CRA Modernization Proposal Review - 2020
Presented by
Kathleen Blanchard
Recorded on February 26, 2020.
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2.0 hours
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The OCC and FDIC, without the Federal Reserve, have issued a proposal to “modernize” the Community Reinvestment Act (CRA). This proposal is a radical revision to the existing CRA. There are good proposed changes such as acknowledging that not all underserved areas are rural, and allowing more activity outside of geographic assessment areas, which would be especially helpful in “overserved” highly populated areas. However, the proposal as written complicates a great deal that could potentially have been improved without the overcomplication.
The definition of assessment area would change, a new deposit based assessment area would be implemented, and the frequency of changes to assessment areas would be limited.
The regulators make much of the list of “community development activities” proposed, but that list could have been provided to banks and examiners without “throwing the baby out with the bath water”. Much of what banks found frustrating was activities that counted for one bank being rejected for another, with some differences being by agency and others seeming to be by individual examiner. The entire regulation did not need to be changed and complicated to fix that issue.
The small bank upper threshold would be increased but the intermediate small bank designation would be eliminated. That alone should cause ISBs to pay close attention.
For banks other than small banks new “tests” would be implemented that push a great deal of the examination burden onto the banks. Given that banks even with several billion in assets might have one person responsible for CRA reporting and compliance, these tests could greatly increase the burden of the regulation (while reducing it for examiners) and bears close study.
This webinar will review the proposed changes, the “tests”, what is good, and what could be problematic so that affected parties will be aware of the proposed changes and prepared to comment on the proposal.
Who Should Attend?
Bank staff responsible for CRA compliance and reporting, auditors and examiners who need to understand CRA, and management that needs to understand the beneficial changes and potential increases to workload this proposal could entail all will find value in this webinar.
Kathleen Blanchard
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