Office of the Comptroller of the Currency Undermines Own CRA Rule By Putting Key Metric On Hold

American Banker
1 minute read | October.21.2020

Critics of the Office of the Comptroller of the Currency's new Community Reinvestment Act rule say it was rushed to completion, bypassing the interagency approach that once defined the rule.

Left scattered in its place is a reform (from the OCC) and proposal (from the Federal Reserve), leaving stakeholders with no clear direction on how the OCC's final version will work, critics say. Still, as national banks and thrifts try to figure out how to comply with it, those critics find themselves with an unlikely ally: the OCC itself.

In federal court filings contesting a community group challenge to the rule for being arbitrary and capricious, the OCC said the new rule was in an "inchoate state." The OCC explained that "the necessary benchmarks and thresholds that the OCC will use for assessing banks' performance" based on the new rule were not even in place, so any claim that banks' CRA activities may decrease under the new standard was "speculative."

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Warren Traiger Senior Counsel, Financial & Fintech Advisory, Strategic Advisory & Government Enforcement (SAGE)

New York

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Warren Traiger Senior Counsel

New York

He argued before the U.S. Court of Appeals for the Second Circuit in Lee v. Board of Governors, a benchmark case regarding the rights of community organizations to challenge Federal Reserve Board (FRB) determinations on merger applications. He has testified before Congress and the federal banking agencies on fair lending and CRA reform, served as Special Counsel to the New York banking regulator on CRA, and advised the regulator on predatory lending regulation.

Warren regularly helps banks and bank holding companies prepare the community convenience and needs portion of their regulatory applications to merge or acquire, and he helps clients respond to public comment regarding CRA and fair lending compliance. He represented a bank in its acquisition and integration of the finance arm of major automaker, directing pre-acquisition fair lending due diligence and updating the combined entity’s policies, procedures and regulatory relations strategy. Warren also served as an independent consultant for the New York Attorney General, overseeing compliance with that office’s settlement with a company that provides criminal background checks on prospective employees.

A prolific writer and researcher, Warren’s research and statistical analysis of mortgage lending data has been cited in publications of the Federal Reserve Banks of San Francisco, Boston and Dallas; the Federal Deposit Insurance Corporation (FDIC); and in testimony before the U.S. House Financial Services Committee.

Prior to joining Orrick, Warren was senior counsel at Buckley LLP. He also served as Co-Chairman of Traiger & Hinckley LLP. Prior to entering private practice in 1990, Warren was vice president, counsel and director of government relations for the New York Bankers Association, the trade group for New York commercial banks. He also served as director of legislation and research and special counsel for the New York City Department of Consumer Affairs and as a New York State Consumer Protection Board official.

Warren is entrenched in the New York legal and financial services community. He has served on the Banking Law Committee of the New York State Bar Association, as a member of the Banking Law and Consumer Law Committees of the Association of the Bar of the City of New York, and has taught as adjunct professor of economics at Hunter College of the City University of New York.