OCC May Rewrite Community Reinvestment Act Regulations

Housing Affordability

The Office of the Comptroller of the Currency (OCC) yesterday announced it would reconsider a rule finalized by the Trump administration to modernize the Community Reinvestment Act (CRA) regulations.

The OCC published a final rule in June 2020 to strengthen and modernize the agency’s regulations under the CRA to encourage banks to engage in more activities to serve the needs of their communities, particularly low- and moderate-income and other historically underserved communities.

OCC will continue to implement the provisions of the June 2020 CRA rule that had a compliance date of Oct. 1, 2020, which include:

  1. Issuance of OCC Bulletin 2021-5 providing bank type determinations, lists of distressed and underserved areas, and the median hourly compensation value for community development service activities;
  2. Deployment of the CRA Qualifying Activities Confirmation Request process for banks and other stakeholders to request confirmation whether an activity meets the qualifying criteria under the June 2020 CRA rule; and
  3. Training on provisions of the June 2020 rule with the Oct. 1, 2020, compliance date in a series of webinars for examiners and bankers.

Although NAHB welcomed provisions in the final rule that would provide a list of CRA-eligible activities and a pre-approval process that banks could use to determine whether an activity would be eligible for CRA credit, we remained gravely concerned about the rule’s potential negative impact on the demand and value of Low-Income Housing Tax Credits (LIHTCs).

NAHB is hopeful that OCC’s decision to reconsider its CRA rule will facilitate the opportunity for the three banking regulators (OCC, Federal Deposit Insurance Corp. and the Federal Reserve) to craft a common CRA rule across the agencies that will open the door to homeownership for more minority and low-to-moderate income families and reinforce the federal government’s commitment to LIHTC, its largest, most successful affordable multifamily housing production program.

For more information, contact Michelle Kitchen or Becky Froass.

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