Fed PolicyMortgage

OCC moves to rescind 2020 version of CRA rule

Proposes to reinstall rules jointly adopted by the Federal banking agencies in 1995

The Office of the Comptroller of Currency announced today that it is moving to gut the controversial Community Reinvestment Act (CRA) rule issued in 2020.

Instead, the agency is proposing to replace the federal anti-redlining rule with rules adopted jointly by the OCC, Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System in 1995. The agency is soliciting public commentary, due by Oct. 29.

The CRA rule, enacted in 1977, mandates that banks help meet the credit needs of communities in which they do business, specifically in low- and moderate-income neighborhoods.

According to the OCC, the current proposal would align the OCC’s CRA rules with the other federal banking agencies to “facilitate ongoing interagency work to modernize the CRA rules and create consistency for all insured depository institutions.”

“The issuance of the OCC’s NPR today is an important step toward strengthening and modernizing the CRA,” said Acting Comptroller Michael J. Hsu.

Hsu added, “The OCC is committed to working with the Federal Reserve and FDIC on a future joint rulemaking to develop a consistent framework across all banks that encourages higher levels of responsible lending, investments, services, and greater community engagement, particularly focused on helping to meet the needs of low- and moderate-income and other underserved communities across the nation.”

Last year, the OCC, under the helm of former Comptroller of Currency Joseph Otting, issued a revised CRA rule, foregoing any interagency collaboration.

In turn, the new rule was picked apart by fair housing advocates and the mortgage industry.

Fair housing advocates condemned the OCC for “unlawfully eviscerating the vital anti-redlining rules.”

Meanwhile, trade groups, such as the Mortgage Bankers Association and the American Bankers Association, criticized the rule for setting overly complicated data reporting requirements that would inevitably present challenges for banks.

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