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TREAS/OTS

RIN: 1550-AB48

Publication ID: Fall 2005

Title: Community Reinvestment Act
Abstract: OCC, the Board, FDIC, and OTS reviewed the Agencies' Community Reinvestment Act (CRA) regulations. The Agencies issued a joint advance notice of proposed rulemaking (ANPRM) seeking public comment on a wide range of questions as part of the review. In February 2004, the Agencies issued a joint notice of proposed rulemaking following their review of the CRA regulations, which included an analysis of about 400 comments received on the ANPRM. The comments reflected a general consensus that fundamental elements of the regulations are sound, but indicated a profound split over the need for, and appropriate direction of, change. In an effort to keep pace with changes in the financial services industry, the Agencies proposed changes to the CRA in two areas: 1) To reduce burden, it would raise the asset threshold for being a "small institution" from $250 million to $500 million and drop the holding company test; and 2) to address abusive lending practices, it would provide for taking into account in assessing an institution's CRA performance, evidence that the institution (or any of the institution's affiliates the loans of which are considered) has engaged in specified discriminatory, illegal, or abusive credit practices in connection with certain loans. In August of 2004, OTS issued a final rule revising the definition of "small savings association" under its CRA regulations. Under the revised definition, "small savings association" means a savings association with total assets of less than $1 billion, regardless of any holding company assets. This final rule permits additional small savings associations to be subject to streamlined examinations as well as reduced data collection and reporting burdens under the CRA. In November of 2004, OTS issued a second NPRM, proposing to revise the definition of "community development" to encourage all savings associations to increase their community development lending, qualified investments, and community development services in rural areas, with a particular focus on increasing these activities in underserved nonmetropolitan areas. The proposal also solicited comment on further encouraging savings associations to perform community development activities in any areas affected by natural and other disasters or other major community disruptions. Furthermore, the proposal solicited comment on providing additional flexibility in assigning CRA ratings to encourage large retail savings associations to focus their community reinvestment efforts on the types of activities the communities they serve need, consistent with safe and sound operations. As an alternative, this proposal solicited comment on eliminating the investment test. In its March 2005 final rule, OTS made changes to its CRA regulations to reduce burden, provide greater flexibility to meet community needs, and restore the focus of CRA to lending. Specifically, OTS provided additional flexibility to each savings association evaluated under the large retail institution test to determine the combination of lending, investment, and service it will use to meet the credit needs of the local communities in which it is chartered, consistent with safe and sound operations.
Agency: Department of the Treasury(TREAS)	Priority: Substantive, Nonsignificant
RIN Status: Previously published in the Unified Agenda	Agenda Stage of Rulemaking: Long-Term Actions
Major: No	Unfunded Mandates: No
CFR Citation: 12 CFR 563e (To search for a specific CFR, visit the Code of Federal Regulations.)
Legal Authority: 12 USC 1462a 12 USC 1463 12 USC 1464 12 USC 1467a 12 USC 1814 12 USC 1816 12 USC 1828(c) 12 USC 2901 to 2907

Legal Deadline: None

Timetable:

Action	Date	FR Cite
Joint ANPRM	07/19/2001	66 FR 37602
Joint ANPRM Comment Period End	10/17/2001
NPRM	02/06/2004	69 FR 5729
NPRM Comment Period End	04/06/2004
Final Rule	08/18/2004	69 FR 51155
Final Rule Effective	10/01/2004
Second NPRM	11/24/2004	69 FR 68257
Second NPRM Comment Period End	01/24/2005
Final Rule	03/02/2005	70 FR 10023
Final Rule Effective	04/01/2005
Next Action Undetermined	To Be Determined

Regulatory Flexibility Analysis Required: No	Government Levels Affected: None
Federalism: No
Included in the Regulatory Plan: No
Related Agencies: Joint: TREAS/OCC, FRS, FDIC;
Agency Contact: Celeste Anderson Senior Project Manager, Compliance and Consumer Protection Department of the Treasury Office of Thrift Supervision 1700 G Street NW., Washington, DC 20552 Phone:202 906-7990 Richard Bennett Senior Compliance Counsel, Regulations and Legislation Division Department of the Treasury Office of Thrift Supervision 1700 G Street NW., Washington, DC 20552 Phone:202 906-7409