The federal bank and thrift regulatory agencies today
published in the Federal Register a joint interagency notice of proposed
rulemaking (NPR) regarding the Community Reinvestment Act (CRA).
CRA directs the agencies to assess an insured depository
institutions record of meeting the credit needs of its entire community, and
to consider that record when acting on certain applications for branches,
office relocations, mergers, consolidations and other corporate
activities. The NPR is the product of
an interagency review of the CRA regulations that fulfilled the commitment the
agencies made when they adopted the
current CRA regulations in 1995 to review the regulations to determine whether
they were producing objective, performance-based CRA evaluations without
imposing undue burden on institutions.
The proposed rulemaking, which is being published by the
Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency and the Office of
Thrift Supervision, underscores the agencies conclusion that the CRA
regulations are essentially sound, but need to be updated to keep pace with
changes in the financial services industry.
This proposed rule was developed following the agencies
review of the CRA regulations, which included an analysis of about four hundred
comments received on the Advance Notice of Proposed Rulemaking.
The agencies are proposing amendments to the CRA regulations
in two areas.
First, to reduce unwarranted burden consistent with the
agencies ongoing efforts to identify and reduce regulatory burden, the
agencies are proposing to amend the definition of small institution to mean
an institution with total assets of less than $500 million, without regard to
any holding company assets.
This change would take into account substantial
institutional asset growth and consolidation in the banking and thrift
industries since the definition was adopted.
The proposal would increase the number of institutions that are eligible
for evaluation under the small institution performance standards, while only
slightly reducing the portion of the nations bank and thrift assets that is
subject to evaluation under the large retail institution performance
standards.
Second, in order to better address abusive lending practices
in CRA evaluations, the agencies are proposing to amend the regulations to
provide explicitly that an institution's CRA evaluation will be adversely
affected by evidence of specified discriminatory, illegal, or abusive practices
by the institution or by an affiliate whose loans were considered in the
evaluation as part of the institution's own CRA record.
In addition, the agencies also propose several enhancements
to the loan data disclosed in CRA public evaluations and CRA disclosure
statements.
The agencies encourage comments from the public and
regulated financial institutions on all aspects of this NPR, in order to ensure
a full discussion of the issues.
Comments must be received by April 6, 2004.
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Media Contacts:
Federal Reserve Susan Stawick
(202) 452-2955
FDIC David Barr (202) 898-6992
OCC Robert M. Garsson (202)
874-5770
OTS Chris Smith (202) 906-6677