CBA Statement On Joint CRA Proposal

Consumer Bankers Association (CBA) President & CEO Richard Hunt today released the following statement after the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) released a joint notice of proposed rulemaking to reform the Community Reinvestment Act (CRA):

“This is an important step towards modernizing a law that has not been meaningfully updated in decades, well before the widespread adoption of smartphones and mobile banking. We’re pleased to see the proposal focus on providing banks with the clarity, consistency, and transparency necessary to continue delivering on CRA's important mission for years to come. We also commend leading regulators for taking a unified approach and incorporating feedback from all stakeholders .

“Since the CRA was enacted more than 40 years ago, banks have invested trillions of dollars into underserved communities – making the vision of CRA a reality for families and small business most in need. Recognizing our shared commitment to expanding access to credit across every community banks serve, it’s imperative any final rule applies new requirements uniformly across the board to all financial institutions. CBA, our Community Reinvestment Committee and all of our member banks are currently analyzing the proposal and look forward to working with regulators, providing recommendations critical to ensuring the success of this effort.”

CBA Advocacy

Through CRA, banks are currently investing nearly $500 billion annually into communities across the country. Modernizing CRA will give banks more clarity as to which investments will count – allowing for them to do more, not less. It will also help ensure CRA investments reach those communities most in need. To successfully modernize CRA, CBA long has called on regulators to:

1. 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. Further, examiners from different agencies interpret the same rules differently. 
2. Account for digital transformation and customer preference. Modernization efforts should take into account the transformation in both technology and customer preference. It is important for both branch and non-branch 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.
3. 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.
4. Provide optionality for business models and strategies. 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.

After the Federal Reserve, OCC, and FDIC released an Advance Notice of Proposed Rulemaking in February 2021, CBA outlined key priorities for policymakers to consider in a comment letter sent to the agencies on behalf America’s leading banks and the millions of consumers they serve. 

Further Background

In July 2021, CBA commended the OCC  after the agency announced its decision to move forward with a repeal of the June 2020 (CRA) rule and continue working with the Federal Reserve and the FDIC on a joint rulemaking process to modernize the law.

At CBA LIVE 2021 in August, Acting Comptroller of the Currency Michael Hsu provided an updateon CRA interagency reform efforts, stating “People are meeting a lot on an interagency basis. […] We aren’t doing things in parallel and then hoping to reconcile it. We’re doing it together, each step of the way. […] Everyone is incentivized to get to the finish line together.”

In May 2021, CBA responded to the OCC’s decision to reconsider the rule, noting: “CRA has not been modernized since the shared line rotary phone days, and it is needed to reflect advancements in the marketplace. The OCC has demonstrated a path forward, and we hope regulators and politicians put politics aside and find common ground to best serve communities across the nation.”

To learn more about the importance of modernizing CRA, click HERE.