The Federal Reserve will not move with other regulators this year to modernize the Community Reinvestment Act, according to Comptroller of the Currency Joseph Otting.
But speaking to reporters on Tuesday, Otting downplayed the impact of the Fed's lack of participation.
"Not every rule among agencies is the same," Otting said after speaking at the Bank Policy Institute's annual conference in New York this week. "Between the OCC and the FDIC, we control about 85% of the CRA."
According to Otting, the chief disagreement with the Federal Reserve came down to how regulators would measure CRA investment. "We've been trying to formalize a unit and dollars approach," Otting told reporters.
While the OCC planned to incorporate both the number of loans and total value into CRA assessment, the Fed sought to put more emphasis on the number of loans, Otting said.
Speaking to reporters later in the day, Federal Deposit Insurance Corp. Chairman Jelena McWilliams said her agency would join the OCC in its proposal.
"You do have these situations where one agency, for whatever internal politics or substantive reasons, doesn't want to move forward," she said. "It's not about leaving the Fed behind... You can't wait for the perfect solution. At some point you've got to move."
A Federal Reserve spokesperson said the central bank "worked diligently for months with the FDIC and OCC to agree on a common approach."
"It is unfortunate that these efforts have so far not been successful and that the agencies were unable to reach agreement on metrics that would be tailored to bank size and business model and reflect the different credit needs of the local communities that are at the heart of the statute," the spokesperson said. "We continue to believe that the best outcome would be a joint proposal.”
Otting's comment comes a few weeks after regulators hinted that a joint proposal may not be possible. McWilliams said last month that a
In the interim, Otting said he was "optimistic" that his agency would be able to move with the FDIC to shortly issue a joint proposal. The plan is expected to be unveiled in mid-December and could be finalized by May. Asked whether the Federal Reserve could theoretically sign onto a joint finalized rule without being included in the NPR, Otting said he "hadn't gotten a legal opinion back on that yet."
