CRA Modernization: What’s Up With The OCC, FRB and FDIC

Changing, updating or issuing a new regulation involves myriad complex issues, such as divergent bank business models, different needs of communities across the country and rapidly changing consumer preferences regarding the ways they want to bank and transact business. This is especially true related to CRA because not only bankers and regulators want to understand and respond to the issues, but also consumer and community advocacy groups, economic councils and those interested in public policy.

The OCC issued its final rule on May 20, after two years of stakeholder research, changing the agency’s regulations to implement CRA (Regulation BB) and make CRA examination more consistent and predictable.  The rule includes a list of CRA-qualifying activities and a pre-approval process to confirm that a contemplated activity will receive CRA credit. Although the House of Representatives passed a Congressional Review Act resolution disapproving the OCC’s new CRA rule on June 29, the measure did not receive the required Senate simple majority vote required to pass. Learn more.

As for the FDIC, on May 20, 2020, Chairman Jelena McWilliams said, “While the FDIC strongly supports the efforts to make the CRA rules clearer, more transparent, and less subjective, the agency is not prepared to finalize the CRA proposal at this time. The FDIC recognizes the herculean effort community banks are making to support America's small businesses and families during this challenging time and encourages financial institutions to work constructively with borrowers affected by COVID-19."

The Federal Reserve Board published a proposed rule in the Federal Register in October seeking comments on modernizing the CRA to more effectively meet the needs of low- and moderate-income communities and provide more equal access to credit, as well as how to consider COVID-19 impacts on CRA. The comment period closes February 16, 2021. Learn more.

 

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