Reforming the Community Reinvestment Act Regulatory Framework, 45053-45059 [2018-19169]

Download as PDF Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE’s website: https://energy.gov/eere/ buildings/appliance-standards-andrulemaking-federal-advisory-committee. Participants are responsible for ensuring their systems are compatible with the webinar software. Procedure for Submitting Prepared General Statements for Distribution Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the FOR FURTHER INFORMATION CONTACT section of this notice. The request and advance copy of statements must be received at least one week before the public meeting and may be emailed, hand-delivered, or sent by mail. DOE prefers to receive requests and advance copies via email. Please include a telephone number to enable DOE staff to make a follow-up contact, if needed. daltland on DSKBBV9HB2PROD with PROPOSALS Conduct of Public Meeting ASRAC’s Designated Federal Officer will preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. A transcript of the public meeting will be included on DOE’s website: https://energy.gov/eere/ buildings/appliance-standards-andrulemaking-federal-advisory-committee. In addition, any person may buy a copy of the transcript from the transcribing reporter. Public comment and statements will be allowed prior to the close of the meeting. Docket The docket is available for review at https://www.regulations.gov/ docket?D=EERE-2018-BT-STD-0003, including Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. All documents in the docket are listed in the regulations.gov index. However, not all documents listed in the index may VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 be publically available, such as information that is exempt from public disclosure. DATES: Signed in Washington, DC, on August 29, 2018. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and Renewable Energy. ADDRESSES: [FR Doc. 2018–19212 Filed 9–4–18; 8:45 am] BILLING CODE 6450–01–P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Parts 25 and 195 [Docket ID OCC–2018–0008] RIN 1557–AE34 Reforming the Community Reinvestment Act Regulatory Framework Office of the Comptroller of the Currency. ACTION: Advance notice of proposed rulemaking. AGENCY: The Office of the Comptroller of the Currency (OCC or agency) invites comments on this advance notice of proposed rulemaking (ANPR) to solicit ideas for building a new framework to transform or modernize the regulations that implement the Community Reinvestment Act of 1977 (CRA). A new CRA regulatory framework would help regulated financial institutions more effectively serve the convenience and needs of their communities by encouraging more lending, investment, and activity where it is needed most; evaluating CRA activities more consistently; and providing greater clarity regarding CRA-qualifying activities. A transformed or modernized framework also would facilitate more timely evaluations of bank CRA performance, offer greater transparency regarding ratings, promote a consistent interpretation of the CRA, and encourage increased community and economic development in low- and moderate-income (LMI) areas. Revisions of this nature are consistent with the original intent of the CRA: To help meet the credit needs of the communities that banks serve. In addition, these types of revisions would align with the transformation of the banking industry and reduce the complexity, ambiguity, and burden associated with the regulations. SUMMARY: PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 45053 Comments on this ANPR must be received on or before November 19, 2018. Comments should be directed to: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ‘‘Reforming the Community Reinvestment Act Regulatory Framework’’ to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: • Federal eRulemaking Portal— ‘‘Regulations.gov’’: Go to www.regulations.gov. Enter ‘‘Docket ID OCC–2018–0008’’ in the Search box and click ‘‘Search.’’ Click on ‘‘Comment Now’’ to submit public comments. Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. • Email: regs.comments@ occ.treas.gov. • Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E–218, Washington, DC 20219. • Hand Delivery/Courier: 400 7th Street SW, Suite 3E–218, Washington, DC 20219. • Fax: (571) 465–4326. Instructions: You must include ‘‘OCC’’ as the agency name and ‘‘Docket ID OCC–2018–0008’’ in your comment. In general, the OCC will enter all relevant comments received into the docket and publish your comment on the Regulations.gov website without change, including any business or personal information that you provide, such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this rulemaking action by any of the following methods: • Viewing Comments Electronically: Go to www.regulations.gov. Enter ‘‘Docket ID OCC–2018–0008’’ in the Search box and click ‘‘Search.’’ Click on ‘‘Open Docket Folder’’ on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ‘‘View all documents and comments in this docket’’ and then E:\FR\FM\05SEP1.SGM 05SEP1 45054 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules using the filtering tools on the left side of the screen. Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period. • Viewing Comments Personally: You may personally inspect comments at the OCC, 400 7th Street SW, Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649–6700 or, for persons who are deaf or hearing impaired, TTY (202) 649–5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect comments. FOR FURTHER INFORMATION CONTACT: OCC: Vonda J. Eanes, Director for CRA and Fair Lending Policy, Compliance Risk Policy Division, (202) 649–5470; Emily R. Boyes, Senior Attorney, (202) 649–6350, Karen E. McSweeney, Special Counsel, (202) 649–5490, and Allison Hester-Haddad, Counsel, (202) 649–5490, Chief Counsel’s Office; for persons who are deaf or hearing impaired, TTY (202) 649–5597; or Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. SUPPLEMENTARY INFORMATION: daltland on DSKBBV9HB2PROD with PROPOSALS I. Background and Introduction The Community Reinvestment Act of 1977 1 was enacted to encourage financial institutions 2 (banks) to help meet the credit needs of the communities that they serve, including LMI neighborhoods, consistent with the banks’ safe and sound operations. In passing the CRA, Congress established that (1) banks are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business; (2) the convenience and needs of communities include the need for credit services as well as deposit services; and (3) banks have a continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.3 The statute directed each appropriate federal financial supervisory agency (i.e., the OCC, the 1 Public Law 95–128, 91 Stat. 1147 (October 12, 1977), codified at 12 U.S.C. 2901 et seq. 2 12 U.S.C. 2902(2) defines ‘‘regulated financial institution’’ to mean an ‘‘insured depository institution’’ as defined in 12 U.S.C. 1813. Twelve U.S.C. 1813(c)(2) defines ‘‘insured depository institution’’ to mean any bank or savings association whose deposits are insured by the Federal Deposit Insurance Corporation. 3 12 U.S.C. 2901(a). VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, agencies)) to assess the record of a bank in meeting the credit needs of its entire community, including LMI neighborhoods; 4 take this record into account when evaluating the bank’s application for a deposit facility; 5 and report to Congress the actions it has taken to carry out its CRA responsibilities.6 The CRA directed each agency to publish regulations to carry out the statute’s purpose.7 Since the CRA’s enactment, Congress has amended the statute numerous times, including in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 8 (which required public disclosure of a bank’s CRA written evaluation and rating); the Federal Deposit Insurance Corporation Improvement Act of 1991 9 (which required the inclusion of a bank’s CRA examination data in the determination of its CRA rating); the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 10 (which (1) required an agency to consider an outof-state national bank’s or state bank’s CRA rating when determining whether to allow interstate branches; and (2) prescribed certain requirements for the contents of the written CRA evaluation for banks with interstate branches); and the Gramm-Leach-Bliley Act of 1999 11 (which, among other things, provided regulatory relief for smaller banks by reducing the frequency of their CRA examinations). In 1978, consistent with Congress’ statutory directive, the agencies promulgated the first CRA regulations.12 They have since amended these regulations on several occasions, most significantly in 1995 and 2005.13 In addition, the agencies have periodically published interpretations of the CRA regulations in the form of Interagency Questions and Answers Regarding U.S.C. 2903(a)(1). U.S.C. 2903(a)(2). 6 12 U.S.C. 2904. 7 12 U.S.C. 2905. 8 Public Law 101–73, 103 Stat. 183 (August 9, 1989). 9 Public Law 102–242, 105 Stat. 2236 (December 19, 1991). 10 Public Law 103–328, 108 Stat. 2338 (September 29, 1994). 11 Public Law 106–102, 113 Stat. 1338 (November 12, 1999). 12 43 FR 47144 (October 12, 1978). 13 60 FR 22156 (May 4, 1995); 70 FR 44256 (August 2, 2005). Although adopted individually by each agency, the regulations have generally been drafted on an interagency basis and released jointly. Community Reinvestment (Q&A guidance).14 The CRA requires each agency to prepare a written evaluation of a bank’s record of meeting the credit needs of its entire community, including LMI neighborhoods, at the conclusion of its CRA evaluation.15 This report, known as a Performance Evaluation (PE), is required to be a public document that presents an agency’s conclusions regarding a bank’s overall performance for each ‘‘assessment factor’’ identified in the CRA regulations.16 A PE must also present facts and data supporting the agency’s conclusions 17 and contain both the bank’s CRA rating and a description of the basis for the rating.18 A bank’s CRA rating is considered, for example, in applications to merge or acquire another bank, open a branch, or relocate a main office or branch.19 A bank with a CRA rating below ‘‘satisfactory’’ may be restricted from certain activities until its next CRA evaluation, which is generally one or more years in the future. II. The Changing Banking Environment Over the past two decades, the financial services industry has undergone transformative changes, including the removal of bank interstate branching restrictions and the expanded role of technology in financial services. To better understand how banking products and services are delivered to consumers in this evolving industry and how these changes affect a bank’s CRA performance, the agencies have solicited feedback from the banking industry, community groups, academics, and others (collectively, stakeholders) on several occasions. For example, in 2010, the agencies held a series of joint public hearings across the country and solicited written feedback regarding how to update the CRA regulations in light of, among other things, changes in how banking services were delivered to consumers.20 From 2014 through 2016, the agencies again solicited feedback on the CRA, as part of the Economic Growth and 4 12 5 12 PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 14 The agencies have published the Q & A guidance for notice and comment prior to final publication in the Federal Register. 15 12 U.S.C. 2906. 16 12 U.S.C. 2906(b)(1)(A)(i). 17 12 U.S.C. 2906(b)(1)(A)(ii). 18 12 U.S.C. 2906(b)(1)(A)(iii). There are four statutory rating categories: Outstanding, satisfactory, needs to improve, and substantial noncompliance (12 U.S.C. 2906(b)(2)). 19 12 CFR 25.29 and 195.29. 