After a summer spent visiting communities to see where the Community Reinvestment Act (CRA) has succeeded, and understanding where it can be improved, Comptroller of the Currency Joseph Otting said he is hopeful that a joint CRA modernization proposal will be issued on an interagency basis this fall.
He made the remarks in a speech at the National Asian American Coalition’s (NAAC) 16th Annual Economic Development Conference.
The Office of the Comptroller of the Currency (OCC) announced an Advanced Notice of Proposed Rulemaking (ANPR) for Community Reinvestment Act updates in August 2018. This long-awaited step toward CRA modernization was been widely welcomed by the industry.
While the OCC was alone in issuing the proposal, Otting said the OCC is working with other federal banking agencies to develop a CRA modernization proposal.
“My experiences this summer and the preponderance of feedback we have heard reemphasizes the opportunity we have to encourage more CRA activity where it is needed most by modernizing the rules to clarify what counts, update where CRA activity counts, evaluate CRA performance more objectively, and make reporting more timely and transparent,” Otting said.
CRA Modernization – A Refresher
The ANPR signaled the beginning of a fact-finding mission for the OCC as it welcomed feedback from stakeholders and offered ideas for what modernized CRA might look that. Those ideas included:
- Revising the current performance evaluation method
- Increasing transparency with quantitative benchmarks and clear standards for qualifying activities
- A broader definition of “community”
- Expanding the activities that would receive CRA consideration.
The OCC is also interested in giving banks credit for work done outside of their CRA assessment area and better accommodating banks without branches or whose services reach beyond their physical branch network.
The CRA modernization ANPR also posed 31 questions to the industry and public. The agencies received nearly 1,500 comments, which it shared with the other regulators.
Regulatory CRA Outreach
The Federal Reserve combined the OCC’s responses with feedback gathered at 29 roundtable sessions attended by over 400 bankers held across the country in both urban and rural locations, releasing its summary of CRA feedback in June.
The OCC also went on the road to gather information, visiting places like Atlanta, Baltimore, and several Pueblos of New Mexico. Before releasing the ANPR, the OCC reviewed previous CRA studies. The findings and recommendations were published by the U.S. Department of the Treasury in April 2018.
Where Can You Find More Information?
Here is a link to the ANPR. As always, you can stay tuned to the Regulatory Compliance & Growth Blog for more news on CRA modernization as it develops. The ABA has also done a really great job of reporting on this issue, so we definitely recommend that you keep an eye on their materials, too.
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