The Office of the Comptroller of the Currency (OCC) released a final rule related to the agency’s regulations under the Community Reinvestment Act (CRA). The final rule clarifies and expands the banking activities that qualify for positive consideration, updates how banks delineate the assessment areas in which they are evaluated, provides additional methods for evaluating CRA performance and requires timely and transparent reporting.

The final rule evaluates banks on both the number of CRA-eligible loans and investments and the total amount of loans and investments to communities. The final rule’s emphasis on the dollar volume of loans and the repeal of a separate investment test raises concerns it could de-emphasize low-income housing tax credit (LIHTC) and new markets tax credit (NMTC) equity investment as compared to lending. The OCC issued a non-exhaustive, illustrative list of example activities that would qualify for CRA consideration.

TAAHP raised concerns and submitted a public comment letter to OCC Comptroller Joseph Otting on April 8th. Otting is expected to step down from his position as the OCC’s top regulator at the end of the week, according to reports from Politico and the Wall Street Journal.

The OCC issued the final rule without FDIC, so the new rule will apply only to OCC-regulated banks. The final CRA rule applies to national banks and savings associations, which conduct the majority of all CRA activity. In a statement by FDIC Chairman Jelena McWilliams, she said “the agency is not prepared to finalize the CRA proposal at this time.”

The final rule is effective Oct. 1, 2020, and banks must comply with the final amendments by Oct. 1, 2020, Jan. 1, 2023, or Jan. 1, 2024.

Related Post: CRA Reform – What it may mean to the Affordable Housing Industry

Founded in 1997, the Texas Affiliation of Affordable Housing Providers (TAAHP) is a non-profit trade association serving as the primary advocate and leading resource for the affordable housing industry in Texas. Our vision is to inspire and engage our members and stakeholders to end the affordable housing crisis in Texas.

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