New leadership usually takes us into the future. The Office of the Comptroller of the Currency (OCC) is reversing this trend by first taking us into the past for a bit. Seeing the June 5, 2020, final rule to modernize its Community Reinvestment Act (CRA) framework (June 2020 Rule) as a false start, the OCC has issued a proposed rule to rescind it in favor of working with the other agencies to develop a new rule. The proposed rule would replace the existing 12 CFR part 25 with a revised 12 CFR part 25 based on the 1995 Rules and reinstate 12 CFR part 195 (for savings associations). The proposed 12 CFR part 25 would be substantively identical to the 1995 rule. All definitions, performance tests and standards, and related data collection, recordkeeping, and reporting requirements would revert to those in place before the OCC issued the June 2020 Rule. Also, the rules surrounding the public file and public notice requirements would revert to those in the 1995 rule. The proposed rule applies to all national banks and all federal and state savings associations. If you would like to comment on any aspect of the proposal, you must submit those before Oct. 29, 2021. The June 2020 Rule would remain in effect until replaced by final rules based on this proposal.

The OCC recognizes that banks have relied on the June 2020 Rule to plan for their ongoing compliance with the CRA. Given the partial implementation of the June 2020 Rule, its replacement would change the regulatory framework that impacts, among other things, how examiners evaluate banks and what qualifying activities they would consider in CRA examinations. The OCC proposes a transition to replace certain aspects of the June 2020 Rule, which it summarizes in a chart on Page 38 of the proposed rule (https://www.occ.gov/news-issuances/federal-register/2021/nr-occ-2021-94a.pdf). Subsequently, as part of the ongoing interagency CRA rulemaking, the OCC would propose a joint revised CRA rule to replace the rules in this proposal. Following publication of any final rules regarding this proposal, banks would have a minimum of 30 days before they would be required to comply with most of the provisions described in the proposed rule. Therefore, the OCC is considering an effective date of Jan. 1, 2022, for any final rules, provided they are published by Dec. 1, 2021.

Banks that changed type based on the asset threshold adjustments in the June 2020 Rule are subject to different performance standards for activities conducted on or after Oct. 1, 2020. Also, former “large banks” that became “intermediate banks” under the June 2020 Rule were no longer required to collect data for calendar year 2021 onward and report data for calendar year 2022 onward. Many of these banks will transition back to their prior bank type based on the proposed asset-size thresholds. Consistent with its historical practices, if the proposed rules take effect Jan. 1, 2022, the OCC would require newly-classified large banks to begin collecting data Jan. 1, 2023, and reporting required and optional data the following year. The OCC will not provide banks transitioning from small banks to Intermediate Small Banks (ISB) to transition to the ISB performance standards. However, the OCC would consider the change in bank type as part of the bank’s performance context when evaluating the bank’s CRA performance.

The OCC proposes that OCC-regulated banks would receive consideration in their CRA examinations for activities that met the qualifying activities criteria or definitions that were in effect when the bank conducted those activities. The OCC will maintain the illustrative list of qualifying activities on its website to help banks determine whether the activities they performed while the June 2020 Rule was in effect are eligible for CRA consideration. However, activities included on the illustrative list may not receive consideration if conducted after the effective date of the final rules.

The June 2020 Rule changed the public file requirements by reducing the information required in the public file and changing the requirements for how an OCC-regulated bank makes the public file available to the public, including permitting these banks to make the public file available solely on their websites. Under the proposed rules, banks would need to include additional information in their public file and make the file available at their main office. Interstate banks must make their public file available at one branch in each state and more limited information at each branch. Since the proposed rules would impose additional public file content and availability requirements, the OCC expects to provide in the final rule that banks would comply with these requirements no later than three months after the final rule’s effective date.

The June 2020 Rule permitted banks to include target market assessment areas when requesting approval for a strategic plan. The OCC proposes maintaining any strategic plans approved by the OCC under the June 2020 Rule and would not require these banks to amend their strategic plans.