American Banker, August 28, 2018: OCC goes it alone on first step toward CRA overhaul
The Office of the Comptroller of the Currency issued more than 30 questions Tuesday asking the public how it can revamp a 40-year-old law that grades banks on their lending to low- and moderate-income communities.
The questions are included as part of an advance notice of proposed rulemaking as the OCC begins the process of modernizing the Community Reinvestment Act of 1977 with the hope that other bank regulators will join later.
“I really believe this ANPR starts the process of that discussion of how we can bring more [lending] to those communities across America,” Comptroller Joseph Otting said during a call with reporters. “The longer we wait on an ANPR is just the longer that those communities will be underserved and not have the hope that we can assist them in those respected communities.”
Some of the key questions look at how so-called community assessment areas should be redefined, as the law was originally written to primarily look at areas where a bank is headquartered or has physical branches. This has become a greater challenge as there are rural areas in need of loans but have no bank branches, and online banking has expanded but does not count toward CRA credit.
Otting has also repeatedly pushed to expand the types of loans that would get CRA credit, including, for example, certain business loans that would be aimed at increasing job growth in a community. He suggested perhaps lifting a CRA restriction on lending through religious organizations.
Yet some community groups have raised concerns that expanding the types of loans or assessment areas included under the law would simply make it easier for banks to get CRA credit rather than placing a greater focus on areas that need loans the most. This debate is likely to be an area of focus for public comment in response to the ANPR.
