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Financial Services Law Insights and Observations

OCC seeks stakeholder feedback on modernizing the Community Reinvestment Act

Agency Rule-Making & Guidance OCC CRA Department of Treasury

Agency Rule-Making & Guidance

On August 28, the OCC issued an advance notice of proposed rulemaking (ANPR) seeking input from stakeholders on ways to transform or modernize the Community Reinvestment Act (CRA) regulatory framework. According to OCC Bulletin 2018-24, the ANPR seeks comments on several issues including:

  • encouraging more lending and services in areas where there is the most need, such as low- and moderate-income areas;
  • clarifying and expanding the types of activities eligible for CRA consideration;
  • reviewing and updating how assessment areas are delineated and used;
  • establishing measurable CRA rating metric-based thresholds;
  • increasing the transparency of a bank’s CRA performance;
  • improving the timeliness of CRA regulatory decisions; and
  • reducing the cost and regulatory burden associated with CRA evaluations.

In its press release, the OCC stated that modernizing CRA regulations will “better achieve the statute’s original purpose, increase lending and investment where it is needed most, and reduce the burden associated with reporting and assessing CRA performance.” Additionally, the OCC noted in the ANPR that many stakeholders believe that aspects of current CRA regulations may only be “sufficient for certain locally focused and less complex banks,” as banking practices and the financial services industry continue to evolve.

As previously covered by InfoBytes, in April the Treasury Department released a memorandum of recommendations addressing findings from Treasury’s comprehensive assessment of the CRA framework. The memorandum focused on four key areas: assessment areas, examination clarity and flexibility, the examination process, and bank performance. According to the OCC, comments on the ANPR “may inform the development of more specific policy proposals or future rulemakings.” The OCC will accept comments for 75 days following publication in the Federal Register.

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