Community Reinvestment Act Regulations, 78258-78269 [2020-26394]
Download as PDF
<![CDATA[
78258
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
(iii) In the case of a law graduate, he
or she has filed a statement that he or
she is appearing under the supervision
of a licensed attorney or accredited
representative and that he or she is
appearing without direct or indirect
remuneration from the alien he or she
represents;
(iv) An attorney or accredited
representative physically accompanies
the law student or law graduate who is
appearing. The accompanying attorney
or accredited representative must be
authorized to practice before EOIR and
be prepared to proceed with the case at
all times; and
(v) All filings by law students and law
graduates are made through an EOIRregistered attorney or accredited
representative.
*
*
*
*
*
James R. McHenry,
Director, Executive Office for Immigration
Review, Department of Justice.
[FR Doc. 2020–26115 Filed 12–3–20; 8:45 am]
BILLING CODE 4410–30–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 24, 25, 35, and 192
[Docket ID OCC–2020–0025]
RIN 1557–AE96
Community Reinvestment Act
Regulations
Office of the Comptroller of the
Currency, Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Office of the Comptroller
of the Currency (OCC) is issuing a notice
of proposed rulemaking to request
comment on the OCC’s proposed
approach to determine the Community
Reinvestment Act (CRA) evaluation
measure benchmarks, retail lending
distribution test thresholds, and
community development minimums
under the general performance
standards. The proposal further explains
how the OCC would assess significant
declines in CRA activities levels in
connection with performance context
following the initial establishment of
the benchmarks, thresholds, and
minimums. Finally, the proposed rule
would make clarifying and technical
amendments to the CRA final rule.
DATES: Comments must be received on
or before February 2, 2021.
ADDRESSES: Commenters are encouraged
to submit comments through the Federal
SUMMARY:
VerDate Sep<11>2014
18:21 Dec 03, 2020
Jkt 253001
eRulemaking Portal, if possible. Please
use the title ‘‘Community Reinvestment
Act Regulations’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
Regulations.gov Classic or
Regulations.gov Beta
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC 2020–0025’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments. For
help with submitting effective
comments please click on ‘‘View
Commenter’s Checklist.’’ Click on the
‘‘Help’’ tab on the Regulations.gov home
page to get information on using
Regulations.gov, including instructions
for submitting public comments.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov classic homepage. Enter
‘‘Docket ID OCC–2020–0025’’ in the
Search Box and click ‘‘Search.’’ Public
comments can be submitted via the
‘‘Comment’’ box below the displayed
document information or click on the
document title and click the
‘‘Comment’’ box on the top-left side of
the screen. For help with submitting
effective comments please click on
‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov Beta
site please call (877)-378–5457 (toll free)
or (703) 454–9859 Monday-Friday, 9am5pm ET or email to regulations@
erulemakinghelpdesk.com.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, 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.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2020–0025’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided 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
PO 00000
Frm 00019
Fmt 4702
Sfmt 4702
rulemaking action by the following
method:
• Viewing Comments Electronically—
Regulations.gov Classic or
Regulations.gov Beta:
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2020–0025’’ 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 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.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov classic homepage. Enter
‘‘Docket ID OCC–2020–0025’’ in the
Search Box and click ‘‘Search.’’ Click on
the ‘‘Comments’’ tab. Comments can be
viewed and filtered by clicking on the
‘‘Sort By’’ drop-down on the right side
of the screen or the ‘‘Refine Results’’
options on the left side of the screen.
Supporting Materials can be viewed by
clicking on the ‘‘Documents’’ tab and
filtered by clicking on the ‘‘Sort By’’
drop-down on the right side of the
screen or the ‘‘Refine Results’’ options
on the left side of the screen.’’ For
assistance with the Regulations.gov Beta
site please call (877)-378–5457 (toll free)
or (703) 454–9859 Monday-Friday, 9am5pm ET or email to regulations@
erulemakinghelpdesk.com.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
FOR FURTHER INFORMATION CONTACT: Ioan
Voicu, Director, Compliance Risk
Analysis Division, at (202) 649–5550; or
Daniel Borman, Senior Attorney, Daniel
Sufranski, Attorney, or Jean Xiao,
Attorney, Chief Counsel’s Office, (202)
649–5490, Office of the Comptroller of
the Currency, 400 7th Street SW,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
I. Introduction
On June 5, 2020, the OCC published
a final rule in the Federal Register (2020
final rule) to update the regulatory
framework implementing the
Community Reinvestment Act of 1977
(CRA) 1 for national banks and savings
1 Community Reinvestment Act of 1977, Public
Law 95–128, 91 Stat. 1147 (1977), codified at 12
U.S.C. 2901 et seq.
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
associations (collectively, banks).2 The
2020 final rule was the culmination of
a multi-year process of engagement with
various stakeholders to ensure that the
CRA remains a relevant and powerful
tool for encouraging insured depository
institutions to serve the needs of their
entire communities, including low- and
moderate-income (LMI) neighborhoods.
The 2020 final rule strengthened and
modernized the implementation of the
CRA by making the regulatory
framework more objective, transparent,
consistent in application, and reflective
of changes in the banking industry and
how consumers bank. The OCC’s goal in
implementing the 2020 final rule was to
make the CRA framework a better tool
to encourage banks to engage in more
activities to serve the needs of their
communities, particularly in LMI and
other historically underserved
communities. These goals are consistent
with the statutory purpose of the CRA
to encourage insured depository
institutions 3 to help meet the credit
needs of the local communities in
which they are chartered, including LMI
neighborhoods, consistent with banks’
safe and sound operations.
The 2020 final rule made changes in
four areas of the historical CRA
framework. Specifically, the 2020 final
rule: (1) Clarified and expanded the
bank lending, investment, and services
that qualify for CRA consideration
(collectively, qualifying activities or
CRA activities); (2) updated how banks
delineate the assessment areas in which
they are evaluated; (3) provided
additional methods for evaluating CRA
performance in a consistent and
objective manner; and (4) required
reporting that is timely and transparent.
The new framework incentivizes
banks to achieve specific performance
goals. Timely and transparent CRA data,
including CRA performance
evaluations, will provide meaningful
information to all stakeholders.
The 2020 final rule made changes to
aspects of the historical CRA framework
that had unintentionally inhibited
2 85 FR 34734 (June 5, 2020). As used throughout
this notice, the term ‘‘bank’’ or ‘‘banks’’ also
includes uninsured Federal branches that result
from an acquisition described in section 5(a)(8) of
the International Banking Act of 1978 (12 U.S.C.
3103(a)(8)). The rulemaking authority of the Office
of Thrift Supervision (OTS) and the Director of the
OTS, respectively, relating to savings associations
was transferred to the OCC in Title III of the Dodd–
Frank Wall Street Reform and Consumer Protection
Act, Public Law 111–203, 124 Stat. 1376, 1522
(2010). As a result, the OCC has CRA rulewriting
authority for both Federal and state savings
associations, as well as for national banks. The OCC
also has rulewriting authority for Federal and state
savings associations for purposes of the CRA
specifically pursuant to 12 U.S.C. 2905.
3 12 U.S.C. 1813(c)(2).
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
banks’ CRA activities by creating
uncertainty about which activities
would qualify and how much those
activities would contribute to banks’
CRA ratings. Through hearings,
outreach, and public comments during
the rulemaking process, the OCC
learned that many banks engaged only
in CRA activities for which they
previously received CRA consideration
and committed capital and credit only
to activities for which they were
confident that they would receive
consideration—at the cost of innovation
and responsiveness. In addition, the
historical framework lacked consistent
and objective evaluations and timely
and transparent reporting, which
inhibited the public’s ability to
understand how and to what extent
banks were meeting community credit
needs.
By moving to a system that is
primarily objective and transparent
under the 2020 final rule, CRA ratings
will be more consistent, reproducible,
and comparable over time. The agency’s
2020 final rule was designed so that
similar circumstances will be evaluated
in a similar manner from bank to bank.
In the 2020 final rule, the OCC
finalized the framework for the general
performance standards (i.e., the CRA
evaluation measure, retail lending
distribution tests, community
development (CD) minimums, and the
percentage of assessment areas for
which a bank must receive a satisfactory
or outstanding assigned rating to
achieve a bank presumptive rating of
satisfactory or outstanding); however,
the OCC decided not to adopt the
specific CRA evaluation measure
benchmarks, retail lending distribution
test thresholds, and CD minimums as
initially proposed. As noted in the
preamble of the 2020 final rule, the OCC
believes that it is appropriate to gather
more information and further calibrate
these measures, and the agency stated
that it would issue a proposal that
would explain the process the OCC will
use to more precisely calibrate the
benchmark, threshold, and minimum
values.4
This proposal seeks comment on the
approach the OCC would use to set
these benchmarks, thresholds, and
minimums. As described further in this
SUPPLEMENTARY INFORMATION section, the
OCC is separately seeking data through
an Information Collection Survey from
banks subject to the general
performance standards.5 Once the OCC
4 85
FR at 34774.
CFR 25.10(a) of the 2020 final rule
applies the general performance standards to banks
with more than $2.5 billion in assets that are not
5 Twelve
PO 00000
Frm 00020
Fmt 4702
Sfmt 4702
78259
analyzes the public comments on this
proposal and the data it receives, the
OCC plans to issue a final rule that will
adopt an approach for setting the
benchmark, threshold, and minimum
values that correspond to the
presumptive ratings 6 (i.e., outstanding,
satisfactory, needs to improve, and
substantial noncompliance) for banks
assessed under the general performance
standards. In addition, once the OCC
has determined the specific
benchmarks, thresholds, and minimums
according to the selected approach, the
agency will take the appropriate steps to
publicize the standards and engage
stakeholders regarding the specific
benchmarks, thresholds, and
minimums. Once finalized, the OCC
expects to periodically review and
adjust these benchmarks, thresholds,
and minimums, as necessary, to ensure
that these measures are incentivizing
banks to engage in appropriate levels of
CRA activities, while taking into
consideration market conditions and
changes in economic cycles. The OCC
also expects to take the appropriate
steps to publicize the future adjustments
to the benchmarks, thresholds, and
minimums and engage stakeholders on
these adjustments.
II. Background
The OCC’s 2020 final rule
incorporates many of the measures and
methods the OCC historically has used
to assess CRA performance, but it also
provides clarity about how the OCC will
use those mechanisms to assess a bank’s
CRA performance. Among other things,
the 2020 final rule describes what
activities will qualify for CRA credit and
how they will be measured to assess
CRA performance. Further, the 2020
final rule explains that banks are
expected to meet specific benchmarks,
thresholds, and minimums in order to
achieve presumptive CRA ratings.
evaluated under a strategic plan and that are not
wholesale or limited purpose banks. Under
§ 25.10(b) of the 2020 final rule, small,
intermediate, wholesale, and limited purpose banks
can opt into and elect to be evaluated under the
general performance standards. For purposes of the
Information Collection Survey, the OCC is not
collecting data from any small, intermediate,
wholesale, and limited purpose banks.
6 Under § 25.13 of the 2020 final rule, banks
assessed under the general performance standards
receive presumptive ratings at both the bank and
assessment area level based on their performance
on objective criteria (i.e., the CRA evaluation
measure, retail lending distribution test
performance, CD minimum calculation, and the
percentage of assessment areas in which the bank
received a satisfactory or outstanding assigned
rating). Those presumptive ratings are adjusted for
performance context and evidence of
discriminatory or other illegal credit practices to
determine the assigned rating pursuant to § 25.19 of
the 2020 final rule.
E:\FR\FM\04DEP1.SGM
04DEP1
78260
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
Under the 2020 final rule, banks
assessed under the general performance
standards will be evaluated based on (1)
the distribution of their retail loans (i.e.,
home mortgage loans, small loans to
businesses, small loans to farms, and
consumer loans) (retail lending
distribution tests); (2) the dollar value of
qualifying retail loans and CD activities
and the distribution of their branches in
each assessment area and at the bank
level (CRA evaluation measure); and (3)
the level of their CD activities in each
assessment area and at the bank level
(CD minimum calculation).
Twelve CFR 25.13 of the 2020 final
rule provides the general performance
standards and describes how they are
applied to determine bank and
assessment area presumptive ratings.
Section 25.13(d) of the 2020 final rule
states that a bank’s presumptive
assessment area rating is based on its
CRA evaluation measure, CD minimum
calculation, and performance on the
retail lending distribution tests. Section
25.13(c) of the 2020 final rule states that
the bank-level presumptive rating is
based on the CRA evaluation measure,
CD minimum calculation, and assigned
ratings in its assessment areas. Sections
25.11 and 25.13 of the 2020 final rule
require a bank to determine its CRA
evaluation measure and CD minimum
calculation in each assessment area and
at the bank level. As described in
§ 25.11 of the 2020 final rule, the CRA
evaluation measure is the sum of the
bank’s annual qualifying activities
values (including any applicable
multipliers 7) divided by its annual
7 The purpose of multipliers is to incentivize
banks to engage in activities that are particularly
valuable and important from a CRA perspective by
giving banks additional credit towards their CRA
evaluation measures and CD minimum calculations
for these activities. Under § 25.08 of the 2020 final
rule, banks may be eligible for multipliers for the
following: (1) Activities provided to or that support
minority depository institutions, women’s
depository institutions, Community Development
Financial Institutions, and low-income credit
unions, except activities related to mortgage-backed
securities; (2) other CD investments, except CD
investments in mortgage-backed securities and
municipal bonds; (3) other CD services; (4) other
affordable housing-related CD loans; (5) retail loans
generated by branches in LMI census tracts; and (6)
qualifying activities in CRA deserts. Pursuant to
§ 25.08(b)(4) of the 2020 final rule, qualifying
activities that receive a multiplier may be eligible
for an additional multiplier based on the OCC’s
determination of the activity’s responsiveness,
innovativeness, or complexity. Further, to ensure
that the use of multipliers does not reduce the level
of CD activities that banks conduct, a bank is not
eligible for multipliers until the quantified dollar
values of its current period CD activities are
approximately equal to the quantified dollar values
of CD activities in its prior evaluation period. As
described below, this proposal would make
clarifying edits to the multiplier for activities that
are determined to be particularly responsive,
innovative, or complex. Additionally, as discussed
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
average quarterly retail domestic
deposits value plus the percentage of
the bank’s branches in certain areas of
need multiplied by .02, subject to a cap
on the value of branches of one
percentage point. The bank’s average
annual CRA evaluation measure at both
the assessment area level and at the
bank level will be compared to a
specific quantitative benchmark, which
is to be determined by the OCC.
Under § 25.13 of the 2020 final rule,
the CD minimum calculation is
determined by dividing the total
quantified dollar value of a bank’s CD
loans and CD investments, including
any applicable multipliers, by the
bank’s average quarterly retail domestic
deposits value. The bank’s CD minimum
calculations at both the assessment area
level and at the bank level will be
compared to the CD minimums to be
determined by the OCC.
Section 25.12 of the 2020 final rule
describes the application of the retail
lending distribution tests. The retail
lending distribution tests evaluate the
geographic and borrower distributions
of a bank’s major retail lending product
lines in assessment areas in which the
bank has originated 20 or more loans in
those product lines per year during an
evaluation period. The geographic
distribution test evaluates the
percentage of a bank’s retail loan
originations in LMI census tracts, and
the borrower distribution test evaluates
the percentage of a bank’s retail loan
originations to LMI borrowers, CRAeligible businesses, and CRA-eligible
farms, as applicable. Section 25.13 of
the 2020 final rule requires a bank to
pass both the geographic and borrower
distribution tests for each applicable
product line to receive a presumptive
rating of satisfactory or outstanding in
an assessment area. Section 25.12 of the
2020 final rule allows a bank to pass
each test based on its performance
relative to either the demographic
comparator, which is based on the
demographics of a given assessment
area, or the peer comparator, which is
based on peer performance in a given
assessment area. The OCC will
determine the thresholds to pass the
borrower distribution test and
geographic distribution test for both the
demographic and peer comparators.
Although performance on the retail
lending distribution tests is only
below, this proposal would clarify that to be eligible
for the multipliers described in § 25.08, the
quantified dollar value of a bank’s current
evaluation period CD loans, CD investments, and
CD services must be ‘‘approximately equal to or
greater than’’ the quantified dollar value of these
activities considered in the bank’s prior evaluation
period.
PO 00000
Frm 00021
Fmt 4702
Sfmt 4702
evaluated at the assessment area level,
§ 25.13 of the 2020 final rule provides
that in order to achieve a satisfactory or
outstanding presumptive rating at the
bank level, a bank with more than five
assessment areas must receive an
assigned rating of at least satisfactory or
outstanding, respectively, in: (1) 80
percent of its assessment areas; and (2)
assessment areas from which the banks
receives 80 percent of its retail domestic
deposits that it receives from its
assessment areas. For a bank with five
or fewer assessment areas to achieve a
satisfactory or outstanding presumptive
rating at the bank level, the bank must
receive an assigned rating of at least
satisfactory or outstanding, respectively,
in: (1) 50 percent of its assessment areas;
and (2) assessment areas from which the
bank receives 80 percent of its retail
domestic deposits that it receives from
its assessment areas. Banks that do not
meet these standards or the bank-level
CD minimum requirement will receive a
presumptive rating of needs to improve
or substantial noncompliance,
depending on the bank-level CRA
evaluation measure.
