A proposal to rescind the agency’s 2020 Community Reinvestment Act (CRA) rule by Jan. 1 and replace it with rules based on the 1995 interagency rules was announced Wednesday by the Office of the Comptroller of the Currency (OCC), which said it will take comments on the proposal until Oct. 29.
The OCC action follows the July 20 statement issued jointly by the agencies – the OCC as well as the Federal Reserve and Federal Deposit Insurance Corp. (FDIC) – that they planned to work together on a V to strengthen and modernize their implementation of the anti-redlining CRA. The OCC said its reinstatement of the 1995 rules “would allow for an orderly transition to future, modernized CRA rules.”
According to the OCC, its proposal would replace the June 2020 rule – which was issued without the participation of the Fed or the FDIC – with rules largely based on those adopted by all three agencies and leave them in effect until they are replaced by final rules “based on this proposal.”
The OCC noted that the June 2020 rule included a transition provision, effective Oct. 1, 2020, to provide for an orderly move to the new regulatory framework, and many aspects of the 1995 rules remain in effect. It said this limits the potential disruption associated with the proposed reversion to CRA rules based on the 1995 rules.
“Therefore, the OCC is considering an effective date of January 1, 2022, for any final rules, provided they are published by December 1, 2021,” the agency stated. “A January 1, 2022, effective date would provide all stakeholders with certainty regarding the applicable rules and would eliminate the need for banks to continue to expend resources developing new systems necessary for compliance with the June 2020 Rule.”
The OCC noted its proposal does not include “particular” transition provisions in the proposed text, and comments are sought “on whether, for purposes of any final rules the OCC should amend the proposed rule text to address any or all” of certain of those issues.
Issues addressed include, among others, bank type changes, qualifying activities, affiliates, outside assessment area activities, community development-related matters, and more. A table outlining the proposed transition considerations begins on page 38 of the draft Federal Register notice.
The OCC said banks would have a minimum of 30 days following the publication of any final rules before they would be required to comply with most of the provisions described in the proposed rules.