|On July 20, the Federal Reserve Board (Board), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) announced their joint commitment to strengthen and modernize the Community Reinvestment Act (CRA). The CRA, which aims to help low- and moderate- income (LMI) communities gain access to financial services, loans, and community development investments, was first enacted into law in 1978 and has only been amended twice since – in 1995 and 2005. Following a review initiated by Acting Comptroller of the Currency Michael Hsu, the OCC also announced its plans to rescind its May 2020 final rule, which it issued independently in an unprecedented break from the other agencies. Separately, Federal Reserve Governor Lael Brainard issued a statement noting that the new attempt to develop a joint notice of proposed rulemaking (NPR) will build on the Federal Reserve Board’s September 2020 advance NPR, which outlined a joint rulemaking process for CRA modernization.
The announcement of the OCC’s final CRA rule recission, as well as the three banking regulators forthcoming joint CRA rulemaking effort, is noteworthy, as experts – including those at the three regulatory agencies – have widely expressed the importance of a unified approach to CRA modernization. Currently, there are few details on what the rulemaking process and timeline may look like, though a formal, joint proposal is not anticipated for several more months. The timing may be further delayed considering some banks have already begun operating under the OCC final rule’s guidance on qualifying activities. Despite the uncertainty in timing, Enterprise applauds this unified approach and will continue to advocate for modernized CRA regulations that are broad and flexible given the infrequent changes to the rules.
To learn more about the joint effort to modernize Community Reinvestment Act, click here.