In the preamble to the 2020 final rule,
the OCC indicated that it would set the
objective CRA evaluation measure
benchmarks, retail lending distribution
test thresholds, and CD minimums for
the level of performance necessary to
achieve each presumptive rating
category at a later date, and that it
would apply these benchmarks,
thresholds, and minimums as of January
1, 2023, which is the compliance date
applicable to banks subject to the
general performance standards.8 This
proposal suggests an approach to
determine those objective benchmarks,
thresholds, and minimums.
III. Information Collection Survey
Separate from this proposal, the OCC
will issue an Information Collection
Survey to obtain bank-specific
information from banks subject to the
general performance standards, which
will assist the OCC in determining the
CRA evaluation measure benchmarks,
retail lending distribution test
thresholds, and CD minimums under
the 2020 final rule that will correspond
to the presumptive ratings. This
information collection will supplement
existing OCC data and facilitate a
broader review of the framework going
forward, which may inform additional
revisions in future years.
8 85 FR at 34736. The OCC would also apply
these benchmarks, thresholds, and minimums for
banks that opt into the general performance
standards at the time of opt in.
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
Specifically, the OCC will request
four types of bank data or information.
First, the OCC will collect data on
banks’ main office presence, branch
presence, deposit-taking facility
presence, retail domestic deposit data at
the county level, and what banks’
facility-based and deposit-based
assessment areas would have been
under the standards in § 25.09. This
data will assist the OCC in determining
how banks would have performed under
the general performance standards and
the banks’ presumptive ratings under
§§ 25.10 through 25.13 of the 2020 final
rule. Second, the OCC will collect data
on what would have been the quantified
dollar value of banks’ CRA qualifying
activities under the 2020 final rule to
determine what banks’ performance
would have been on the CRA evaluation
measure under § 25.11 of the 2020 final
rule and the CD minimum under
§ 25.13(c) and (d) of the 2020 final rule.
Third, the OCC will collect data on
retail loan applications and on what
would have been the quantified dollar
value of banks’ CRA qualifying retail
loan originations to determine the CRA
evaluation measure under § 25.11 of the
2020 final rule. Obtaining information
on retail loan applications and
originations will, in the near term, help
inform the OCC about banks’ credit
supply decisions across geographies
and, over time, assist the OCC in
refining and improving the CRA
framework.9 Finally, the OCC will
collect information on banks’ branch
locations to determine what would have
been the branch distribution component
of the CRA evaluation measure under
§ 25.11 of the 2020 final rule.
IV. Description of Proposed Rule
A. Proposed Approach for Setting the
Benchmarks, Thresholds, and
Minimums
The OCC is seeking to set CRA
evaluation measure benchmarks, retail
lending distribution test thresholds, and
CD minimums that provide objectivity
and transparency for banks evaluated
under the general performance
standards, while also encouraging banks
9 See various studies using application
information to understand credit supply such as:
Antoniades, A. 2016. ‘‘Liquidity Risk and the Credit
Crunch of 2007–2008: Evidence from Micro-Level
Data on Mortgage Loan Applications.’’ Journal of
Financial and Quantitative Analysis 51(6): 1795–
1822; Mian, Atif, and Amir Sufi. 2009. ‘‘The
Consequences of Mortgage Credit Expansion:
Evidence from the U.S. Mortgage Default Crisis.’’
The Quarterly Journal of Economics 124(4): 1449–
1496; Puri, Manju, Jorg Rocholl, and Sascha Steffen.
2011. ‘‘Global Retail Lending in the Aftermath of
the US Financial Crisis: Distinguishing Between
Supply and Demand Effects.’’ Journal of Financial
Economics 100(3): 556–578.
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
to engage in CRA activities at a level no
less than the status quo.10 To
accomplish these goals, the OCC is
proposing to establish benchmarks,
thresholds, and minimums that
correspond to a proportion of banks that
would have received a hypothetical
bank-level presumptive CRA rating of
outstanding and satisfactory that is no
greater than the historical proportion of
banks that have received a bank-level
assigned CRA rating of outstanding and
satisfactory.11
Using banks’ responses to the
information collection, the OCC would
calculate CRA evaluation measures and
CD minimum calculations for each
bank’s assessment areas, as well as a
bank-level CRA evaluation measure and
CD minimum calculation for each bank.
Similarly, for each major retail lending
product line, the OCC would calculate
the numerator used in determining each
bank’s retail lending distribution test
ratios for each bank’s assessment areas.
After combining data from the Census
and Dun and Bradstreet files of
businesses, the OCC would then
calculate the demographic comparator
under the borrower and geographic
distribution tests for each retail lending
product line, if applicable, for every
bank’s assessment areas. Similarly, the
OCC would use data collected from all
banks subject to the general
performance standards to calculate the
peer comparator under the borrower and
geographic distribution tests for each
retail lending product line, if applicable,
for every bank’s assessment areas. Each
bank’s numerators under the borrower
and geographic distribution tests would
be divided by the applicable
demographic and peer comparators to
calculate each bank’s retail lending
distribution test ratios for each bank’s
assessment areas. These calculations
would result in (1) bank-level
distributions of the CRA evaluation
measure and CD minimum calculation
and (2) assessment area-level
distributions of the CRA evaluation
measure, CD minimum calculation, and
the borrower and geographic
distribution test ratios.
Using the dataset described above,
possibly combined with other datasets,
10 Stakeholders can make only educated guesses
about the current level of bank CRA activities
because there is no standardized set of data or
information about the actual levels of bank CRA
activities. The Information Collection Survey will
assist the OCC in making a more informed estimate
of the current level of bank CRA activities.
11 The population of banks being analyzed under
this approach is the same population of banks
subject to the Information Collection Survey (i.e.,
banks with assets of $2.5 billion or more that are
subject to the general performance standards under
the 2020 final rule).
PO 00000
Frm 00022
Fmt 4702
Sfmt 4702
78261
the OCC would examine possible
combinations of benchmark, threshold,
and minimum values. For each set of
benchmarks, thresholds, and
minimums, the OCC would iteratively
calculate the proportion of assessment
areas that would pass for each bank.
Subsequently, the OCC would
determine the proportion of banks that
would meet or exceed the bank-level CD
minimum and the bank-level CRA
evaluation measure benchmark. The
OCC would compare the results to the
historical proportion of outstanding
ratings under the prior CRA framework
to ensure that the chosen set of
benchmarks, thresholds, and minimums
yields a proportion of outstanding
ratings that is no greater than the
historical proportion. The OCC would
determine the appropriate set of
benchmarks, thresholds, and minimums
for a satisfactory rating using the same
approach. In the OCC’s analysis, the
banks that do not meet or exceed the
benchmarks, thresholds, or minimums
for satisfactory and outstanding ratings
would receive a needs to improve or
substantial noncompliance rating,
depending on the criteria outlined in
the 2020 final rule.
If the OCC identifies multiple
combinations of benchmarks,
thresholds, and minimums that result in
a similar proportion of banks that pass,
the OCC would consider additional
criteria, such as incentives to further
increase CRA activities that benefit LMI
individuals and distressed or
underserved areas, to identify the most
appropriate set of performance standard
values.
To maintain flexibility, the OCC
would not require any of the
benchmark, threshold, or minimum
values to be similar to each other. That
is, the information collection may reveal
that distributions of the various CRA
performance standards differ across
retail lending product lines and
aggregation levels. For example, the
distribution of the mortgage product
line may be significantly different from
that of the automobile loan or small loan
to a business product lines. Similarly,
the distribution of the CRA evaluation
measure at the assessment area level
may differ from that at the bank level.
As such, the OCC anticipates that there
may be as many as 26 different
calibrated benchmark, threshold, and
minimum values under the general
performance standards. Specifically, the
retail lending distribution tests reflect
six retail lending product lines for the
borrower distribution test, three retail
lending product lines for the geographic
distribution test, and involve two
different comparisons under each test,
E:\FR\FM\04DEP1.SGM
04DEP1
78262
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
thus yielding up to 18 different
threshold values. The CRA evaluation
measure would involve six different
benchmark values (one at the bank level
and one at the assessment area level for
needs to improve, satisfactory, and
outstanding presumptive ratings,
respectively), while the CD minimum
would involve two values, one at the
bank level and one at the assessment
area level.
B. Alternatives Considered to the
Proposed Approach for Setting the
Benchmarks, Thresholds, and
Minimums
The OCC recognizes that some extent
of normative judgment is necessary for
any approach the OCC chooses. The
OCC considered proposing an
alternative where instead of the
proposed approach, the OCC would
choose a set of benchmarks, thresholds,
and minimums without reference to the
historical distribution of ratings. The
OCC chose not to propose this approach
because the OCC believes that setting
benchmarks, thresholds, and minimums
in relation to the historic status quo
minimizes the degree of normative
judgment and provides a useful starting
point for determining an expected
distribution of CRA ratings.
The OCC also considered proposing
using the information collection to
calculate the historical aggregate
distribution and dollar amount of CRA
activities for the components of the
general performance standards to set
benchmarks, thresholds, and
minimums. This approach would
consider the CRA activities, branches,
and retail domestic deposits of all banks
as if they were the CRA activities,
branches, and retail domestic deposits
of a single hypothetical bank in order to
set the thresholds, benchmarks, and
minimums that correspond to the
desirable level of CRA activity.
The OCC chose not to propose this
approach because of the additional
assumptions and constraints it would
entail. First, the OCC views this
approach as unworkable for the retail
lending distribution tests. Consolidating
all banks would prevent the calculation
of the peer comparator because the
hypothetical, aggregate bank has no
peers. For the demographic comparator,
this approach would require either
using nationwide demographics (i.e.,
the proportion of LMI families, LMI
tracts, or owner-occupied units in LMI
tracts in the entire United States) or
assuming how the hypothetical
aggregate bank would delineate its
assessment areas. Because each bank’s
lending activities likely do not cover all
areas in which LMI families reside or all
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
the LMI tracts nationwide, and
individual banks delineate their own
assessment areas pursuant to § 25.09 of
the 2020 final rule, it is unclear whether
this approach would be appropriate.
Second, without further data analysis,
the approach may be disproportionately
influenced by the activities of the largest
banks assessed under the general
performance standards, which are
responsible for the majority of CRA
activities and deposits. Lastly, the OCC
does not believe that this approach
would sufficiently capture the
interaction between the benchmarks,
thresholds, and minimums, making it
difficult to predict a resulting
distribution of presumptive ratings for a
set of chosen values.
Having considered different
approaches to setting the benchmarks,
thresholds, and minimums, the OCC is
proposing an approach that would set
robust benchmarks, thresholds, and
minimums. The OCC believes that the
proposed approach will effectively
achieve the agency’s goals of providing
objectivity and transparency in the
performance standards, while also
encouraging banks to engage in CRA
activities at an aggregate level that is no
less than the status quo.
C. Proposed Approach for Treating
Declines in CRA Performance Following
the Initial Establishment of the
Benchmarks, Thresholds, and
Minimums
The OCC is proposing to amend
§ 25.16 of the 2020 final rule to state
that banks whose performance
precipitously decreases by ten percent 12
or more on the general performance
standards after the establishment of the
initial benchmarks, thresholds, and
minimums without an adequate
explanation under the performance
context criteria, including consideration
of market conditions, risk having their
assigned ratings adversely impacted.
The OCC recognizes that for any welldefined set of benchmarks, thresholds,
minimums, and CRA presumptive
ratings, the current CRA activities of
some banks will fall below, while the
current CRA activities of other banks
will exceed, the chosen set of
benchmarks, thresholds, and
minimums. The former set of banks
would be expected to increase CRA
activities, whereas the latter set of banks
could potentially decrease CRA
activities while maintaining the same
rating or achieving a better rating under
12 This proposed ten percent figure is based on
the expert judgment of the OCC Economics
Department and is a reasonable representation of
what the OCC currently considers to be a
precipitous decrease in a bank’s CRA activities.
PO 00000
Frm 00023
Fmt 4702
Sfmt 4702
the new benchmarks, thresholds, and
minimums. This potential decrease in
CRA activities by some banks may
negate any increase in CRA activities
that would result from other banks
increasing their CRA activities to meet
the new benchmarks, thresholds, and
minimums. Therefore, with the
proposed approach and alternative
approaches considered, the OCC
recognizes the need to evaluate
precipitous declines in CRA activity
under performance context as banks
adapt to the new benchmarks,
thresholds, and minimums.
As a general matter, it is appropriate
for banks to adjust their CRA activities
over time in response to regulatory
requirements. This is normal and
acceptable. That said, precipitous
declines of ten percent or more in a
bank’s performance on the general
performance standards as calculated
based on historical data, between the
establishment of the objective
benchmarks, thresholds, and minimums
and the bank’s first evaluation under the
general performance standards, that
cannot be explained by market
conditions or other performance context
criteria may result in the bank receiving
an assigned rating that is no higher than
needs to improve at the assessment area
level as well as at the overall bank level.
V. 2020 Final Rule Clarifying and
Technical Amendments
Following publication of the 2020
final rule, the OCC engaged in a review
process with the goal of providing
additional clarity to 12 CFR part 25,
effective October 1, 2020. The OCC
seeks comment on revisions to aspects
of the 2020 final rule, including
compliance dates, some definitions,
multipliers, the general performance
standards opt out, the aggregate
disclosure statement, and references to
the FDIC. In addition, the proposal
contains various technical, clarifying,
and conforming amendments.
A. Compliance Dates for Banks
Evaluated Under a Strategic Plan
Under the 2020 final rule, all banks
have the option to be evaluated under
a strategic plan, including banks that
meet the small or intermediate bank
definitions. The 2020 final rule also sets
forth compliance dates for certain
sections of the rule based on bank type.
Section 25.01(c)(4)(i) of the 2020 final
rule states that ‘‘[b]anks other than
small, intermediate, wholesale, and
limited purpose banks must comply
with §§ 25.07—25.13, 25.21, 25.25, and
25.26 by January 1, 2023.’’ This
provision was intended to apply to
banks evaluated under a strategic plan,
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
and the sections referenced in this
paragraph are applicable to banks
evaluated under a strategic plan or the
general performance standards (e.g.,
§ 25.21 includes the data collection
requirements for banks evaluated under
the general performance standards or a
strategic plan). In contrast,
§ 25.01(c)(4)(iii) of the 2020 final rule
includes the compliance dates
applicable to small and intermediate
banks. To eliminate any potential
confusion regarding which compliance
dates apply to banks evaluated under a
strategic plan that also meet either the
small bank or intermediate bank
definition, the proposal would revise
§ 25.01(c)(4)(i) to clarify that banks other
than those evaluated under the
performance standards applicable to
small, intermediate, wholesale, and
limited purpose banks must comply
with the applicable sections by January
1, 2023.
B. Definitions
In § 25.03 of the 2020 final rule, the
definition of ‘‘compensation’’ refers to
‘‘median hourly compensation value
(i.e., total salaries and benefits divided
by full-time equivalent employees).’’ It
also describes the calculation as being
based on aggregate Call Report data on
median salaries and benefits and the
median number of full-time equivalent
employees. The OCC determined that
the two descriptions are inconsistent
and may result in different
compensation levels. The OCC intended
for the definition of ‘‘compensation’’ to
reflect the median hourly compensation
value based on each bank’s total salaries
and benefits and its full-time equivalent
employees. Therefore, the proposed rule
would revise the definition of
‘‘compensation’’ to clarify this approach
for determining compensation value.
Under the 2020 final rule’s definitions
of ‘‘partially’’ and ‘‘primarily,’’ it is
possible that an activity could meet both
definitions if the activity has an express,
bona fide intent, purpose, or mandate,
consistent with a criterion in § 25.04(c)
of the 2020 final rule. To eliminate the
potential overlap in the definitions, the
proposal would revise the definition of
‘‘partially’’ to clarify that the definition
applies to activities that do not have an
express, bona fide intent, purpose, or
mandate consistent with a criterion in
§ 25.04(c) of the 2020 final rule. The
proposal also would revise the
definitions of ‘‘partially’’ and
‘‘primarily’’ to clarify that the terms
apply to activities involving ‘‘families,
businesses, or farms’’ to ensure
consistency with the qualifying
activities criteria that use those terms.
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
C. Multiplier Clarifications
Section 25.08(b) of the 2020 final rule
includes multipliers for some qualifying
activities, including a multiplier for
activities that are determined to be
particularly responsive, innovative, or
complex. The proposal would clarify
that this multiplier is applicable to any
activity that received one of the other
multipliers provided for in the 2020
final rule and that the maximum total
upward adjustment considering all
multipliers is four times the quantified
dollar value of the qualifying activity.
Section 25.08(b)(1) also provides that to
be eligible for the multipliers in sections
25.08(b)(2) and (b)(3) of the 2020 final
rule, the quantified dollar value of a
bank’s current evaluation period CD
loans, CD investments, and CD services
must be ‘‘approximately equal to’’ the
quantified dollar value of these
activities considered in the bank’s prior
evaluation period. The proposal would
clarify that the quantified dollar value of
a bank’s current evaluation period CD
loans, CD investments, and CD services
must be ‘‘approximately equal to or
greater than’’ the quantified dollar value
of these activities considered in the
bank’s prior evaluation period.
