OCC Issues CRA Regulations

The OCC recently issued a Final Rule amending the regulations that implement the Community Reinvestment Act (CRA).  The Final Rule is largely based on the 1995 CRA rules, which were issued by the OCC, Federal Reserve Board, and FDIC, and it applies to national banks and savings institutions.  The Final Rule became effective on January 1, 2022, but the OCC delayed the compliance date for the Final Rule’s public file and public notice requirements until April 1, 2022.

The Final Rule effectively rescinds and replaces the CRA rule that was published by the OCC on June 5, 2020 (the 2020 Rule), which WBK previously covered here and, according to the OCC, will facilitate the agency’s planned future issuance of updated interagency CRA rules with the Federal Reserve Board and FDIC. 

Some of the key changes made by the Final Rule include the following:

• Reinstates different performance tests and standards for banks of different sizes, structures, and operations, including, for example, an assessment method for large, retail banks that focuses on lending, investment, and service performance.
• Gives banks the option to allow its prudential regulator to evaluate it under its strategic plan. 
• Allows strategic plans approved under the 2020 Rule to remain in effect as long as these plans otherwise comply with the Final Rule.
• Provides that the appropriate prudential regulator will consider a bank’s performance context in assessing its CRA performance.
• Excludes from consideration any CRA activities that do not directly or indirectly serve either the bank’s assessment area(s) or the broader statewide or regional area(s) that include a bank’s assessment area(s).
• With respect to the qualifying activities criteria or retail or community development definitions, states that banks will receive consideration in their CRA examinations for activities in effect at the time the banks conducted the activities or entered into legally binding commitments to conduct the activities.

As noted above, the Final Rule generally became effective on January 1, 2022.  However, the Final Rule’s public file provision, which requires banks to maintain a public file containing certain specified information, and the public notice provision, which requires banks to display in their main office and each of their branches the appropriate CRA notice, will go into effect on April 1, 2022.