20 See ‘‘Agencies Announce Public Hearings on Community Reinvestment Act Regulations,’’ Joint Press Release (June 17, 2010) (available at https:// www.occ.gov/news-issuances/news-releases/2010/ nr-ia-2010-65.html). E:\FR\FM\05SEP1.SGM 05SEP1 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules daltland on DSKBBV9HB2PROD with PROPOSALS Regulatory Paperwork Reduction Act of 1996 review,21 and received more than 60 comments about the CRA regulatory framework. These comments raised issues related to regulatory burden, as well as broader issues related to modernizing the CRA regulations and related Q&A guidance. During 2017 and 2018, the OCC held numerous meetings with bankers, community groups, nonprofit organizations, legislators, and other stakeholders and regulators to discuss the current CRA regulatory framework and to solicit input on how to improve the current regulatory framework. During 2017 and 2018, the U.S. Department of the Treasury (Treasury Department) invited a diverse group of stakeholders to provide feedback on how the CRA regulations could more effectively encourage economic growth in the communities that banks serve.22 On April 3, 2018, the Treasury Department issued recommendations to the agencies for broad changes to the fundamental administration of the CRA based on the feedback it had received. Specifically, the Treasury Department recommended updating the approach to delineating assessment areas to reflect the changing nature of banking; improving the evaluation process to increase the timeliness of evaluations and enable greater accountability for banks’ CRA activity planning; increasing the clarity and flexibility of CRA evaluations to foster transparency and effectiveness in CRA rating determinations; and incorporating performance incentives to encourage banks to meet the credit and deposit needs of their communities.23 As the financial services industry continues to evolve, many stakeholders believe that the statutory purpose of the CRA—to encourage banks to help meet the credit needs of the communities they serve, including LMI areas, in a manner that is consistent with their safe and sound operation—is not fully or effectively accomplished through the current regulations. Although aspects of the current CRA regulatory framework may be sufficient for certain locally focused and less complex banks, stakeholders have expressed concern that the current CRA regulatory framework no longer reflects how many banks and consumers engage in the 21 See, e.g., 80 FR 7980 (February 13, 2015). 22 Memorandum from the U.S. Department of the Treasury to the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (April 3, 2018) (available at https:// home.treasury.gov/sites/default/files/2018-04/4-318%20CRA%20memo.pdf). 23 Id. at 2. VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 business of banking. Stakeholders have also identified concerns about the lack of clarity, consistency, and certainty with respect to current CRA regulatory requirements. III. Objectives of the ANPR The OCC has reached out to and engaged with over 1,000 stakeholders on the existing CRA framework and whether it is meeting the credit needs of communities, given the changing landscape of the financial services industry and banking. The OCC’s goal for issuing this ANPR is to obtain additional public input on how to revise the CRA regulations to encourage more local and nationwide community and economic development—and thus promote economic opportunity—by encouraging banks to lend more to LMI areas, small businesses, and other communities in need of financial services. The agency invites comments on how to revise the CRA regulations to bring greater clarity, consistency, and certainty to the evaluation process, as well as to provide flexibility to accommodate banks with different business strategies. The OCC also invites comments on how to update assessment area definitions to accommodate digital lending channels, while retaining a focus on the communities in which bank branches are located. Additionally, the agency invites comments on clarifying and broadening the range of activities supporting community and economic development that qualify for CRA consideration. The following sections of the ANPR invite comments from all stakeholders on changing the current approach to performance evaluations; developing metrics to increase the objectivity of performance measures; updating how communities and assessment areas are defined to accommodate banks with different business strategies and allow banks to help meet the needs of underserved communities; broadening the range of qualifying activities to better support the purpose of the CRA; and enhancing recordkeeping and reporting. The OCC invites all comments and suggestions for other ways to improve the CRA regulatory framework. IV. Current CRA Regulatory Approach A. Current Performance Evaluation Methods The OCC’s current CRA regulations provide different methods to evaluate a bank’s CRA performance depending on the bank’s asset size and business PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 45055 strategy.24 Some stakeholders have expressed the view that the current regulatory framework is too complex, the asset thresholds for the performance tests and standards have not kept pace with bank asset sizes, and the standards are not applied transparently or consistently in performance evaluations. Under the current framework, • small banks (banks with less than $313 million in assets) are evaluated under a retail lending test that may also consider community development (CD) loans. CD investments and services may be considered for an outstanding rating at the bank’s option, but only if the bank meets or exceeds the lending test criteria in the small bank performance standards. • intermediate small banks (ISB) (banks with asset sizes between $313 million and $1.252 billion) are evaluated under the retail lending test for small banks and a CD test. The ISB CD test evaluates all CD activities together. • large banks (banks with more than $1.252 billion in assets) are evaluated under the lending, investment, and service tests. The large bank lending and service tests consider both retail and CD activity, while the investment test focuses on qualified CD investments. • wholesale and limited purpose banks are evaluated under a CD test that considers activities in a much broader geographic area than the area that is considered for large banks or ISBs. • a bank whose business predominantly consists of serving the needs of military personnel who are not located within a defined geographic area is evaluated under the performance test or standards applicable to its size and business model; such a bank, however, may delineate its entire deposit customer base as its assessment area. • any bank can elect to be evaluated under a strategic plan that sets out measurable, annual goals for lending, investment, and service to achieve a satisfactory or outstanding rating. A strategic plan must be developed with community input and approved by the bank’s primary regulator. Additionally, although the small bank, ISB, and large bank lending tests share some common elements, other elements are unique to each test. For example, to facilitate the evaluation of performance under the large bank lending test, the CRA regulations require that certain data on small business, small farm, and CD loans be collected and reported annually. Small 24 The asset sizes are adjusted annually based on the Consumer Price Index. E:\FR\FM\05SEP1.SGM 05SEP1 45056 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules banks and ISBs are not required to report this data. Finally, the OCC also considers applicable performance context information to inform its conclusions and CRA ratings in all cases. B. Community and Assessment Areas daltland on DSKBBV9HB2PROD with PROPOSALS The CRA statute does not define ‘‘community.’’ The statute requires the OCC to state conclusions, supported by facts and data, on banks’ performance in metropolitan areas and—for banks with branches in more than one state—in the nonmetropolitan area of a state where a bank has one or more domestic branches.25 The current CRA regulations also do not expressly define ‘‘community’’; they implement the concept by requiring a bank to delineate one or more ‘‘assessment area(s)’’ in which the agency evaluates the bank’s record of helping to meet the credit needs of its ‘‘community.’’ 26 The current CRA regulations specify what must be and what cannot be included in the assessment area delineation. The current interpretation of the regulations limits assessment area(s) to the area(s) surrounding a bank’s main office, branch offices, and deposit-taking automated teller machines (ATMs). A bank’s CRA performance evaluation is based primarily on the CRAqualifying activities that occur in or serve a bank’s assessment area(s). For some banks, their assessment area(s) may not include a substantial portion of the area(s) in which they conduct activities that would otherwise qualify for CRA consideration. The activities that occur outside of the bank’s assessment area that do not have a purpose, mandate, or function of serving the bank’s assessment area generally will not receive consideration unless the agency concludes that the bank has been responsive to the needs of its assessment area(s). Even then, the current CRA regulations and Q&A guidance generally limit consideration of CD activities to the broader statewide or regional areas that includes the 25 12 U.S.C. 2906(b)(1)(B), (d)(3)(A). ‘‘Domestic branch’’ is defined as any bank branch office or other bank facility that accepts deposits, located in any state (12 U.S.C. 2906(e)(1)). For banks that maintain domestic branches in two or more states, the OCC must prepare separate written evaluations of performance in each state in which banks maintain one or more domestic branches. For banks that maintain domestic branches in two or more states within a multistate metropolitan area, the OCC must prepare a separate written evaluation of performance within the multistate metropolitan area (12 U.S.C. 2906(d)(1)(B), (d)(2)). 26 12 CFR 25.41 and 195.41. VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 bank’s assessment area(s).27 Stakeholders have expressed concern that, in practice, the lack of clarity in the regulations and guidance limits banks’ willingness or ability to engage in CD activities outside of their assessment area(s). The current assessment area definition was developed when banking was based largely on physical branch locations as the primary means of delivering products and services. While some banks continue to conduct most of their CRA-qualifying activities within their assessment area(s), in part because of the current framework for evaluating CRA performance, banking has evolved and the cost of operating branches has increased. Changes in the industry offer more opportunities for banks to engage in business outside of the geographies surrounding physical branches. Numerous factors, including technological advances in the delivery of banking services, shifting business models, and changes in consumer behavior and preferences permit banks to engage in the business of banking regardless of whether they have branches or, if they do, the location of their branches. C. Questions Regarding Current Regulatory Approach The OCC invites comments on changes to transform or modernize the current CRA regulatory framework, including with respect to the following questions: 1. Are the current CRA regulations clear and easy to understand? 2. Are the current CRA regulations applied consistently? 3. Is the current CRA rating system objective, fair, and transparent? 