Markets Wired

Today, the OCC took an important step forward to strengthen and modernize the regulatory framework implementing the CRA.

By finalizing the rule to improve the regulatory framework, we will make CRA work better for everyone and are encouraging banks and savings associations to lend, invest, and provide more services in the communities they serve, including low- and moderate-income neighborhoods across our country.

The final rule is the culmination of a multiyear process and more than a decade of dialogue about improving how CRA works. We carefully considered more than 7,500 comments stakeholders submitted on our proposal. We incorporated many of those suggestions in the final rule and appreciate the thoughtful input from all the stakeholders who sought to make the final rule as strong as it could be.

The final rule achieves our original goals of strengthening the CRA regulatory framework by clarifying what qualifies for CRA consideration, updating how banks define their assessment areas, evaluating bank CRA performance more objectively, and making the entire process more transparent and timelier. The final rule’s framework will increase support to small business, small and family-owned farms, Indian Country, and distressed areas, and it accommodates banks of all sizes and business models.

The OCC also acknowledges the weakness of existing data regarding CRA performance. The final rule addresses this concern by clearly defining the data needed to objectively evaluate CRA performance and establishing the necessary recordkeeping and reporting to make that data accessible. The final rule defers setting thresholds for grading banks’ CRA performance until the OCC can assess this improved data. During the interim period, examiners will evaluate banks’ CRA performance using the current approach, using all available information, and considering all CRA qualifying activity identified in the new rule. Importantly, the final rule also preserves examiner judgment requiring examiners to consider performance context and evidence of discrimination and illegal credit activity before assigning final ratings. I want to make clear that the final rule makes no change to our commitment and obligation to fight discrimination and redlining. We will continue to address these illegal practices through our fair lending examinations and, when necessary, enforcement authority under applicable laws.

The final rule provides an ample phase in period, but I hope banks will act quickly so their communities can realize the benefits of the final rule as soon as possible.

I want to thank all the stakeholders and the dozens of OCC staff who participated in developing this important rule making process. The final rule issued today will help ensure the CRA remains a relevant and powerful tool for the revitalization of our communities and for our nation’s civil rights.