OCC starts process to ‘modernize’ community reinvestment/CRA framework

Comments on the best ways to modernize the regulatory framework implementing the anti-redlining Community Reinvestment Act (CRA) are being sought in an advance notice of proposed rulemaking (ANPR) released Tuesday by the regulator of national banks.

The Office of the Comptroller of the Currency (OCC) issued the long-waited call for comments, it said, to determine how to modernize the regulations, based on the law adopted in 1977. The agency said modernization of the rules would strive to “ 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.”

The proposal will be open for a 75-day comment period (beginning on the day of publication in the Federal Register).

In a release, the OCC said the ANPR seeks comments on such areas as:

  • increasing lending and services to people and in areas that need it most, including in low- moderate income (LMI) areas;
  • clarifying and expanding the types of activities eligible for CRA consideration;
  • revisiting how assessment areas are defined and used;
  • establishing metric-based thresholds for CRA ratings;
  • making bank CRA performance more transparent;
  • improving the timeliness of regulatory decisions related to CRA; and
  • reducing the cost and burden related to evaluating performance under the CRA.

The agency asserted in its release that public comment called for CRA reform. But much of the feedback cited was gathered over the last 19 months.

The OCC cited feedback gathered by the Treasury Department in 2017 and 2018 and Treasury recommendations published in April of this year. Those recommendations called for regulations that would “better align CRA activity with the needs of the communities that banks serve, while being conducted in a manner consistent with a bank’s safety and soundness,” according to a release.

The OCC also cited feedback gathered by federal banking agencies in their decennial review of regulations under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) process.

OCC Seeks Comments on Modernizing Community Reinvestment Act Regulations

Advance Notice of Proposed Rule (PDF)