4. Two goals of the CRA are to help banks effectively serve the convenience and needs of their entire communities and to encourage banks to lend, invest, and provide services to LMI neighborhoods. Does the current regulatory framework support these goals in light of how banks and consumers now engage in the business of banking? 5. With the statutory purpose of the CRA in mind, what aspects of the current regulatory framework are most successful in achieving that purpose? 6. If the current regulatory framework is changed, what features and aspects of 27 See Q & A guidance § l.12(h)–6. For banks evaluated pursuant to the CD test for wholesale or limited purpose banks, the agencies also consider qualified investments, CD loans, and CD services that benefit areas outside the bank’s asessment area(s), if the bank has adequately adressed the needs of its assessment area(s) (12 CFR 25.25(e)(2) and 195.25(e)(2)). PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 the current framework should be retained? V. A Modernized CRA A. Revising or Transforming the Current Regulatory Approach 1. Revising the Current Performance Evaluation Method The OCC invites comments on ways to modernize the current regulatory framework by modifying and streamlining the existing CRA performance tests, such as by implementing an alternative evaluation method or by increasing and enhancing the use of metrics within the performance tests. One such alternative evaluation method could replace existing performance tests and standards and separately evaluate retail or CD activities for all banks, accounting for variations in size, business model, and other factors. This approach could include updated metrics that take into account information on a bank’s performance context, such as the demographic characteristics and the economic and financial conditions of specific communities. 2. Metric-Based Framework The OCC also invites comments on a more transformational approach to the CRA regulatory framework that could (1) increase the transparency of how a bank’s CRA performance is evaluated by using quantitative benchmarks for specific ratings and clear standards for quantifying CRA activities; (2) define ‘‘community’’ more broadly to include additional domestic geographies in which the bank engages in the business of banking; and (3) expand the types of activities that would receive CRA consideration in a CRA evaluation, with a focus on lending, investments, and services for LMI geographies and individuals and other geographies and populations in need of financial services. Such an approach could simplify and improve the implementation of the CRA while better effectuating the law’s directive to encourage banks to serve their entire communities, including LMI neighborhoods, consistent with safe and sound operations. One approach is to create a metricbased performance measurement system with thresholds or ranges (benchmarks) that correspond to the four statutory CRA rating categories.28 These benchmarks could represent the overall or ‘‘macro’’ benchmarks for obtaining a 28 As noted in footnote 18, the four statutory rating categories are outstanding, satisfactory, needs to improve, and substantial non-compliance (12 U.S.C. 2906(b)(2)). E:\FR\FM\05SEP1.SGM 05SEP1 daltland on DSKBBV9HB2PROD with PROPOSALS Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules particular rating and could be composed of the ‘‘micro’’ components of CRA qualifying lending, investments, and services. These components could be aggregated to achieve the overall benchmark or level of performance. This approach would allow flexibility to accommodate bank capacity and business models while facilitating the comparison among banks of all sizes and business models and the evaluation against an objective, transparent threshold. In a metric-based framework designed to bring clarity to the determination of CRA ratings, the benchmarks representing the dollar value of CRAqualified activity could be compared to readily available and objective criteria, such as, a percentage of domestic assets, deposits, or capital from the bank’s balance sheet, to calculate a ratio that could correspond to the benchmark established for each rating category. For example, a bank with $1 billion in total assets that conducted $100 million of CRA-qualifying activities in the aggregate would achieve a 10-percent ratio, if total assets were used for the denominator. The OCC invites comments on the above approaches, including with respect to the following questions: 7. How could an alternative method for evaluating CRA performance be applied, taking into account the following factors: bank business model, asset size, delivery channels, and branch structure; measures or criteria used to evaluate performance, including appropriate metrics; and consideration for qualifying activities that serve areas outside a bank’s delineated assessment areas? 8. How could appropriate benchmarks for CRA ratings be established under a metric-based framework approach, taking into account balance-sheet items, such as assets, deposits, or capital and other factors, including business models? 9. How could performance context be included in such a metric-based approach? 10. In a metric-based framework, additional weight could be given to certain categories of CRA-qualifying activities, such as activities in certain geographies, including LMI areas near bank branches; activities targeted to LMI borrowers; or activities that are particularly innovative, complex, or impactful on the bank’s community. How could a metric-based framework most effectively apply different weighting to such categories of activities? For example, should a $1 loan product count as $1 in the VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 aggregate, while a $1 CD equity investment count as $2 in the aggregate? 11. How can community involvement be included in an evaluation process that uses a metric-based framework? 12. For purposes of evaluating performance, CD services are not currently quantified in a standard way, such as by dollar value. Under a metricbased framework, how should CD services be quantified? For example, a bank could calculate the value of 1,000 hours of volunteer work by multiplying it by an average labor rate and then include that number in the aggregate total value of its CRA activity. 3. Redefining Communities and Assessment Areas To recognize evolving banking practices, the OCC invites comments on ways to update how a bank’s community is interpreted for purposes of implementing the CRA. Under an updated approach, banks would continue to receive consideration for CRA-qualifying activities within their branch and deposit-taking ATM footprint and could receive consideration for providing these types of beneficial activities in LMI areas outside of their branch and deposittaking ATM footprint and other underserved areas. An updated approach to defining assessment areas could allow a bank to include additional areas tied to the bank’s business operations (e.g., areas where the bank has a concentration of deposits or loans, non-bank affiliate offices, or loan production offices). Under such an approach, banks could include these additional geographies in their assessment areas, enabling consideration of CRA-qualifying activities conducted within these areas. Such an approach could address concerns that the current CRA assessment areas can restrict bank lending or investment in areas of need, by expanding the circumstances in which banks receive consideration for CRA-qualifying activities beyond their delineated assessment areas. Providing consideration for activities conducted in targeted areas or areas that have historically been largely excluded from consideration such as remote rural populations or Indian country, for example, could help promote services and activities in those areas as well. It may also accommodate banks that either operate with business models that have no physical branches or banks with services that reach far beyond the geographic location of their physical branches. While the OCC would continue to assess CRA performance as required by statute, qualifying activities PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 45057 outside of the areas where a bank has its main office, branch offices, and deposittaking ATMs could be considered and assessed in the aggregate, at the bank level, in addition to activities in its traditional assessment areas or local geographies. The OCC invites comments on this approach, including with respect to the following questions: 13. How could the current approach to delineating assessment areas be updated to consider a bank’s business operations, in addition to branches and deposit-taking ATMs, as well as more of the communities that banks serve, including where the bank has a concentration of deposits, lending, employees, depositors, or borrowers? 14. Should bank activities in the LMI geographies surrounding branches and deposit-taking ATMs, or in other targeted geographic areas, be weighted (and if so, how), or should some other approach be taken to ensure that activities in those areas continue to receive appropriate focus from banks, such as requiring banks to have some minimum level of performance in the metropolitan statistical area (MSA) and non-MSA areas in which they have domestic branches before receiving credit for activity outside those areas? B. Expanding CRA-Qualifying Activities The OCC invites comments on the type and categories of activities that should receive CRA consideration. Within the current regulation’s performance tests and standards, CRA activities are generally considered in two categories—retail and CD—with the objective of encouraging banks to engage in a broad range of CRA-qualifying activities that are within LMI and other areas specified in the regulations and that benefit LMI individuals, small businesses, and small farms. For the most part, CRA-qualifying activities are defined by the regulations and further described in the Q&A guidance. The statute, however, requires the agencies to consider low-cost education loans provided to low-income borrowers, and it permits the agencies to consider activities undertaken by a non-minorityowned bank in conjunction with a minority- or women-owned bank or low-income credit union (MWLI), provided these activities benefit the MWLI’s local community. Some stakeholders have expressed concerns about which activities receive CRA consideration. These stakeholders generally express a desire for more clarity and certainty regarding which CD, small business, lending, and retail service activities will receive CRA consideration. E:\FR\FM\05SEP1.SGM 05SEP1 45058 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules daltland on DSKBBV9HB2PROD with PROPOSALS The OCC invites comments on regulatory changes that could ensure CRA consideration for a broad range of activities supporting community and economic development in banks’ CRA performance evaluations, while retaining a focus on LMI populations and areas, and set clear standards for determining whether an activity qualifies for CRA consideration. The OCC recognizes that providing greater clarity on qualifying activities could be beneficial in supporting the goals of the CRA for all banks, including those with more traditional business models. Additionally, under the current regulatory framework banks receive CRA consideration for certain small business loans. The CRA regulatory definition of a small business loan mirrors the definition found in bank Call Reports.29 The OCC also considers whether a large bank uses innovative or flexible lending practices in addressing the credit needs of LMI borrowers or geographies. Depending on the facts and circumstances, a bank that develops a unique approach or lending program targeted to support the needs of borrowers or small businesses in LMI geographies, LMI borrowers, or small businesses may be eligible to receive consideration under CRA for those activities. The OCC invites comments on the role of small business credit in LMI areas or for LMI small business owners, and under what circumstances small business loans should receive CRA consideration. The OCC invites comments on qualifying activities, including with respect to the following questions: 15. How should ‘‘community and economic development’’ be defined to better address community needs and to incentivize banks to lend, invest, and provide services that further the purposes of the CRA? For example, should certain categories of loans and investments be presumed to receive consideration, such as those that support projects, programs, or organizations with a mission, purpose, or intent of community or economic development; or, within such categories, only those that are defined as community or economic development 29 Loans to small businesses are defined as those with original amounts of $1 million or less reported on the institution’s Call Report as either ‘‘loans secured by nonfarm residential property’’ or ‘‘commercial and industrial loans.’’ In addition to receiving consideration for business loan in amounts of $1 million or less, a bank may also receive CRA consideration for business loans of more than $1 million if the loan has a primary purpose of ‘‘community development’’ as that term is defined in the CRA regulations. VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 by federal, state, local, or tribal governments? 16. Should there be specific standards for CD activities to receive consideration, such as requiring those activities to provide identified benefits to LMI individuals and small business borrowers or to lend to and invest in LMI communities or other areas or populations identified by federal, state, local, or tribal government as distressed or underserved, including designated major disaster areas (hereinafter referred to as ‘‘other identified areas’’ or ‘‘other identified populations’’)? 17. Are there certain categories of CD activities that should only receive consideration if they benefit specified underserved populations or areas, such as providing credit or technical assistance to small businesses or small farms; credit or financial services to LMI individuals or other identified populations (such as the disabled); or social services for LMI individuals or job creation, workforce development, internships, or apprentice programs for LMI individuals or other identified populations? 18. Should consideration for certain activities that might otherwise qualify as CD be limited or excluded? For example, how should investments in loan-backed securities be considered? 19. How should financial education or literacy programs, including digital literacy, be considered? 20. Should bank activities to expand the use of small and disadvantaged service providers receive CRA consideration as CD activities? 21. The current regulatory framework provides for CRA performance evaluations to consider home mortgage, small business, and small farm lending, and consumer lending in certain circumstances. Should these categories of lending continue to be considered as CRA-qualifying activities or should consideration in any or all of these categories be limited to loans to LMI borrowers and loans in LMI or other identified areas? 22. Under what circumstances should consumer lending be considered as a CRA-qualifying activity? For example, should student, auto, credit card, or affordably priced small-dollar loans receive consideration? If so, what loan features or characteristics should be considered in deciding whether loans in these categories are CRA-qualifying? 23. Under what circumstances should small business loans receive CRA consideration? For example should consideration be given to all loans to businesses that meet the Small Business Administration standards for small businesses? PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 24. How should small business loans with a CD purpose be considered? 25. Should a bank’s loan purchases and loan originations receive equal consideration when evaluating that bank’s lending performance? 26. Should loans originated by a bank to hold in portfolio be weighted differently from loans originated for sale? If so, how? 27. Should bank delivery channels, branching patterns, and branches in LMI areas be reviewed as part of the CRA evaluations? If so, what factors should be considered? 28. The CRA states that the agencies may take into consideration in the CRA evaluation of a non-minority-owned and non-women-owned financial institution (majority-owned institution) any capital investment, loan participation, and other venture undertaken in cooperation with MWLIs, even if these activities do not benefit the majority-owned institution’s community, provided that these activities help meet the credit needs of local communities in which the MWLIs are chartered. What types of ventures should be eligible for such consideration, and how should such ventures be considered? C. Recordkeeping and Reporting The OCC also invites comments on how to modernize CRA regulations to promote transparency and consistency in recordkeeping, reporting, and examination requirements. The current regulatory approach does not facilitate regular tracking, monitoring, and comparisons of levels of CRA performance by banks and other stakeholders. One advantage of a modernized CRA framework that uses objective reportable metrics could be to allow for better tracking by banks of their overall CRA level of performance on a regular, periodic basis. If a metricbased framework and clarified standards for identifying and measuring qualifying activities were implemented, such an approach could also allow stakeholders to better understand the level of a bank’s CRA performance on a straightforward and timely basis. This type of framework may involve an updated approach to the OCC’s CRArelated data collection to be used for monitoring and assessing banks’ CRA performance. Additionally, under a metric-based framework, the ability to differentiate among activities based on their location, type, or other factors may involve additional recordkeeping and reporting. Such reporting could also support comparison among banks, their peer groups, or the entire industry and would E:\FR\FM\05SEP1.SGM 05SEP1 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules support understanding of industry-wide activity and trends. The OCC invites comments on CRA recordkeeping and reporting requirements. The OCC notes that additional feedback on recordkeeping and reporting may be necessary if a new framework is proposed in a future rulemaking. 29. Could the reporting of data gathered using a metric-based approach on a regular, periodic basis better support the tracking, monitoring, and comparison of CRA performance levels? 30. How frequently should banks report CRA activity data for the OCC to evaluate and report on CRA performance under a revised regulatory framework? 31. As required by law, and to the extent possible, the OCC attempts to minimize regulatory burden in its rulemakings consistent with the effective implementation of its statutory responsibilities. The OCC is committed to evaluating the economic impact of, and costs and benefits associated with, any changes that are proposed to the CRA regulations. Under the current regulatory framework, what are the annual costs, in dollars or staff hours, associated with CRA-related data collection, recordkeeping, and reporting? D. Additional Options or Approaches The OCC invites other ideas and options for modernizing the CRA regulatory framework not identified in this ANPR. Dated: August 28, 2018. Joseph M. Otting, Comptroller of the Currency. [FR Doc. 2018–19169 Filed 9–4–18; 8:45 am] BILLING CODE 4810–33–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG–2018–0832] RIN 1625–AA00 daltland on DSKBBV9HB2PROD with PROPOSALS Safety Zone; Head of the Buffalo Regatta; Buffalo River, Buffalo, NY Coast Guard, DHS. Notice of proposed rulemaking. AGENCY: ACTION: The Coast Guard proposes to establish a temporary safety zone for certain waters of the Buffalo River during the Head of the Buffalo Regatta. This proposed rulemaking would prohibit persons and vessels from being SUMMARY: VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 in the safety zone unless authorized by the Captain of the Port Buffalo or a designated representative. We invite your comments on this proposed rulemaking. Comments and related material must be received by the Coast Guard on or before October 5, 2018. ADDRESSES: You may submit comments identified by docket number USCG– 2018–0832 using the Federal eRulemaking Portal at https:// www.regulations.gov. See the ‘‘Public Participation and Request for Comments’’ portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments. DATES: If you have questions about this proposed rulemaking, call or email LTJG Sean Dolan, Chief of Waterways Management, U.S. Coast Guard Sector Buffalo; telephone 716–843–9322, email D09SMB-SECBuffalo-WWM@uscg.mil. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis On August 16, 2018, the Buffalo Scholastic Rowing Association notified the Coast Guard that it would be conducting a rowing regatta from 8:00 a.m. to 6:00 p.m. on October 20, 2018, in conjunction with the Head of the Buffalo Regatta. The rowing vessels will launch for their warmup from the Ohio St. Kayak Launch, at position 42°51′55.9″ N, 78°52′07.2″ W, then proceed to travel upriver to turnaround at position 42°51′36.7″ N, 78°50′56.0″ W. The race will then begin at position 42°51′40.0″ N, 78°50′56.5″ W, and proceed downriver to the finish line near the Ohio St. bridge at position 42°52′17.5″ N, 78°52′21.0″ W. Participants will then proceed further upriver to the turnaround point located at position 42°52′19.4″ N, 78°52′25.3″ W, and return to the starting point. The Captain of the Port Buffalo (COTP) has determined that potential hazards associated with rowboat races would be a safety concern for anyone within that stretch of the Buffalo River. The purpose of this rulemaking is to enhance the safety of vessels and racers on the navigable waters within the above stated points, before, during, and after the scheduled event. The Coast PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 45059 Guard proposes this rulemaking under authority 33 U.S.C. 1231. III. Discussion of Proposed Rule The COTP proposes to establish a temporary safety zone to be enforced intermittently from 8:00 a.m. until 6:00 p.m. on October 20, 2018. The safety zone will cover all navigable waters between the two points starting at position 42°52′19.4″ N, 78°52′25.3″ W, and ending at position 42°51′36.7″ N, 78°50′56.0″ W, on the Buffalo River, Buffalo, NY. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled rowboat races between 8:00 a.m. and 6:00 p.m. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document. IV. Regulatory Analyses We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors. A. Regulatory Planning and Review Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a ‘‘significant regulatory action,’’ under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771. This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic would not be able to safely transit around this safety zone, which would impact a small designated area of the Buffalo River. However, the Coast Guard would issue a Broadcast Notice to Mariners via VHF–FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone. B. Impact on Small Entities The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, as amended, requires Federal agencies to consider E:\FR\FM\05SEP1.SGM 05SEP1

