Dec 4 -- The Office of the Comptroller of the Currency (OCC) is issuing a notice of proposed rulemaking to request comment on the OCC's proposed approach to determine the Community Reinvestment Act (CRA) evaluation measure benchmarks, retail lending distribution test thresholds, and community development minimums under the general performance standards. The proposal further explains how the OCC would assess significant declines in CRA activities levels in connection with performance context following the initial establishment of the benchmarks, thresholds, and minimums. Finally, the proposed rule would make clarifying and technical amendments to the CRA final rule. Comments must be received on or before February 2, 2021.
On June 5, 2020, the OCC published a final rule in the Federal Register (2020 final rule) to update the regulatory framework implementing the Community Reinvestment Act of 1977 (CRA) for national banks and savings associations (collectively, banks). The 2020 final rule made changes in four areas of the historical CRA framework. Specifically, the 2020 final rule: (1) Clarified and expanded the bank lending, investment, and services that qualify for CRA consideration (collectively, qualifying activities or CRA activities); (2) updated how banks delineate the assessment areas in which they are evaluated; (3) provided additional methods for evaluating CRA performance in a consistent and objective manner; and (4) required reporting that is timely and transparent.
In the 2020 final rule, the OCC finalized the framework for the general performance standards (i.e., the CRA evaluation measure, retail lending distribution tests, community development (CD) minimums, and the percentage of assessment areas for which a bank must receive a satisfactory or outstanding assigned rating to achieve a bank presumptive rating of satisfactory or outstanding); however, the OCC decided not to adopt the specific CRA evaluation measure benchmarks, retail lending distribution test thresholds, and CD minimums as initially proposed. As noted in the preamble of the 2020 final rule, the OCC believes that it is appropriate to gather more information and further calibrate these measures, and the agency stated that it would issue a proposal that would explain the process the OCC will use to more precisely calibrate the benchmark, threshold, and minimum values.
This proposal seeks comment on the approach the OCC would use to set these benchmarks, thresholds, and minimums. As described further in this SUPPLEMENTARY INFORMATION section, the OCC is separately seeking data through an Information Collection Survey from banks subject to the general performance standards. Once the OCC analyzes the public comments on this proposal and the data it receives, the OCC plans to issue a final rule that will adopt an approach for setting the benchmark, threshold, and minimum values that correspond to the presumptive ratings (i.e., outstanding, satisfactory, needs to improve, and substantial noncompliance) for banks assessed under the general performance standards. In addition, once the OCC has determined the specific benchmarks, thresholds, and minimums according to the selected approach, the agency will take the appropriate steps to publicize the standards and engage stakeholders regarding the specific benchmarks, thresholds, and minimums. Once finalized, the OCC expects to periodically review and adjust these benchmarks, thresholds, and minimums, as necessary, to ensure that these measures are incentivizing banks to engage in appropriate levels of CRA activities, while taking into consideration market conditions and changes in economic cycles. The OCC also expects to take the appropriate steps to publicize the future adjustments to the benchmarks, thresholds, and minimums and engage stakeholders on these adjustments.