In a speech delivered to attendees at the National Association of Affordable Housing Lenders Policy and Practice Conference, the Office of the Comptroller of the Currency’s (OCC) Thomas J. Curry stressed the significance of Community Reinvestment Act (CRA) and its effects on the financial industry.
Curry stated that the OCC’s modifications will shape the future of the financial world. “The changes that the OCC is making to improve our supervision of compliance and CRA, are intended to keep up with the rapid pace of change occurring in the financial world today,” he said. “These changes are reshaping what financial products and services look like, how they are delivered to consumers, and who the financial services competitors are. Many of these changes are driven by technology developments that are reinventing how loans are made and bank account services are accessed.”
Established in 1977, the CRA lays the foundation for financial institutions, state and local governments, and community organizations to promote banking services to all members of a community. The CRA bans redlining and encourages attempts to meet the credit needs of each community member, including residents of low-and-moderate-income neighborhoods. Last year, approximately $87 billion was allocated toward CRA community development lending for affordable housing, which was a $12 billion increase from 2014.
Curry explained the correlation between CRA performance and the growth of financial institutions through mergers or acquisitions. The OCC examines CRA performance of the acquiring bank and the target bank when reviewing corporate applications and the OCC “performs a convenience and needs analysis based on the bank’s description of how the resulting financial institution will serve the community.”
“Your bank’s performance related to CRA and fair lending is integral to its overall reputation and success, and your role within your organization can help your institution maintain a stronger compliance,” he said.
He went on to discuss the Compliance and Community Affairs (CCA) department, which is the newest unit in the OCC led by Senior Deputy Comptroller Grovetta Gardineer. The department is split into three divisions: Compliance Risk, led by Deputy Comptroller Donna Murphy; Compliance Supervision, led by Deputy Comptroller Beverly Cole; and Community Affairs, led by Deputy Comptroller Barry Wides. These units will work together to enhance the OCC’s CRA performance evaluation process. CRA performance evaluations for the month of November were released on December 1 and the 2017 CRA first quarter performance evaluation schedule was released the following day.
The CCA team will also collaborate to provide support to local examiners through training, risk analytics, examination tools, and quality assurance.
To view the full transcription of the speech, click here.