Comptroller of the Currency Joseph Otting said March 28 that his agency is finalizing a proposal to "revolutionize" the decades-old Community Reinvestment Act, and he expects it to be out for comments in the beginning of April.
Otting, speaking at a forum in Atlanta, outlined key elements of the proposal, which would broaden the types of lending that boost banks' ratings under the CRA. The law, which took effect in 1977, aims to ensure banks are serving low- and moderate-income communities.
Otting said he has talked to 1,000 people in the last 30 days about the proposal and has not had "one person who didn't stand up and almost cheer" for the plan, which he billed as "monumental change" for the country.
He also called on community groups, bankers, lawmakers, religious groups and fellow regulators to unite behind the changes. "If anybody starts to pooh-pooh it, it will create friction along the way," Otting said.
Industry groups, regulators and community groups have long looked at possible ways to revise the law, partly due to technological changes that have arisen. On March 26, for example, Federal Reserve Vice Chairman for Supervision Randal Quarles said the Fed is conducting a wide-ranging review of financial technology, including whether the CRA needs updating.
At a HOPE Global Forums event, Otting said the OCC wants to create a platform for the public to compare banks' commitment to the CRA. Right now, he said, those kinds of comparisons are "very complicated" and hard for even the OCC to make.
"I think it will change people's perspective of where they want to bank," he said.
Over time, Otting said, regulators have added more and more regulations to the CRA and "mucked it up," in part by shutting out some activities from helping banks' CRA ratings. He wants to broaden the kinds of lending that qualify for helping banks' CRA ratings, beyond the mortgage and multifamily home lending that makes up much of the current CRA activities. Those broader categories include, for instance, student lending in low- and moderate-income areas, small business lending and lending to churches' community efforts.
He also said he is working with the Fed and the Federal Deposit Insurance Corp. to begin producing CRA data every quarter.