D. General Performance Standards Opt
Out
Section 25.10(b) of the 2020 final rule
permits a small, intermediate,
wholesale, or limited purpose bank that
opted into the general performance
standards a single opportunity to opt
out of evaluation under those standards.
The 2020 final rule stated that banks
that elected to opt out of evaluation
under the general performance
standards would ‘‘revert’’ to being
evaluated according to the small and
intermediate performance standards or
the wholesale and limited purpose
performance standards. This provision
may lead to confusion in circumstances
where a bank meets a different bank size
or type definition when it opts into the
general performance standards than it
does when it elects to opt out. The
proposal would revise the opt out
provision to clarify that banks are
subject to the applicable performance
standards based on the bank’s size or
type when it opts out.
E. References to the Federal Deposit
Insurance Corporation (FDIC)
The 2020 final rule integrates 12 CFR
part 195 into 12 CFR part 25 and
eliminates the former part 195. As of
October 1, 2020, national banks and
Federal savings associations supervised
by the OCC and state savings
associations supervised by the FDIC will
PO 00000
Frm 00024
Fmt 4702
Sfmt 4702
78263
be evaluated under part 25. The
proposal would add references to the
FDIC where they were inadvertently
omitted in the 2020 final rule.
F. Aggregate CRA Disclosure Statement
Section 25.27(b) of the 2020 final rule
provides for public disclosure of the
retail loan origination data reported to
the OCC that is necessary to evaluate
banks’ performance under the retail
lending distribution tests. The OCC
intended to include all data reported to
the OCC regarding retail loan
originations in the aggregate disclosure
statement but inadvertently omitted
disclosure of banks’ number of home
mortgage loans in LMI census tracts.
The proposal would add this disclosure
requirement to the rule.
G. Other Revisions
In addition to the revisions discussed
above, the proposal would make several
non-substantive technical, clarifying,
and conforming revisions throughout
the 2020 final rule to improve clarity
and consistency. The OCC is also
proposing revisions to regulations that
include cross references to the CRA
implementing regulations in effect prior
to October 1, 2020, including 12 CFR
part 24, 12 CFR part 35, and 12 CFR part
192. These revisions update the cross
references to be consistent with the
2020 final rule and include transition
provisions as appropriate.
VI. Request for Comments
The OCC requests comment on all
aspects of the proposed rule. The OCC
specifically requests comments on the
approach the OCC would use to
determine the CRA evaluation measure
benchmarks, retail lending distribution
test thresholds, and CD minimums
under the Community Reinvestment
Act’s general performance standards.
The OCC also seeks comment on its
proposal to amend the 2020 final rule to
consider, under performance context,
declines of ten percent or greater on a
bank’s performance under the general
performance standards following the
establishment of the benchmarks,
thresholds, and minimums.
VII. Regulatory Analyses
A. Paperwork Reduction Act
In accordance with the requirements
of the Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501 et seq., the OCC
may not conduct or sponsor, and
respondents are not required to respond
to, an information collection unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. The OCC has reviewed the
notice of proposed rulemaking and
E:\FR\FM\04DEP1.SGM
04DEP1
78264
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
determined that it would not introduce
any new or revise any existing
collection of information pursuant to
the PRA. Therefore, no submission will
be made to OMB for review.
B. Regulatory Flexibility Act
In general, the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.) requires
an agency, in connection with a
proposed rule, to prepare an Initial
Regulatory Flexibility Analysis
describing the impact of the rule on
small entities (defined by the Small
Business Administration for purposes of
the RFA to include commercial banks
and savings institutions with total assets
of $600 million or less and trust
companies with total assets of $41.5
million of less). However, under section
605(b) of the RFA, this analysis is not
required if an agency certifies that the
rule would not have a significant
economic impact on a substantial
number of small entities and publishes
its certification and a short explanatory
statement in the Federal Register along
with its rule.
The OCC currently supervises
approximately 1,067 insured depository
institutions, of which 1,030 may be
impacted by the proposed rule.
Moreover, 745 of the institutions are
small entities.13 The OCC estimates that
the proposed rule’s technical
amendments and updated cross
references may impact approximately
708 of these small entities, which is a
significant number.14 However, because
the OCC estimates the costs, if any,
associated with the proposal would be
de minimis, the proposed rule would
not have a significant economic impact
on any small OCC-regulated entities.
Additionally, the other sections of the
proposed rule do not impose new
mandates and primarily request
comment on the OCC’s proposed
approach for setting the benchmarks,
thresholds, and minimums as well as
how the OCC would consider decreases
in CRA activities following the
establishment of these standards.15
13 Consistent with the General Principles of
Affiliation 13 CFR 121.103(a), the OCC counts the
assets of affiliated financial institutions when
determining if it should classify an institution as a
small entity. The OCC used December 31, 2019, to
determine size because a ‘‘financial institution’s
assets are determined by averaging the assets
reported on its four quarterly financial statements
for the preceding year.’’ See footnote 8 of the U.S.
Small Business Administration’s Table of Size
Standards.
14 The OCC excluded entities with a CRA
examination type of ‘‘exempt’’ in an OCC
supervisory information system.
15 As noted above, these sections of the proposal
are relevant to banks subject to the general
performance standards, which generally only apply
to institutions that have more than $2.5 billion in
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
Therefore, the OCC believes the costs
associated with the proposal, if any,
would be de minimis. For these reasons,
the OCC certifies that, if adopted, the
proposed rule would not have a
significant economic impact on a
substantial number of small entities
regulated by the OCC. Accordingly, an
Initial Regulatory Flexibility Analysis is
not required.
C. Unfunded Mandates Reform Act of
1995
The OCC has analyzed the proposed
rule under the factors in the Unfunded
Mandates Reform Act of 1995 (UMRA),
2 U.S.C. 1501 et seq. Under this analysis
the OCC considered whether the
proposed rule includes a Federal
mandate that may result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year ($157 million as
adjusted annually for inflation). The
UMRA does not apply to regulations
that incorporate requirements
specifically set forth in law.
As discussed above, the proposed
rule, if implemented, would not impose
new mandates. The OCC concludes that
if implemented, the proposed rule
would not result in an expenditure of
$157 million or more annually by State,
local, and tribal governments, or by the
private sector. Therefore, the OCC finds
that the proposed rule does not trigger
the UMRA cost threshold. Accordingly,
the OCC has not prepared the written
statement described in section 202 of
the UMRA.
D. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act of 1994
(RCDRIA), 12 U.S.C. 4802(a), in
determining the effective date and
administrative compliance requirements
for new regulations that impose
additional reporting, disclosure, or other
requirements on insured depository
institutions, the OCC will consider,
consistent with principles of safety and
soundness and the public interest: (1)
Any administrative burdens that the
proposed rule would place on
depository institutions, including small
depository institutions and customers of
depository institutions; and (2) the
benefits of the proposed rule. The OCC
requests comment on any administrative
burdens that the proposed rule would
place on depository institutions,
assets that are not evaluated under a strategic plan
and that are not wholesale or limited purpose
banks.
PO 00000
Frm 00025
Fmt 4702
Sfmt 4702
including small depository institutions,
and their customers, and the benefits of
the proposed rule that the OCC should
consider in determining the effective
date and any administrative compliance
requirements for a final rule.
List of Subjects
12 CFR Part 24
Community development, Credit,
Investments, Low- and moderateincome housing, National banks,
Reporting and recordkeeping
requirements, Rural areas, Small
businesses.
12 CFR Part 25
Community development, Credit,
Investments, National banks, Reporting
and recordkeeping requirements,
Savings associations.
12 CFR Part 35
Community development, Credit,
Freedom of information, Investments,
National banks, Reporting and
recordkeeping requirements.
12 CFR Part 192
Reporting and recordkeeping
requirements, Savings associations,
Securities.
For the reasons set out in the
preamble, the OCC proposes to amend
12 CFR chapter I as follows:
PART 24—COMMUNITY AND
ECONOMIC DEVELOPMENT ENTITIES,
COMMUNITY DEVELOPMENT
PROJECTS, AND OTHER PUBLIC
WELFARE INVESTMENTS
1. The authority citation for part 24
continues to read as follows:
■
Authority: 12 U.S.C. 24(Eleventh), 93a,
481 and 1818.
§ 24.2
[Amended]
2. In § 24.2 amend paragraph (f) by
removing ‘‘12 CFR 25.12(m)’’ and
adding in its place ‘‘12 CFR 25.03’’.
■
§ 24.3
[Amended]
3. Section 24.3 is amended by
removing the phrase ‘‘12 CFR 25.23 as
a ‘‘qualified investment.’’’’ and adding
in its place the phrase ‘‘12 CFR 25.04 as
a ‘‘community development
investment.’’’’.
■
§ 24.7
[Amended]
4. In § 24.7 amend (paragraph (b) by
removing ‘‘12 CFR 25.23’’ and adding in
its place ‘‘12 CFR 25.04’’.
■
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
PART 25—COMMUNITY
REINVESTMENT ACT AND
INTERSTATE DEPOSIT PRODUCTION
REGULATIONS
5. The authority citation for part 25
continues to read as follows:
■
Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36,
93a, 161, 215, 215a, 481, 1462a, 1463, 1464,
1814, 1816, 1828(c), 1835a, 2901 through
2908, 3101 through 3111, and 5412(b)(2)(B).
6. Section 25.01 amended by:
a. In paragraph (b)(1) adding the
phrase ‘‘or the Federal Deposit
Insurance Corporation (FDIC)’’ after
‘‘(OCC)’’;
■ b. In paragraph (b)(2) adding the
phrase ‘‘or FDIC’’ after ‘‘OCC’’;
■ c. In paragraph (c)(1) removing
‘‘§ 25.03’’ and adding ‘‘§ 25.03,’’ in its
place;
■ d. Revising paragraph (c)(4)(i); and
■ e. In paragraph (c)(5):
■ i. Removing ‘‘October 1, 2020.’’ and
adding ‘‘October 1, 2020,’’ in its place;
■ ii. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in the introductory text; and
■ iii. Removing the word ‘‘element’’ and
adding in its place the word ‘‘elements’’
in the introductory text.
The revision reads as follows:
■
■
§ 25.01 Authority, purposes, scope, and
severability.
*
*
*
*
*
(c)* * *
(4) Compliance dates. (i) Banks other
than banks evaluated under the
performance standards applicable to
small, intermediate, wholesale, and
limited purpose banks must comply
with §§ 25.07–25.13, 25.21, 25.25, and
25.26, as applicable, by January 1, 2023.
*
*
*
*
*
§ 25.02
[Amended]
7. Section 25.02 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a) introductory
text;
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in the second sentence of
paragraph (b); and
■ c. In paragraph (c):
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’; and
■ ii. Removing the phrase ‘‘OCC’s
procedures set forth in part 5 of this
chapter’’ and adding in its place the
phrase ‘‘applicable comment
procedures’’.
■ 8. Section 25.03 is amended by:
■ a. In the definition of Affiliate
removing the phrase ‘‘October 1, 2020’’
and adding the phrase ‘‘October 1,
2020,’’ in its place;
■ b. In the definition of Automated
teller machine (ATM) removing the
phrase ‘‘cash dispersed’’ and adding the
phrase ‘‘cash is disbursed’’ in its place;
■
■
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
c. Revising the definition of
Compensation;
■ d. In the definition of Essential
community facility removing the word
‘‘means’’ and adding the word ‘‘means’’
in its place;
■ e. In the definition of Essential
infrastructure:
■ i. Removing the word ‘‘means’’ and
adding the word ‘‘means’’ in its place;
and
■ ii. Adding the word ‘‘and’’ before the
word ‘‘tunnels’’ in paragraph (1);
■ f. Moving the definition of Lowincome credit union to follow the
definition of Limited purpose bank;
■ g. In the definition of Metropolitan
division adding the word ‘‘the’’ before
the phrase ‘‘successor publication
thereof’’;
■ h. In the definition of Metropolitan
statistical area adding the word ‘‘the’’
before the phrase ‘‘successor publication
thereof’’;
■ i. Revising the definition of Partially;
■ j. In the definition of Primarily
removing the phrase ‘‘individuals or
census tracts’’ from paragraph (1) and
adding in its place the phrase
‘‘individuals, families, businesses,
farms, or census tracts’’;
■ k. In the definition of Retail domestic
deposit:
■ i. Removing ‘‘FDIA’’ in the
introductory text and adding in its place
the phrase ‘‘Federal Deposit Insurance
Act’’ in the first sentence of the
definition;
■ ii. Removing ‘‘FDIA’’ and adding in its
place ‘‘Federal Deposit Insurance Act’’
in paragraph (2)(i)(A); and
■ iii. Adding quotation marks to the
phrase ‘‘reciprocal deposit’’ in
paragraph (2)(ii);
■ l. In the definition of Metropolitan
division removing the phrase ‘‘the
center of the census tract if the census
tract’’ in paragraph (2)(i)(D) and adding
in its place the word ‘‘the center of the
census tract if it’’; and
■ m. In the definition of Wholesale bank
adding the word ‘‘loans’’ after the word
‘‘mortgage’’.
The revisions read as follows:
■
§ 25.03
Definitions.
*
*
*
*
*
Compensation means the median
hourly compensation value (where
compensation value equals total salaries
and benefits divided by full-time
equivalent employees) for the banking
industry based on Call Report data for—
(1) Salaries and employee benefits
from Schedule RI, Item 7.a; and
(2) Number of full-time equivalent
employees from Schedule RI,
Memorandum Item 5.
*
*
*
*
*
PO 00000
Frm 00026
Fmt 4702
Sfmt 4702
78265
Partially means 50 percent or less of
the dollar value of the activity or of the
individuals, families, businesses, farms,
or census tracts served by the activity,
if the activity does not have an express,
bona fide intent, purpose, or mandate
consistent with a criterion in § 25.04(c).
*
*
*
*
*
§ 25.04
[Amended]
9. In § 25.04 amend paragraph (a)(3)
by removing the phrase ‘‘on the date’’
and adding in its place the word
‘‘conducted’’;
■
§ 25.06
[Amended]
10. In § 25.06 amend paragraph (c)(2)
by removing the word ‘‘activity’’ and
adding in its place the word ‘‘area’’.
■ 11. Section 25.08 is amended by:
■ a. Adding the phrase ‘‘or greater than’’
after the phrase ‘‘approximately equal
to’’ in the first sentence of paragraph
(b)(1);
■ b. Removing the word ‘‘conducted’’ in
the second sentence of paragraph (b)(1)
and adding ‘‘conducted,’’;
■ c. Removing the word ‘‘activity’’ and
adding in its place the word ‘‘activities’’
in paragraph (b)(2); and
■ d. Revising paragraph (b)(4).
The revision reads as follows:
■
§ 25.08
Qualifying activities value.
*
*
*
*
*
(b)* * *
(4) The quantified dollar value of
qualifying activities that receive a
multiplier under paragraphs (b)(2) or
(b)(3) of this section may also be subject
to an additional upward adjustment, for
a maximum total upward adjustment of
up to 4 times the quantified dollar value
of the qualifying activity based on the
OCC’s or FDIC’s determination of the
activity’s responsiveness,
innovativeness, or complexity.
*
*
*
*
*
§ 25.09
[Amended]
12. Section 25.09 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(a);
■ b. Removing the word ‘‘it’’ from
paragraph (c)(2)(v) and adding in its
place the phrase ‘‘the bank’’;
■ c. In paragraph (e):
■ i. Removing the phrase ‘‘will consist’’
from the first sentence and adding in its
place the word ‘‘consists’’; and
■ ii. Adding the phrase ‘‘assessed under
the general performance standards in
§ 25.13’’ after the word ‘‘bank’’ in the
second sentence; and
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(g)
■ 13. Section 25.10 is amended by:
■
■
E:\FR\FM\04DEP1.SGM
04DEP1
78266
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a) introductory
text;
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(1)(i);
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(1)(ii);
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(1)(iii);
■ e. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(2)(i);
■ f. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(2)(ii);
■ g. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(2)(iii);
■ h. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(3)(i);
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(3)(ii);
■ j. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(a)(4);
■ k. Revising the last sentence of
paragraph (b); and
■ l. Removing the word ‘‘anticipates’’
and adding the phrase ‘‘and FDIC
anticipate’’ in paragraph (c).
The revision reads as follows:
■
§ 25.10 Performance standards and
ratings, in general.
*
*
*
*
*
(b)* * *A small, intermediate,
wholesale, or limited purpose bank that
opts out from the general performance
standards will be evaluated according to
the performance standards described in
paragraphs (a)(2) and (a)(3) of this
section, as applicable, unless the bank is
evaluated under an approved strategic
plan as described under (a)(4) of this
section.
*
*
*
*
*
§ 25.11
[Amended]
14. Section 25.11 is amended by
removing ‘‘§ 25.08(c);’’ in paragraph
(c)(1) and adding ‘‘§ 25.08(c)’’ in its
place.
