In June 2020, the OCC issued its CRA modernization rule to update the regulations implementing the Community Reinvestment Act. Although the regulators normally act together, the OCC decided to go it alone and not only updated the CRA regulations, but also published guidance along the way. At some point, the OCC decided that their CRA changes were premature, and the June 2020 CRA modernization rule was rescinded, leaving the previous 1995 CRA rules which mirrored those of the other regulators in its place, effective January 1, 2022.
Due to the confusion about what the implications are of the modernized CRA rules which were in effect for OCC banks October 2020 – December 2021, the OCC recently published a “frequently asked questions” document, featuring 30 questions related to the rescinding of the June 2020 rule. The FAQ addresses the areas of Rulemaking Process, Bank Type, Qualifying Activities, Transition Period, Examinations, Assessment Area, Activity Location, Data Reporting, Public Notices, the Public File, and Strategic Plans. By and large, the big takeaway from the FAQs is that plans that were made and put into place to comply the June 2020 rules are no longer necessary unless they’re also necessary to comply with the 1995 rules.
One of the first things to determine is whether the bank’s reporting and examination requirements will change. With banks reverting to the 1995 rules, certain banks will remain as the same type (Large, Small, Intermediate Small), but some will change as of January 1, 2022. For those banks that were an intermediate small back under the 1995 rules and were an intermediate small bank under the June 2020 rules but will become a large bank under the December 2021 rules, data collection is not required until January 1, 2023, with reporting happening the following year.
However, for those banks that were large banks under the 1995 rules, became intermediate small banks under the June 2020 rules, and are once again becoming large banks under the re-instated 1995 rules, data collection begins in 2022. The December 2021 rule does not contain a specific date by which data collection must begin, but 2022 data must be reported by March 1, 2023. The FAQ indicates that a redesignated large bank will not be out of compliance with the December 2021 rule if the bank’s data collection and record keeping systems are not fully in place in 2022, if the 2022 data is reported by March 1, 2023.
Another change that will have widespread effect is the changes to the notices and public files. Under the 1995 rules there were separate notices required at a bank’s main office and individual branches. The June 2020 rule designated a single notice that was to be posted at both the main office and branches. Additionally, the scope of information to be included in the public file is greater under the 1995 rules than the June 2020 rule, so banks will need to include additional information in their public file and make the file available at their main offices, and for interstate banks, at one branch in each state. Because of the change in requirements and increase in the information required, banks have until April 1, 2022, to comply with these requirements.
Compliance Alliance has a robust CRA toolkit to help with getting your bank back to the 1995 rules, and staying in compliance with the December 2021 rule.