American Banker: Cheat sheet: 5 pressure points in CRA reform debate

American Banker, August 30,2018: Cheat sheet: 5 pressure points in CRA reform debate

The Office of the Comptroller of the Currency is asking the public dozens of questions about how banks should be graded on their lending to communities in need.

The answers that bankers, consumer groups and others provide in response to the “advance notice of proposed rulemaking” could ultimately help regulators settle on a plan finally for revamping Community Reinvestment Act policy. The document is divided into five sections that are key topic areas for reform discussions.

Stakeholders of all stripes agree the 40-year-old law, meant to encourage banks to lend in low- and moderate-income communities and prevent discrimination, needs an update.

But how to modernize the CRA has long triggered intense debate and disagreement among all the parties as banks favor expanding CRA assessment areas and consumer groups worry that a broad expansion would simply make it easier for banks to score high CRA grades.

Comptroller of the Currency Joseph Otting “has said he wants to improve CRA, and if he does so in ways that increase lending and investments to low- and moderate-income communities, we will be the first to applaud it,” Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, said in a statement. “But I have very serious concerns about the ideas contained in the ANPR. As always, the devil is in the details.”

The OCC’s questions are detailed and cover a wide range of aspects dealing with CRA requirements, ranging from which types of areas and loans should get CRA credit to revamping how banks are graded. The following is a summary of the 31 questions.

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