■
§ 25.12
[Amended]
15. Section 25.12 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a) introductory
text;
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1) introductory
text;
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(2) introductory
text;
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(3) introductory
text;
■ e. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c)(1) introductory
text;
■ f. In paragraph (c)(2):
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’; and
■
■
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
ii. Removing the phrase ‘‘demographic
borrower comparator or the associated’’
and adding in its place ‘‘borrower
demographic comparator or the
associated borrower’’;
■ g. In paragraph (c)(3):
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’; and
■ ii. Removing the phrase ‘‘demographic
borrower comparator or the associated’’
and adding in its place ‘‘borrower
demographic comparator or the
associated borrower’’;
■ h. In paragraph (c)(4) introductory
text:
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’; and
■ ii. Removing the phrase ‘‘demographic
borrower comparator or the associated’’
and adding in its place ‘‘borrower
demographic comparator or the
associated borrower’’.
■ 16. Section 25.13 is amended by:
■ a. Removing the word ‘‘in’’ and
adding in its place ‘‘in—’’ in paragraph
(c)(1)(ii)(B) introductory text;
■ b. Removing the word ‘‘in’’ and
adding in its place ‘‘in—’’ in paragraph
(c)(2)(ii)(A) introductory text;
■ c. Removing the word ‘‘in’’ and
adding in its place ‘‘in—’’ in paragraph
(c)(2)(ii)(B) introductory text;
■ d. Removing the phrase ‘‘divided by’’
in paragraph (c)(2)(iii) and adding
‘‘divided by’’ in its place;
■ e. Removing the phrase ‘‘substantial
noncompliance standard’’ in paragraph
(c)(4) and adding in its place the phrase
‘‘substantial noncompliance
performance standard’’;
■ f. Removing the phrase ‘‘average
assessment area CRA evaluation
measure’’ in paragraph (d)(2)(ii) and
adding in its place the phrase ‘‘average
annual assessment area CRA evaluation
measure’’;
■ g. Removing the phrase ‘‘average
assessment area CRA evaluation
measure’’ in paragraph (d)(3) and
adding in its place the phrase ‘‘average
annual assessment area CRA evaluation
measure’’;
■ h. Removing the phrase ‘‘average
assessment area CRA evaluation
measure’’ in paragraph (d)(4) and
adding in its place the phrase ‘‘average
annual assessment area CRA evaluation
measure’’; and
■ i. Adding paragraph (e).
The addition reads as follows:
■
§ 25.13 General performance standards
and presumptive rating.
*
*
*
*
*
(e) OCC approach to setting CRA
evaluation measure benchmarks, retail
lending distribution test thresholds, and
community development minimums.
Based on the activity data collected
PO 00000
Frm 00027
Fmt 4702
Sfmt 4702
from banks that are subject to the
general performance standards, the OCC
will calculate historic CRA activity
levels and corresponding performance
ratings under the general performance
standards had they been in place. Based
on this analysis, the OCC will set the
CRA evaluation measure benchmarks,
retail lending distribution test
thresholds, and community
development minimums such that the
proportion of banks receiving
hypothetical presumptive ratings of
outstanding and satisfactory is no
greater than the historical proportion of
banks that received assigned ratings of
outstanding and satisfactory.
§ 25.14
[Amended]
17. Section 25.14 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(1);
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(2); and
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (d).
■
■
§ 25.15
[Amended]
18. Section 25.15 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a);
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(b);
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c) introductory
text;
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (d)(1);
■ e. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (d)(2); and
■ f. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (e).
■ 19. Section 25.16 is amended by:
■ a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a) introductory
text;
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b) introductory
text;
■ c. Removing the period at the end of
paragraph (b)(3) and adding in its place
a semicolon;
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(4);
■ e. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(5);
■ f. Removing the phrase ‘‘including for
each assessment area.’’ in paragraph (c)
and adding in its place the phrase
‘‘including for each assessment area.’’;
and
■ g. Adding paragraph (d).
The addition reads as follows:
■
■
§ 25.16 Consideration of performance
context.
*
*
*
*
*
(d) Declines in CRA performance. In
assessing a bank’s performance, the OCC
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
considers whether there has been a
decline of 10% or greater in a bank’s
performance on the general performance
standards as calculated based on
historical data between the
establishment of the objective
benchmarks, thresholds, and minimums
and the bank’s first evaluation under the
general performance standards. Declines
that cannot be explained by market
conditions or other factors under
paragraph (b) of this section may
warrant a downward adjustment in
determining the bank’s assigned rating.
§ 25.17
[Amended]
20. Section 25.17 is amended by:
a. Adding the phrase ‘‘or FDIC’s’’ after
‘‘OCC’s’’ in paragraph (a) introductory
text; and
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b).
■
■
§ 25.18
[Amended]
21. Section 25.18 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a) introductory
text;
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(1);
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a)(2);
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(2);
■ e. In paragraph (c):
■ i. Adding the phrase ‘‘or FDIC’s’’ after
‘‘OCC’s’’;
■ ii. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears;
■ f. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (d)(1);
■ g. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (e) introductory
text;
■ h. Adding the phrase ‘‘or FDIC’s’’ after
‘‘OCC’s’’ in paragraph (e)(1);
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(f);
■ j. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(g)(3);
■ k. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(g)(4);
■ l. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(h)(1);
■ m. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (h)(2);
■ n. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (h)(3); and
■ o. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(i).
■ 22. Section 25.19 is amended by:
■ a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ and removing the comma after
‘‘§ 25.16’’ in paragraph (a)(1); and
■
■
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
■
b. Revising paragraphs (a)(2) and (b).
The revisions read as follows:
§ 25.19
Assigned ratings.
(a)* * *
(2) Assessment area assigned
rating(s). The OCC or FDIC determines
the assessment area assigned rating(s)
for a bank evaluated under § 25.13 based
on its assessment area presumptive
rating(s) under § 25.13, adjusted for
performance context under § 25.16 and
consideration of discriminatory or other
illegal credit practices under § 25.17.
(b) Strategic plans assigned rating(s).
A bank operating under a strategic plan
will receive, as applicable, an assigned
rating, assessment area assigned
rating(s), and state-level and multistate
metropolitan statistical area assigned
rating(s) of satisfactory or outstanding if
it has met the measurable goals in the
plan that correspond to those ratings
after considering performance context
under § 25.16 and discriminatory or
other illegal credit practices under
§ 25.17.
§ 25.20
[Amended]
23. Section 25.20 is amended by:
a. Removing the phrase ‘‘assigned
rating’’ from the heading and adding in
its place the phrase ‘‘assigned rating(s)’’;
and
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’.
■
■
§ 25.21
[Amended]
24. Section 25.21 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a);
■ b. Removing the phrase ‘‘evaluated in
the assessment area’’ and adding in its
place the phrase ‘‘evaluated in each
assessment area’’ in paragraph (b)(1);
■ c. Removing the phrase ‘‘paragraph
(c)(8) of this section’’ in paragraph (c)(1)
introductory text and adding in its place
the phrase ‘‘paragraph (c)(9) of this
section’’;
■ d. In paragraph (c)(7):
■ i. Redesignating paragraphs (c)(7)(iii)
through (viii) as paragraphs (c)(7)(iv)
through (ix); and
■ ii. Redesignating the second instance
of paragraph (c)(7)(ii) as paragraph
(c)(7)(iii);
■ e. Removing the phrase ‘‘qualifies
under § 25.04(a)(1)(3)’’ in paragraph
(c)(9) introductory text and adding in its
place the phrase ‘‘qualifies under
§ 25.04(a)(3)’’; and
■ f. Removing the phrase ‘‘on the date’’
in paragraph (c)(9)(vii) and adding in its
place the word ‘‘conducted’’.
■
■
§ 25.23
[Amended]
PO 00000
Frm 00028
Fmt 4702
paragraph (b) heading and adding in its
place ‘‘community development service
data required’’; and
■ b. Removing the phrase ‘‘qualifies
under § 25.04(d)’’ in paragraph (b)(4)
introductory text and adding in its place
the phrase ‘‘qualifies under
§ 25.04(a)(3)’’.
§ 25.25
[Amended]
26. Section 25.25 is amended by
adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’.
■
§ 25.26
[Amended]
27. Section 25.26 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a);
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1)(i)
introductory text;
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1)(ii)
introductory text;
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1)(iii);
■ e. In paragraph (c):
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’; and
■ ii. Removing ‘‘§ 25.21(e)’’ and adding
in its place ‘‘§ 25.23(d)’’.
■ 28. Section 25.27 is amended in
paragraph (b) by:
■ a. Removing in the introductory text
the phrase ‘‘subject to reporting under
this part’’ and adding in its place the
phrase ‘‘evaluated under § 25.13’’;
■ b. Redesignating paragraphs (b)(2)
through (10) as paragraphs (b)(3)
through (11); and adding a new
paragraph (b)(2).
The addition reads as follows:
■
■
§ 25.27
Public disclosures.
*
*
*
*
*
(b) * * *
(2) The number of home mortgage
loans in low- and moderate-income
census tracts;
*
*
*
*
*
§ 25.28
[Amended]
29. Section 25.28 is amended by:
a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ wherever it appears in paragraph
(a)(2); and
■ b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1).
■
■
§ 25.29
[Amended]
30. Section 25.29 is amended by
adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’.
■
Appendix A to Part 25 [Amended]
31. Appendix A to part 25 is amended
by:
■ a. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (a);
■
25. Section 25.23 is amended by:
a. Removing the phrase ‘‘community
development service required’’ in the
■
■
Sfmt 4702
78267
E:\FR\FM\04DEP1.SGM
04DEP1
78268
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
b. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(1)(i)
introductory text;
■ c. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(2)(i);
■ d. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(2)(ii);
■ e. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (b)(3)(ii)(B);
■ f. Removing the phrase ‘‘assigned
rating’’ after ‘‘substantial
noncompliance’’ in paragraph (b)(3)(iii);
■ g. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c) introductory
text;
■ h. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c)(1) introductory
text;
■ i. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c)(2) introductory
text;
■ j. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c)(3) introductory
text; and
■ k. Adding the phrase ‘‘or FDIC’’ after
‘‘OCC’’ in paragraph (c)(4) introductory
text.
■ 32. Revise appendix B to part 25 to
read as follows:
■
Appendix B to Part 25—Community
Reinvestment Act Notice
Under the Federal Community
Reinvestment Act (CRA), the [Office of
the Comptroller of the Currency (OCC)
or Federal Deposit Insurance
Corporation (FDIC)] evaluates our
record of helping to meet the credit
needs of this community, consistent
with safe and sound operations. The
[OCC or FDIC] also takes this record into
account when deciding on certain
applications submitted by us.
Your involvement is encouraged.
You are entitled to certain
information about our operations and
our performance under the CRA,
including, for example, information
about our branches, such as their
location and services provided at them;
the public section of our most recent
CRA Performance Evaluation, prepared
by the [OCC or FDIC]; and comments
received from the public relating to
assessment area needs and
opportunities, as well as our responses
to those comments. You may review this
information today by reviewing the
public file which is available at (web
address and/or physical address at
which the public file can be reviewed
and copied).
You may also have access to the
following additional information, which
we will make available to you after you
make a request to us: (1) A map showing
the assessment area containing a select
branch, which is the area in which the
[OCC or FDIC] evaluates our CRA
VerDate Sep<11>2014
17:17 Dec 03, 2020
Jkt 253001
performance for that particular
community; (2) branch addresses and
associated branch facilities and hours in
any assessment area; (3) a list of services
we provide at those locations; (4) our
most recent rating in the assessment
area; and (5) copies of all written
comments received by us that
specifically relate to the needs and
opportunities of a given assessment
area, and any responses we have made
to those comments. If we are operating
under an approved strategic plan, you
may also have access to a copy of the
plan.
At least 30 days before the beginning
of each quarter, the [OCC or FDIC]
publishes a nationwide list of the (entity
type) that are scheduled for CRA
examination in that quarter. This list is
available from the [OCC Deputy
Comptroller (address) or FDIC
appropriate regional director (address)].
You may send written comments
regarding the needs and opportunities of
any of the (entity type)’s assessment
area(s) to (name, address, and email
address of official at bank) and [OCC
Deputy Comptroller (address and email
address) or FDIC appropriate regional
director (address and email address)].
Your comments, together with any
response by us, will be considered by
the [OCC or FDIC] in evaluating our
CRA performance and may be made
public.
You may ask to look at any comments
received by the [OCC Deputy
Comptroller or FDIC appropriate
regional director]. You may also request
from the [OCC Deputy Comptroller or
FDIC appropriate regional director] an
announcement of our applications
covered by the CRA filed with the [OCC
or FDIC]. [(We are an affiliate of (name
of holding company), a (entity type)
holding company. You may request
from the (title of responsible official),
Federal Reserve Bank of
lllll(address) an announcement
of applications covered by the CRA filed
by (entity type) holding companies.)]
Appendix C to Part 25 [Amended]
33. Appendix C to part 25 is amended
by:
■ a. Removing the phrase ‘‘pursuant
part 1003 of this title’’ in § 25.43(b)(2)
and adding in its place the phrase
‘‘pursuant to part 1003 of this title’’; and
■ b. Removing the phrase ‘‘pursuant
part 1003 of this title’’ in § 195.43(b)(2)
and adding in its place the phrase
‘‘pursuant to part 1003 of this title’’.
■
PO 00000
Frm 00029
Fmt 4702
Sfmt 4702
PART 35—DISCLOSURE AND
REPORTING OF CRA–RELATED
AGREEMENTS
34. The authority citation for part 35
continues to read as follows:
■
Authority: 12 U.S.C. 1, 93a, 1462a, 1463,
1464, 1831y, and 5412(b)(2)(B).
§ 35.1
[Amended]
35. Section 35.1 is amended by
removing the phrase ‘‘or part 195
(Community Reinvestment)’’ from
paragraph (c).
■ 36. Section 35.4 is amended by
revising paragraph (a)(2).
The revision reads as follows:
■
§ 35.4
Fulfillment of the CRA.
(a)* * *
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the
insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Retail loans, community
development loans, community
development investments, and
community development services, as
described in § 25.04 (12 CFR 25.04) or
12 CFR part 25, Appendix C, § 25.22 or
§ 25.23, as applicable;
(ii) Delivering retail banking services,
as described in 12 CFR part 25,
Appendix C, § 25.24(d);
(iii) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making community development
investments, or providing community
development services, as described in
§ 25.15(c) (12 CFR 25.15(c)) or 12 CFR
part 25, Appendix C, § 25.25(c), as
applicable;
(iv) In the case of a small insured
depository institution, any lending or
other activity described in § 25.14(a) (12
CFR 25.14(a)) or 12 CFR part 25,
Appendix C, § 25.26(a), as applicable; or
(v) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in § 25.18(g) (12 CFR 25.18(g))
or 12 CFR part 25, Appendix C,
§ 25.27(f), as applicable.
*
*
*
*
*
■ 37. Effective January 1, 2024, revise
paragraph (a)(2) to read as follows:
§ 35.4
Fulfillment of the CRA.
(a)* * *
E:\FR\FM\04DEP1.SGM
04DEP1
Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the
insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Retail loans, community
development loans, community
development investments, and
community development services, as
described in § 25.04 (12 CFR 25.04);
(ii) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making community development
investments, or providing community
development services, as described in
§ 25.15(c) (12 CFR 25.15(c));
(iii) In the case of a small insured
depository institution, any lending or
other activity described in § 25.14(a) (12
CFR 25.14(a)); or
(iv) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in § 25.18(g) (12 CFR
25.18(g)).
*
*
*
*
*
§ 35.6
[Amended]
38. Section 35.6 is amended by
removing the phrase ‘‘set forth in
§ 25.43 (12 CFR 25.43)’’ in paragraph
(b)(7) and adding in its place ‘‘set forth
in § 25.28 (12 CFR 25.28) or 12 CFR part
25, Appendix C, § 25.43, as applicable’’.
■
§ 35.11
[Amended]
39. Section 35.11 is amended by
removing the phrase ‘‘described in
§ 25.43 (12 CFR 25.43)’’ in paragraph (d)
and adding in its place the phrase
‘‘described in § 25.28 (12 CFR 25.28) or
12 CFR part 25, Appendix C, § 25.43, as
applicable’’.
■
PART 192—CONVERSIONS FROM
MUTUAL TO STOCK FORM
40. The authority citation for part 192
continues to read as follows:
■
Authority: 12 U.S.C. 1462a, 1463, 1464,
1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C.
78c, 78l, 78m, 78n, 78w.
§ 192.200
[Amended]
41. Section 192.200 is amended by
removing the phrase ‘‘under 12 CFR part
■
VerDate Sep<11>2014
18:21 Dec 03, 2020
Jkt 253001
195’’ in paragraph (c) introductory text
and adding in its place ‘‘under part 25’’.
Brian P. Brooks,
Acting Comptroller of the Currency.
[FR Doc. 2020–26394 Filed 12–3–20; 8:45 am]
BILLING CODE 4810–33–P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 741
[NCUA 2020–0114]
RIN 3133–AF30
Capitalization of Interest in Connection
With Loan Workouts and Modifications
National Credit Union
Administration (NCUA).
