The OCC’s Final CRA Rule Improves Upon the Proposed Rule but Remains Unsatisfactory

Brief

The OCC’s Final CRA Rule Improves Upon the Proposed Rule but Remains Unsatisfactory

Abstract

On May 20, 2020, the Office of the Comptroller of the Currency issued a final set of regulations intended to modernize the Community Reinvestment Act. While some improvements were made from the proposed regulations, the new regulations suffer from four big problems: There is no evidence of the impact of the new regulations; The primary metric used for assessing CRA compliance neglects community needs; The regulations create a limited and unforgiving test on retail and community development lending, with limited community coverage; and public data will be lost while bank reporting burdens will increase. In addition, the refusal of the other two bank regulators – the Federal Deposit Insurance Corporation and the Federal reserve – to sign-on to these final regulations will create confusion among banks and their community partners as well as opportunities for regulatory arbitrage.

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