WASHINGTON–Three Federal agencies have issued a joint statement on the Community Reinvestment Act, saying they plan to take joint action, including plans to scrap a Trump-era overhaul of the rules that had led to strong divisions.
The brief statement from the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), said all the agencies are committed to working together to jointly strengthen and modernize regulations implementing the Community Reinvestment Act (CRA).
Under a new Democratic administration and Congress, more aggressive action around CRA is expected.
In the statement the agencies said they have broad authority and responsibility for implementing the CRA.
“Joint agency action will best achieve a consistent, modernized framework across all banks to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods,” the agencies said.
Proposal Withdrawn
Meanwhile, the OCC, which oversees national banks and the bulk of the activity under the low-income lending rules, said it would propose withdrawing controversial changes it pushed through last year without the support of the Federal Reserve and the FDIC, the Wall Street Journal reported.
“While the OCC deserves credit for taking action to modernize the CRA through adoption of the 2020 rule, upon review I believe it was a false start,” Acting Comptroller Michael Hsu said in a statement.
The Journal pointed out that a 2020 regulatory split could have led to an unusual situation in which some U.S. banks would have to follow one set of rules to comply with the law while others would have to abide by a different set of rules. “The FDIC has also sought to allow most of the community banks it regulates to follow the existing rules, raising the prospect of three different regulatory regimes for a single law,” the Journal added.