The Center for Responsible Lending and Center for Community Self-Help applaud the effort of the Agencies to update and modernize the CRA regulations given the massive changes that have taken place in the financial services industry in the more than 25 years since the regulations were last amended. Likewise, we support the overall thrust of the Agencies’ proposal, which provides a much more robust, transparent, and objective framework for conducting CRA evaluations than that provided by current regulations. We offer these comments to respond to some of the questions posed by the NPRM and suggest ways of strengthening the proposal to better achieve the CRA’s vital objectives.

The comment is divided into four parts. Part I addresses the overall evaluation framework set forth in the NPRM given the purposes of the CRA. Part II responds to some of the questions posed by the Agencies with respect to the Retail Lending Test. Part III responds to some of the questions regarding the Retail Service and Products Test and, more specifically, with respect to the retail products component of this test. Part IV comments on the proposed treatment of bank lending, investment, and service activities pertaining to Treasury-certified Community Development Financial Institutions (CDFIs) under the Community Development Financing Test, and on the inclusion of disaster preparedness and climate resiliency activities.

By focusing on these areas, we by no means intend to denigrate the importance of topics not covered. Indeed, as discussed in Part I, it is essential that the evaluation framework the Agencies adopt create strong incentives for banks to meet the needs of underserved people and communities via robust and responsive community development financing, retail lending, and retail products.