Affordable Housing Finance, July 28, 2021, Agencies Signal New Joint Effort on CRA
The Federal Reserve Board, the Federal Deposit Insurance Corp. (FDIC), and the Office of the Comptroller of the Currency (OCC) announced that they will work together to update the Community Reinvestment Act (CRA).
“The agencies have broad authority and responsibility for implementing the CRA,” said the agencies in a statement. “Joint agency action will best achieve a consistent, modernized framework across all banks to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods.”
The OCC also announced that it will rescind its controversial CRA rule issued last year.
This decision follows the completion of a review initiated by Michael Hsu, acting comptroller of the currency, shortly after he took office.
“To ensure fairness in the face of persistent and rising inequality and changes in banking, the CRA must be strengthened and modernized,” said Hsu. “The disproportionate impacts of the pandemic on low- and moderate-income communities, the comments provided on the Board’s Advanced Notice of Proposed Rulemaking, and our experience with implementation of the 2020 rule have highlighted the criticality of strengthening the CRA jointly with the Board and FDIC. While the OCC deserves credit for taking action to modernize the CRA through adoption of the 2020 rule, upon review I believe it was a false start. This is why we will propose rescinding it and facilitating an orderly transition to a new rule.”
