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OCC Bulletin 2020-99
November 9, 2020
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Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches; Department and Division Heads; All Examining Personnel; and Other Interested Parties
The Office of the Comptroller of the Currency (OCC) published in the Federal Register on June 5, 2020, a final rule1 (June 2020 rule) that strengthens and modernizes the agency’s regulations under the Community Reinvestment Act (CRA). This bulletin summarizes key provisions of the June 2020 rule, which became effective October 1, 2020. This bulletin provides responses to frequently asked questions (FAQ) from bankers2 and examiners about how the OCC will administer and implement the June 2020 rule.
This bulletin rescinds OCC Bulletin 2020-3, “Community Reinvestment Act: Notice of Proposed Rulemaking,” and OCC Bulletin 2020-4, “Community Reinvestment Act: Request for Public Input.”
This rule applies to community banks subject to the CRA.
The June 2020 rule preserves the important objective of encouraging banks to help meet the credit needs of their local communities, including low- and moderate-income neighborhoods, while responding to the significant changes and advancements in the banking industry since the CRA’s enactment in 1977 and the last comprehensive regulatory changes in 1995. The June 2020 rule provides new standards for evaluating bank performance and for collecting, maintaining, and reporting data used in the CRA evaluation process.
The June 2020 rule establishes transparent criteria for qualifying retail and community development activities and provides for an illustrative list of activities that will receive CRA credit. The rule also establishes new criteria for designating bank assessment areas, including
The June 2020 rule provides for different performance standards by bank type, which are
The June 2020 rule retains a strategic plan option available to all types of banks.
Small banks, intermediate banks, limited purpose banks, and wholesale banks will be examined based on the June 2020 rule’s performance tests and standards corresponding to their specific bank type. Those performance standards generally continue the performance standards under the 1995 rule, as revised (1995 rule).5 GPS banks will be examined under the June 2020 rule’s new GP standards. Banks with assets of $2.5 billion or less, as adjusted, may opt into the new GP standards. Banks that elect the strategic plan option will be subject to performance standards that are tailored to the banks’ unique characteristics and needs.
GPS banks will be required to collect, maintain, and report certain data related to their qualifying activities, certain non-qualifying activities, retail domestic deposits, performance context, and assessment areas. Banks evaluated under a strategic plan will be required to collect, maintain, and report certain data related to their qualifying activities, certain non-qualifying activities, retail domestic deposits, performance context, and assessment areas, unless otherwise determined in writing by the OCC. Wholesale and limited purpose banks will be required to collect, maintain, and report certain data related to their qualifying activities, retail domestic deposits, performance context, and assessment areas.
The June 2020 rule establishes three compliance dates. Banks must comply with certain provisions of the June 2020 rule as of the effective date of October 1, 2020, while other provisions have compliance dates of either January 1, 2023, or January 1, 2024, depending on the bank type. The June 2020 rule sets January 1, 2023, as the compliance date for the GP standards in 12 CFR 25.13, and the preamble to the rule states that the streamlined compliance dates in the final rule allow GPS banks to determine individually when to implement the various systems changes required to comply with this rule by January 1, 2023.6 The June 2020 rule also includes a transition provision to provide flexibility for the OCC to establish an orderly transition for CRA examinations that assess performance based on activities conducted on or after October 1, 2020, but before the applicable compliance date.
The OCC will issue guidance to address how the Interagency Questions and Answers Regarding Community Reinvestment (Q&As)7 will apply to activities conducted under the June 2020 rule.
The OCC is conducting outreach activities to provide banks with more information regarding how the agency will administer the transition to the June 2020 rule, beginning with those provisions in the rule that have an October 1, 2020, compliance date. The OCC will continue to conduct outreach and training on other aspects of the June 2020 rule during the transition period.
For more information about this bulletin, please contact Vonda Eanes, Director for CRA and Fair Lending Policy, Compliance Risk Policy, at (202) 649-5470.
Refer to BankNet for information about the OCC’s CRA Webinar Series.
Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy
1 Refer to OCC News Release 2020-63, “OCC Finalizes Rule to Strengthen and Modernize Community Reinvestment Act Regulations.”
2 “Banks” refers to national banks and federal savings associations subject to the CRA. Generally, references to “national banks” also apply to federal branches subject to the CRA unless otherwise specified. Refer to the “Federal Branches and Agencies Supervision” booklet of the Comptroller’s Handbook for more information regarding the applicability of laws, regulations, and guidance to federal branches and agencies.
3 The small bank and intermediate bank asset size thresholds shall be adjusted annually and published by the OCC based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest $100,000.
4 For more information, refer to OCC Bulletin 2019-40, “Community Reinvestment Act: Guidelines for Requesting Designation as a Wholesale, Limited Purpose, or Special Purpose Bank.”
5 The 1995 rule was amended in 2005 to add intermediate small banks and consideration of activities in distressed and underserved geographies. Refer to 70 Fed. Reg. 44256. Additional conforming changes were made in 2010 and 2015.
6 Refer to 85 Fed. Reg. 34734 and 34783-84.
7 Refer to OCC News Release 2016-82, “Agencies Release Final Revisions to Interagency Questions and Answers Regarding Community Reinvestment.”
8 For more information, refer to OCC Bulletin 2019-40, “Community Reinvestment Act: Guidelines for Requesting Designation as a Wholesale, Limited Purpose, or Special Purpose Bank.”