50 people. The city offers various services and resources, including technical assistance and help with permits, contributing to a business-friendly environment in Arizona.
Community Engagement and Future Outlook
The CRA aims to ensure that federally insured banks meet the credit needs of all communities. These updated thresholds encourage financial institutions to continue evaluating and responding to the specific credit needs of their local communities, including those in Phoenix and across Arizona.
The growth of online and digital banking has led to discussions about how CRA evaluations should adapt, given that consumers are less reliant on physical branches for banking services. Regulators adopted a new CRA rule in 2023 to reflect a more expansive view of CRA assessment areas, moving beyond a purely branch-centric approach.
As Phoenix continues its trajectory of economic growth and innovation, the diligent application of CRA regulations, combined with a responsive regulatory framework, will be instrumental in ensuring that financial institutions contribute meaningfully to the prosperity of all residents and businesses.
Conclusion
The updated 2026 Community Reinvestment Act thresholds represent a significant, Nationwide adjustment for banks and the communities they serve. In Phoenix, a city built on the determination of Arizona AZ entrepreneurs and the resilience of Phoenix small business, these changes emphasize the importance of local financial institutions in driving economic vitality. By understanding and adapting to these thresholds, community banks can continue to play a pivotal role in fostering local investment, supporting innovation, and contributing to the overall economic growth of our vibrant city. We encourage all residents and businesses to remain engaged in Phoenix’s economic future and to support the local institutions that are vital to its continued success.
Frequently Asked Questions (FAQ)
What is the Community Reinvestment Act (CRA)?
The Community Reinvestment Act (CRA) is a United States federal law enacted in 1977 designed to encourage commercial banks and savings associations to help meet the credit needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.
Who announced the 2026 CRA thresholds?
The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) announced the 2026 updated Community Reinvestment Act (CRA) asset-size thresholds.
What are the new asset-size thresholds for a “small bank” in 2026?
Beginning January 1, 2026, a small bank will be defined as an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.649 billion.
What are the new asset-size thresholds for an “intermediate small bank” in 2026?
Beginning January 1, 2026, an intermediate small bank will be defined as a small institution with assets of at least $412 million as of December 31 of both of the prior two calendar years and less than $1.649 billion as of December 31 of either of the prior two calendar years.
When do these 2026 CRA thresholds take effect?
These updated thresholds are in effect from the latter of January 1, 2026, or the date of publication in the Federal Register, through December 31, 2026.
How often are CRA asset-size thresholds adjusted?
The asset-size thresholds are adjusted annually based on the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a nationwide measure of inflation.
Key Features of 2026 CRA Thresholds
| Feature | Description | Scope |
|---|---|---|
| Governing Act | Community Reinvestment Act (CRA) of 1977 | Nationwide |
| Announcing Agencies | Federal Reserve Board and Federal Deposit Insurance Corporation (FDIC) | Nationwide |
| Effective Period | January 1, 2026, through December 31, 2026 | Nationwide |
| Definition of “Small Bank” | Assets of less than $1.649 billion as of December 31 of either of the prior two calendar years | Nationwide |
| Definition of “Intermediate Small Bank” | Assets of at least $412 million and less than $1.649 billion as of December 31 of both of the prior two calendar years | Nationwide |
| Adjustment Basis | Annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) | Nationwide |
| CPI-W Increase (Nov 2025) | 2.51 percent | Nationwide |
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The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.
