OCC Issues Community Reinvestment Act FAQs

On December 14, 2021, the Office of the Comptroller of the Currency (“OCC”) issued Bulletin 2021-61 (“December Rule”) rescinding the Community Reinvestment Act (“CRA”) regulation applying to national banks and savings associations issued on June 5, 2020 (“2020 Rule”). Under that final rule, the OCC replaced the 2020 Rule with a rule that was largely based on prior rules adopted by federal banking agencies in 1995 (“1995 Rules”).

In Bulletin 2021-61, the OCC stated it anticipated that the final rule—which was effective January 1, 2022—would have “limited impact on banks” and that the intention of this transition was to ease the burdens associated with the agency’s CRA requirements.  

In an effort to further the ease on financial institutions, on February 22, 2022, the OCC issued Bulletin 2022-4 providing responses to FAQs received in response to the OCC's decision to rescind the rule. The main inquiries surrounding the rescission included:

• the impact of the final rule on CRA bank type;

  • OCC Response: your institution’s “bank type” will be determined by the December 2021 CRA Rule and the classification will depend on the bank’s size

• qualifying activities;

  • OCC Response:

    • A qualified activity under the 2020 Rule that was conducted between October 1, 2020 and December 31, 2021, will still be considered as qualifying, even after the recission and regardless of the timing of a bank’s CRA examination.

    • Affiliate activities will be included in CRA evaluations as of April 1, 2022.

    • Disaster-related activities conducted on or after January 1, 2022 will receive CRA consideration if it is within a federally declared major disaster areas.

• the qualifying activity confirmation request system;

  • OCC Response:

    • Under the December bulletin, the OCC will only continue to accept requests from banks and other stakeholder to confirm whether:

      • “an activity is consistent with the June 2020 CRA rule qualifying activity criteria, if the activity was conducted between October 1, 2020 and December 31, 2021; or

      • an activity is consistent with the CD definition in the 1995 rules, as interpreted in the Interagency CRA Q&As, if the activity is conducted on or after January 1, 2022”

    • The OCC will maintain the Illustrative List of Qualifying Activities for banks to utilize to determine if activities conducted between October 1, 2020 and December 31, 2021 are eligible for CRA consideration. After this December cutoff, banks should inquire as to whether “the activity is consistent with the CD definition and geographic requirements in the December 2021 CRA rule.”

• the transition period;

  • OCC Response: Examination of banks will be governed by the provisions of the December 2021 CRA Rule on January 1, 2023 and these provisions will not be applied retroactively.

• examination administration;

  • OCC Response: If the institution’s bank type changed, there may be an adjustment in the evaluation period of that bank as well as the four year examination cycle for complex CRA banks. However, further guidance will need to be issued on the matter. 

• assessment areas;

  • OCC Response: Activities outside of the assessment area will be considered in the manner described in the Interagency CRA Q&As.

• targeted geographic areas;

  • OCC Response: “Under the December 2021 CRA rule, activities conducted on or after January 1, 2022, that meet the 1995 rules’ CD definition will receive consideration if the activities serve low- or moderate-income areas, distressed or underserved nonmetropolitan middle income areas, or disaster areas, and if they meet the geographic requirements of the 1995 rules. The terms low- or moderate-income areas, distressed or underserved nonmetropolitan middle-income areas, and disaster areas are defined under the 1995 rules and explained in the Interagency CRA Q&As.”

• data reporting;

  • OCC Response:

    • Banks that are classified as a “large bank” under the December rule will need to begin collecting loan data until one year after the bank type changed—January 1, 2023.

    • “Banks that were large banks under the 1995 rules, became intermediate banks under the June 2020 CRA rule, and transitioned back to large banks as a result of the December 2021 CRA rule (referred to as redesignated large banks) are not eligible for a grace period for compliance with the large bank data requirements, except as provided under the December 2021 CRA rule. The final rule requires redesignated large banks to report calendar year 2022 data by March 1, 2023.”

• changes to public notices and public files; 

  • OCC Response: The content of public notices, the content and location of public bank files, and the manner for providing public notice are outlined in the December rule.

• strategic plans.

  • OCC Response: banks that have an in-process strategic plan that would be effective after the December 31, 2021 cutoff which includes a proposed target market assessment area would need to amend the plan to exclude these areas as those are not required under the December Rule.