WASHINGTON — The Office of the Comptroller of the Currency made good on a promise to rescind the agency's unilateral reforms of the Community Reinvestment Act.
The agency on Wednesday proposed to revert its CRA regulations to the previous framework in effect since 1995.
The rescission proposal, with comments due by Oct. 29, would undo virtually the entire rule finalized under the Trump administration and former Comptroller Joseph Otting in 2020. It would also further align the OCC with the CRA rules enforced by the other bank regulators in advance of their attempting to develop an interagency overhaul of the anti-redlining law.
Acting Comptroller Michael Hsu announced
“This would put us back in alignment with the Fed and FDIC,” Hsu said in an interview Wednesday.
In its proposed rulemaking, the agency said the framework "would be substantively identical to the 1995 Rules.”
“Consequently," it said, "all definitions, performance tests and standards, and related data collection, recordkeeping, and reporting requirements would revert to those in place prior to the issuance of the June 2020 Rule.”
While the agency had considered a partial rescission that retained some of the more broadly popular elements of the Trump-era rule, it ultimately concluded that the compliance difficulties would be too great.
“Proposing yet another regulatory framework would impose undue burden on banks, their communities, and examiners who would need to learn and implement a new framework that was neither the June 2020 Rule, the 1995 Rules, nor the prospective interagency CRA rules,” the OCC said in its proposed rulemaking.
However, the OCC suggested that one popular element of the 2020 rule may live on as guidance: the illustrative list of activities that most frequently receive CRA credit. Banks and other CRA stakeholders had lauded that element of the Trump rule as a boon for transparency.
“Because the qualifying activity confirmation process is procedural and applies facts regarding a potential qualifying activity,” the proposed rule said, “the OCC could have interpreted and provided guidance on which activities would receive consideration in CRA examinations without codifying the process in the June 2020 Rule.”
The agency is eyeing an effective date of Jan. 1 for the proposal.
Hsu said the agency’s rationale for providing the timetable was rooted in a desire to move as quickly as possible to reform the 1977 law.
“The history of this rule has been one of a lot of delays, and I can't ignore that,” Hsu said in an interview. “There is kind of a central tendency to just kind of get mired in the details, and, well, we don't have time for that.”