ACTION: Proposed rule.
AGENCY:
The NCUA Board (Board)
seeks public comment on a proposed
rule to amend its regulations by
removing the prohibition on the
capitalization of interest in connection
with loan workouts and modifications.
The Board has determined that the
current prohibition on authorizing
additional advances to finance unpaid
interest may be overly burdensome and,
in some cases, hamper a federally
insured credit union’s (FICU’s) goodfaith efforts to engage in loan workouts
with borrowers facing difficulty because
of the economic disruption that the
COVID–19 pandemic has caused.
Advancing interest may avert the need
for alternative actions that would be
more harmful to borrowers. The
proposed rule would establish
documentation requirements to help
ensure that the addition of unpaid
interest to the principal balance of a
mortgage loan does not hinder the
borrower’s ability to become current on
the loan. The proposed change would
apply to workouts of all types of
member loans, including commercial
and business loans. The Board has also
taken this opportunity to make several
technical changes to the Appendix to
improve its clarity and update certain
references. For the convenience of
readers, the Board is republishing the
Appendix in its entirety so that the
changes may be viewed in the context
of the full document.
DATES: Comments must be received on
or before February 2, 2021.
ADDRESSES: You may submit written
comments, identified by RIN 3133–
AF30, by any of the following methods
(Please send comments by one method
only):
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
SUMMARY:
PO 00000
Frm 00030
Fmt 4702
Sfmt 4702
78269
instructions for submitting comments
for NCUA 2020–0114.
• Fax: (703) 518–6319. Include
‘‘[Your Name]—Comments on
‘‘Proposed Rule: Capitalization of
Interest in Connection with Loan
Workouts and Modifications’’ in the
transmittal.
• Mail: Address to Melane ConyersAusbrooks, Secretary of the Board,
National Credit Union Administration,
1775 Duke Street, Alexandria, Virginia
22314–3428.
Public Inspection: You may view all
public comments on the Federal
eRulemaking Portal (https://
www.regulations.gov) as submitted,
except for those we cannot post for
technical reasons. The NCUA will not
edit or remove any identifying or
contact information from the public
comments submitted. Due to social
distancing measures in effect, the usual
opportunity to inspect paper copies of
comments in the NCUA’s law library is
not currently available. After social
distancing measures are relaxed, visitors
may make an appointment to review
paper copies by calling (703) 518–6540
or emailing OGCMail@ncua.gov.
FOR FURTHER INFORMATION CONTACT:
Scott Neat, Associate Director of the
Office of Examination and Insurance, at
(703) 518–6360; and Ariel Pereira and
Gira Bose, Staff Attorneys, Office of
General Counsel, at (703) 518–6540.
SUPPLEMENTARY INFORMATION:
I. Background
II. Legal Authority
III. Summary of the Proposed Rule
IV. Regulatory Procedures
I. Background
A. May 2012 Adoption of the Loan
Workout and Accrual and TDR
Requirements
In May 2012, the Board published a
final rule on loan workout policies and
monitoring requirements that applies to
all FICUs. The rule also established
requirements for nonaccrual policies,
and for regulatory reporting of troubled
debt restructurings (TDRs).1 The Board
noted that the May 2012 final rule was
similar to guidance set forth in an
interagency policy statement issued by
the banking agencies of the Federal
Financial Institutions Examination
Council (FFIEC) on June 12, 2000,2
though the NCUA did not join the
agencies in issuing the statement.
The May 2012 final rule, codified in
Appendix B to Part 741 of the NCUA’s
1 77
FR 31993 (May 31, 2012).
Uniform Retail Credit Classification and
Account Management Policy, 65 FR 36903 (June 12,
2000).
2 FFIEC,
E:\FR\FM\04DEP1.SGM
04DEP1
]]>Agencies
[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Proposed Rules]
[Pages 78258-78269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26394]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 24, 25, 35, and 192
[Docket ID OCC-2020-0025]
RIN 1557-AE96
Community Reinvestment Act Regulations
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Office of the Comptroller of the Currency (OCC) is issuing
a notice of proposed rulemaking to request comment on the OCC's
proposed approach to determine the Community Reinvestment Act (CRA)
evaluation measure benchmarks, retail lending distribution test
thresholds, and community development minimums under the general
performance standards. The proposal further explains how the OCC would
assess significant declines in CRA activities levels in connection with
performance context following the initial establishment of the
benchmarks, thresholds, and minimums. Finally, the proposed rule would
make clarifying and technical amendments to the CRA final rule.
DATES: Comments must be received on or before February 2, 2021.
ADDRESSES: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal, if possible. Please use the title
``Community Reinvestment Act Regulations'' to facilitate the
organization and distribution of the comments. You may submit comments
by any of the following methods:
Federal eRulemaking Portal--Regulations.gov Classic or
Regulations.gov Beta
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC 2020-0025'' in the Search Box and click ``Search.''
Click on ``Comment Now'' to submit public comments. For help with
submitting effective comments please click on ``View Commenter's
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page
to get information on using Regulations.gov, including instructions for
submitting public comments.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC-2020-0025'' in the Search Box and click
``Search.'' Public comments can be submitted via the ``Comment'' box
below the displayed document information or click on the document title
and click the ``Comment'' box on the top-left side of the screen. For
help with submitting effective comments please click on ``Commenter's
Checklist.'' For assistance with the Regulations.gov Beta site please
call (877)-378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9am-
5pm ET or email to [email protected].
Mail: Chief Counsel's Office, Attention: Comment
Processing, 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.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2020-0025'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the Regulations.gov website without change, including any business or
personal information provided 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 the following method:
Viewing Comments Electronically--Regulations.gov Classic
or Regulations.gov Beta:
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2020-0025'' 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
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.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC-2020-0025'' in the Search Box and click
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
filtered by clicking on the ``Sort By'' drop-down on the right side of
the screen or the ``Refine Results'' options on the left side of the
screen. Supporting Materials can be viewed by clicking on the
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down
on the right side of the screen or the ``Refine Results'' options on
the left side of the screen.'' For assistance with the Regulations.gov
Beta site please call (877)-378-5457 (toll free) or (703) 454-9859
Monday-Friday, 9am-5pm ET or email to
[email protected].
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
FOR FURTHER INFORMATION CONTACT: Ioan Voicu, Director, Compliance Risk
Analysis Division, at (202) 649-5550; or Daniel Borman, Senior
Attorney, Daniel Sufranski, Attorney, or Jean Xiao, Attorney, Chief
Counsel's Office, (202) 649-5490, Office of the Comptroller of the
Currency, 400 7th Street SW, Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
I. Introduction
On June 5, 2020, the OCC published a final rule in the Federal
Register (2020 final rule) to update the regulatory framework
implementing the Community Reinvestment Act of 1977 (CRA) \1\ for
national banks and savings
[[Page 78259]]
associations (collectively, banks).\2\ The 2020 final rule was the
culmination of a multi-year process of engagement with various
stakeholders to ensure that the CRA remains a relevant and powerful
tool for encouraging insured depository institutions to serve the needs
of their entire communities, including low- and moderate-income (LMI)
neighborhoods. The 2020 final rule strengthened and modernized the
implementation of the CRA by making the regulatory framework more
objective, transparent, consistent in application, and reflective of
changes in the banking industry and how consumers bank. The OCC's goal
in implementing the 2020 final rule was to make the CRA framework a
better tool to encourage banks to engage in more activities to serve
the needs of their communities, particularly in LMI and other
historically underserved communities. These goals are consistent with
the statutory purpose of the CRA to encourage insured depository
institutions \3\ to help meet the credit needs of the local communities
in which they are chartered, including LMI neighborhoods, consistent
with banks' safe and sound operations.
---------------------------------------------------------------------------
\1\ Community Reinvestment Act of 1977, Public Law 95-128, 91
Stat. 1147 (1977), codified at 12 U.S.C. 2901 et seq.
\2\ 85 FR 34734 (June 5, 2020). As used throughout this notice,
the term ``bank'' or ``banks'' also includes uninsured Federal
branches that result from an acquisition described in section
5(a)(8) of the International Banking Act of 1978 (12 U.S.C.
3103(a)(8)). The rulemaking authority of the Office of Thrift
Supervision (OTS) and the Director of the OTS, respectively,
relating to savings associations was transferred to the OCC in Title
III of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, 124 Stat. 1376, 1522 (2010). As a result,
the OCC has CRA rulewriting authority for both Federal and state
savings associations, as well as for national banks. The OCC also
has rulewriting authority for Federal and state savings associations
for purposes of the CRA specifically pursuant to 12 U.S.C. 2905.
\3\ 12 U.S.C. 1813(c)(2).
---------------------------------------------------------------------------
The 2020 final rule made changes in four areas of the historical
CRA framework. Specifically, the 2020 final rule: (1) Clarified and
expanded the bank lending, investment, and services that qualify for
CRA consideration (collectively, qualifying activities or CRA
activities); (2) updated how banks delineate the assessment areas in
which they are evaluated; (3) provided additional methods for
evaluating CRA performance in a consistent and objective manner; and
(4) required reporting that is timely and transparent.
The new framework incentivizes banks to achieve specific
performance goals. Timely and transparent CRA data, including CRA
performance evaluations, will provide meaningful information to all
stakeholders.
The 2020 final rule made changes to aspects of the historical CRA
framework that had unintentionally inhibited banks' CRA activities by
creating uncertainty about which activities would qualify and how much
those activities would contribute to banks' CRA ratings. Through
hearings, outreach, and public comments during the rulemaking process,
the OCC learned that many banks engaged only in CRA activities for
which they previously received CRA consideration and committed capital
and credit only to activities for which they were confident that they
would receive consideration--at the cost of innovation and
responsiveness. In addition, the historical framework lacked consistent
and objective evaluations and timely and transparent reporting, which
inhibited the public's ability to understand how and to what extent
banks were meeting community credit needs.
By moving to a system that is primarily objective and transparent
under the 2020 final rule, CRA ratings will be more consistent,
reproducible, and comparable over time. The agency's 2020 final rule
was designed so that similar circumstances will be evaluated in a
similar manner from bank to bank.
In the 2020 final rule, the OCC finalized the framework for the
general performance standards (i.e., the CRA evaluation measure, retail
lending distribution tests, community development (CD) minimums, and
the percentage of assessment areas for which a bank must receive a
satisfactory or outstanding assigned rating to achieve a bank
presumptive rating of satisfactory or outstanding); however, the OCC
decided not to adopt the specific CRA evaluation measure benchmarks,
retail lending distribution test thresholds, and CD minimums as
initially proposed. As noted in the preamble of the 2020 final rule,
the OCC believes that it is appropriate to gather more information and
further calibrate these measures, and the agency stated that it would
issue a proposal that would explain the process the OCC will use to
more precisely calibrate the benchmark, threshold, and minimum
values.\4\
---------------------------------------------------------------------------
\4\ 85 FR at 34774.
---------------------------------------------------------------------------
This proposal seeks comment on the approach the OCC would use to
set these benchmarks, thresholds, and minimums. As described further in
this SUPPLEMENTARY INFORMATION section, the OCC is separately seeking
data through an Information Collection Survey from banks subject to the
general performance standards.\5\ Once the OCC analyzes the public
comments on this proposal and the data it receives, the OCC plans to
issue a final rule that will adopt an approach for setting the
benchmark, threshold, and minimum values that correspond to the
presumptive ratings \6\ (i.e., outstanding, satisfactory, needs to
improve, and substantial noncompliance) for banks assessed under the
general performance standards. In addition, once the OCC has determined
the specific benchmarks, thresholds, and minimums according to the
selected approach, the agency will take the appropriate steps to
publicize the standards and engage stakeholders regarding the specific
benchmarks, thresholds, and minimums. Once finalized, the OCC expects
to periodically review and adjust these benchmarks, thresholds, and
minimums, as necessary, to ensure that these measures are incentivizing
banks to engage in appropriate levels of CRA activities, while taking
into consideration market conditions and changes in economic cycles.
The OCC also expects to take the appropriate steps to publicize the
future adjustments to the benchmarks, thresholds, and minimums and
engage stakeholders on these adjustments.
---------------------------------------------------------------------------
\5\ Twelve CFR 25.10(a) of the 2020 final rule applies the
general performance standards to banks with more than $2.5 billion
in assets that are not evaluated under a strategic plan and that are
not wholesale or limited purpose banks. Under Sec. 25.10(b) of the
2020 final rule, small, intermediate, wholesale, and limited purpose
banks can opt into and elect to be evaluated under the general
performance standards. For purposes of the Information Collection
Survey, the OCC is not collecting data from any small, intermediate,
wholesale, and limited purpose banks.
\6\ Under Sec. 25.13 of the 2020 final rule, banks assessed
under the general performance standards receive presumptive ratings
at both the bank and assessment area level based on their
performance on objective criteria (i.e., the CRA evaluation measure,
retail lending distribution test performance, CD minimum
calculation, and the percentage of assessment areas in which the
bank received a satisfactory or outstanding assigned rating). Those
presumptive ratings are adjusted for performance context and
evidence of discriminatory or other illegal credit practices to
determine the assigned rating pursuant to Sec. 25.19 of the 2020
final rule.
---------------------------------------------------------------------------
II. Background
The OCC's 2020 final rule incorporates many of the measures and
methods the OCC historically has used to assess CRA performance, but it
also provides clarity about how the OCC will use those mechanisms to
assess a bank's CRA performance. Among other things, the 2020 final
rule describes what activities will qualify for CRA credit and how they
will be measured to assess CRA performance. Further, the 2020 final
rule explains that banks are expected to meet specific benchmarks,
thresholds, and minimums in order to achieve presumptive CRA ratings.
[[Page 78260]]
Under the 2020 final rule, banks assessed under the general
performance standards will be evaluated based on (1) the distribution
of their retail loans (i.e., home mortgage loans, small loans to
businesses, small loans to farms, and consumer loans) (retail lending
distribution tests); (2) the dollar value of qualifying retail loans
and CD activities and the distribution of their branches in each
assessment area and at the bank level (CRA evaluation measure); and (3)
the level of their CD activities in each assessment area and at the
bank level (CD minimum calculation).
Twelve CFR 25.13 of the 2020 final rule provides the general
performance standards and describes how they are applied to determine
bank and assessment area presumptive ratings. Section 25.13(d) of the
2020 final rule states that a bank's presumptive assessment area rating
is based on its CRA evaluation measure, CD minimum calculation, and
performance on the retail lending distribution tests. Section 25.13(c)
of the 2020 final rule states that the bank-level presumptive rating is
based on the CRA evaluation measure, CD minimum calculation, and
assigned ratings in its assessment areas. Sections 25.11 and 25.13 of
the 2020 final rule require a bank to determine its CRA evaluation
measure and CD minimum calculation in each assessment area and at the
bank level. As described in Sec. 25.11 of the 2020 final rule, the CRA
evaluation measure is the sum of the bank's annual qualifying
activities values (including any applicable multipliers \7\) divided by
its annual average quarterly retail domestic deposits value plus the
percentage of the bank's branches in certain areas of need multiplied
by .02, subject to a cap on the value of branches of one percentage
point. The bank's average annual CRA evaluation measure at both the
assessment area level and at the bank level will be compared to a
specific quantitative benchmark, which is to be determined by the OCC.
---------------------------------------------------------------------------
\7\ The purpose of multipliers is to incentivize banks to engage
in activities that are particularly valuable and important from a
CRA perspective by giving banks additional credit towards their CRA
evaluation measures and CD minimum calculations for these
activities. Under Sec. 25.08 of the 2020 final rule, banks may be
eligible for multipliers for the following: (1) Activities provided
to or that support minority depository institutions, women's
depository institutions, Community Development Financial
Institutions, and low-income credit unions, except activities
related to mortgage-backed securities; (2) other CD investments,
except CD investments in mortgage-backed securities and municipal
bonds; (3) other CD services; (4) other affordable housing-related
CD loans; (5) retail loans generated by branches in LMI census
tracts; and (6) qualifying activities in CRA deserts. Pursuant to
Sec. 25.08(b)(4) of the 2020 final rule, qualifying activities that
receive a multiplier may be eligible for an additional multiplier
based on the OCC's determination of the activity's responsiveness,
innovativeness, or complexity. Further, to ensure that the use of
multipliers does not reduce the level of CD activities that banks
conduct, a bank is not eligible for multipliers until the quantified
dollar values of its current period CD activities are approximately
equal to the quantified dollar values of CD activities in its prior
evaluation period. As described below, this proposal would make
clarifying edits to the multiplier for activities that are
determined to be particularly responsive, innovative, or complex.
Additionally, as discussed below, this proposal would clarify that
to be eligible for the multipliers described in Sec. 25.08, the
quantified dollar value of a bank's current evaluation period CD
loans, CD investments, and CD services must be ``approximately equal
to or greater than'' the quantified dollar value of these activities
considered in the bank's prior evaluation period.
---------------------------------------------------------------------------
Under Sec. 25.13 of the 2020 final rule, the CD minimum
calculation is determined by dividing the total quantified dollar value
of a bank's CD loans and CD investments, including any applicable
multipliers, by the bank's average quarterly retail domestic deposits
value. The bank's CD minimum calculations at both the assessment area
level and at the bank level will be compared to the CD minimums to be
determined by the OCC.
