Comptroller of the Currency Joseph Otting is looking to limit Community Reinvestment Act credit to loans made only to low- to moderate-income borrowers living in low- to moderate-income areas, American Banker reported.
The OCC plans to change some rules of the law to resolve the issue of banks getting CRA credit for originating mortgages for medium- to high-income borrowers who happen to live in a low- to middle-income neighborhood, the news outlet quoted Otting as saying.
Otting is also considering a suggestion from John Hope Bryant, CEO of charity organization Operation HOPE Inc., to award CRA credit for investments made in Opportunity Zones, according to the news outlet. At present, loans made in Opportunity Zones, or sites mapped out by the U.S. government in 2017 to help low-income areas, qualify for special tax credits.
Both Otting and Bryant visited distressed areas in Atlanta that have benefited from CRA loans, American Banker reported.
The OCC, the Federal Deposit Insurance Corp. and the Federal Reserve Board are all looking at both proposals in reforming the CRA policy. However, Otting said there is no guarantee they will be included in the final amendment proposals that the regulators are set to release this fall, the news outlet reported.