OCC Policy to Make It Easier for Banks to Fix CRA Problems

The OCC today issued a revised policies and procedures manual spelling out its approach to licensing applications from banks that have non-satisfactory Community Reinvestment Act ratings, either overall or in a particular geographic region.

While low CRA ratings have historically blocked banks from branching, merging or converting charters, the revisions allow applicants to document for the OCC how a transaction — such as an acquisition or a branch relocation — would “help the bank to achieve its CRA objectives.” The OCC manual also spells out factors the agency will consider when evaluating an application in this situation.

The American Bankers Association has advocated for regulatory agencies to address this element of CRA compliance, in which a bank can be blocked from taking actions that would help it ameliorate a low rating. The revised manual is part of a broader effort under Acting Comptroller Keith Noreika to tie CRA compliance examinations more closely to the community-serving purposes of CRA. For more information, contact ABA’s Krista Shonk.