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Community Reinvestment Act Update

The Office of the Comptroller of the Currency (OCC) enacted The Community Reinvestment Act (CRA) in 1977. The OCC, the Federal Reserve Board (FRB), and the Federal Deposit Insurance Corporation (FDIC) have authority for implementing the statute to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low-and-moderate-income (LMI) neighborhoods.

The OCC’s CRA rules became effective in October 2020. At that time, OCC Bulletin 2020-86, dated 10/1/20 included:

  • A compliance guide for small banks.
  • An initial illustrative list of qualifying activities.
  • A form to request consideration of items to be added to the list of qualifying activities.
  • Change in CRA lobby sign requirements.

The OCC also revised the CRA to include:

  • Clarifying what qualifies for CRA consideration.
  • Evaluating banks more objectively.
  • Requiring banks to lend and invest wherever they take the majority of their deposits.
  • Making reporting and recordkeeping timelier and more transparent.

In September 2020, the FRB released its Advance Notice of Proposed Rulemaking (ANPR) seeking public comment on revising their CRA regulation. The goal was to determine ways to:

  • Modernize the regulation.
  • Seeking feedback on:
    • Ways to evaluate how banks meet the needs of low-and-moderate-income communities.
    • Address inequities in credit access.

The FRB’s ANPR was published in the Federal Register on October 19, 2020. With a deadline for commenting on the ANPR of February 16, 2021.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.