Smaller banks – those with $10 billion or less in assets – would receive significant easing of anti-redlining regulations under a joint proposal issued by the national bank regulator and federal bank deposit insurance agency announced Friday.
Under the proposal, those banks would not be subject to data collection, maintenance, and reporting requirements, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC) said in a joint announcement. The agencies also said those banks would also “receive more flexible supervision.”
The agencies said the proposal would “retain the key elements of the regulatory framework” of the Community Reinvestment Act (CRA) that they say they have generally applied since 1995. The proposal, they said, and would propose certain substantive, technical, and process-oriented changes.
According to the agencies, the proposal would increase their focus on lending and “ensure that community development grants and donations reach the communities they are intended to benefit instead of being diverted to other activities or excessive operating costs.” They contended that the proposal would also narrow the range of retail banking services the agencies consider to focus on credit services, thereby excluding deposit services.
The OCC and FDIC called the proposal “targeted changes” to their rules implementing the CRA. They said the changes would do several things: better align with the statutory mandate; better ensure that community development grants reach the communities they are intended to benefit; reduce burden for banks, particularly for community banks; and provide greater clarity for how to obtain CRA consideration.
“The CRA requires the agencies to assess a bank’s record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations,” the agencies said.
The FDIC Board issued the proposal on a notation vote Friday taken without a meeting.
Comments on the proposal are due 60 days after publication in the Federal Register.
Agencies Issue Joint Proposal Amending the Community Reinvestment Act Rules
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