Section 25.12 of the 2020 final rule describes the application of
the retail lending distribution tests. The retail lending distribution
tests evaluate the geographic and borrower distributions of a bank's
major retail lending product lines in assessment areas in which the
bank has originated 20 or more loans in those product lines per year
during an evaluation period. The geographic distribution test evaluates
the percentage of a bank's retail loan originations in LMI census
tracts, and the borrower distribution test evaluates the percentage of
a bank's retail loan originations to LMI borrowers, CRA-eligible
businesses, and CRA-eligible farms, as applicable. Section 25.13 of the
2020 final rule requires a bank to pass both the geographic and
borrower distribution tests for each applicable product line to receive
a presumptive rating of satisfactory or outstanding in an assessment
area. Section 25.12 of the 2020 final rule allows a bank to pass each
test based on its performance relative to either the demographic
comparator, which is based on the demographics of a given assessment
area, or the peer comparator, which is based on peer performance in a
given assessment area. The OCC will determine the thresholds to pass
the borrower distribution test and geographic distribution test for
both the demographic and peer comparators.
Although performance on the retail lending distribution tests is
only evaluated at the assessment area level, Sec. 25.13 of the 2020
final rule provides that in order to achieve a satisfactory or
outstanding presumptive rating at the bank level, a bank with more than
five assessment areas must receive an assigned rating of at least
satisfactory or outstanding, respectively, in: (1) 80 percent of its
assessment areas; and (2) assessment areas from which the banks
receives 80 percent of its retail domestic deposits that it receives
from its assessment areas. For a bank with five or fewer assessment
areas to achieve a satisfactory or outstanding presumptive rating at
the bank level, the bank must receive an assigned rating of at least
satisfactory or outstanding, respectively, in: (1) 50 percent of its
assessment areas; and (2) assessment areas from which the bank receives
80 percent of its retail domestic deposits that it receives from its
assessment areas. Banks that do not meet these standards or the bank-
level CD minimum requirement will receive a presumptive rating of needs
to improve or substantial noncompliance, depending on the bank-level
CRA evaluation measure.
In the preamble to the 2020 final rule, the OCC indicated that it
would set the objective CRA evaluation measure benchmarks, retail
lending distribution test thresholds, and CD minimums for the level of
performance necessary to achieve each presumptive rating category at a
later date, and that it would apply these benchmarks, thresholds, and
minimums as of January 1, 2023, which is the compliance date applicable
to banks subject to the general performance standards.\8\ This proposal
suggests an approach to determine those objective benchmarks,
thresholds, and minimums.
---------------------------------------------------------------------------
\8\ 85 FR at 34736. The OCC would also apply these benchmarks,
thresholds, and minimums for banks that opt into the general
performance standards at the time of opt in.
---------------------------------------------------------------------------
III. Information Collection Survey
Separate from this proposal, the OCC will issue an Information
Collection Survey to obtain bank-specific information from banks
subject to the general performance standards, which will assist the OCC
in determining the CRA evaluation measure benchmarks, retail lending
distribution test thresholds, and CD minimums under the 2020 final rule
that will correspond to the presumptive ratings. This information
collection will supplement existing OCC data and facilitate a broader
review of the framework going forward, which may inform additional
revisions in future years.
[[Page 78261]]
Specifically, the OCC will request four types of bank data or
information. First, the OCC will collect data on banks' main office
presence, branch presence, deposit-taking facility presence, retail
domestic deposit data at the county level, and what banks' facility-
based and deposit-based assessment areas would have been under the
standards in Sec. 25.09. This data will assist the OCC in determining
how banks would have performed under the general performance standards
and the banks' presumptive ratings under Sec. Sec. 25.10 through 25.13
of the 2020 final rule. Second, the OCC will collect data on what would
have been the quantified dollar value of banks' CRA qualifying
activities under the 2020 final rule to determine what banks'
performance would have been on the CRA evaluation measure under Sec.
25.11 of the 2020 final rule and the CD minimum under Sec. 25.13(c)
and (d) of the 2020 final rule. Third, the OCC will collect data on
retail loan applications and on what would have been the quantified
dollar value of banks' CRA qualifying retail loan originations to
determine the CRA evaluation measure under Sec. 25.11 of the 2020
final rule. Obtaining information on retail loan applications and
originations will, in the near term, help inform the OCC about banks'
credit supply decisions across geographies and, over time, assist the
OCC in refining and improving the CRA framework.\9\ Finally, the OCC
will collect information on banks' branch locations to determine what
would have been the branch distribution component of the CRA evaluation
measure under Sec. 25.11 of the 2020 final rule.
---------------------------------------------------------------------------
\9\ See various studies using application information to
understand credit supply such as: Antoniades, A. 2016. ``Liquidity
Risk and the Credit Crunch of 2007-2008: Evidence from Micro-Level
Data on Mortgage Loan Applications.'' Journal of Financial and
Quantitative Analysis 51(6): 1795-1822; Mian, Atif, and Amir Sufi.
2009. ``The Consequences of Mortgage Credit Expansion: Evidence from
the U.S. Mortgage Default Crisis.'' The Quarterly Journal of
Economics 124(4): 1449-1496; Puri, Manju, Jorg Rocholl, and Sascha
Steffen. 2011. ``Global Retail Lending in the Aftermath of the US
Financial Crisis: Distinguishing Between Supply and Demand
Effects.'' Journal of Financial Economics 100(3): 556-578.
---------------------------------------------------------------------------
IV. Description of Proposed Rule
A. Proposed Approach for Setting the Benchmarks, Thresholds, and
Minimums
The OCC is seeking to set CRA evaluation measure benchmarks, retail
lending distribution test thresholds, and CD minimums that provide
objectivity and transparency for banks evaluated under the general
performance standards, while also encouraging banks to engage in CRA
activities at a level no less than the status quo.\10\ To accomplish
these goals, the OCC is proposing to establish benchmarks, thresholds,
and minimums that correspond to a proportion of banks that would have
received a hypothetical bank-level presumptive CRA rating of
outstanding and satisfactory that is no greater than the historical
proportion of banks that have received a bank-level assigned CRA rating
of outstanding and satisfactory.\11\
---------------------------------------------------------------------------
\10\ Stakeholders can make only educated guesses about the
current level of bank CRA activities because there is no
standardized set of data or information about the actual levels of
bank CRA activities. The Information Collection Survey will assist
the OCC in making a more informed estimate of the current level of
bank CRA activities.
\11\ The population of banks being analyzed under this approach
is the same population of banks subject to the Information
Collection Survey (i.e., banks with assets of $2.5 billion or more
that are subject to the general performance standards under the 2020
final rule).
---------------------------------------------------------------------------
Using banks' responses to the information collection, the OCC would
calculate CRA evaluation measures and CD minimum calculations for each
bank's assessment areas, as well as a bank-level CRA evaluation measure
and CD minimum calculation for each bank. Similarly, for each major
retail lending product line, the OCC would calculate the numerator used
in determining each bank's retail lending distribution test ratios for
each bank's assessment areas. After combining data from the Census and
Dun and Bradstreet files of businesses, the OCC would then calculate
the demographic comparator under the borrower and geographic
distribution tests for each retail lending product line, if applicable,
for every bank's assessment areas. Similarly, the OCC would use data
collected from all banks subject to the general performance standards
to calculate the peer comparator under the borrower and geographic
distribution tests for each retail lending product line, if applicable,
for every bank's assessment areas. Each bank's numerators under the
borrower and geographic distribution tests would be divided by the
applicable demographic and peer comparators to calculate each bank's
retail lending distribution test ratios for each bank's assessment
areas. These calculations would result in (1) bank-level distributions
of the CRA evaluation measure and CD minimum calculation and (2)
assessment area-level distributions of the CRA evaluation measure, CD
minimum calculation, and the borrower and geographic distribution test
ratios.
Using the dataset described above, possibly combined with other
datasets, the OCC would examine possible combinations of benchmark,
threshold, and minimum values. For each set of benchmarks, thresholds,
and minimums, the OCC would iteratively calculate the proportion of
assessment areas that would pass for each bank. Subsequently, the OCC
would determine the proportion of banks that would meet or exceed the
bank-level CD minimum and the bank-level CRA evaluation measure
benchmark. The OCC would compare the results to the historical
proportion of outstanding ratings under the prior CRA framework to
ensure that the chosen set of benchmarks, thresholds, and minimums
yields a proportion of outstanding ratings that is no greater than the
historical proportion. The OCC would determine the appropriate set of
benchmarks, thresholds, and minimums for a satisfactory rating using
the same approach. In the OCC's analysis, the banks that do not meet or
exceed the benchmarks, thresholds, or minimums for satisfactory and
outstanding ratings would receive a needs to improve or substantial
noncompliance rating, depending on the criteria outlined in the 2020
final rule.
If the OCC identifies multiple combinations of benchmarks,
thresholds, and minimums that result in a similar proportion of banks
that pass, the OCC would consider additional criteria, such as
incentives to further increase CRA activities that benefit LMI
individuals and distressed or underserved areas, to identify the most
appropriate set of performance standard values.
To maintain flexibility, the OCC would not require any of the
benchmark, threshold, or minimum values to be similar to each other.
That is, the information collection may reveal that distributions of
the various CRA performance standards differ across retail lending
product lines and aggregation levels. For example, the distribution of
the mortgage product line may be significantly different from that of
the automobile loan or small loan to a business product lines.
Similarly, the distribution of the CRA evaluation measure at the
assessment area level may differ from that at the bank level. As such,
the OCC anticipates that there may be as many as 26 different
calibrated benchmark, threshold, and minimum values under the general
performance standards. Specifically, the retail lending distribution
tests reflect six retail lending product lines for the borrower
distribution test, three retail lending product lines for the
geographic distribution test, and involve two different comparisons
under each test,
[[Page 78262]]
thus yielding up to 18 different threshold values. The CRA evaluation
measure would involve six different benchmark values (one at the bank
level and one at the assessment area level for needs to improve,
satisfactory, and outstanding presumptive ratings, respectively), while
the CD minimum would involve two values, one at the bank level and one
at the assessment area level.
B. Alternatives Considered to the Proposed Approach for Setting the
Benchmarks, Thresholds, and Minimums
The OCC recognizes that some extent of normative judgment is
necessary for any approach the OCC chooses. The OCC considered
proposing an alternative where instead of the proposed approach, the
OCC would choose a set of benchmarks, thresholds, and minimums without
reference to the historical distribution of ratings. The OCC chose not
to propose this approach because the OCC believes that setting
benchmarks, thresholds, and minimums in relation to the historic status
quo minimizes the degree of normative judgment and provides a useful
starting point for determining an expected distribution of CRA ratings.
The OCC also considered proposing using the information collection
to calculate the historical aggregate distribution and dollar amount of
CRA activities for the components of the general performance standards
to set benchmarks, thresholds, and minimums. This approach would
consider the CRA activities, branches, and retail domestic deposits of
all banks as if they were the CRA activities, branches, and retail
domestic deposits of a single hypothetical bank in order to set the
thresholds, benchmarks, and minimums that correspond to the desirable
level of CRA activity.
The OCC chose not to propose this approach because of the
additional assumptions and constraints it would entail. First, the OCC
views this approach as unworkable for the retail lending distribution
tests. Consolidating all banks would prevent the calculation of the
peer comparator because the hypothetical, aggregate bank has no peers.
For the demographic comparator, this approach would require either
using nationwide demographics (i.e., the proportion of LMI families,
LMI tracts, or owner-occupied units in LMI tracts in the entire United
States) or assuming how the hypothetical aggregate bank would delineate
its assessment areas. Because each bank's lending activities likely do
not cover all areas in which LMI families reside or all the LMI tracts
nationwide, and individual banks delineate their own assessment areas
pursuant to Sec. 25.09 of the 2020 final rule, it is unclear whether
this approach would be appropriate. Second, without further data
analysis, the approach may be disproportionately influenced by the
activities of the largest banks assessed under the general performance
standards, which are responsible for the majority of CRA activities and
deposits. Lastly, the OCC does not believe that this approach would
sufficiently capture the interaction between the benchmarks,
thresholds, and minimums, making it difficult to predict a resulting
distribution of presumptive ratings for a set of chosen values.
Having considered different approaches to setting the benchmarks,
thresholds, and minimums, the OCC is proposing an approach that would
set robust benchmarks, thresholds, and minimums. The OCC believes that
the proposed approach will effectively achieve the agency's goals of
providing objectivity and transparency in the performance standards,
while also encouraging banks to engage in CRA activities at an
aggregate level that is no less than the status quo.
C. Proposed Approach for Treating Declines in CRA Performance Following
the Initial Establishment of the Benchmarks, Thresholds, and Minimums
The OCC is proposing to amend Sec. 25.16 of the 2020 final rule to
state that banks whose performance precipitously decreases by ten
percent \12\ or more on the general performance standards after the
establishment of the initial benchmarks, thresholds, and minimums
without an adequate explanation under the performance context criteria,
including consideration of market conditions, risk having their
assigned ratings adversely impacted.
---------------------------------------------------------------------------
\12\ This proposed ten percent figure is based on the expert
judgment of the OCC Economics Department and is a reasonable
representation of what the OCC currently considers to be a
precipitous decrease in a bank's CRA activities.
---------------------------------------------------------------------------
The OCC recognizes that for any well-defined set of benchmarks,
thresholds, minimums, and CRA presumptive ratings, the current CRA
activities of some banks will fall below, while the current CRA
activities of other banks will exceed, the chosen set of benchmarks,
thresholds, and minimums. The former set of banks would be expected to
increase CRA activities, whereas the latter set of banks could
potentially decrease CRA activities while maintaining the same rating
or achieving a better rating under the new benchmarks, thresholds, and
minimums. This potential decrease in CRA activities by some banks may
negate any increase in CRA activities that would result from other
banks increasing their CRA activities to meet the new benchmarks,
thresholds, and minimums. Therefore, with the proposed approach and
alternative approaches considered, the OCC recognizes the need to
evaluate precipitous declines in CRA activity under performance context
as banks adapt to the new benchmarks, thresholds, and minimums.
As a general matter, it is appropriate for banks to adjust their
CRA activities over time in response to regulatory requirements. This
is normal and acceptable. That said, precipitous declines of ten
percent or more in a bank's performance on the general performance
standards as calculated based on historical data, between the
establishment of the objective benchmarks, thresholds, and minimums and
the bank's first evaluation under the general performance standards,
that cannot be explained by market conditions or other performance
context criteria may result in the bank receiving an assigned rating
that is no higher than needs to improve at the assessment area level as
well as at the overall bank level.
V. 2020 Final Rule Clarifying and Technical Amendments
Following publication of the 2020 final rule, the OCC engaged in a
review process with the goal of providing additional clarity to 12 CFR
part 25, effective October 1, 2020. The OCC seeks comment on revisions
to aspects of the 2020 final rule, including compliance dates, some
definitions, multipliers, the general performance standards opt out,
the aggregate disclosure statement, and references to the FDIC. In
addition, the proposal contains various technical, clarifying, and
conforming amendments.
A. Compliance Dates for Banks Evaluated Under a Strategic Plan
Under the 2020 final rule, all banks have the option to be
evaluated under a strategic plan, including banks that meet the small
or intermediate bank definitions. The 2020 final rule also sets forth
compliance dates for certain sections of the rule based on bank type.
Section 25.01(c)(4)(i) of the 2020 final rule states that ``[b]anks
other than small, intermediate, wholesale, and limited purpose banks
must comply with Sec. Sec. 25.07--25.13, 25.21, 25.25, and 25.26 by
January 1, 2023.'' This provision was intended to apply to banks
evaluated under a strategic plan,
[[Page 78263]]
and the sections referenced in this paragraph are applicable to banks
evaluated under a strategic plan or the general performance standards
(e.g., Sec. 25.21 includes the data collection requirements for banks
evaluated under the general performance standards or a strategic plan).
In contrast, Sec. 25.01(c)(4)(iii) of the 2020 final rule includes the
compliance dates applicable to small and intermediate banks. To
eliminate any potential confusion regarding which compliance dates
apply to banks evaluated under a strategic plan that also meet either
the small bank or intermediate bank definition, the proposal would
revise Sec. 25.01(c)(4)(i) to clarify that banks other than those
evaluated under the performance standards applicable to small,
intermediate, wholesale, and limited purpose banks must comply with the
applicable sections by January 1, 2023.
B. Definitions
In Sec. 25.03 of the 2020 final rule, the definition of
``compensation'' refers to ``median hourly compensation value (i.e.,
total salaries and benefits divided by full-time equivalent
employees).'' It also describes the calculation as being based on
aggregate Call Report data on median salaries and benefits and the
median number of full-time equivalent employees. The OCC determined
that the two descriptions are inconsistent and may result in different
compensation levels. The OCC intended for the definition of
``compensation'' to reflect the median hourly compensation value based
on each bank's total salaries and benefits and its full-time equivalent
employees. Therefore, the proposed rule would revise the definition of
``compensation'' to clarify this approach for determining compensation
value. Under the 2020 final rule's definitions of ``partially'' and
``primarily,'' it is possible that an activity could meet both
definitions if the activity has an express, bona fide intent, purpose,
or mandate, consistent with a criterion in Sec. 25.04(c) of the 2020
final rule. To eliminate the potential overlap in the definitions, the
proposal would revise the definition of ``partially'' to clarify that
the definition applies to activities that do not have an express, bona
fide intent, purpose, or mandate consistent with a criterion in Sec.
