The Office of the Comptroller of the Currency (OCC) today released a final rule that rescinds the agency’s harmful 2020 Community Reinvestment Act (CRA) rule, which weakened the OCC’s performance review of banks and restricted public involvement. The OCC replaced the 2020 rule with amended rules jointly adopted by the three federal banking agencies in 1995.
Jesse Van Tol, President and CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:
“Getting the disastrous 2020 CRA rule fully rescinded was a hard-fought battle that involved comments from hundreds of our members across the nation and this is a huge victory for them and their communities. We’re relieved and welcome this action today from the OCC.
“Now, it’s time to move forward to create a stronger and modernized CRA that will produce greater access to financial services, lending and investments in low- and moderate-income communities, and specifically for people and communities of color. That needs to come jointly through new interagency rules from all three federal banking agencies and I’m encouraged by signs that the OCC, FDIC and Federal Reserve Board are working toward that.
“A modernized CRA needs to be applied across the financial industry. So much has changed since CRA was created in 1977, including the emergence of online lending and the rise of nonbanks that now make the majority of mortgage loans. All lenders, not just banks, should be accountable and obligated to serve and strengthen low- and moderate-income communities and communities of color. The rules themselves need to be strengthened to produce better results, and regulators need to strengthen their enforcement. There’s still a long way to go to fulfill the transformational objectives of the Community Reinvestment Act.
“It’s also long past time to update CRA to include a robust consideration of race. CRA was established to combat and reverse the overtly racist outcomes of redlining that defined access to homeownership and personal wealth in the 20th Century. Those outcomes have endured in this century in lower homeownership rates for people of color, in disinvestment and health risks in formerly redlined communities, and in a racial wealth gap that needs to be solved, not just studied and discussed.