Office of the Comptroller of the Currency Undermines Own CRA Rule By Putting Key Metric On Hold

American Banker
1 minute read | October.21.2020

Critics of the Office of the Comptroller of the Currency's new Community Reinvestment Act rule say it was rushed to completion, bypassing the interagency approach that once defined the rule.

Left scattered in its place is a reform (from the OCC) and proposal (from the Federal Reserve), leaving stakeholders with no clear direction on how the OCC's final version will work, critics say. Still, as national banks and thrifts try to figure out how to comply with it, those critics find themselves with an unlikely ally: the OCC itself.

In federal court filings contesting a community group challenge to the rule for being arbitrary and capricious, the OCC said the new rule was in an "inchoate state." The OCC explained that "the necessary benchmarks and thresholds that the OCC will use for assessing banks' performance" based on the new rule were not even in place, so any claim that banks' CRA activities may decrease under the new standard was "speculative."