OCC Finalizes Rules to Update Community Reinvestment Act Regulations

The Office of the Comptroller of the Currency (OCC) today announced final rules to update the agency’s regulations under the Community Reinvestment Act (CRA). NAHB submitted comments on the proposed rule issued by the Federal Deposit Insurance Corp. (FDIC) and OCC in April and we are currently examining the 372-page regulation to determine its impact on the housing community.

The OCC issued the final rule without FDIC, so the new rule will apply only to OCC-regulated banks. The OCC regulates all national banks and federal savings associations — approximately 1,200 financial institutions nationwide. In a statement by FDIC Chairman Jelena McWilliams, she said “the agency is not prepared to finalize the CRA proposal at this time.”

In its comments, NAHB asked the agencies to clarify that construction loans to home builders could receive CRA credit under the new proposal. In its new rulemaking — and in a win for NAHB — the OCC said that construction loans for 1-4 family residential properties to builders and consumers are home mortgage loans for CRA purposes if they are reported on a bank’s Call Report.

The final rule is effective Oct. 1, 2020.

In a related development, Comptroller of the Currency Joseph Otting is expected to step down from his position as the OCC’s top regulator at the end of the week, according to reports from Politico and the Wall Street Journal.