In a bid to modernize the regulatory framework of implementing the Community Reinvestment Act (CRA), The Office of the Comptroller of Currency (OCC) has asked for comments from stakeholders.
The CRA, which was enacted in 1977 to encourage banks and other insured depository institutions to help meet the credit needs of their communities, including low- and moderate-income (LMI) neighborhoods, is being considered for reforms. In 2017 and 2018, the Department of Treasury gathered feedback and published recommendations for modernizing the regulatory framework of this act.
In a statement the OCC said that it had issued the Advance Notice of Proposed Rulemaking (ANPR) to better achieve the statute's original purpose, increase lending and investment where it was needed most, and reduce the burden associated with reporting and assessing CRA performance.
“As a long-time banker, I have seen firsthand the benefit of CRA investment and how it makes communities vibrant,” said Comptroller of the Currency Joseph M. Otting. “I have also seen how limitations in the current CRA regulation can fail to provide consideration to a bank that wants to lend and invest in a community with a need for capital, including many low- and moderate-income areas.”
Noting that the operation of the current CRA regulation could result in restricted resources, Otting said that it was time for a national discussion on how "we can make the CRA work better."
Through the ANPR the OCC is asking stakeholders to comment on a number of questions regarding the improvements to the CRA regulation on various aspects such as increasing lending and services to people and in areas that need it most including LMI areas; clarifying and expanding the types of activities eligible for CRA consideration; revisiting how assessment areas are defined and used; making bank CRA performance more transparent; and reducing the cost and burden related to evaluating performance under the CRA.
According to Otting, some of the areas that stakeholders had complained about included the difficulty of getting capital to critical areas, significant administrative burden, lack of CRA consideration for important development activities, and failure to adapt to advances in banking such as interstate branching and digitization of services.