CBA Writes Prudential Regulators on CRA

August 10, 2020


CBA Writes Prudential Regulators on CRA

PPP loans should qualify for CRA credit; Consistent qualifying activity list vital to CRA compliance



WASHINGTON, D.C. – The Consumer Bankers Association today sent two letters to prudential regulators focused on Community Reinvestment Act policy.


The first, sent to FDIC Chairman Jelena McWilliams, Federal Reserve Board of Governors Chair Jerome Powell and Acting Comptroller of the Currency Brian Brooks urges the agencies to ensure CRA examiners provide positive CRA consideration for Paycheck Protection Program loans and could qualify as Community Development loans without extensive review or additional documentation.


“Many institutions have already greatly reallocated resources and innumerable staff to participate in the PPP program,” CBA President and CEO Richard Hunt wrote. “Requiring further verification on these loans will only inundate banks with unnecessary regulatory burden, rather than applying those resources to further serve communities during this trying time. Banks need an efficient process to qualify PPP program loans for positive CRA consideration so they can move on to addressing the developing needs of their communities.”


A copy of CBA’s letter is available here.


CBA also wrote FDIC Chairman Jelena McWilliams and Federal Reserve Chair Jerome Powell encouraging both agencies to adopt the OCC’s list of qualified activities as outlined in their final rule in lieu of finalized rules from either agency. That letter is available here.


In the letter, CBA implores the FDIC and Federal Reserve to publish illustrative lists of activities qualifying for CRA credit to bring objectivity and transparency to CRA compliance. Creating and maintaining a list of qualified activities among all three prudential regulators will help banks operate CRA portfolios with more certainty, which in turn will result in more comprehensive and expansive CRA programs.


“For far too long, CRA has been an overly subjective process,” said CBA President and CEO Richard Hunt. “Often, banks are uncertain as to whether an activity will qualify for CRA consideration until long after they have conducted the activity, or worse, passed on it due to this ambiguity. The framework as it exists today puts far too much power in the hands of an individual examiner, which creates an inconsistent and opaque CRA regime. Despite this uncertainty, banks invest nearly $500 billion each year into low- and moderate-income neighborhoods through CRA and these changes will ensure appropriate resources are invested through approved activity across the country.”


More information on CBA’s work to modernize CRA is available here and CBA’s comments on the OCC’s final rule are available here.






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.