Agencies

[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Proposed Rules]
[Pages 45053-45059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19169]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 25 and 195

[Docket ID OCC-2018-0008]
RIN 1557-AE34


Reforming the Community Reinvestment Act Regulatory Framework

AGENCY: Office of the Comptroller of the Currency.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Office of the Comptroller of the Currency (OCC or agency) 
invites comments on this advance notice of proposed rulemaking (ANPR) 
to solicit ideas for building a new framework to transform or modernize 
the regulations that implement the Community Reinvestment Act of 1977 
(CRA). A new CRA regulatory framework would help regulated financial 
institutions more effectively serve the convenience and needs of their 
communities by encouraging more lending, investment, and activity where 
it is needed most; evaluating CRA activities more consistently; and 
providing greater clarity regarding CRA-qualifying activities. A 
transformed or modernized framework also would facilitate more timely 
evaluations of bank CRA performance, offer greater transparency 
regarding ratings, promote a consistent interpretation of the CRA, and 
encourage increased community and economic development in low- and 
moderate-income (LMI) areas. Revisions of this nature are consistent 
with the original intent of the CRA: To help meet the credit needs of 
the communities that banks serve. In addition, these types of revisions 
would align with the transformation of the banking industry and reduce 
the complexity, ambiguity, and burden associated with the regulations.

DATES: Comments on this ANPR must be received on or before November 19, 
2018.

ADDRESSES: Comments should be directed to:
    Commenters are encouraged to submit comments through the Federal 
eRulemaking Portal or email, if possible. Please use the title 
``Reforming the Community Reinvestment Act Regulatory Framework'' to 
facilitate the organization and distribution of the comments. You may 
submit comments by any of the following methods:
     Federal eRulemaking Portal--``Regulations.gov'': Go to 
www.regulations.gov. Enter ``Docket ID OCC-2018-0008'' in the Search 
box and click ``Search.'' Click on ``Comment Now'' to submit public 
comments. Click on the ``Help'' tab on the Regulations.gov home page to 
get information on using Regulations.gov, including instructions for 
submitting public comments.
     Email: [email protected].
     Mail: Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E-
218, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2018-0008'' in your comment. In general, the OCC will 
enter all relevant comments received into the docket and publish your 
comment on the Regulations.gov website without change, including any 
business or personal information that you provide, such as name and 
address information, email addresses, or phone numbers. Comments 
received, including attachments and other supporting materials, are 
part of the public record and subject to public disclosure. Do not 
include any information in your comment or supporting materials that 
you consider confidential or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically: Go to 
www.regulations.gov. Enter ``Docket ID OCC-2018-0008'' in the Search 
box and click ``Search.'' Click on ``Open Docket Folder'' on the right 
side of the screen. Comments and supporting materials can be viewed and 
filtered by clicking on ``View all documents and comments in this 
docket'' and then

[[Page 45054]]

using the filtering tools on the left side of the screen. Click on the 
``Help'' tab on the Regulations.gov home page to get information on 
using Regulations.gov. The docket may be viewed after the close of the 
comment period in the same manner as during the comment period.
     Viewing Comments Personally: You may personally inspect 
comments at the OCC, 400 7th Street SW, Washington, DC 20219. For 
security reasons, the OCC requires that visitors make an appointment to 
inspect comments. You may do so by calling (202) 649-6700 or, for 
persons who are deaf or hearing impaired, TTY (202) 649-5597. Upon 
arrival, visitors will be required to present valid government-issued 
photo identification and submit to security screening in order to 
inspect comments.

FOR FURTHER INFORMATION CONTACT: 
    OCC: Vonda J. Eanes, Director for CRA and Fair Lending Policy, 
Compliance Risk Policy Division, (202) 649-5470; Emily R. Boyes, Senior 
Attorney, (202) 649-6350, Karen E. McSweeney, Special Counsel, (202) 
649-5490, and Allison Hester-Haddad, Counsel, (202) 649-5490, Chief 
Counsel's Office; for persons who are deaf or hearing impaired, TTY 
(202) 649-5597; or Office of the Comptroller of the Currency, 400 7th 
Street SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION: 

I. Background and Introduction

    The Community Reinvestment Act of 1977 \1\ was enacted to encourage 
financial institutions \2\ (banks) to help meet the credit needs of the 
communities that they serve, including LMI neighborhoods, consistent 
with the banks' safe and sound operations. In passing the CRA, Congress 
established that (1) banks are required by law to demonstrate that 
their deposit facilities serve the convenience and needs of the 
communities in which they are chartered to do business; (2) the 
convenience and needs of communities include the need for credit 
services as well as deposit services; and (3) banks have a continuing 
and affirmative obligation to help meet the credit needs of the local 
communities in which they are chartered.\3\ The statute directed each 
appropriate federal financial supervisory agency (i.e., the OCC, the 
Board of Governors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation (collectively, agencies)) to assess the 
record of a bank in meeting the credit needs of its entire community, 
including LMI neighborhoods; \4\ take this record into account when 
evaluating the bank's application for a deposit facility; \5\ and 
report to Congress the actions it has taken to carry out its CRA 
responsibilities.\6\ The CRA directed each agency to publish 
regulations to carry out the statute's purpose.\7\
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    \1\ Public Law 95-128, 91 Stat. 1147 (October 12, 1977), 
codified at 12 U.S.C. 2901 et seq.
    \2\ 12 U.S.C. 2902(2) defines ``regulated financial 
institution'' to mean an ``insured depository institution'' as 
defined in 12 U.S.C. 1813. Twelve U.S.C. 1813(c)(2) defines 
``insured depository institution'' to mean any bank or savings 
association whose deposits are insured by the Federal Deposit 
Insurance Corporation.
    \3\ 12 U.S.C. 2901(a).
    \4\ 12 U.S.C. 2903(a)(1).
    \5\ 12 U.S.C. 2903(a)(2).
    \6\ 12 U.S.C. 2904.
    \7\ 12 U.S.C. 2905.
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    Since the CRA's enactment, Congress has amended the statute 
numerous times, including in the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 \8\ (which required public 
disclosure of a bank's CRA written evaluation and rating); the Federal 
Deposit Insurance Corporation Improvement Act of 1991 \9\ (which 
required the inclusion of a bank's CRA examination data in the 
determination of its CRA rating); the Riegle-Neal Interstate Banking 
and Branching Efficiency Act of 1994 \10\ (which (1) required an agency 
to consider an out-of-state national bank's or state bank's CRA rating 
when determining whether to allow interstate branches; and (2) 
prescribed certain requirements for the contents of the written CRA 
evaluation for banks with interstate branches); and the Gramm-Leach-
Bliley Act of 1999 \11\ (which, among other things, provided regulatory 
relief for smaller banks by reducing the frequency of their CRA 
examinations).
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    \8\ Public Law 101-73, 103 Stat. 183 (August 9, 1989).
    \9\ Public Law 102-242, 105 Stat. 2236 (December 19, 1991).
    \10\ Public Law 103-328, 108 Stat. 2338 (September 29, 1994).
    \11\ Public Law 106-102, 113 Stat. 1338 (November 12, 1999).
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    In 1978, consistent with Congress' statutory directive, the 
agencies promulgated the first CRA regulations.\12\ They have since 
amended these regulations on several occasions, most significantly in 
1995 and 2005.\13\ In addition, the agencies have periodically 
published interpretations of the CRA regulations in the form of 
Interagency Questions and Answers Regarding Community Reinvestment (Q&A 
guidance).\14\
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    \12\ 43 FR 47144 (October 12, 1978).
    \13\ 60 FR 22156 (May 4, 1995); 70 FR 44256 (August 2, 2005). 
Although adopted individually by each agency, the regulations have 
generally been drafted on an interagency basis and released jointly.
    \14\ The agencies have published the Q & A guidance for notice 
and comment prior to final publication in the Federal Register.
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    The CRA requires each agency to prepare a written evaluation of a 
bank's record of meeting the credit needs of its entire community, 
including LMI neighborhoods, at the conclusion of its CRA 
evaluation.\15\ This report, known as a Performance Evaluation (PE), is 
required to be a public document that presents an agency's conclusions 
regarding a bank's overall performance for each ``assessment factor'' 
identified in the CRA regulations.\16\ A PE must also present facts and 
data supporting the agency's conclusions \17\ and contain both the 
bank's CRA rating and a description of the basis for the rating.\18\ A 
bank's CRA rating is considered, for example, in applications to merge 
or acquire another bank, open a branch, or relocate a main office or 
branch.\19\ A bank with a CRA rating below ``satisfactory'' may be 
restricted from certain activities until its next CRA evaluation, which 
is generally one or more years in the future.
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    \15\ 12 U.S.C. 2906.
    \16\ 12 U.S.C. 2906(b)(1)(A)(i).
    \17\ 12 U.S.C. 2906(b)(1)(A)(ii).
    \18\ 12 U.S.C. 2906(b)(1)(A)(iii). There are four statutory 
rating categories: Outstanding, satisfactory, needs to improve, and 
substantial non-compliance (12 U.S.C. 2906(b)(2)).
    \19\ 12 CFR 25.29 and 195.29.
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II. The Changing Banking Environment

