OCC Official: Expect CRA Reform Proposal by End of Summer

The federal banking agencies expect to issue a notice of proposed rulemaking to revise their Community Reinvestment Act regulations by the end of summer, Senior Deputy Comptroller of the Currency for Bank Supervision Policy Grovetta Gardineer said today at the American Bankers Association’s Regulatory Compliance Conference. She also provided some additional detail on what the agencies are focusing on in their conversations.

Specifically, the agencies are responding to concerns reflected in the comments the OCC received on its CRA advance notice of proposed regulations. Ninety-one percent of commenters said the current CRA regs lack objectivity, transparency and fairness, Gardineer said, adding that 98% think they are applied inconsistently and 88% say they have become harder to understand. To address these, she said the agencies are considering how they can clarify CRA-qualifying activities, refine the assessment area definition and implement “an objective set of measures that you can apply—not a single metric.”

Suzanne Killian, senior associate director for consumer and community affairs at the Federal Reserve Board, added that the Fed wants to ensure that the CRA reform process results in “no reduction” in banks’ investments in low- and moderate-income communities and clients. Gardineer agreed. “If there’s greater clarity, transparency and predictability around what counts, where it counts, and where it’s going to be counted, we believe that banks will actually do more, not less,” she said. “If they’re not sure, then it may not result in them doing that investment or engaging in that type of loan, which is counter to the entire purpose of the statute.”