OCC Proposes Rescinding Fair Housing Data Rule and Simplifying Community Bank Licensing

The Office of the Comptroller of the Currency ("OCC") issued two Notices of Proposed Rulemaking that would rescind the Fair Housing Data rule and simplify licensing requirements for community banks.

Under the first proposal, the OCC seeks to "rescind its Fair Housing Home Loan Data System regulation." The OCC said the 1979 rule was intended to strengthen fair housing oversight by requiring data collection from national banks that received at least 50 home loan applications per year or were subject to the Home Mortgage Disclosure Act ("HMDA").  The OCC explained that the rule was now obsolete because (i) its data collection requirements largely duplicate those under HMDA and Equal Credit Opportunity Act ("ECOA"); (ii) its provisions, unchanged since 1994, are inconsistent with modern standards for collecting race and ethnicity data; (iii) it applies only to national banks, creating an uneven regulatory burden; and (iv) the data collected has limited supervisory value, as examiners rely primarily on HMDA and ECOA data and the information is not publicly reported. The OCC stated that rescinding the rule would reduce regulatory burden without affecting fair housing supervision.

Comments are due 30 days after publication in the Federal Register.

Under the second proposal, the OCC seeks to "amend its [licensing] rules ... to simplify ... requirements for corporate activities and transactions involving national banks and Federal savings associations [with] less than $30 billion in total assets [that meet] specified conditions." The OCC explained that the proposal would create a new category of "covered community banks" and "covered community savings associations," defined as institutions that (i) have less than $30 billion in assets, (ii) are well capitalized, and (iii) are not subject to enforcement actions. The OCC stated that qualifying institutions would receive expedited review and reduced filing requirements for activities such as mergers, branch openings, and capital changes. 

The OCC stated that the proposal would reduce regulatory burden by tailoring licensing requirements to the size and risk profile of community institutions, explaining that (i) community national banks and Federal savings associations typically engage in lower-risk and less complex activities, making their filings comparable to those already eligible for expedited review; (ii) because of this lower risk and complexity, the OCC can generally review such filings more efficiently; and (iii) the proposal is part of a broader OCC initiative to tailor the regulatory framework for community banks, with the $30 billion asset threshold aligning with the agency’s newly established Community Bank group, which supervises institutions of similar size.

Comments are due 60 days after publication in the Federal Register.