OCC Issues CRA Final Rule

The OCC recently issued a final rule amending its regulation implementing the Community Reinvestment Act (CRA).  Although the FDIC and the OCC published a joint notice of proposed rulemaking (NPRM), which WBK previously covered here, the FDIC did not join in the final rule.  FDIC Chairman Jelena McWilliams stated that “[w]hile the FDIC strongly supports the efforts to make the CRA rules clearer, more transparent, and less subjective, the agency is not prepared to finalize the CRA proposal at this time.” 

Some of the key changes made by the final rule include the following:

• Clarifies and expands the types of activities that qualify for CRA credit (OCC’s illustrative list of qualifying activities is available here)
• States that a bank that receives more than 50% of its retail domestic deposits from outside of its facility-based assessment areas must delineate separate deposit-based assessment areas where it receives 5% or more of its retail domestic deposits
• Provides additional methods for evaluating CRA performance in a consistent and objective manner
• Includes enhanced data collection, recordkeeping, and reporting requirements to support the new CRA regulatory framework

The final rule is effective October 1, 2020, but it provides a transition period for compliance based on a bank’s size and business model.  Generally, large banks and wholesale and limited purpose banks must comply with the new provisions by January 1, 2023.  However, small and intermediate banks must generally comply by January 1, 2024.