The OCC and the FDIC proposed amendments to the regultions implementing the Community Reinvestment Act ("CRA"), a law requiring that insured depository institutions help meet community credit needs. The last major revisions to CRA regulations were made in 1995.
According to the OCC and FDIC, the proposed amendments would encourage banks to provide more CRA-qualified lending, investment and services by making the framework more "objective, transparent, consistent, and easy to understand." Specifically, the proposal:
clarifies and expands which activities qualify for CRA credit;
creates additional "assessment areas" related to where deposits originate in order to expand which CRA activity counts toward CRA credit;
establishes activity thresholds as a percentage of domestic deposits to more objectively measure CRA performance;
increases the transparency, consistency and timeliness of CRA-related data collection, recordkeeping and reporting; and
allows small banks - those with $500 million or less in total assets - to either continue evaluation under the CRA small bank test or opt in to the new general performance standards.
The Federal Reserve has not yet issued a proposal to amend the regulations.
The House Financial Services Committee considered (i) testimony from federal banking regulators on a broad range of concerns and (ii) several proposed bills imposing additional requirements on financial institutions.
At a roundtable discussion hosted by the Federal Reserve Board, bankers and community groups described their experiences with Community Reinvestment Act implementation and proposed amendments to better address underserved areas.
Senator Elizabeth Warren introduced draft legislation that would make sweeping changes to the Community Reinvestment Act of 1977.
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