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Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules A. Bank Type Changes The June 2020 Rule resulted in a change in bank type for some banks due to changes in the bank asset-size thresholds. For example, certain ISBs became small banks i.e., banks with assets between $326 million and $600
million and certain large banks became intermediate banks i.e., banks with assets between $1.305 billion and $2.5
billion. These banks are subject to different performance standards for activities conducted on or after October 1, 2020, than they were prior to that date. In addition, OCC-regulated large banks under the 1995 Rules that became intermediate banks under the June 2020
Rule were no longer required to collect data for calendar years 2021 forward and report data for calendar years 2022
forward.
Under the proposed rules, many of these banks would transition back to their prior bank type based on the proposed asset-size thresholds i.e., small banks would be banks with less than $330 million in assets, ISBs would be banks with at least $330 million but less than $1.322 billion, and large banks would be banks with assets of $1.322
billion or more, as adjusted. As a result, reinstated data collection and reporting requirements would apply to banks redesignated as large banks under the proposed rules.
The OCC proposes to treat banks that would transition from ISBs to large banks under the proposed rules consistent with how the OCC has historically treated these banks. Under the 1995 Rules, the OCC would have required banks that transitioned from ISBs to large banks to begin collecting loan data as provided in proposed 12
CFR 25.42 one year after the bank type changed. Therefore, if the proposed rules take effect on January 1, 2022, the OCC would require newly classified large banks to begin collecting data on January 1, 2023, and reporting required and optional data the following year.
For banks that would transition from small bank to ISBs under the proposed rules, the OCC would not provide additional time to transition to the ISB
performance standards; however, the OCC would consider the change in bank type as part of the banks performance context when evaluating the banks CRA
performance. Additionally, the OCC
intends to continue to issue bulletins to inform the public of the annual bank asset-size threshold adjustments based on changes in the Consumer Price Index for Urban Wage Earners and Clerical
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Workers CPIW.71 The OCC requests specific comment on whether:

The OCC requests specific comment on whether:

The OCC should apply its historical policy for newly designated large banks data collection, recordkeeping, and reporting requirements, with the result that certain large banks under the final rules would not collect data until January 2023 and would not report it until January 2024. In the alternative, should banks that were formerly large banks under the 1995 Rules and that return to large bank status as proposed begin data collection in 2022? Are there alternative transition policies related to data collection, recordkeeping, and reporting requirements that the OCC should consider?
The OCCs plan to consider changes from small bank to ISB bank type as part of performance context is a reasonable means of addressing the transition from the June 2020
Rule to the proposed rules bank asset-size thresholds.

The proposal to consider activities based on whether they qualified at the time the activities were conducted is a reasonable approach to addressing the changes to the type of activities that will receive consideration in CRA examinations.

B. Qualifying Activities As of the effective date of the final rules, the OCC would rescind the qualifying activities criteria in the June 2020 Rule and replace it with the 1995
Rules home mortgage loan, small business loan, small farm loan, consumer loan, and CD definitions.
Also, as of the effective date of any final rules, the definitions related to the qualifying activities criteria in the June 2020 Rule, including the compensation, distressed area, underserved area, CRAeligible business, CRA-eligible farm, small loans to businesses, small loans to farms, partially, and primarily definitions would revert to the applicable definitions under the 1995
Rules or be eliminated.
The OCC proposes to address these changes by explaining that OCCregulated banks would receive consideration in their CRA
examinations for activities that met the qualifying activities criteria or definitions that were in effect at the time that the bank conducted those activities. Consistent with the OCCs historical practice, the OCC also would apply this policy to legally binding commitments to lend or invest. For banks or interested parties that received confirmation letters for qualifying activities under the June 2020 Rule, those letters would be applicable while the June 2020 Rule was in effect but would not apply to activities conducted after any final rules effective date. The OCC believes this policy is reasonable because it honors the qualified status of activities when conducted by the bank.
71 See OCC Bulletin 20215, Community Reinvestment Act: Bank Type Determinations, Distressed and Underserved Areas, and Banking Industry Compensation Provisions of the June 2020
CRA January 29, 2021.

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C. Affiliates As explained in a January 2021
interpretive letter, under the June 2020
Rule, generally, a bank would not receive CRA consideration for affiliate activities, including activities conducted by the nonbank parent and sister companies of the bank, unless the bank could demonstrate that it provided financing for or otherwise supported the qualifying activities of these affiliates.72
This policy represented a significant change from how the OCC considered affiliate activities under the 1995 Rules, and, as such, the OCC used the flexibility provided by the transition provision to delay compliance with this aspect of the June 2020 Rule until April 1, 2022.73
The proposal would consider affiliate activities consistent with their treatment under the 1995 Rules and the guidance in the Q&As, which permit banks to elect to include affiliate activities in their CRA evaluations, subject to certain limitations. Consequently, the OCC
would rescind the January 2021
interpretive letter regarding affiliate activities as of the effective date of any final rules.
D. Outside Assessment Area Activities Under the 1995 Rules, the agencies provided consideration for activities conducted outside banks assessment areas in limited circumstances.
Specifically, under the 1995 Rules, the performance tests and standards generally provided that the Agencies would evaluate an IDIs CRA
performance in its assessment areas.74
In addition, the 1995 Rules provided that the Agencies may consider CD
activities that benefit the broader statewide or regional areas that include 72 OCC Senior Deputy Comptroller and Chief Counsels Interpretation: Community Reinvestment Act Qualifying CRA Activities Conducted by a National Banks or Savings Associations Subsidiaries and Affiliates, Including Nonbank Parent and Sister Companies of a National Bank or Savings Association Under Certain Circumstances, Can Receive CRA Credit Under the June 2020 CRA
Final Rule January 4, 2021, available at https
www.occ.gov/topics/charters-and-licensing/
interpretations-and-actions/2021/interpretive-letteraffiliates.pdf.
73 OCC Bulletin 202099, Community Reinvestment Act: Key Provisions of the June 2020
CRA Rule and Frequently Asked Questions November 9, 2020.
74 See 12 CFR part 25, Appendix C.

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