The National Community Reinvestment Coalition (NCRC) submitted two comment letters to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Company (FDIC) on the agencies’ proposed rule changes to the Community Reinvestment Act (CRA).
One letter included a detailed analysis of the entire proposal. The second focused on NCRC’s analysis of the Federal Reserve’s CRA database.
NCRC determined that the rules outlined in a Notice of Proposed Rulemaking (NPRM) issued by the agencies in January would weaken CRA and decrease CRA-related lending, investing, and services to low- and moderate-income (LMI) households and communities.
The OCC and FDIC laud CRA, stating that the 1977 law has been responsible for trillions of dollars in lending and investing in LMI communities, and they assert that their proposal would leverage billions of additional CRA dollars. However, the proposed rules would halt if not reverse the progress made under CRA by introducing an overly simplistic and yet convoluted evaluation system that would divert CRA lending and investing away from LMI families and communities.
“The proposal would weaken CRA and lead to less lending in some communities, and it’s really as simple as that,” said Jesse Van Tol, CEO of NCRC. “While the agencies identify pressing issues associated with CRA, their prescriptions for reform will not achieve clarity and fairness nor leverage more dollars for those most in need.”
As FDIC board member Martin Gruenberg stated, “This is a deeply misconceived proposal that would fundamentally undermine and weaken the Community Reinvestment Act.”
Previously, based on Federal Reserve research, NCRC estimated that any proposal that undermines local evaluations of CRA performance could result in a reduction of up to $105 billion in home and small business lending over five years. Since the proposal would allow banks to fail in up to one half of their assessment areas, eliminate evaluations of home lending in LMI tracts, and evaluate banks by a CRA evaluation measure that favors large-scale finance over smaller dollar retail lending, NCRC’s estimate is not likely to overstate the potential harm of this proposal.
To read NCRC’s comment letters in full, visit:
NCRC Comments Regarding Notice of Proposed Rulemaking (Docket ID OCC–2018-0008 and RIN 3064-AF22)
NCRC Supplemental CRA Comment Using Federal Reserve CRA Data
