Alert March 26, 2013

FDIC, FRB and OCC Jointly Propose Revisions to Interagency Q&As Regarding Community Reinvestment; Comptroller Curry Presents Remarks Concerning Revisions to Q&As

The OCC, FDIC, and FRB jointly proposed certain updates to the Interagency Questions and Answers Regarding Community Reinvestment.  The proposed changes (the “Proposal”) focus primarily on issues concerning community development and seek to revise five questions and answers that address (1) community development activities outside institutions’ assessment areas, (2) additional ways to determine whether recipients of community services are low- or moderate-income and (3) providing a community development service by serving on the board of directors of a community development organization.  For example, the Proposal would clarify that community development activities in the broader statewide or regional area will be considered in the evaluation of an institution’s Community Reinvestment Act (“CRA”) performance.  The Proposal also seeks to add two new questions and answers.  The first new question and answer relates to consideration of community development performance in determining a financial institution’s lending test rating.  The second new question and answer concerns quantitative consideration given to a certain type of community development investment.  Comments must be received by May 17, 2013.

Separately, Comptroller of the Currency Thomas J. Curry presented remarks to a meeting of the National Community Reinvestment Coalition in which he stated that implementation of the CRA “makes a measurable difference” to low- and moderate-income communities and was not a contributor to the nation’s recent financial crisis.  Comptroller Curry commented on the Proposal and stated that the Proposal is intended “to provide more clarity so that banks will look into more opportunities to lend and make investments in rural and under-served areas in their broader statewide and regional areas…”  while still meeting community needs in [the respective bank’s] assessment area.  Comptroller Curry also noted that the federal bank regulatory agencies continue to work to improve CRA guidance and will, in the future, issue additional questions and answers regarding CRA issues.