WASHINGTON — The Office of the Comptroller of the Currency issued a bulletin Friday that simplifies how banks are examined for lending under the Community Reinvestment Act, just as the agency works towards a much larger CRA revamp.

The OCC’s bulletin clarifies the exam cycle for when a bank is evaluated for CRA compliance, mostly based on asset size, and how examiners look at so-called assessment areas where banks get CRA credit for community lending.

The bulletin is an initial step toward a much larger effort by Comptroller Joseph Otting to modernize and broaden the 1970s CRA, including expanding how banks get credit for lending to low- and moderate-income communities.

Joseph Otting, Comptroller of the Currency.
“It’s been a back-and-forth process,” Comptroller of the Currency Joseph Otting said of efforts to modernize CRA.
Joseph Otting, Comptroller of the Currency. Bloomberg News

Banks are typically examined for CRA compliance every three to four years, but the CRA grades for some banks have been publicly released at significantly longer intervals — an issue that Otting and his predecessor, Thomas Curry, have tried to address.

“While modernization efforts are proceeding, the OCC is issuing this bulletin to inform” its regulated banks “about clarifications to OCC supervisory policies and processes regarding how examiners evaluate and communicate bank performance under the CRA,” the OCC said in the bulletin. “The OCC has clarified and simplified these policies and processes to promote the consistency and effectiveness of CRA performance evaluations.”

Otting has tried to hurry the release of an advance notice of proposed rulemaking on more extensive CRA changes and said he is hopeful the Federal Deposit Insurance Corp. and the Federal Reserve Board will join in the effort.

“It’s been a back-and-forth process,” Otting said Thursday at a National Association of Affordable Housing Lenders conference. “I would hope in [the] next week or so we will make a decision whether we will release it as a sole agency or a joint agency. I hope it’s a joint agency ... but I am prepared to go singular if I have to.”

As part of the new bulletin that applies to all OCC-regulated banks, the OCC rescinded its previous guidance on examining large banks for CRA that was issued in December 2000.

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