Bank Policy Institute Outlines Principles for CRA Reform in Comment Letter

Bank Policy Institute Outlines Principles for CRA Reform in Comment Letter

Washington, DC – Today, the Bank Policy Institute submitted a comment letter to the Office of the Comptroller of the Currency (OCC) in response to its advance notice of proposed rulemaking, which solicited ideas for building a new regulatory framework to modernize the Community Reinvestment Act (CRA).  BPI’s comment letter recommended 13 principles that should guide the agency in its efforts.

“The OCC has chosen an ideal moment to explore ways to make the CRA work better for banks’ customers and communities,” BPI wrote in its comment letter. “BPI fully supports the long-standing goals of the CRA and believes that the act should continue to be an effective force for strengthening the development of the communities that they serve. The CRA has been invaluable in encouraging banks to meet the credit needs of low- and moderate-income neighborhoods and individuals. We share with community groups the goal of continuing to promote and advance economic opportunity by building on the CRA’s foundations and enhancing the framework to ensure banks can lend more to low- and moderate-income areas, small businesses, and other communities in need of financial services.”

BPI’s principles for CRA reform emphasize that:

  • It should be based on an assessment methodology that is objective and measurable, and furthers the goals of simplification, transparency, and certainty.
  • The CRA framework should accommodate the variety of bank business models, capabilities, and opportunities, as well as changing economic conditions.
  • The CRA should include an evaluation method for banks whose business is not clustered in geographies circumscribed by its branches.
  • The evaluation regime should be based on the language and purpose of the statute.

BPI’s comment letter also included a range of specific recommendations to put these principles into action.  Key among them are steps the OCC and other banking agencies could take to alleviate the problem of concentration of CRA activities in certain metropolitan areas, ways to clarify the types of activities for which a bank may receive CRA credit and ways to improve the timely issuance of performance evaluations.


About the Bank Policy Institute. The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

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