    Over the past two decades, the financial services industry has 
undergone transformative changes, including the removal of bank 
interstate branching restrictions and the expanded role of technology 
in financial services. To better understand how banking products and 
services are delivered to consumers in this evolving industry and how 
these changes affect a bank's CRA performance, the agencies have 
solicited feedback from the banking industry, community groups, 
academics, and others (collectively, stakeholders) on several 
occasions. For example, in 2010, the agencies held a series of joint 
public hearings across the country and solicited written feedback 
regarding how to update the CRA regulations in light of, among other 
things, changes in how banking services were delivered to 
consumers.\20\
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    \20\ See ``Agencies Announce Public Hearings on Community 
Reinvestment Act Regulations,'' Joint Press Release (June 17, 2010) 
(available at https://www.occ.gov/news-issuances/news-releases/2010/nr-ia-2010-65.html).
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    From 2014 through 2016, the agencies again solicited feedback on 
the CRA, as part of the Economic Growth and

[[Page 45055]]

Regulatory Paperwork Reduction Act of 1996 review,\21\ and received 
more than 60 comments about the CRA regulatory framework. These 
comments raised issues related to regulatory burden, as well as broader 
issues related to modernizing the CRA regulations and related Q&A 
guidance. During 2017 and 2018, the OCC held numerous meetings with 
bankers, community groups, non-profit organizations, legislators, and 
other stakeholders and regulators to discuss the current CRA regulatory 
framework and to solicit input on how to improve the current regulatory 
framework.
---------------------------------------------------------------------------

    \21\ See, e.g., 80 FR 7980 (February 13, 2015).
---------------------------------------------------------------------------

    During 2017 and 2018, the U.S. Department of the Treasury (Treasury 
Department) invited a diverse group of stakeholders to provide feedback 
on how the CRA regulations could more effectively encourage economic 
growth in the communities that banks serve.\22\ On April 3, 2018, the 
Treasury Department issued recommendations to the agencies for broad 
changes to the fundamental administration of the CRA based on the 
feedback it had received. Specifically, the Treasury Department 
recommended updating the approach to delineating assessment areas to 
reflect the changing nature of banking; improving the evaluation 
process to increase the timeliness of evaluations and enable greater 
accountability for banks' CRA activity planning; increasing the clarity 
and flexibility of CRA evaluations to foster transparency and 
effectiveness in CRA rating determinations; and incorporating 
performance incentives to encourage banks to meet the credit and 
deposit needs of their communities.\23\
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    \22\ Memorandum from the U.S. Department of the Treasury to the 
Office of the Comptroller of the Currency, the Board of Governors of 
the Federal Reserve System, and the Federal Deposit Insurance 
Corporation (April 3, 2018) (available at https://home.treasury.gov/sites/default/files/2018-04/4-3-18%20CRA%20memo.pdf).
    \23\ Id. at 2.
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    As the financial services industry continues to evolve, many 
stakeholders believe that the statutory purpose of the CRA--to 
encourage banks to help meet the credit needs of the communities they 
serve, including LMI areas, in a manner that is consistent with their 
safe and sound operation--is not fully or effectively accomplished 
through the current regulations. Although aspects of the current CRA 
regulatory framework may be sufficient for certain locally focused and 
less complex banks, stakeholders have expressed concern that the 
current CRA regulatory framework no longer reflects how many banks and 
consumers engage in the business of banking. Stakeholders have also 
identified concerns about the lack of clarity, consistency, and 
certainty with respect to current CRA regulatory requirements.

III. Objectives of the ANPR

    The OCC has reached out to and engaged with over 1,000 stakeholders 
on the existing CRA framework and whether it is meeting the credit 
needs of communities, given the changing landscape of the financial 
services industry and banking. The OCC's goal for issuing this ANPR is 
to obtain additional public input on how to revise the CRA regulations 
to encourage more local and nationwide community and economic 
development--and thus promote economic opportunity--by encouraging 
banks to lend more to LMI areas, small businesses, and other 
communities in need of financial services. The agency invites comments 
on how to revise the CRA regulations to bring greater clarity, 
consistency, and certainty to the evaluation process, as well as to 
provide flexibility to accommodate banks with different business 
strategies. The OCC also invites comments on how to update assessment 
area definitions to accommodate digital lending channels, while 
retaining a focus on the communities in which bank branches are 
located. Additionally, the agency invites comments on clarifying and 
broadening the range of activities supporting community and economic 
development that qualify for CRA consideration.
    The following sections of the ANPR invite comments from all 
stakeholders on changing the current approach to performance 
evaluations; developing metrics to increase the objectivity of 
performance measures; updating how communities and assessment areas are 
defined to accommodate banks with different business strategies and 
allow banks to help meet the needs of underserved communities; 
broadening the range of qualifying activities to better support the 
purpose of the CRA; and enhancing recordkeeping and reporting. The OCC 
invites all comments and suggestions for other ways to improve the CRA 
regulatory framework.

IV. Current CRA Regulatory Approach

A. Current Performance Evaluation Methods

    The OCC's current CRA regulations provide different methods to 
evaluate a bank's CRA performance depending on the bank's asset size 
and business strategy.\24\ Some stakeholders have expressed the view 
that the current regulatory framework is too complex, the asset 
thresholds for the performance tests and standards have not kept pace 
with bank asset sizes, and the standards are not applied transparently 
or consistently in performance evaluations.
---------------------------------------------------------------------------

    \24\ The asset sizes are adjusted annually based on the Consumer 
Price Index.
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    Under the current framework,
     small banks (banks with less than $313 million in assets) 
are evaluated under a retail lending test that may also consider 
community development (CD) loans. CD investments and services may be 
considered for an outstanding rating at the bank's option, but only if 
the bank meets or exceeds the lending test criteria in the small bank 
performance standards.
     intermediate small banks (ISB) (banks with asset sizes 
between $313 million and $1.252 billion) are evaluated under the retail 
lending test for small banks and a CD test. The ISB CD test evaluates 
all CD activities together.
     large banks (banks with more than $1.252 billion in 
assets) are evaluated under the lending, investment, and service tests. 
The large bank lending and service tests consider both retail and CD 
activity, while the investment test focuses on qualified CD 
investments.
     wholesale and limited purpose banks are evaluated under a 
CD test that considers activities in a much broader geographic area 
than the area that is considered for large banks or ISBs.
     a bank whose business predominantly consists of serving 
the needs of military personnel who are not located within a defined 
geographic area is evaluated under the performance test or standards 
applicable to its size and business model; such a bank, however, may 
delineate its entire deposit customer base as its assessment area.
     any bank can elect to be evaluated under a strategic plan 
that sets out measurable, annual goals for lending, investment, and 
service to achieve a satisfactory or outstanding rating. A strategic 
plan must be developed with community input and approved by the bank's 
primary regulator.
    Additionally, although the small bank, ISB, and large bank lending 
tests share some common elements, other elements are unique to each 
test. For example, to facilitate the evaluation of performance under 
the large bank lending test, the CRA regulations require that certain 
data on small business, small farm, and CD loans be collected and 
reported annually. Small

[[Page 45056]]

banks and ISBs are not required to report this data.
    Finally, the OCC also considers applicable performance context 
information to inform its conclusions and CRA ratings in all cases.

