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CBA Comment Letter re Reforming the CRA Regulatory Framework
November 19, 2018
Legislative and Regulatory Activities Division
Office of the Comptroller of the Currency
400 7th Street, SW, Suite 3E-218
Washington, DC 20219
Via Email: Regs.firstname.lastname@example.org
Re: Docket ID OCC-2018-0008: Reforming the Community Reinvestment Act Regulatory Framework
To Whom It May Concern:
The Consumer Bankers Association (CBA) is pleased to submit these comments to the Office of the Comptroller of the Currency (OCC) on behalf of its members in response to the Advance Notice of Proposed Rulemaking (ANPR) entitled “Reforming the Community Reinvestment Act Regulatory Framework.”
CBA commends the OCC for embarking on an exploration of ideas for building a modernized framework for the regulations implementing the Community Reinvestment Act (CRA). The OCC’s goal is to help regulated financial institutions more effectively serve the convenience and needs of their communities by encouraging more CRA activities where they are needed most; evaluating CRA activities more consistently; and providing greater clarity regarding CRA-qualifying activities.
As the ANPR states, “A transformed or modernized framework also would facilitate more timely evaluations of bank CRA performance, offer greater transparency regarding ratings, promote a consistent interpretation of the CRA, and encourage increased community and economic development in low- and moderate-income (LMI) areas.”
CBA supports the goals of CRA and believes banks have an affirmative obligation to help meet the credit needs of their communities, including low- and moderate-income areas, consistent with safe and sound banking. Since CRA was enacted, billions of dollars have been invested in communities that have demonstrably benefited them. We do not advocate, and would not support, changes to CRA that would undermine its value to the communities our banks serve.
At the same time, CRA is over 40 years old, and the framework of the current regulations is over two decades old. Since then, banking has been undergoing a rapid transformation — which is unlikely to end soon. With that in mind, we are advocating reforms; but we do so with the understanding we do not want to see CRA lose its overall effectiveness. Indeed, the purpose of reforms should be to enhance the effectiveness of CRA and ensures its continued value to the communities banks serve, including low- and moderate-income areas.
Reforms to CRA regulations should try to achieve at least the following goals, thereby increasing the benefits of CRA to the communities served by banks:
- Provide more clarity and certainty in CRA-eligible activities;
- Address digital transformation and the changing preferences of consumers;
- Permit more flexibility to invest where there is need; and
- Provide optionality for different models and strategies.