CBA Submits Comment Letter to OCC on CRA

November 19, 2018


CBA Submits Comment Letter to OCC on CRA

Offers goals of modernization efforts: Clarity, Transformation, Flexibility & Optionality


WASHINGTON – Consumer Bankers Association today submitted comments in response to the Office of the Comptroller of Currency’s advance notice of proposed rulemaking on ways to modernize the Community Reinvestment Act. CBA’s comment letter was drafted in conjunction with the more than 50 member banks on the CBA Community Reinvestment Committee. These banks represent retail banks of all sizes – including regional and national banks – operating in all 50 states.


“We support the goals of CRA and believe 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. The modernization principles outlined in our comment letter will make the Community Reinvestment Act more effective and more efficient for the communities our banks serve,” said CBA President and CEO Richard Hunt. “Banks currently invest more than $100 billion each year into communities through CRA projects. Modernizing CRA will ensure these investments help those most in need and maintain CRA’s value in the future.”


“CRA is more than 40 years old and the framework of the current regulations is over two decades old,” CBA Executive Vice President and General Counsel Steven Zeisel said. “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 ensure its continued value to the communities banks serve, including low and moderate income areas.”


A copy of CBA’s comment letter is available here and a resource page with more information on the Community Reinvestment Act is available here, along with video testimonials from CRA practitioners.


In the letter, CBA outlines key goals of CRA modernization. Those goals are outlined and discussed in more detail below:


  • Provide clarity and certainty in CRA-eligible activities: There is currently too much ambiguity in CRA compliance and too much need to document detailed compliance requirements. Different examiners and different agencies interpret the same rules differently. Subjective terminology often requires examiners to make determinations on a case-by-case basis, so banks do not know what they have to do to comply. Too much unnecessary documentation is often needed, overly complicating and limiting the ability to reach lower income and underserve populations.


  • Account for digital transformation and customer preference: Modernization efforts should take into account the transformation in both technology and customer preference. CBA wrote, “It is important for both branch and nonbranch channels to be given equal weight, and that banks be able to demonstrate they are serving the needs of their entire communities, including low- and moderate-income customers, by employing channels that fit their model and their market.”


  • Permit more flexibility to invest where there is need:  Modernization should allow CRA-eligible activity wherever it is needed, including areas identified as underserved, while continuing to ensure banks are helping to meet local community needs.


  • Provide optionality for business models and strategies: While clarity is needed, CRA modernization should also avoid an overly strict one-size-fits-all framework. Rules should take into consideration different banks’ unique business strategies, just as they consider the unique needs of each community.


These changes should also reduce costly and time-consuming technical requirements; expand the value of CRA by ensuring the most appropriate CRA-eligible activities receive consideration; and provide for more timely evaluations.


CBA encourages the OCC, Federal Reserve Board and Federal Deposit Insurance Corporation to work together toward a single uniform framework for CRA and encourages rigorous testing of regulatory changes, employing a sufficient number of banks with diverse strategies and markets to ensure any changes to CRA maintain its value in the decades to come.




 About the Consumer Bankers Association
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.