February 20, 2020

February 20, 2020

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February 19, 2020

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February 18, 2020

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Treasury to recommend CRA changes

According to a Wall Street Journal article, the Treasury Department expects to make recommendations in early 2018 for changing Community Reinvestment Act regulations.

The article quotes a Treasury spokesperson who is reported to have said that CRA modernization is needed to align the statute’s goals and ensure that banks’ investments better support community needs.  The spokesperson is reported to also have said that Treasury has solicited input from consumer advocates, trade associations, financial institutions, legal scholars, think tanks, civil rights groups, and community development financial institutions, and plans to work with the OCC, FDIC, and Federal Reserve in developing the recommendations.

In discussing changes Treasury might propose, the article notes that Comptroller Otting has “floated the idea” that “community development loans” for CRA purposes be expanded to include more small business loans, and that the American Bankers Association has suggested expanding such loans to include infrastructure lending and other activities that do not solely benefit the poor.

In November 2017, the OCC issued a framework for evaluating applications from banks with less than satisfactory CRA ratings.  OCC regulations implementing the CRA provide that the OCC must consider a bank’s CRA rating when reviewing the bank’s application for branch establishment, branch relocation, main or home office relocation, a Bank Merger Act filing involving two insured depository institutions, conversion from a state to a federal charter, and conversion between federal charters.

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About this Author

Culhane, Ballard, Partner

John L. Culhane, Jr., is known for his work advising on interstate direct and indirect consumer and residential mortgage loan and leasing programs, through both traditional brick-and-mortar facilities and e-commerce. Before joining Ballard Spahr, Mr. Culhane was associate counsel with Mellon Bank, N.A.; associate counsel with Bank of America NT&SA; and senior attorney (section chief) with the National Credit Union Administration, the federal agency regulating federal credit unions.

Mr. Culhane addresses issues involving licensing,...