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Oct 19 -- The Board of Governors of the Federal Reserve System (Board) is publishing for public comment an advance notice of proposed rulemaking (ANPR) to solicit public input regarding modernizing the Board's Community Reinvestment Act regulatory and supervisory framework. The Board is seeking comment on all aspects of the ANPR from all interested parties and also requests commenters to identify other issues that the Board should consider. Comments on this ANPR must be received on or before February 16, 2021.
 
In this ANPR, the Board requests feedback on different approaches to modernizing the regulatory and supervisory framework for the Community Reinvestment Act (CRA) in order to more effectively meet the needs of low- and moderate-income (LMI) communities and address inequities in credit access. This includes seeking feedback from stakeholders regarding, among other things, accounting for changes in the banking system, applying metrics to certain CRA evaluation standards, and providing greater clarity regarding CRA-eligible activities. The Board is also mindful of the economic impact of the COVID-19 pandemic, particularly on LMI communities and households, and seeks feedback on how it should consider these impacts in CRA modernization.

In addition to requesting comment on all topics raised below, this ANPR also includes specific questions that are numbered consecutively. Commenters are requested to refer to these question numbers in their submitted comments, which will assist the Board in its efforts as well as members of the public that review comments online.

The contemplated changes to Regulation BB are guided by the following objectives:

More effectively meet the needs of LMI communities and address inequities in credit access, in furtherance of the CRA statute and its core purpose.

Increase the clarity, consistency, and transparency of supervisory expectations and of standards regarding where activities are assessed, which activities are eligible for CRA purposes, and how eligible activities are evaluated and assessed, while seeking to minimize the associated data burden and to tailor collection and reporting requirements.
 
Tailor CRA supervision of financial institutions (banks) [2] to reflect:
○ Differences in bank sizes and business models;
○ Differences in local markets, needs, and opportunities, including with respect to small banks serving rural markets; and
○ Expectations across business cycles.

Update standards in light of changes to banking over time, particularly the increased use of mobile and internet delivery channels.
 
Promote community engagement.
 
Strengthen the special treatment of minority depository institutions (MDIs).
 
Recognize that CRA and fair lending responsibilities are mutually reinforcing.
 
The Board seeks public input on different policy options to carry out the above objectives in several key areas and looks forward to assessing this input to advance the goal of strengthening the CRA regulation.
 
FR notice: https://www.federalregister.gov/documents/2020/10/19/2020-21227/community-reinvestment-act

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