After nearly three years of ongoing advocacy, the CDFI industry received a major policy win when the Office of the Comptroller of the Currency (OCC) announced plans to reconsider its controversial 2020 Community Reinvestment Act (CRA) rule. The rule, which made major changes to the enforcement of the 1977 law, received widespread criticism from stakeholders, including OFN, banks, community groups, and policymakers.
This action by the OCC halts the implementation of a substantial portion of the rule, including evaluation criteria, changes to assessment areas, performance standards, and data collection and reporting. According to the OCC, reconsidering the rule allows time for additional stakeholder input, to evaluate issues and questions that have been raised, to reassess the necessary data, and to take additional regulatory action. The OCC will move forward with provisions of the rule that had a compliance date of October 1, 2020, including the CRA Qualifying Activities Confirmation Request process for banks and other stakeholders to request confirmation whether an activity is CRA-eligible.
The important policy decision also provides a new opportunity for the Federal Deposit Insurance Corporation (FDIC), OCC, and Federal Reserve to engage in a joint rulemaking process. For decades, the three regulators have operated under the same rules for CRA enforcement. The OCC’s decision to move forward with its own CRA reform effort added additional complexity to an already challenging regulatory environment.
The Federal Reserve notably chose not to endorse the OCC's CRA reform approach. In September 2020, the agency released an Advanced Notice of Proposed Rulemaking (ANPR) outlining its own proposal to reform CRA regulations. The FDIC initially joined the OCC’s reform efforts in the Notice of Proposed Rulemaking released in late 2019 but chose not to join the OCC in the publication of the final rule. Ultimately, the next steps on CRA reform will be influenced by the new leadership at the OCC. The Biden Administration has yet to put forth a nominee to serve as Comptroller.
OFN will continue to urge regulators to enforce CRA under a joint regulatory framework and advocate for CRA reform that increases lending and investment in underserved markets. For more information on OFN’s CRA advocacy, contact Dafina Williams, SVP, Public Policy at OFN.