Key provisions of the revised Community Reinvestment Act (CRA) rule issued this June by the national bank regulator are highlighted in a bulletin issued Monday that also provides answers to 32 “frequently asked questions” (FAQs) about the rule.
The Office of the Comptroller of the Currency (OCC) issued its revised CRA rule without the participation of either of the other two federal prudential regulators of banks – the Federal Reserve and the Federal Deposit Insurance Corp. (FDIC). The rule went into effect Oct. 1, though some provisions aren’t expected to be fully in effect before 2023 or even 2024.
The 2020 rule provides an illustrative list of activities that will receive CRA credit and, among other things, establishes new criteria for designating bank assessment areas under CRA (facility-based and deposit-based), the OCC said. It also provides for different performance standards by bank type, including small banks with assets less than or equal to $600 million (adjusted annually); intermediate banks with assets greater than $600 million and less than or equal to $2.5 billion (adjusted annually); banks with assets greater than $2.5 billion (adjusted annually) and banks that opt into the general performance standards (GP standards or GPS banks); and wholesale and limited purpose banks. The June 2020 rule retains a strategic plan option available to all types of banks.
The OCC said that banks must comply with certain provisions of the June 2020 rule as of the effective date of Oct. 1, 2020, while other provisions have compliance dates of either Jan. 1, 2023, or Jan. 1, 2024, depending on the bank type.
The bulletin explains the agency’s plans for CRA examination as follows:
- Small banks, intermediate banks, limited-purpose banks, and wholesale banks will be examined based on the June 2020 rule’s performance tests and standards corresponding to their specific bank type. Those performance standards generally continue the performance standards under the 1995 rule, as revised.
- Banks opting into the general performance standards – or “GPS banks” – will be examined under the June 2020 rule’s new GP standards. It states that banks with assets of $2.5 billion or less, as adjusted, may opt into the new GP standards.
- Banks that elect the strategic plan option will be subject to performance standards that are tailored to the banks’ unique characteristics and needs, the bulletin states.
The bulletin’s 32 FAQs address the rule’s transition period; qualifying activities; valuing qualifying activities; activities outside bank assessment areas; bank type, examination type, evaluation period, and examination cycle; bank type determinations; examination administration; data collection and reporting; strategic plans; CRA public files and CRA public notices; performance context and community contacts; disaster areas; and qualifying activities and CRA desert confirmation.
“The OCC will issue guidance to address how the Interagency Questions and Answers Regarding Community Reinvestment (Q&As) will apply to activities conducted under the June 2020 rule,” the bulletin states. It also says the agency is conducting outreach activities to provide banks with more information regarding how the agency will administer the transition to the June 2020 rule, beginning with those provisions with an Oct. 1, 2020, compliance date. The OCC said it will continue to conduct outreach and training on other aspects of the June 2020 rule during the transition period.
Monday’s bulletin (2020-99) also rescinds OCC Bulletin 2020-3, “Community Reinvestment Act: Notice of Proposed Rulemaking,” and OCC Bulletin 2020-4, “Community Reinvestment Act: Request for Public Input.”