25.04(c) of the 2020 final rule. The proposal also would revise the
definitions of ``partially'' and ``primarily'' to clarify that the
terms apply to activities involving ``families, businesses, or farms''
to ensure consistency with the qualifying activities criteria that use
those terms.
C. Multiplier Clarifications
Section 25.08(b) of the 2020 final rule includes multipliers for
some qualifying activities, including a multiplier for activities that
are determined to be particularly responsive, innovative, or complex.
The proposal would clarify that this multiplier is applicable to any
activity that received one of the other multipliers provided for in the
2020 final rule and that the maximum total upward adjustment
considering all multipliers is four times the quantified dollar value
of the qualifying activity. Section 25.08(b)(1) also provides that to
be eligible for the multipliers in sections 25.08(b)(2) and (b)(3) of
the 2020 final rule, the quantified dollar value of a bank's current
evaluation period CD loans, CD investments, and CD services must be
``approximately equal to'' the quantified dollar value of these
activities considered in the bank's prior evaluation period. The
proposal would clarify that the quantified dollar value of a bank's
current evaluation period CD loans, CD investments, and CD services
must be ``approximately equal to or greater than'' the quantified
dollar value of these activities considered in the bank's prior
evaluation period.
D. General Performance Standards Opt Out
Section 25.10(b) of the 2020 final rule permits a small,
intermediate, wholesale, or limited purpose bank that opted into the
general performance standards a single opportunity to opt out of
evaluation under those standards. The 2020 final rule stated that banks
that elected to opt out of evaluation under the general performance
standards would ``revert'' to being evaluated according to the small
and intermediate performance standards or the wholesale and limited
purpose performance standards. This provision may lead to confusion in
circumstances where a bank meets a different bank size or type
definition when it opts into the general performance standards than it
does when it elects to opt out. The proposal would revise the opt out
provision to clarify that banks are subject to the applicable
performance standards based on the bank's size or type when it opts
out.
E. References to the Federal Deposit Insurance Corporation (FDIC)
The 2020 final rule integrates 12 CFR part 195 into 12 CFR part 25
and eliminates the former part 195. As of October 1, 2020, national
banks and Federal savings associations supervised by the OCC and state
savings associations supervised by the FDIC will be evaluated under
part 25. The proposal would add references to the FDIC where they were
inadvertently omitted in the 2020 final rule.
F. Aggregate CRA Disclosure Statement
Section 25.27(b) of the 2020 final rule provides for public
disclosure of the retail loan origination data reported to the OCC that
is necessary to evaluate banks' performance under the retail lending
distribution tests. The OCC intended to include all data reported to
the OCC regarding retail loan originations in the aggregate disclosure
statement but inadvertently omitted disclosure of banks' number of home
mortgage loans in LMI census tracts. The proposal would add this
disclosure requirement to the rule.
G. Other Revisions
In addition to the revisions discussed above, the proposal would
make several non-substantive technical, clarifying, and conforming
revisions throughout the 2020 final rule to improve clarity and
consistency. The OCC is also proposing revisions to regulations that
include cross references to the CRA implementing regulations in effect
prior to October 1, 2020, including 12 CFR part 24, 12 CFR part 35, and
12 CFR part 192. These revisions update the cross references to be
consistent with the 2020 final rule and include transition provisions
as appropriate.
VI. Request for Comments
The OCC requests comment on all aspects of the proposed rule. The
OCC specifically requests comments on the approach the OCC would use to
determine the CRA evaluation measure benchmarks, retail lending
distribution test thresholds, and CD minimums under the Community
Reinvestment Act's general performance standards. The OCC also seeks
comment on its proposal to amend the 2020 final rule to consider, under
performance context, declines of ten percent or greater on a bank's
performance under the general performance standards following the
establishment of the benchmarks, thresholds, and minimums.
VII. Regulatory Analyses
A. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA), 44 U.S.C. 3501 et seq., the OCC may not conduct or
sponsor, and respondents are not required to respond to, an information
collection unless it displays a currently valid Office of Management
and Budget (OMB) control number. The OCC has reviewed the notice of
proposed rulemaking and
[[Page 78264]]
determined that it would not introduce any new or revise any existing
collection of information pursuant to the PRA. Therefore, no submission
will be made to OMB for review.
B. Regulatory Flexibility Act
In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) requires an agency, in connection with a proposed rule, to
prepare an Initial Regulatory Flexibility Analysis describing the
impact of the rule on small entities (defined by the Small Business
Administration for purposes of the RFA to include commercial banks and
savings institutions with total assets of $600 million or less and
trust companies with total assets of $41.5 million of less). However,
under section 605(b) of the RFA, this analysis is not required if an
agency certifies that the rule would not have a significant economic
impact on a substantial number of small entities and publishes its
certification and a short explanatory statement in the Federal Register
along with its rule.
The OCC currently supervises approximately 1,067 insured depository
institutions, of which 1,030 may be impacted by the proposed rule.
Moreover, 745 of the institutions are small entities.\13\ The OCC
estimates that the proposed rule's technical amendments and updated
cross references may impact approximately 708 of these small entities,
which is a significant number.\14\ However, because the OCC estimates
the costs, if any, associated with the proposal would be de minimis,
the proposed rule would not have a significant economic impact on any
small OCC-regulated entities. Additionally, the other sections of the
proposed rule do not impose new mandates and primarily request comment
on the OCC's proposed approach for setting the benchmarks, thresholds,
and minimums as well as how the OCC would consider decreases in CRA
activities following the establishment of these standards.\15\
Therefore, the OCC believes the costs associated with the proposal, if
any, would be de minimis. For these reasons, the OCC certifies that, if
adopted, the proposed rule would not have a significant economic impact
on a substantial number of small entities regulated by the OCC.
Accordingly, an Initial Regulatory Flexibility Analysis is not
required.
---------------------------------------------------------------------------
\13\ Consistent with the General Principles of Affiliation 13
CFR 121.103(a), the OCC counts the assets of affiliated financial
institutions when determining if it should classify an institution
as a small entity. The OCC used December 31, 2019, to determine size
because a ``financial institution's assets are determined by
averaging the assets reported on its four quarterly financial
statements for the preceding year.'' See footnote 8 of the U.S.
Small Business Administration's Table of Size Standards.
\14\ The OCC excluded entities with a CRA examination type of
``exempt'' in an OCC supervisory information system.
\15\ As noted above, these sections of the proposal are relevant
to banks subject to the general performance standards, which
generally only apply to institutions that have more than $2.5
billion in assets that are not evaluated under a strategic plan and
that are not wholesale or limited purpose banks.
---------------------------------------------------------------------------
C. Unfunded Mandates Reform Act of 1995
The OCC has analyzed the proposed rule under the factors in the
Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501 et seq.
Under this analysis the OCC considered whether the proposed rule
includes a Federal mandate that may result in the expenditure by State,
local, and tribal governments, in the aggregate, or by the private
sector, of $100 million or more in any one year ($157 million as
adjusted annually for inflation). The UMRA does not apply to
regulations that incorporate requirements specifically set forth in
law.
As discussed above, the proposed rule, if implemented, would not
impose new mandates. The OCC concludes that if implemented, the
proposed rule would not result in an expenditure of $157 million or
more annually by State, local, and tribal governments, or by the
private sector. Therefore, the OCC finds that the proposed rule does
not trigger the UMRA cost threshold. Accordingly, the OCC has not
prepared the written statement described in section 202 of the UMRA.
D. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA), 12 U.S.C. 4802(a), in
determining the effective date and administrative compliance
requirements for new regulations that impose additional reporting,
disclosure, or other requirements on insured depository institutions,
the OCC will consider, consistent with principles of safety and
soundness and the public interest: (1) Any administrative burdens that
the proposed rule would place on depository institutions, including
small depository institutions and customers of depository institutions;
and (2) the benefits of the proposed rule. The OCC requests comment on
any administrative burdens that the proposed rule would place on
depository institutions, including small depository institutions, and
their customers, and the benefits of the proposed rule that the OCC
should consider in determining the effective date and any
administrative compliance requirements for a final rule.
List of Subjects
12 CFR Part 24
Community development, Credit, Investments, Low- and moderate-
income housing, National banks, Reporting and recordkeeping
requirements, Rural areas, Small businesses.
12 CFR Part 25
Community development, Credit, Investments, National banks,
Reporting and recordkeeping requirements, Savings associations.
12 CFR Part 35
Community development, Credit, Freedom of information, Investments,
National banks, Reporting and recordkeeping requirements.
12 CFR Part 192
Reporting and recordkeeping requirements, Savings associations,
Securities.
For the reasons set out in the preamble, the OCC proposes to amend
12 CFR chapter I as follows:
PART 24--COMMUNITY AND ECONOMIC DEVELOPMENT ENTITIES, COMMUNITY
DEVELOPMENT PROJECTS, AND OTHER PUBLIC WELFARE INVESTMENTS
0
1. The authority citation for part 24 continues to read as follows:
Authority: 12 U.S.C. 24(Eleventh), 93a, 481 and 1818.
Sec. 24.2 [Amended]
0
2. In Sec. 24.2 amend paragraph (f) by removing ``12 CFR 25.12(m)''
and adding in its place ``12 CFR 25.03''.
Sec. 24.3 [Amended]
0
3. Section 24.3 is amended by removing the phrase ``12 CFR 25.23 as a
``qualified investment.'''' and adding in its place the phrase ``12 CFR
25.04 as a ``community development investment.''''.
Sec. 24.7 [Amended]
0
4. In Sec. 24.7 amend (paragraph (b) by removing ``12 CFR 25.23'' and
adding in its place ``12 CFR 25.04''.
[[Page 78265]]
PART 25--COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT
PRODUCTION REGULATIONS
0
5. The authority citation for part 25 continues to read as follows:
Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215,
215a, 481, 1462a, 1463, 1464, 1814, 1816, 1828(c), 1835a, 2901
through 2908, 3101 through 3111, and 5412(b)(2)(B).
0
6. Section 25.01 amended by:
0
a. In paragraph (b)(1) adding the phrase ``or the Federal Deposit
Insurance Corporation (FDIC)'' after ``(OCC)'';
0
b. In paragraph (b)(2) adding the phrase ``or FDIC'' after ``OCC'';
0
c. In paragraph (c)(1) removing ``Sec. 25.03'' and adding ``Sec.
25.03,'' in its place;
0
d. Revising paragraph (c)(4)(i); and
0
e. In paragraph (c)(5):
0
i. Removing ``October 1, 2020.'' and adding ``October 1, 2020,'' in its
place;
0
ii. Adding the phrase ``or FDIC'' after ``OCC'' in the introductory
text; and
0
iii. Removing the word ``element'' and adding in its place the word
``elements'' in the introductory text.
The revision reads as follows:
Sec. 25.01 Authority, purposes, scope, and severability.
* * * * *
(c)* * *
(4) Compliance dates. (i) Banks other than banks evaluated under
the performance standards applicable to small, intermediate, wholesale,
and limited purpose banks must comply with Sec. Sec. 25.07-25.13,
25.21, 25.25, and 25.26, as applicable, by January 1, 2023.
* * * * *
Sec. 25.02 [Amended]
0
7. Section 25.02 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)
introductory text;
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in the second sentence
of paragraph (b); and
0
c. In paragraph (c):
0
i. Adding the phrase ``or FDIC'' after ``OCC''; and
0
ii. Removing the phrase ``OCC's procedures set forth in part 5 of this
chapter'' and adding in its place the phrase ``applicable comment
procedures''.
0
8. Section 25.03 is amended by:
0
a. In the definition of Affiliate removing the phrase ``October 1,
2020'' and adding the phrase ``October 1, 2020,'' in its place;
0
b. In the definition of Automated teller machine (ATM) removing the
phrase ``cash dispersed'' and adding the phrase ``cash is disbursed''
in its place;
0
c. Revising the definition of Compensation;
0
d. In the definition of Essential community facility removing the word
``means'' and adding the word ``means'' in its place;
0
e. In the definition of Essential infrastructure:
0
i. Removing the word ``means'' and adding the word ``means'' in its
place; and
0
ii. Adding the word ``and'' before the word ``tunnels'' in paragraph
(1);
0
f. Moving the definition of Low-income credit union to follow the
definition of Limited purpose bank;
0
g. In the definition of Metropolitan division adding the word ``the''
before the phrase ``successor publication thereof'';
0
h. In the definition of Metropolitan statistical area adding the word
``the'' before the phrase ``successor publication thereof'';
0
i. Revising the definition of Partially;
0
j. In the definition of Primarily removing the phrase ``individuals or
census tracts'' from paragraph (1) and adding in its place the phrase
``individuals, families, businesses, farms, or census tracts'';
0
k. In the definition of Retail domestic deposit:
0
i. Removing ``FDIA'' in the introductory text and adding in its place
the phrase ``Federal Deposit Insurance Act'' in the first sentence of
the definition;
0
ii. Removing ``FDIA'' and adding in its place ``Federal Deposit
Insurance Act'' in paragraph (2)(i)(A); and
0
iii. Adding quotation marks to the phrase ``reciprocal deposit'' in
paragraph (2)(ii);
0
l. In the definition of Metropolitan division removing the phrase ``the
center of the census tract if the census tract'' in paragraph (2)(i)(D)
and adding in its place the word ``the center of the census tract if
it''; and
0
m. In the definition of Wholesale bank adding the word ``loans'' after
the word ``mortgage''.
The revisions read as follows:
Sec. 25.03 Definitions.
* * * * *
Compensation means the median hourly compensation value (where
compensation value equals total salaries and benefits divided by full-
time equivalent employees) for the banking industry based on Call
Report data for--
(1) Salaries and employee benefits from Schedule RI, Item 7.a; and
(2) Number of full-time equivalent employees from Schedule RI,
Memorandum Item 5.
* * * * *
Partially means 50 percent or less of the dollar value of the
activity or of the individuals, families, businesses, farms, or census
tracts served by the activity, if the activity does not have an
express, bona fide intent, purpose, or mandate consistent with a
criterion in Sec. 25.04(c).
* * * * *
Sec. 25.04 [Amended]
0
9. In Sec. 25.04 amend paragraph (a)(3) by removing the phrase ``on
the date'' and adding in its place the word ``conducted'';
Sec. 25.06 [Amended]
0
10. In Sec. 25.06 amend paragraph (c)(2) by removing the word
``activity'' and adding in its place the word ``area''.
0
11. Section 25.08 is amended by:
0
a. Adding the phrase ``or greater than'' after the phrase
``approximately equal to'' in the first sentence of paragraph (b)(1);
0
b. Removing the word ``conducted'' in the second sentence of paragraph
(b)(1) and adding ``conducted,'';
0
c. Removing the word ``activity'' and adding in its place the word
``activities'' in paragraph (b)(2); and
0
d. Revising paragraph (b)(4).
The revision reads as follows:
Sec. 25.08 Qualifying activities value.
* * * * *
(b)* * *
(4) The quantified dollar value of qualifying activities that
receive a multiplier under paragraphs (b)(2) or (b)(3) of this section
may also be subject to an additional upward adjustment, for a maximum
total upward adjustment of up to 4 times the quantified dollar value of
the qualifying activity based on the OCC's or FDIC's determination of
the activity's responsiveness, innovativeness, or complexity.
* * * * *
Sec. 25.09 [Amended]
0
12. Section 25.09 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (a);
0
b. Removing the word ``it'' from paragraph (c)(2)(v) and adding in its
place the phrase ``the bank'';
0
c. In paragraph (e):
0
i. Removing the phrase ``will consist'' from the first sentence and
adding in its place the word ``consists''; and
0
ii. Adding the phrase ``assessed under the general performance
standards in Sec. 25.13'' after the word ``bank'' in the second
sentence; and
0
d. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (g)
0
13. Section 25.10 is amended by:
[[Page 78266]]
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)
introductory text;
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(1)(i);
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(1)(ii);
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph
(a)(1)(iii);
0
e. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(2)(i);
0
f. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(2)(ii);
0
g. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph
(a)(2)(iii);
0
h. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(3)(i);
0
i. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(3)(ii);
0
j. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (a)(4);
0
k. Revising the last sentence of paragraph (b); and
0
l. Removing the word ``anticipates'' and adding the phrase ``and FDIC
anticipate'' in paragraph (c).
The revision reads as follows:
Sec. 25.10 Performance standards and ratings, in general.
* * * * *
(b)* * *A small, intermediate, wholesale, or limited purpose bank
that opts out from the general performance standards will be evaluated
according to the performance standards described in paragraphs (a)(2)
and (a)(3) of this section, as applicable, unless the bank is evaluated
under an approved strategic plan as described under (a)(4) of this
section.
