Proposed changes will be unveiled within the next four weeks about revised rules implementing community reinvestment by banks and other financial institutions, the regulator of national banks told a meeting of bankers in Washington Wednesday.
Comptroller of the Currency Joseph Otting told bankers attending an American Bankers Association (ABA) conference to expect an advance notice of proposed rulemaking (ANPR) on Community Reinvestment Act (CRA) regulations. (CRA is an anti-redlining law.) He said the focus of his agency’s efforts in revising the rules will be to add “clarity and objectivity” to the CRA compliance process, with an aim at making it better.
Otting said the proposed rules from the Office of the Comptroller of the Currency (OCC) will address how to come to a more common way to measure CRA compliance; what qualifies as CRA compliance; and “can we design a plan to confirm compliance.” He urged the assembled bankers to participate in the rulemaking process through comments.
In other areas, Otting addressed (in a question-and-answer format):
- Anti-money laundering/Bank Secrecy Act: He said he would join with leaders of the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve to meet with representatives of the Financial Crimes Enforcement Network (FinCEN) to discuss changes to rules implementing AML/BSA. “We’ve done a ton of work in the last 60 days on this issue,” he said.
- Small-dollar loans: He said banks have a role to offer better-quality loans of between $500 and $5,000. “If we can get people back into the regulated market, that will be better for them and the economy,” he said.
- Fintech: His agency is still considering whether to offer a so-called “fintech charter” (a license from OCC for firms offering financial services through technology, such as the Internet). He asserted that “banks are fintechs” and should not be wary of new entrants to the market bringing new perspectives. At any rate, Otting said, his agency is also wary. “We’re going to be very, very careful” in taking action, he said.
- Regulatory relief legislation: He urged banks to support the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) as passed by the Senate, noting also that the legislation holds a “significant portion” of provisions that originated in the House (some House leaders have insisted that the Senate bill, passed last month on a vote of 67-31, be amended in the House with more regulatory relief provisions and sent back to the Senate). “I am very supportive of this bill,” he said. “It’s imperative we move this forward.”