B. Community and Assessment Areas

    The CRA statute does not define ``community.'' The statute requires 
the OCC to state conclusions, supported by facts and data, on banks' 
performance in metropolitan areas and--for banks with branches in more 
than one state--in the nonmetropolitan area of a state where a bank has 
one or more domestic branches.\25\
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    \25\ 12 U.S.C. 2906(b)(1)(B), (d)(3)(A). ``Domestic branch'' is 
defined as any bank branch office or other bank facility that 
accepts deposits, located in any state (12 U.S.C. 2906(e)(1)). For 
banks that maintain domestic branches in two or more states, the OCC 
must prepare separate written evaluations of performance in each 
state in which banks maintain one or more domestic branches. For 
banks that maintain domestic branches in two or more states within a 
multistate metropolitan area, the OCC must prepare a separate 
written evaluation of performance within the multistate metropolitan 
area (12 U.S.C. 2906(d)(1)(B), (d)(2)).
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    The current CRA regulations also do not expressly define 
``community''; they implement the concept by requiring a bank to 
delineate one or more ``assessment area(s)'' in which the agency 
evaluates the bank's record of helping to meet the credit needs of its 
``community.'' \26\
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    \26\ 12 CFR 25.41 and 195.41.
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    The current CRA regulations specify what must be and what cannot be 
included in the assessment area delineation. The current interpretation 
of the regulations limits assessment area(s) to the area(s) surrounding 
a bank's main office, branch offices, and deposit-taking automated 
teller machines (ATMs).
    A bank's CRA performance evaluation is based primarily on the CRA-
qualifying activities that occur in or serve a bank's assessment 
area(s). For some banks, their assessment area(s) may not include a 
substantial portion of the area(s) in which they conduct activities 
that would otherwise qualify for CRA consideration. The activities that 
occur outside of the bank's assessment area that do not have a purpose, 
mandate, or function of serving the bank's assessment area generally 
will not receive consideration unless the agency concludes that the 
bank has been responsive to the needs of its assessment area(s). Even 
then, the current CRA regulations and Q&A guidance generally limit 
consideration of CD activities to the broader statewide or regional 
areas that includes the bank's assessment area(s).\27\ Stakeholders 
have expressed concern that, in practice, the lack of clarity in the 
regulations and guidance limits banks' willingness or ability to engage 
in CD activities outside of their assessment area(s).
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    \27\ See Q & A guidance Sec.  _.12(h)-6. For banks evaluated 
pursuant to the CD test for wholesale or limited purpose banks, the 
agencies also consider qualified investments, CD loans, and CD 
services that benefit areas outside the bank's asessment area(s), if 
the bank has adequately adressed the needs of its assessment area(s) 
(12 CFR 25.25(e)(2) and 195.25(e)(2)).
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    The current assessment area definition was developed when banking 
was based largely on physical branch locations as the primary means of 
delivering products and services. While some banks continue to conduct 
most of their CRA-qualifying activities within their assessment 
area(s), in part because of the current framework for evaluating CRA 
performance, banking has evolved and the cost of operating branches has 
increased. Changes in the industry offer more opportunities for banks 
to engage in business outside of the geographies surrounding physical 
branches. Numerous factors, including technological advances in the 
delivery of banking services, shifting business models, and changes in 
consumer behavior and preferences permit banks to engage in the 
business of banking regardless of whether they have branches or, if 
they do, the location of their branches.

C. Questions Regarding Current Regulatory Approach

    The OCC invites comments on changes to transform or modernize the 
current CRA regulatory framework, including with respect to the 
following questions:
    1. Are the current CRA regulations clear and easy to understand?
    2. Are the current CRA regulations applied consistently?
    3. Is the current CRA rating system objective, fair, and 
transparent?
    4. Two goals of the CRA are to help banks effectively serve the 
convenience and needs of their entire communities and to encourage 
banks to lend, invest, and provide services to LMI neighborhoods. Does 
the current regulatory framework support these goals in light of how 
banks and consumers now engage in the business of banking?
    5. With the statutory purpose of the CRA in mind, what aspects of 
the current regulatory framework are most successful in achieving that 
purpose?
    6. If the current regulatory framework is changed, what features 
and aspects of the current framework should be retained?

V. A Modernized CRA

A. Revising or Transforming the Current Regulatory Approach

1. Revising the Current Performance Evaluation Method
    The OCC invites comments on ways to modernize the current 
regulatory framework by modifying and streamlining the existing CRA 
performance tests, such as by implementing an alternative evaluation 
method or by increasing and enhancing the use of metrics within the 
performance tests. One such alternative evaluation method could replace 
existing performance tests and standards and separately evaluate retail 
or CD activities for all banks, accounting for variations in size, 
business model, and other factors. This approach could include updated 
metrics that take into account information on a bank's performance 
context, such as the demographic characteristics and the economic and 
financial conditions of specific communities.
2. Metric-Based Framework
    The OCC also invites comments on a more transformational approach 
to the CRA regulatory framework that could (1) increase the 
transparency of how a bank's CRA performance is evaluated by using 
quantitative benchmarks for specific ratings and clear standards for 
quantifying CRA activities; (2) define ``community'' more broadly to 
include additional domestic geographies in which the bank engages in 
the business of banking; and (3) expand the types of activities that 
would receive CRA consideration in a CRA evaluation, with a focus on 
lending, investments, and services for LMI geographies and individuals 
and other geographies and populations in need of financial services. 
Such an approach could simplify and improve the implementation of the 
CRA while better effectuating the law's directive to encourage banks to 
serve their entire communities, including LMI neighborhoods, consistent 
with safe and sound operations.
    One approach is to create a metric-based performance measurement 
system with thresholds or ranges (benchmarks) that correspond to the 
four statutory CRA rating categories.\28\ These benchmarks could 
represent the overall or ``macro'' benchmarks for obtaining a

[[Page 45057]]

particular rating and could be composed of the ``micro'' components of 
CRA qualifying lending, investments, and services. These components 
could be aggregated to achieve the overall benchmark or level of 
performance. This approach would allow flexibility to accommodate bank 
capacity and business models while facilitating the comparison among 
banks of all sizes and business models and the evaluation against an 
objective, transparent threshold.
---------------------------------------------------------------------------

    \28\ As noted in footnote 18, the four statutory rating 
categories are outstanding, satisfactory, needs to improve, and 
substantial non-compliance (12 U.S.C. 2906(b)(2)).
---------------------------------------------------------------------------

    In a metric-based framework designed to bring clarity to the 
determination of CRA ratings, the benchmarks representing the dollar 
value of CRA-qualified activity could be compared to readily available 
and objective criteria, such as, a percentage of domestic assets, 
deposits, or capital from the bank's balance sheet, to calculate a 
ratio that could correspond to the benchmark established for each 
rating category. For example, a bank with $1 billion in total assets 
that conducted $100 million of CRA-qualifying activities in the 
aggregate would achieve a 10-percent ratio, if total assets were used 
for the denominator.
    The OCC invites comments on the above approaches, including with 
respect to the following questions:
    7. How could an alternative method for evaluating CRA performance 
be applied, taking into account the following factors: bank business 
model, asset size, delivery channels, and branch structure; measures or 
criteria used to evaluate performance, including appropriate metrics; 
and consideration for qualifying activities that serve areas outside a 
bank's delineated assessment areas?
    8. How could appropriate benchmarks for CRA ratings be established 
under a metric-based framework approach, taking into account balance-
sheet items, such as assets, deposits, or capital and other factors, 
including business models?
    9. How could performance context be included in such a metric-based 
approach?
    10. In a metric-based framework, additional weight could be given 
to certain categories of CRA-qualifying activities, such as activities 
in certain geographies, including LMI areas near bank branches; 
activities targeted to LMI borrowers; or activities that are 
particularly innovative, complex, or impactful on the bank's community. 
How could a metric-based framework most effectively apply different 
weighting to such categories of activities? For example, should a $1 
loan product count as $1 in the aggregate, while a $1 CD equity 
investment count as $2 in the aggregate?
    11. How can community involvement be included in an evaluation 
process that uses a metric-based framework?
    12. For purposes of evaluating performance, CD services are not 
currently quantified in a standard way, such as by dollar value. Under 
a metric-based framework, how should CD services be quantified? For 
example, a bank could calculate the value of 1,000 hours of volunteer 
work by multiplying it by an average labor rate and then include that 
number in the aggregate total value of its CRA activity.
3. Redefining Communities and Assessment Areas
    To recognize evolving banking practices, the OCC invites comments 
on ways to update how a bank's community is interpreted for purposes of 
implementing the CRA. Under an updated approach, banks would continue 
to receive consideration for CRA-qualifying activities within their 
branch and deposit-taking ATM footprint and could receive consideration 
for providing these types of beneficial activities in LMI areas outside 
of their branch and deposit-taking ATM footprint and other underserved 
areas. An updated approach to defining assessment areas could allow a 
bank to include additional areas tied to the bank's business operations 
(e.g., areas where the bank has a concentration of deposits or loans, 
non-bank affiliate offices, or loan production offices). Under such an 
approach, banks could include these additional geographies in their 
assessment areas, enabling consideration of CRA-qualifying activities 
conducted within these areas. Such an approach could address concerns 
that the current CRA assessment areas can restrict bank lending or 
investment in areas of need, by expanding the circumstances in which 
banks receive consideration for CRA-qualifying activities beyond their 
delineated assessment areas. Providing consideration for activities 
conducted in targeted areas or areas that have historically been 
largely excluded from consideration such as remote rural populations or 
Indian country, for example, could help promote services and activities 
in those areas as well. It may also accommodate banks that either 
operate with business models that have no physical branches or banks 
with services that reach far beyond the geographic location of their 
physical branches. While the OCC would continue to assess CRA 
performance as required by statute, qualifying activities outside of 
the areas where a bank has its main office, branch offices, and 
deposit-taking ATMs could be considered and assessed in the aggregate, 
at the bank level, in addition to activities in its traditional 
assessment areas or local geographies.
    The OCC invites comments on this approach, including with respect 
to the following questions:
    13. How could the current approach to delineating assessment areas 
be updated to consider a bank's business operations, in addition to 
branches and deposit-taking ATMs, as well as more of the communities 
that banks serve, including where the bank has a concentration of 
deposits, lending, employees, depositors, or borrowers?
    14. Should bank activities in the LMI geographies surrounding 
branches and deposit-taking ATMs, or in other targeted geographic 
areas, be weighted (and if so, how), or should some other approach be 
taken to ensure that activities in those areas continue to receive 
appropriate focus from banks, such as requiring banks to have some 
minimum level of performance in the metropolitan statistical area (MSA) 
and non-MSA areas in which they have domestic branches before receiving 
credit for activity outside those areas?

