During remarks at an industry event today, Acting Comptroller of the Currency Michael Hsu addressed upcoming plans to modernize the regulation implementing the Community Reinvestment Act. Hsu said that “in the not-too-distant future” the OCC, along with the Federal Reserve and FDIC would release a joint notice of proposed rulemaking, adding that “several objectives” are guiding the agencies’ work.
He said revised regulations are intended to increase levels of CRA activity to help address existing disparities and ensure that banks are being responsive the local needs of low- and moderate-income communities, not just applying “one-size-fits-all” solutions. In addition, Hsu said it is important to increase the “clarity, consistency and transparency” of CRA supervisory expectations and standards regarding activities that are eligible for CRA credit and how eligible activities are evaluated. He also noted that CRA standards needed to be brought up to date, reflecting “changes in the business of banking,” in particular the increased use of mobile and internet delivery channels that were not in place when the regulation was last updated.
He also noted that the Fed’s 2020 advance notice of proposed rulemaking on CRA modernization served as the “basic framework” for the interagency conversations around this latest attempt to modernize the three-decade-old regulations. The OCC previously issued a unilateral rule to modernize the CRA under former Comptroller Joseph Otting, but that rule was later rescinded. The American Bankers Association has consistently supported interagency collaboration on CRA modernization.
