Despite recent opposition from the House Financial Services Committee, Comptroller of the Currency Joseph Otting released a statement saying his office will move forward with an overhaul of the Community Reinvestment Act (CRA).
“It is our intention to craft a final rule that will encourage banks to lend and invest more in the communities they serve, including low- and moderate-income neighborhoods,” Otting said.
Otting continued, saying the Office of the Comptroller of the Currency (OCC) seeks to increase support to distressed areas.
He added that modernizing CRA regulations would require OCC-regulated banks to conduct and hold on their balance sheet of $500 billion to meet minimum requirements and up to $1 trillion to meet outstanding requirements and CRA qualified investments and loans.
“Modernization would bring valuable additional resources to communities across America that are currently underserved by the current regime and provide greater transparency to help ensure those dollars serve the communities they were intended to help,” he said.
Otting added, “Further delay would only prevent these valuable resources from reaching those who need them most in this time of national emergency.”
Maxine Waters, Chair of the House Financial Services Committee, previously sent a letter to Otting and Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation, urging them to prioritize a strong response to the COVID-19 pandemic and suspend efforts to revise the Community Reinvestment Act (CRA) and any "unrelated rulemakings."
“At a time when regulators should be working together to appropriately respond to this growing pandemic and keep our banking system safe and sound, unrelated rulemaking should be put on hold for the time being,” the lawmakers wrote. “To that end, we urge you to delay any unrelated rulemakings, including the Notice of Proposed Rulemaking (NPRM) with respect to the CRA, during the ongoing crisis. After the crisis passes, we urge your agencies to work with the Federal Reserve to develop a new, joint NPRM that is consistent with the purpose of the Community Reinvestment Act.”
Waters and members of the Committee voiced their displeasure with proposed changes to the CRA during a hearing in January.
“Under Comptroller [Joseph] Otting, the Community Reinvestment Act would become the Community Disinvestment Act. Such a radical change to the CRA demands a heightened level of public scrutiny,” Waters said.
Waters said that proposed changes to the CRA by the OCC would lead to “widespread bank disinvestment from low and moderate communities.” She added the changes set forth by Otting would allow banks to receive a passing grade by doing the bare minimum.