B. Expanding CRA-Qualifying Activities

    The OCC invites comments on the type and categories of activities 
that should receive CRA consideration. Within the current regulation's 
performance tests and standards, CRA activities are generally 
considered in two categories--retail and CD--with the objective of 
encouraging banks to engage in a broad range of CRA-qualifying 
activities that are within LMI and other areas specified in the 
regulations and that benefit LMI individuals, small businesses, and 
small farms. For the most part, CRA-qualifying activities are defined 
by the regulations and further described in the Q&A guidance. The 
statute, however, requires the agencies to consider low-cost education 
loans provided to low-income borrowers, and it permits the agencies to 
consider activities undertaken by a non-minority-owned bank in 
conjunction with a minority- or women-owned bank or low-income credit 
union (MWLI), provided these activities benefit the MWLI's local 
community.
    Some stakeholders have expressed concerns about which activities 
receive CRA consideration. These stakeholders generally express a 
desire for more clarity and certainty regarding which CD, small 
business, lending, and retail service activities will receive CRA 
consideration.

[[Page 45058]]

    The OCC invites comments on regulatory changes that could ensure 
CRA consideration for a broad range of activities supporting community 
and economic development in banks' CRA performance evaluations, while 
retaining a focus on LMI populations and areas, and set clear standards 
for determining whether an activity qualifies for CRA consideration. 
The OCC recognizes that providing greater clarity on qualifying 
activities could be beneficial in supporting the goals of the CRA for 
all banks, including those with more traditional business models.
    Additionally, under the current regulatory framework banks receive 
CRA consideration for certain small business loans. The CRA regulatory 
definition of a small business loan mirrors the definition found in 
bank Call Reports.\29\
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    \29\ Loans to small businesses are defined as those with 
original amounts of $1 million or less reported on the institution's 
Call Report as either ``loans secured by nonfarm residential 
property'' or ``commercial and industrial loans.'' In addition to 
receiving consideration for business loan in amounts of $1 million 
or less, a bank may also receive CRA consideration for business 
loans of more than $1 million if the loan has a primary purpose of 
``community development'' as that term is defined in the CRA 
regulations.
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    The OCC also considers whether a large bank uses innovative or 
flexible lending practices in addressing the credit needs of LMI 
borrowers or geographies. Depending on the facts and circumstances, a 
bank that develops a unique approach or lending program targeted to 
support the needs of borrowers or small businesses in LMI geographies, 
LMI borrowers, or small businesses may be eligible to receive 
consideration under CRA for those activities.
    The OCC invites comments on the role of small business credit in 
LMI areas or for LMI small business owners, and under what 
circumstances small business loans should receive CRA consideration.
    The OCC invites comments on qualifying activities, including with 
respect to the following questions:
    15. How should ``community and economic development'' be defined to 
better address community needs and to incentivize banks to lend, 
invest, and provide services that further the purposes of the CRA? For 
example, should certain categories of loans and investments be presumed 
to receive consideration, such as those that support projects, 
programs, or organizations with a mission, purpose, or intent of 
community or economic development; or, within such categories, only 
those that are defined as community or economic development by federal, 
state, local, or tribal governments?
    16. Should there be specific standards for CD activities to receive 
consideration, such as requiring those activities to provide identified 
benefits to LMI individuals and small business borrowers or to lend to 
and invest in LMI communities or other areas or populations identified 
by federal, state, local, or tribal government as distressed or 
underserved, including designated major disaster areas (hereinafter 
referred to as ``other identified areas'' or ``other identified 
populations'')?
    17. Are there certain categories of CD activities that should only 
receive consideration if they benefit specified underserved populations 
or areas, such as providing credit or technical assistance to small 
businesses or small farms; credit or financial services to LMI 
individuals or other identified populations (such as the disabled); or 
social services for LMI individuals or job creation, workforce 
development, internships, or apprentice programs for LMI individuals or 
other identified populations?
    18. Should consideration for certain activities that might 
otherwise qualify as CD be limited or excluded? For example, how should 
investments in loan-backed securities be considered?
    19. How should financial education or literacy programs, including 
digital literacy, be considered?
    20. Should bank activities to expand the use of small and 
disadvantaged service providers receive CRA consideration as CD 
activities?
    21. The current regulatory framework provides for CRA performance 
evaluations to consider home mortgage, small business, and small farm 
lending, and consumer lending in certain circumstances. Should these 
categories of lending continue to be considered as CRA-qualifying 
activities or should consideration in any or all of these categories be 
limited to loans to LMI borrowers and loans in LMI or other identified 
areas?
    22. Under what circumstances should consumer lending be considered 
as a CRA-qualifying activity? For example, should student, auto, credit 
card, or affordably priced small-dollar loans receive consideration? If 
so, what loan features or characteristics should be considered in 
deciding whether loans in these categories are CRA-qualifying?
    23. Under what circumstances should small business loans receive 
CRA consideration? For example should consideration be given to all 
loans to businesses that meet the Small Business Administration 
standards for small businesses?
    24. How should small business loans with a CD purpose be 
considered?
    25. Should a bank's loan purchases and loan originations receive 
equal consideration when evaluating that bank's lending performance?
    26. Should loans originated by a bank to hold in portfolio be 
weighted differently from loans originated for sale? If so, how?
    27. Should bank delivery channels, branching patterns, and branches 
in LMI areas be reviewed as part of the CRA evaluations? If so, what 
factors should be considered?
    28. The CRA states that the agencies may take into consideration in 
the CRA evaluation of a non-minority-owned and non-women-owned 
financial institution (majority-owned institution) any capital 
investment, loan participation, and other venture undertaken in 
cooperation with MWLIs, even if these activities do not benefit the 
majority-owned institution's community, provided that these activities 
help meet the credit needs of local communities in which the MWLIs are 
chartered. What types of ventures should be eligible for such 
consideration, and how should such ventures be considered?

C. Recordkeeping and Reporting

    The OCC also invites comments on how to modernize CRA regulations 
to promote transparency and consistency in recordkeeping, reporting, 
and examination requirements. The current regulatory approach does not 
facilitate regular tracking, monitoring, and comparisons of levels of 
CRA performance by banks and other stakeholders. One advantage of a 
modernized CRA framework that uses objective reportable metrics could 
be to allow for better tracking by banks of their overall CRA level of 
performance on a regular, periodic basis. If a metric-based framework 
and clarified standards for identifying and measuring qualifying 
activities were implemented, such an approach could also allow 
stakeholders to better understand the level of a bank's CRA performance 
on a straightforward and timely basis.
    This type of framework may involve an updated approach to the OCC's 
CRA-related data collection to be used for monitoring and assessing 
banks' CRA performance. Additionally, under a metric-based framework, 
the ability to differentiate among activities based on their location, 
type, or other factors may involve additional recordkeeping and 
reporting.
    Such reporting could also support comparison among banks, their 
peer groups, or the entire industry and would

[[Page 45059]]

support understanding of industry-wide activity and trends.
    The OCC invites comments on CRA recordkeeping and reporting 
requirements. The OCC notes that additional feedback on recordkeeping 
and reporting may be necessary if a new framework is proposed in a 
future rulemaking.
    29. Could the reporting of data gathered using a metric-based 
approach on a regular, periodic basis better support the tracking, 
monitoring, and comparison of CRA performance levels?
    30. How frequently should banks report CRA activity data for the 
OCC to evaluate and report on CRA performance under a revised 
regulatory framework?
    31. As required by law, and to the extent possible, the OCC 
attempts to minimize regulatory burden in its rulemakings consistent 
with the effective implementation of its statutory responsibilities. 
The OCC is committed to evaluating the economic impact of, and costs 
and benefits associated with, any changes that are proposed to the CRA 
regulations. Under the current regulatory framework, what are the 
annual costs, in dollars or staff hours, associated with CRA-related 
data collection, recordkeeping, and reporting?

D. Additional Options or Approaches

    The OCC invites other ideas and options for modernizing the CRA 
regulatory framework not identified in this ANPR.

    Dated: August 28, 2018.
Joseph M. Otting,
Comptroller of the Currency.
[FR Doc. 2018-19169 Filed 9-4-18; 8:45 am]
 BILLING CODE 4810-33-P