Today, the Office of the Comptroller of the Currency (OCC) announced that they will halt the further implementation of the 2020 Community Reinvestment Act (CRA) rule and will reconsider the rule in its entirety — a necessary first step to reversing the Trump-era changes to the critical anti-redlining law. Portions of the harmful rule that have not yet been implemented, including how banks will be evaluated under new exams and additional data reporting requirements, will not go into effect as originally scheduled. Other provisions that are already in effect, including the designation of activities eligible for credit under the CRA, require further OCC action. The action follows the appointment of Michael Hsu as Acting Comptroller early last week.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition, made the following statement:
“We are heartened by Acting Comptroller Hsu’s swift action to restart the long-overdue CRA modernization process. Today’s action lays out a course for reversing the OCC’s 2020 final rule. Although more needs to be done, this is a necessary first step to creating an updated CRA that increases, rather than decreases, financial services, lending and investment in low- and moderate-income communities. The overwhelming opposition to the OCC’s rule from consumer, community and civil rights organizations, as well as bank trade associations, clearly illustrated the urgency of this action.
“Today’s announcement also provides an opportunity to move forward with consistent, clear and strong rules developed by all three banking regulators — the OCC, the Federal Reserve and the Federal Deposit Insurance Corporation. We urge the regulators to do so promptly and to look to the Federal Reserve’s fall 2020 CRA proposal as a starting point for that effort. We also urge the regulators, as part of that interagency process, to develop a more race-conscious CRA and ensure that banks are serving communities of color.
“Some aspects of the 2020 final rule remain in effect, however. Of particular concern, banks are currently permitted to receive CRA credit for loans and investments that only partially benefit low- and moderate-income people. For example, the OCC currently allows banks to get CRA credit for large infrastructure projects, like major bridges, that may do little to improve community or economic development or needs in low- and moderate-income communities. We urge the OCC to take additional action to clarify that CRA-eligible activities must directly benefit LMI people and communities.
“The 2020 OCC rule, if implemented fully, would have disastrous outcomes for LMI communities. Today’s announcement is a step in the right direction, but much more needs to be done. Banking agencies should move forward without delay to modernize rules that are not only out of date, but also out of step with how lending works in a changing economy. Communities are still reeling from the economic and personal devastation of a pandemic, and a strong CRA is a critical component of a just recovery.
NCRC Principles for CRA Reform
NCRC Statement On American Housing And Economic Mobility Act Of 2021
TreasureCRA campaign hub