* * * * *
Sec. 25.11 [Amended]
0
14. Section 25.11 is amended by removing ``Sec. 25.08(c);'' in
paragraph (c)(1) and adding ``Sec. 25.08(c)'' in its place.
Sec. 25.12 [Amended]
0
15. Section 25.12 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)
introductory text;
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(1)
introductory text;
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(2)
introductory text;
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(3)
introductory text;
0
e. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)(1)
introductory text;
0
f. In paragraph (c)(2):
0
i. Adding the phrase ``or FDIC'' after ``OCC''; and
0
ii. Removing the phrase ``demographic borrower comparator or the
associated'' and adding in its place ``borrower demographic comparator
or the associated borrower'';
0
g. In paragraph (c)(3):
0
i. Adding the phrase ``or FDIC'' after ``OCC''; and
0
ii. Removing the phrase ``demographic borrower comparator or the
associated'' and adding in its place ``borrower demographic comparator
or the associated borrower'';
0
h. In paragraph (c)(4) introductory text:
0
i. Adding the phrase ``or FDIC'' after ``OCC''; and
0
ii. Removing the phrase ``demographic borrower comparator or the
associated'' and adding in its place ``borrower demographic comparator
or the associated borrower''.
0
16. Section 25.13 is amended by:
0
a. Removing the word ``in'' and adding in its place ``in--'' in
paragraph (c)(1)(ii)(B) introductory text;
0
b. Removing the word ``in'' and adding in its place ``in--'' in
paragraph (c)(2)(ii)(A) introductory text;
0
c. Removing the word ``in'' and adding in its place ``in--'' in
paragraph (c)(2)(ii)(B) introductory text;
0
d. Removing the phrase ``divided by'' in paragraph (c)(2)(iii) and
adding ``divided by'' in its place;
0
e. Removing the phrase ``substantial noncompliance standard'' in
paragraph (c)(4) and adding in its place the phrase ``substantial
noncompliance performance standard'';
0
f. Removing the phrase ``average assessment area CRA evaluation
measure'' in paragraph (d)(2)(ii) and adding in its place the phrase
``average annual assessment area CRA evaluation measure'';
0
g. Removing the phrase ``average assessment area CRA evaluation
measure'' in paragraph (d)(3) and adding in its place the phrase
``average annual assessment area CRA evaluation measure'';
0
h. Removing the phrase ``average assessment area CRA evaluation
measure'' in paragraph (d)(4) and adding in its place the phrase
``average annual assessment area CRA evaluation measure''; and
0
i. Adding paragraph (e).
The addition reads as follows:
Sec. 25.13 General performance standards and presumptive rating.
* * * * *
(e) OCC approach to setting CRA evaluation measure benchmarks,
retail lending distribution test thresholds, and community development
minimums. Based on the activity data collected from banks that are
subject to the general performance standards, the OCC will calculate
historic CRA activity levels and corresponding performance ratings
under the general performance standards had they been in place. Based
on this analysis, the OCC will set the CRA evaluation measure
benchmarks, retail lending distribution test thresholds, and community
development minimums such that the proportion of banks receiving
hypothetical presumptive ratings of outstanding and satisfactory is no
greater than the historical proportion of banks that received assigned
ratings of outstanding and satisfactory.
Sec. 25.14 [Amended]
0
17. Section 25.14 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(1);
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(2); and
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (d).
Sec. 25.15 [Amended]
0
18. Section 25.15 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a);
0
b. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (b);
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)
introductory text;
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (d)(1);
0
e. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (d)(2); and
0
f. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (e).
0
19. Section 25.16 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)
introductory text;
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)
introductory text;
0
c. Removing the period at the end of paragraph (b)(3) and adding in its
place a semicolon;
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(4);
0
e. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(5);
0
f. Removing the phrase ``including for each assessment area.'' in
paragraph (c) and adding in its place the phrase ``including for each
assessment area.''; and
0
g. Adding paragraph (d).
The addition reads as follows:
Sec. 25.16 Consideration of performance context.
* * * * *
(d) Declines in CRA performance. In assessing a bank's performance,
the OCC
[[Page 78267]]
considers whether there has been a decline of 10% or greater in a
bank's performance on the general performance standards as calculated
based on historical data between the establishment of the objective
benchmarks, thresholds, and minimums and the bank's first evaluation
under the general performance standards. Declines that cannot be
explained by market conditions or other factors under paragraph (b) of
this section may warrant a downward adjustment in determining the
bank's assigned rating.
Sec. 25.17 [Amended]
0
20. Section 25.17 is amended by:
0
a. Adding the phrase ``or FDIC's'' after ``OCC's'' in paragraph (a)
introductory text; and
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b).
Sec. 25.18 [Amended]
0
21. Section 25.18 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)
introductory text;
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(1);
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a)(2);
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(2);
0
e. In paragraph (c):
0
i. Adding the phrase ``or FDIC's'' after ``OCC's'';
0
ii. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears;
0
f. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (d)(1);
0
g. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (e)
introductory text;
0
h. Adding the phrase ``or FDIC's'' after ``OCC's'' in paragraph (e)(1);
0
i. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (f);
0
j. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (g)(3);
0
k. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (g)(4);
0
l. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (h)(1);
0
m. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (h)(2);
0
n. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (h)(3); and
0
o. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (i).
0
22. Section 25.19 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' and removing the comma
after ``Sec. 25.16'' in paragraph (a)(1); and
0
b. Revising paragraphs (a)(2) and (b).
The revisions read as follows:
Sec. 25.19 Assigned ratings.
(a)* * *
(2) Assessment area assigned rating(s). The OCC or FDIC determines
the assessment area assigned rating(s) for a bank evaluated under Sec.
25.13 based on its assessment area presumptive rating(s) under Sec.
25.13, adjusted for performance context under Sec. 25.16 and
consideration of discriminatory or other illegal credit practices under
Sec. 25.17.
(b) Strategic plans assigned rating(s). A bank operating under a
strategic plan will receive, as applicable, an assigned rating,
assessment area assigned rating(s), and state-level and multistate
metropolitan statistical area assigned rating(s) of satisfactory or
outstanding if it has met the measurable goals in the plan that
correspond to those ratings after considering performance context under
Sec. 25.16 and discriminatory or other illegal credit practices under
Sec. 25.17.
Sec. 25.20 [Amended]
0
23. Section 25.20 is amended by:
0
a. Removing the phrase ``assigned rating'' from the heading and adding
in its place the phrase ``assigned rating(s)''; and
0
b. Adding the phrase ``or FDIC'' after ``OCC''.
Sec. 25.21 [Amended]
0
24. Section 25.21 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a);
0
b. Removing the phrase ``evaluated in the assessment area'' and adding
in its place the phrase ``evaluated in each assessment area'' in
paragraph (b)(1);
0
c. Removing the phrase ``paragraph (c)(8) of this section'' in
paragraph (c)(1) introductory text and adding in its place the phrase
``paragraph (c)(9) of this section'';
0
d. In paragraph (c)(7):
0
i. Redesignating paragraphs (c)(7)(iii) through (viii) as paragraphs
(c)(7)(iv) through (ix); and
0
ii. Redesignating the second instance of paragraph (c)(7)(ii) as
paragraph (c)(7)(iii);
0
e. Removing the phrase ``qualifies under Sec. 25.04(a)(1)(3)'' in
paragraph (c)(9) introductory text and adding in its place the phrase
``qualifies under Sec. 25.04(a)(3)''; and
0
f. Removing the phrase ``on the date'' in paragraph (c)(9)(vii) and
adding in its place the word ``conducted''.
Sec. 25.23 [Amended]
0
25. Section 25.23 is amended by:
0
a. Removing the phrase ``community development service required'' in
the paragraph (b) heading and adding in its place ``community
development service data required''; and
0
b. Removing the phrase ``qualifies under Sec. 25.04(d)'' in paragraph
(b)(4) introductory text and adding in its place the phrase ``qualifies
under Sec. 25.04(a)(3)''.
Sec. 25.25 [Amended]
0
26. Section 25.25 is amended by adding the phrase ``or FDIC'' after
``OCC''.
Sec. 25.26 [Amended]
0
27. Section 25.26 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a);
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(1)(i)
introductory text;
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(1)(ii)
introductory text;
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph
(b)(1)(iii);
0
e. In paragraph (c):
0
i. Adding the phrase ``or FDIC'' after ``OCC''; and
0
ii. Removing ``Sec. 25.21(e)'' and adding in its place ``Sec.
25.23(d)''.
0
28. Section 25.27 is amended in paragraph (b) by:
0
a. Removing in the introductory text the phrase ``subject to reporting
under this part'' and adding in its place the phrase ``evaluated under
Sec. 25.13'';
0
b. Redesignating paragraphs (b)(2) through (10) as paragraphs (b)(3)
through (11); and adding a new paragraph (b)(2).
The addition reads as follows:
Sec. 25.27 Public disclosures.
* * * * *
(b) * * *
(2) The number of home mortgage loans in low- and moderate-income
census tracts;
* * * * *
Sec. 25.28 [Amended]
0
29. Section 25.28 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' wherever it appears in
paragraph (a)(2); and
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(1).
Sec. 25.29 [Amended]
0
30. Section 25.29 is amended by adding the phrase ``or FDIC'' after
``OCC''.
Appendix A to Part 25 [Amended]
0
31. Appendix A to part 25 is amended by:
0
a. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (a);
[[Page 78268]]
0
b. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(1)(i)
introductory text;
0
c. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(2)(i);
0
d. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (b)(2)(ii);
0
e. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph
(b)(3)(ii)(B);
0
f. Removing the phrase ``assigned rating'' after ``substantial
noncompliance'' in paragraph (b)(3)(iii);
0
g. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)
introductory text;
0
h. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)(1)
introductory text;
0
i. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)(2)
introductory text;
0
j. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)(3)
introductory text; and
0
k. Adding the phrase ``or FDIC'' after ``OCC'' in paragraph (c)(4)
introductory text.
0
32. Revise appendix B to part 25 to read as follows:
Appendix B to Part 25--Community Reinvestment Act Notice
Under the Federal Community Reinvestment Act (CRA), the [Office of
the Comptroller of the Currency (OCC) or Federal Deposit Insurance
Corporation (FDIC)] evaluates our record of helping to meet the credit
needs of this community, consistent with safe and sound operations. The
[OCC or FDIC] also takes this record into account when deciding on
certain applications submitted by us.
Your involvement is encouraged.
You are entitled to certain information about our operations and
our performance under the CRA, including, for example, information
about our branches, such as their location and services provided at
them; the public section of our most recent CRA Performance Evaluation,
prepared by the [OCC or FDIC]; and comments received from the public
relating to assessment area needs and opportunities, as well as our
responses to those comments. You may review this information today by
reviewing the public file which is available at (web address and/or
physical address at which the public file can be reviewed and copied).
You may also have access to the following additional information,
which we will make available to you after you make a request to us: (1)
A map showing the assessment area containing a select branch, which is
the area in which the [OCC or FDIC] evaluates our CRA performance for
that particular community; (2) branch addresses and associated branch
facilities and hours in any assessment area; (3) a list of services we
provide at those locations; (4) our most recent rating in the
assessment area; and (5) copies of all written comments received by us
that specifically relate to the needs and opportunities of a given
assessment area, and any responses we have made to those comments. If
we are operating under an approved strategic plan, you may also have
access to a copy of the plan.
At least 30 days before the beginning of each quarter, the [OCC or
FDIC] publishes a nationwide list of the (entity type) that are
scheduled for CRA examination in that quarter. This list is available
from the [OCC Deputy Comptroller (address) or FDIC appropriate regional
director (address)]. You may send written comments regarding the needs
and opportunities of any of the (entity type)'s assessment area(s) to
(name, address, and email address of official at bank) and [OCC Deputy
Comptroller (address and email address) or FDIC appropriate regional
director (address and email address)]. Your comments, together with any
response by us, will be considered by the [OCC or FDIC] in evaluating
our CRA performance and may be made public.
You may ask to look at any comments received by the [OCC Deputy
Comptroller or FDIC appropriate regional director]. You may also
request from the [OCC Deputy Comptroller or FDIC appropriate regional
director] an announcement of our applications covered by the CRA filed
with the [OCC or FDIC]. [(We are an affiliate of (name of holding
company), a (entity type) holding company. You may request from the
(title of responsible official), Federal Reserve Bank of _____(address)
an announcement of applications covered by the CRA filed by (entity
type) holding companies.)]
Appendix C to Part 25 [Amended]
0
33. Appendix C to part 25 is amended by:
0
a. Removing the phrase ``pursuant part 1003 of this title'' in Sec.
25.43(b)(2) and adding in its place the phrase ``pursuant to part 1003
of this title''; and
0
b. Removing the phrase ``pursuant part 1003 of this title'' in Sec.
195.43(b)(2) and adding in its place the phrase ``pursuant to part 1003
of this title''.
PART 35--DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS
0
34. The authority citation for part 35 continues to read as follows:
Authority: 12 U.S.C. 1, 93a, 1462a, 1463, 1464, 1831y, and
5412(b)(2)(B).
Sec. 35.1 [Amended]
0
35. Section 35.1 is amended by removing the phrase ``or part 195
(Community Reinvestment)'' from paragraph (c).
0
36. Section 35.4 is amended by revising paragraph (a)(2).
The revision reads as follows:
Sec. 35.4 Fulfillment of the CRA.
(a)* * *
(2) Activities given favorable CRA consideration. Performing any of
the following activities if the activity is of the type that is likely
to receive favorable consideration by a Federal banking agency in
evaluating the performance under the CRA of the insured depository
institution that is a party to the agreement or an affiliate of a party
to the agreement--
(i) Retail loans, community development loans, community
development investments, and community development services, as
described in Sec. 25.04 (12 CFR 25.04) or 12 CFR part 25, Appendix C,
Sec. 25.22 or Sec. 25.23, as applicable;
(ii) Delivering retail banking services, as described in 12 CFR
part 25, Appendix C, Sec. 25.24(d);
(iii) In the case of a wholesale or limited-purpose insured
depository institution, community development lending, including
originating and purchasing loans and making loan commitments and
letters of credit, making community development investments, or
providing community development services, as described in Sec.
25.15(c) (12 CFR 25.15(c)) or 12 CFR part 25, Appendix C, Sec.
25.25(c), as applicable;
(iv) In the case of a small insured depository institution, any
lending or other activity described in Sec. 25.14(a) (12 CFR 25.14(a))
or 12 CFR part 25, Appendix C, Sec. 25.26(a), as applicable; or
(v) In the case of an insured depository institution that is
evaluated on the basis of a strategic plan, any element of the
strategic plan, as described in Sec. 25.18(g) (12 CFR 25.18(g)) or 12
CFR part 25, Appendix C, Sec. 25.27(f), as applicable.
* * * * *
0
37. Effective January 1, 2024, revise paragraph (a)(2) to read as
follows:
Sec. 35.4 Fulfillment of the CRA.
(a)* * *
[[Page 78269]]
(2) Activities given favorable CRA consideration. Performing any of
the following activities if the activity is of the type that is likely
to receive favorable consideration by a Federal banking agency in
evaluating the performance under the CRA of the insured depository
institution that is a party to the agreement or an affiliate of a party
to the agreement--
(i) Retail loans, community development loans, community
development investments, and community development services, as
described in Sec. 25.04 (12 CFR 25.04);
(ii) In the case of a wholesale or limited-purpose insured
depository institution, community development lending, including
originating and purchasing loans and making loan commitments and
letters of credit, making community development investments, or
providing community development services, as described in Sec.
25.15(c) (12 CFR 25.15(c));
(iii) In the case of a small insured depository institution, any
lending or other activity described in Sec. 25.14(a) (12 CFR
25.14(a)); or
(iv) In the case of an insured depository institution that is
evaluated on the basis of a strategic plan, any element of the
strategic plan, as described in Sec. 25.18(g) (12 CFR 25.18(g)).
* * * * *
Sec. 35.6 [Amended]
0
38. Section 35.6 is amended by removing the phrase ``set forth in Sec.
25.43 (12 CFR 25.43)'' in paragraph (b)(7) and adding in its place
``set forth in Sec. 25.28 (12 CFR 25.28) or 12 CFR part 25, Appendix
C, Sec. 25.43, as applicable''.
Sec. 35.11 [Amended]
0
39. Section 35.11 is amended by removing the phrase ``described in
Sec. 25.43 (12 CFR 25.43)'' in paragraph (d) and adding in its place
the phrase ``described in Sec. 25.28 (12 CFR 25.28) or 12 CFR part 25,
Appendix C, Sec. 25.43, as applicable''.
PART 192--CONVERSIONS FROM MUTUAL TO STOCK FORM
0
40. The authority citation for part 192 continues to read as follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq.,
5412(b)(2)(B); 15 U.S.C. 78c, 78l, 78m, 78n, 78w.
Sec. 192.200 [Amended]
0
41. Section 192.200 is amended by removing the phrase ``under 12 CFR
part 195'' in paragraph (c) introductory text and adding in its place
``under part 25''.
Brian P. Brooks,
Acting Comptroller of the Currency.
[FR Doc. 2020-26394 Filed 12-3-20; 8:45 am]
BILLING CODE 4810-33-P
