Otting Previews OCC Actions on CRA, BSA, Small-Dollar Loans

The OCC’s top policy priorities are changing regulations on the Community Reinvestment Act, the Bank Secrecy Act and small-dollar lending, Comptroller of the Currency Joseph Otting said today at the American Bankers Association’s Government Relations Summit. On CRA issues, he said that the agency would issue a long-awaited advance notice of proposed rulemaking in the next four weeks.

Otting said the agency is looking at better ways to measure CRA performance, simpler methods of verifying compliance and a broader definition of what qualifies for CRA credit, which he said has been generally limited to residential lending to low- and moderate-income borrowers. “I’m a big believer that we should stretch that to more small business, more community development,” Otting said.

He also pointed to the massive efforts by banks of all sizes to comply with BSA reporting requirements, which capture far too many non-suspicious transactions, he said. Despite the best intentions of the industry, “we’ve evolved to where this is almost impossible to comply with.” Otting also said he believes there is an opportunity for banks to make more small-dollar loans in the $500-$5,000 segment. “If we can get people back into the regulated market, that will be better for them and the economy,” he said.

While he is paying attention to underwriting trends, cybersecurity and leveraged lending, Otting said that overall “the outlook is very positive” for banking. “We do not see material deterioration in underwriting,” especially at this point in the cycle, he said. “For the most part, the aggressive lending has stayed outside the banking industry.”