Mortgage lending outside usual assessment areas to get attention in coming CRA proposal, Hsu says

A proposal to revise federal banking regulators’ Community Reinvestment Act (CRA) regulations is expected to allow regulators to evaluate “more comprehensively” the CRA performance of banks that offer mortgage loans outside traditional, branch-based assessment areas, the comptroller of the currency said Tuesday.

In prepared remarks for delivery at the Black Homeownership Collaborative’s Fair Housing Month Virtual Forum, Michael Hsu, acting head of the Office of the Comptroller of the Currency (OCC), said he expects a notice of proposed rulemaking (NPR) “soon.”

Hsu reiterated that the aim of the NPR will be to update and strengthen the agencies’ CRA implementing regulations to better reflect how the banking system operates today.

He said the proposal’s focus on mortgage lending outside traditional assessment areas “acknowledges just how dramatically the banking industry has changed,” with banks and other lenders today delivering services via phones and laptops, not only by tellers and loan officers in brick-and-mortar branches. This is important, Hsu noted, as studies have shown that banks do a better job of lending to low- and moderate-income (LMI) individuals and areas within their traditional CRA assessment areas than they do outside of them.

“This and other NPR provisions would give regulators new tools intended to update how we examine bank CRA performance and encourage greater volumes of CRA dollars reaching LMI individuals and communities that have too often been overlooked in the past,” he said.

Hsu also discussed appraisal bias (specifically, the work of the Biden administration’s Interagency Task Force on Property Appraisal and Valuation Equity, or PAVE Task Force); and the agency’s Project REAch (the Roundtable for Economic Access and Change), aimed at promoting greater access to capital and credit for minority and underserved populations.

Acting Comptroller Discusses Expanding Access to Homeownership for Minorities

Hsu speech