OCC Finalizes Rule Intended to Strengthen and Modernize Community Reinvestment Act Regulations

28 May 2020
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Key takeaways:
  • On May 20, 2020, the OCC published a final rule (the “Final Rule”) intended to strengthen and modernize the OCC’s regulations under the Community Reinvestment Act of 1977 (“CRA”). The Final Rule is effective October 1, 2020, with phased-in compliance dates beginning in 2023.
  • The Final Rule is intended to create an objective method for evaluating CRA performance based on new quantitative metrics that form the basis of a presumptive CRA rating. The specific thresholds for these new metrics, however, have not been set and are expected to be the subject of further rulemaking.
  • The Final Rule demonstrates an independent policymaking stance by the OCC, foregoing interagency coordination with the Federal Reserve Board and the FDIC, thereby causing CRA compliance to vary by regulator in the coming years, absent other regulatory action. Moreover, the Final Rule is not the complete framework, possibly creating uncertainty for affected banks unless and until all components are in place.