Independent Banker - October 2020 - 51

Efforts to modernize the CRA
On May 20, the Office of the Comptroller of the Currency (OCC)
issued a final rule to strengthen and modernize regulations
under the Community Reinvestment Act (CRA). This rule
included, among others, provisions to:
 Allow OCC-regulated banks with less than $2.5 billion in assets
to opt into the new performance standards or choose to stay
within the current framework
 Raise the small bank test threshold to $600 million and the
intermediate small bank test threshold to $2.5 billion
 Introduce significant data collection and reporting efforts.
Even small banks that do not opt in to the new framework will
be required to track and report the location of deposits.
 Create an " illustrative list of nonexhaustive examples of
qualifying activities that meet, and may include activities that
do not meet, the qualifying activities criteria. "
" Whether you're an OCC-regulated bank or not, the qualified
list gives you creative ideas, " says Mickey Marshall, ICBA's
director of regulatory legal affairs. " Banks should check with
their own regulator to see if these options apply. "
Notably, when it was put out for comment, the proposed rule
was issued jointly with the FDIC, but that regulator chose to step
back from final rulemaking. The Federal Reserve has expressed
interest in modernization efforts, offering an alternative to the
OCC approach back in January and stating, " It is more important
to get the reforms done right than to do them quickly. "
" The current CRA framework is more than 20 years old, "
Marshall says. " There is interest in modernization, and we're
staying in communication with regulators on this issue. "
day at the school, and students can
bring in their money to deposit. The
parents act as tellers, depositing the
money on the students' behalf. The
kids have a passbook that marks their
deposit, and the parent-tellers stamp
their book and then facilitate the
actual deposit. It's going to the bank
without the actual trip to the branch.
" That program has been going on
for so long that we're now making
home loans and business loans to the
graduates, " Silverman says. " The kids
really love the program; the parents
love the program. It's one of my
favorite things we do. "
Community banks' impact
From supporting healthy savings to
helping homeless in the community,
these case studies provide insights
into the breadth of potential CRA
activities, but they offer only a
glimpse of the impact community
banks can have on the areas
they serve. In fact, the National
Community Reinvestment Coalition
reports that more than $2.25 trillion
in mortgages has been awarded to
low- and moderate-income (LMI)
neighborhoods and borrowers since
2009, and another $1.2 trillion has
been divided among business loans
in LMI neighborhoods and small
business loans.
properties. The bank also made two
investments totaling $100,000 in
Bethlehem Workforce Housing, a
Community Development Finance
Authority (CDFA) tax credit project
in New Hampshire, to support
a 28-unit, low-income housing
project development.
" The other component is that we
documented better, " says Tricia
Hogan, executive vice president and
senior risk manager for Union Bank.
" In the last exam, there was definitely
a change in expectations. We had
to take a step back and just modify
what we were doing in order for it to
qualify, so there was a reemphasis
on what qualifies and what
documentation we needed to show. "
Union Bank also boasts a longterm
community program, Save for
Success. Introduced in the mid-90s,
this program makes savings front
and center for 40 local elementary
and middle schools and promotes
making saving a habit at an early age.
By partnering with volunteer parents,
Union Bank hosts a weekly banking
With community banks having
a presence in 97% of low-income
designated counties, there's a
substantial tie between these funds
and community bank support.
In light of these statistics and
despite the pressures of meeting
CRA obligations, community bankers
point to the need to serve their
customers as the primary driver of
their activities-not the regulatory
mandate. " If the CRA was not in
place, " says Union Bank's Hogan,
" we'd be doing the same activities.
The only difference is now we
document them. "
Colleen Morrison is a writer
in Maryland.
independentbanker.org Q 51
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Independent Banker - October 2020

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