On May 20, 2020, the Office of the Comptroller of the Currency (the “OCC”) issued a final rule overhauling its regulations implementing the Community Reinvestment Act (the “CRA”).  The CRA, enacted in 1977, incentivizes banks to meet the credit needs of their entire communities, including low- and moderate-income neighborhoods.  The final rule makes the first

On January 8, 2020, Federal Reserve Board (“FRB”) Governor Lael Brainard delivered remarks on the state of Community Reinvestment Act (“CRA”) reform before an audience at the Urban Institute.  As we summarized in a client alert, last month, the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”) released a proposed overhaul of the regulations implementing the CRA, which the FRB declined to join.  While Governor Brainard’s speech made clear that she was not speaking on behalf of the FRB, her remarks provided insight into FRB decision-making on CRA reform and possible avenues to consensus among the agencies.

Continue Reading FRB Governor Brainard Discusses Path Forward on Community Reinvestment Act Reform

On December 12, 2019, the Office of the Comptroller of the Currency (the “OCC”) and the Federal Deposit Insurance Corporation (the “FDIC”) released a notice of proposed rulemaking to overhaul the agencies’ regulatory framework for evaluating banks’ Community Reinvestment Act (“CRA”) performance.  The proposal follows a 2018 advance notice of proposed rulemaking by the OCC,

In the past few weeks, both Federal Deposit Insurance Corporation (“FDIC”) Chairman Jelena McWilliams and Comptroller of the Currency Joseph Otting have spoken publicly about ongoing efforts by their agencies, and by the Federal Reserve Board, to reform regulations implementing the Community Reinvestment Act (“CRA”).

The federal bank regulatory agencies have been working on reforms

On June 4, 2019, Jelena McWilliams, the Chairman of the Federal Deposit Insurance Corporation (“FDIC”), addressed the Community Development Bankers Association. Her remarks emphasized the importance of community banking in the U.S. economy while also touching upon a number of related topics including Minority Depositary Institutions (“MDIs”), the Community Reinvestment Act (“CRA”), Small-Dollar Lending and Innovation.

Continue Reading FDIC Chairman McWilliams Speaks at Community Development Bankers Association Meeting

On August 28, 2018, the Office of the Comptroller of the Currency (“OCC”) released an advanced notice of proposed rulemaking (“ANPR”) inviting comments on a revised Community Reinvestment Act (“CRA”) framework. In the ANPR, the OCC described its vision for a new CRA framework that would:

  • encourage more lending and investment activity in low and moderate income communities;
  • provide more consistency across CRA evaluations and ratings; and
  • promote clarity regarding CRA-qualifying activities.

The ANPR requests responses to 31 questions across several topic areas, including the current CRA regulatory approach; a modernized CRA regulatory approach; CRA-qualifying activities; and recordkeeping and reporting.


Continue Reading OCC Releases Advanced Notice of Proposed Rulemaking Regarding CRA Framework

On April 3, 2018, the Department of the Treasury (“Treasury”) released its much-anticipated recommendations to reform the Community Reinvestment Act (“CRA”). The report, which is addressed to the federal banking agencies, outlines a number of proposed regulatory and administrative changes to (i) the CRA’s performance evaluation criteria, and (ii) the federal banking agencies’ approach to

On October 12, 2017, the Office of the Comptroller of the Currency (“OCC”) issued a Policies and Procedures Manual (“PPM”) outlining the framework to be used by examiners to determine whether an OCC-regulated bank should receive a downgrade of its Community Reinvestment Act (“CRA”) performance rating based on evidence of discriminatory or other illegal credit practices.  The PPM signals that the OCC intends to depart from the federal banking agencies’ recent practice of downgrading a bank’s CRA composite rating by one or two levels in virtually any circumstance in which the bank has entered into a consent order related to a consumer compliance violation.

Continue Reading OCC Issues Guidance on CRA Ratings Downgrades for Consumer Compliance Violations

On February 14, 2017, President Donald Trump signed a resolution nullifying a Securities and Exchange Commission (“SEC”) regulation that required energy companies to disclose foreign payments. This marks the first successful use of the Congressional Review Act (“CRA”) procedure in 16 years, and only the second successful use since the statute passed in 1996.  Several more such resolutions are likely to follow, potentially including a resolution nullifying the Consumer Financial Protection Bureau’s (“CFPB”) prepaid card rule.

Continue Reading President Trump Signs First Congressional Review Act Disapproval Resolution in 16 Years

The U.S. Court of Appeals for the Seventh Circuit recently issued a rare decision on a bank’s ability to challenge its supervisory ratings—in this case, its Federal Deposit Insurance Company (“FDIC”) Capital, Assets, Management, Earnings, Liquidity and Sensitivity (“CAMELS”) rating—in court.  See Builders Bank v. FDIC, — F.3d —, 2017 WL 237585 (7th Cir. 2017) (Easterbrook, J.).  The ruling affirmed that, while certain components of supervisory ratings may be committed to agency discretion and therefore not subject to judicial review in the normal course, other components may be reviewable under standard principles of administrative law.

Continue Reading Seventh Circuit Holds Open a Narrow Path for Challenging Bank Supervisory Ratings