‘Satisfactory’ CRA ratings at OCC dominated over last three years

Community Reinvestment Act (CRA) ratings of “satisfactory” for financial institutions evaluated by the Office of the Comptroller of the Currency (OCC) have dominated the evaluations issued by the federal regulator of national banks and federal savings banks, in both the Obama and Trump administrations over the last 36 months, a review by Regulatory Report of evaluations made publicly available shows.

Of the 714 evaluations made during the last 18 months of the administration of the OCC by Comptroller Tom Curry (appointed by President Barack Obama), and the first 18 months of the administration of the agency by appointees of President Donald Trump (Acting Comptroller Keith Noreika, and Comptroller Joseph Otting), more than four in five (82%) resulted in the rating of “satisfactory.”

In August, the OCC issued an advance notice of proposed rulemaking (ANPR) to gather comments on the best ways to modernize the regulatory framework implementing the anti-redlining CRA. (The comment period on the ANPR closes Nov. 19.) 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 ANPR came on the heels of a July report from the Treasury Department calling for CRA 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.”

A review by Regulatory Report of CRA evaluations made public by the OCC during the last 18 months of the administration of Curry (November 2015 through April 2017) and the first 18 months of the combined tenures of Noreika and Otting (May 2017 through October 2018) show that a little more than half of the evaluations made public (54%) during those periods were made by the Curry administration. (That’s just under 22 evaluations each month during Curry’s tenure, and just less than 18 evaluations each under Noreika/Otting.)

Overwhelmingly, for both administrations, the rating of “satisfactory” was given to institutions evaluated during the 36-month period (or for 587 institutions evaluated – 82% of all ratings for institutions evaluated).

A rating of “outstanding” was given more rarely over the 36-month period, with 120 total ratings of those evaluations made public. Under Curry’s administration, 70 institutions received “outstanding” ratings, and 50 under Noreika/Curry (58.3% and 41.7%, respectively).

The “needs to improve” (NI) rating was rarely assigned by either administration: four times by Curry, and two times by Noreika/Otting between November 2015 and October 2018. However, the NI ratings under Curry were assigned based on evaluations in January 2016, February 2017 (two evaluations), and April 2017.

The two NI ratings assigned by Noreika/Otting were for evaluations conducted in June 2017. No other NI ratings have been assigned since.

Only one “substantial noncompliance” rating was assigned for evaluations conducted during the 36-month period: In May 2018 by the Otting administration.

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