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The Office of the Comptroller of the Currency (OCC) Wednesday released its final rule that makes changes to banks' requirements under the Community Reinvestment Act (CRA). While credit unions are not subject to the CRA, NAFCU has worked to ensure CRA requirements are not extended to credit unions and has advocated that all credit unions be allowed to add underserved areas to their fields of membership.

The OCC issued the final rule solely, without the support of the Federal Reserve or the FDIC. During a Senate Banking Committee hearing last week with financial regulators, several regulators called on the agencies to reconsider issuing the rule. NAFCU had also called on the OCC and FDIC to reconsider and postpone the rulemaking in light of the coronavirus pandemic, flagging concerns with the proposed CRA changes.

"FDIC member Martin Gruenberg has called the proposal, and in particular the bank level and assessment area metric, 'deeply misconceived,' warning that it would 'fundamentally undermine and weaken' the CRA," NAFCU wrote as the association detailed how the proposal could degrade the quality of CRA evaluations. In response, the OCC chose to address some of these concerns by deferring establishment of thresholds for grading banks’ CRA performance and delineating banks’ deposit-based assessment areas until improved data is available.

The rule becomes effective Oct. 1, though compliance with the regulation will be phased in through 2024. Its release comes as reports indicated OCC Comptroller Joseph Otting would announce this week he's stepping down from his position.

In 2018, the Treasury Department published a list of recommendations for CRA improvements that, as a result of NAFCU's advocacy, did not include extending the law to credit unions. NAFCU has consistently opposed congressional efforts that would extend the law and a policy report from the Cato Institute last year reinforced the association's position.

The association will continue to advocate in the best interest of credit unions and against expanding the CRA or CRA-like requirements to the industry.