OCC’s Hsu: Improving CRA Is Urgent

Acting Comptroller of the Currency Michael Hsu said today that he “feels the urgency” to modernize the Community Reinvestment Act regulations as soon as possible. On Wednesday, the OCC proposed replacing the 2020 Community Reinvestment Act with rules based on a 1995 version of the law that was jointly adopted by the OCC, Federal Reserve and FDIC. During a question-and-answer session this afternoon with ABA President and CEO Rob Nichols at ABA’s Government Relations Council meeting, Hsu said the effort is “more important than ever,” citing in particular the effects of the pandemic on low- and moderate-income communities.

Hsu emphasized the OCC’s rapid timeline on CRA reform and said, “we are signaling that we want to get this done.” The comment period on the proposal to rescind the 2020 rules ends on Oct. 29, and Hsu said he’s optimistic about progress for the rest of the year. The OCC is considering an effective date of Jan. 1, 2022, for any final rules, provided they are published by Dec. 1 this year, which would “clear a path for the three agencies to work together on the joint notice of proposed rulemaking.”

But as far as a providing a definitive timetable for further interagency action to modernize the CRA, Hsu was less certain. “This is not a one-size-fits-all [endeavor],” he said. “More, better and faster … that’s what we’re talking about. But it is complicated; I don’t want to downplay that. The issues are complex.”

The work toward an updated CRA goes hand in hand with efforts to improve financial inclusion in LMI communities. Reducing inequality is among the four priorities Hsu outlined for the OCC during his conversation with Nichols. In addition to financial inclusion, Hsu cited guarding against complacency; adapting to technology and innovation; and acting on climate changes as his other areas of importance for the agency.

Hsu also tipped his hat to community banks’ performance during the pandemic. “Community banks deserve a special shoutout for their hustle and their outperformance on PPP,” he said. “That’s banking at its best. Your members should be proud. They deserve credit for adapting quickly, continuing operations and working with borrowers.”