Washington, D.C. – The Office of the Comptroller of the Currency (OCC) this week announced that it will work to rescind Trump-era rules that weakened the Community Reinvestment Act (CRA) and that it will work jointly with the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) to strengthen and modernize regulations implementing the CRA.
The 2020 CRA rule implemented new standards for evaluating bank performance and for collecting, maintaining, and reporting data used in the evaluation process. The framework was controversial from its inception and was adopted without support from the Federal Reserve Board and FDIC.
Center for Responsible Lending (CRL) Senior Policy Counsel Melissa Stegman issued the following statement:
The CRA is a landmark civil rights law, designed to undo the abhorrent legacy of government-sponsored redlining. Yet, CRA regulations require strengthening to evolve with the changing banking landscape and to achieve the law’s mission. We need a CRA regulation that prevents lenders from receiving high scores for weak performance, includes robust fair lending measures, and equitably drives investments to low-income communities and communities of color. A greater emphasis must be placed on advancing racial equity and ensuring that financial institutions address the credit needs of Black, Latino, Asian American and Pacific Islander, and Native American communities.
We commend the OCC for working to rescind its structurally flawed 2020 rule, as that rule failed to ensure that local banking needs would be met and disincentivized investment in low- to moderate-income communities and communities of color.
Moving forward, it’s imperative that the Board, OCC and FDIC come together around a CRA regulatory framework that centers racial equity, expands financial opportunity, and helps spur investments in underserved areas. It is also critical that the rulemaking garners broad support from civil rights stakeholders. We look forward to working with the agencies to create a consistent, modernized framework that will allow banks to help meet credit needs in the diverse communities in which they serve.
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