Banker and Tradesman, July 22, 2021, OCC Drops Trump-Era CRA Reform
The yearslong effort to update the Community Reinvestment Act will continue, this time with the three federal banking regulators working together, a move supported by both banks and community organizations.
The Office of the Comptroller of the Currency said in a statement Tuesday that it would propose rescinding the CRA rule that it had issued last year, instead working with the Federal Reserve Board and the Federal Deposit Insurance Corporation on a joint rule to update the CRA.
The OCC had announced in May that it was reconsidering the OCC’s 2020 CRA regulations.
“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,” Acting Comptroller of the Currency Michael Hsu said in Tuesday’s statement. “This is why we will propose rescinding it and facilitating an orderly transition to a new rule.”
Adopted in 1977, the CRA had not been revamped since 1995. The regulations encourage financial institutions to meet community credit needs, including in low- and moderate-income neighborhoods, and prevent discrimination through redlining.