FDIC board to vote on CRA reform plan next week
WASHINGTON — The Federal Deposit Insurance Corp.'s board will vote Dec. 12 to issue a proposal on the Community Reinvestment Act, all but confirming the agency will move in step with the Office of the Comptroller of the Currency to advance a reform plan for the 1977 law.
The board meeting will also include consideration of a long-awaited proposal regarding the FDIC's definition of brokered deposits.
With CRA reform officially on the docket, the FDIC appears ready to sign on to a proposal largely spearheaded by the OCC despite reservations FDIC Chairman Jelena McWilliams has signaled about certain aspects of the plan.
Still, even with the FDIC's backing, the regulators are not expected to receive the support of the Federal Reserve for the notice of proposed rulemaking.
Financial regulators are expected to propose several key changes to how they enforce the anti-redlining law, which was last updated in 1995, including an adjustment of assessment areas, as well as clearer guidelines and metrics for banks to earn CRA credit.
Brokered deposit reform is also a much-watched policy issue. Banks have complained for years that the FDIC's current rules for determining what is a brokered deposit — which can result in regulatory repercussions — have become distorted in the decades since the savings and loan crisis of the eighties and nineties. Many in the industry have urged the FDIC to narrow the definition to focus on higher-risk banks.