Last week the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) released a proposed rule that would modernize the Community Reinvestment Act (CRA) Regulations. The proposal would overhaul CRA assessment boundaries, criteria for eligible CRA activities, and how banks are scored overall for their performance. The draft regulations would require banks to devote two percent of their investments to community development, however many advocates are concerned that both the broadening of the definition of “community development,” as well as the proposed re-weighting of CRA investments and lending tests could negatively impact affordable housing as a preferred CRA investment and lending vehicle.
Comments are due 60 days after publication in the Federal Register, which will likely be by the end of this week. NH&RA is still analyzing the 239-page document and plans to submit comments with our partners and encourage our members to do the same. The Federal Reserve is expected to announce its own steps towards CRA modernization due to concerns about the single-metric approach adopted by the OCC and FDIC.