On November 24, the Office of the Comptroller of the Currency (OCC) released a notice of proposed rulemaking providing details on the general performance standards set forth in its June 2020 final rule to modernize the Community Reinvestment Act (CRA). These general performance standards help determine the evaluation benchmarks, minimums, and thresholds that banks under the OCC’s jurisdiction must meet in order to fulfill their CRA obligations, which ensure that banks serve low- and moderate-income communities.
Under the 2020 final rule, banks assessed under the general performance standards are evaluated based on: (1) the distribution of their retail loans (i.e. home mortgage loans, small loans to businesses and farms, and consumer loans); (2) the dollar value of qualifying retail loans and community development activities as well as the distribution of their branches in each assessment area and at the bank level; and 3) the level of their community development activities in each assessment area and at the bank level. Separate from the proposal but included in the notice are the OCC’s plans to issue an Information Collection Survey to banks subject to these standards, which will help them determine specific evaluation metrics. In addition, the proposed rule addresses how the OCC will assess any significant declines in measures of CRA activity for banks following the establishment of these new metrics and clarifies and makes technical amendments to the final rule issued this past June. Comments on the proposed rule will be accepted 60 days following its publication in the Federal Register.
Meanwhile, the Fed – one of two other regulators that oversees CRA compliance for its member banks – is continuing to accept comments on its advance notice of proposed rulemaking (ANPR) through February 16, 2021. The Fed’s ANPR differs significantly from the OCC’s final rule. The third CRA regulator, the Federal Deposit Insurance Corporation (FDIC), has not issued its own proposed rule. In general, regulatory and community developments experts would prefer a unified approach to CRA enforcement among the three regulators. With the incoming Biden administration expected to appoint a new OCC head, the consensus view is that the OCC’s final rule is likely to be repealed. If that is the case, it is expected that the Fed’s ANPR will serve as the basis for the three regulators to establish one, final CRA rule