OCC Issues Proposal on CRA Performance Standards

The OCC today proposed its approach to determining Community Reinvestment Act evaluation measure benchmarks, retail lending distribution test thresholds and community development minimums under the new general performance standards outlined in the CRA final rule issued earlier this year.

In a notice of proposed rulemaking, the OCC said it intends to issue an information collection survey to obtain bank-specific information from institutions subject to the general performance standards. The agency will use this information to help calculate CRA evaluation measures and CD minimum calculations for each bank’s assessment areas, as well as a bank-level CRA evaluation measure and CD minimum calculations for each bank, among other things. The CRA evaluation measure would involve six different benchmark values (one at the bank level and one at the assessment area level for needs to improve, satisfactory, and outstanding presumptive ratings, respectively), while the CD minimum would involve two values, one at the bank level and one at the assessment area level.

The proposal also addresses how the OCC will address declines in CRA performance following the initial establishment of benchmarks, thresholds and minimums. Institutions that see their performance “precipitously [decrease]by 10% or more on the general performance standards . . . without an adequate explanation under the performance context criteria, including consideration of market conditions, risk having their assigned ratings adversely impacted.”

In addition, the proposal makes clarifying and technical changes to the CRA final rule. ABA is currently reviewing the proposal and will provide feedback to the OCC. Comments are due 60 days after publication in the Federal Register.