Banks' targets for CRA reform go way beyond just credit unions
WASHINGTON — Bank regulators have not come out with a formal plan for updating the Community Reinvestment Act, but a preliminary list of questions about the reform effort issued by the Office of the Comptroller of the Currency has produced a treasure trove of public feedback to guide their deliberations.
The OCC received more than 1,300 comments on its advance notice of proposed rulemaking asking for responses on how to expand the 1977-era CRA, which grades banks on lending to low-to-moderate income communities in their branch networks. The comment period closed on Nov. 19.
Opinions about the OCC’s ANPR vary. Many in the industry have lauded the step taken by the agency, which insists it was merely trying to gather feedback. But some stakeholders say the agency's questions reflected its policy leanings. For example, some critics have suggested the agency appears to support expanding CRA assessment areas, but observers worry that could dilute resources in communities that need the law most.
The comment letters as well as interviews with those following the agencies' effort reflect an intense debate among the various parties focused on CRA, which will only get more intense the further the agencies get in producing a plan.
Among the comment letters, many industry stakeholders backed expanding CRA assessment areas, state authorities warned the regulators not to reduce oversight of discriminatory lending practices and consumer advocacy groups urged the federal agencies to avoid any plan resulting in a loss of loans and investments in low- and moderate-income communities.
Here are key themes that were raised in the comment letters.