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Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules
Updating performance standards to address changes in the banking industry, particularly the increased use of mobile and internet delivery channels;
Promoting community engagement;
Strengthening the special treatment of minority depository institutions; and Recognizing that CRA and fair lending responsibilities are mutually reinforcing.
The Board ANPR invited public comment on different policy options to address its objectives. For example, the Board invited comment on how to delineate assessment areas around physical locations. It also sought public comment on deposit-based and lendingbased assessment areas for IDIs that conduct a significant amount of lending and deposit collection outside assessment areas around physical locations. In addition, the Board ANPR
invited comment on nationwide assessment areas for internet banks.
The Board ANPR suggested a framework for evaluating CRA
performance based on a retail test comprised of retail lending and retail services subtests and a community development CD test comprised of CD
financing and CD services subtests that would be applicable to Board-regulated IDIs, depending on their size or business model. In addition, the Board ANPR
sought feedback on an evaluation framework based on IDI-asset-size thresholds of $750 million or $1 billion.
Under this framework, smaller IDIs would be subject to a retail lending test but would have the option to be evaluated based on their retail services and CD activities, while larger IDIs would be evaluated under all four subtests. The suggested framework would base CRA examinations for wholesale and limited purpose IDIs on the CD test. The Board ANPR generally suggested a metric-based approach for the retail lending and CD financing subtests and a qualitative approach to evaluating retail and CD services under their respective subtests. In addition, the Board ANPR suggested a strategic plan option that would provide more clarity and flexibility for establishing bank specific standards to assess activities.
The Board ANPR also discussed ways to update the State, multistate metropolitan statistical area MSA, and institution ratings by basing these ratings on local assessment area performance. The Board ANPR
suggested that the Board could consider certain activities outside of IDIs assessment areas at the institution level to achieve an outstanding rating. The Board also indicated it could revise how
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it would consider discriminatory or other illegal credit practices DOICP to both align that consideration with the Uniform Interagency Consumer Compliance Rating System and include consideration of the Military Lending Act MLA,24 the Servicemembers Civil Relief Act SCRA,25 and the Prohibition Against Unfair, Deceptive, or Abusive Acts or Practices.26
The Board further sought feedback on potential revisions to CRA data collection and reporting requirements.
The Board ANPR acknowledged that an increased use of metrics would result in an increased need for data collection and reporting and noted that the Board prioritized using both existing data where possible and exempting small IDIs from new data collection requirements.
B. OCC December 2020 NPR
The OCCs June 2020 Rule included new performance standards meant to provide large banks with incentives to achieve specific performance goals and to make CRA evaluations more consistent, reproducible, and comparable over time. These performance standards included the CRA evaluation measure, retail lending distribution tests, and CD minimums.
However, the June 2020 Rule did not include the specific benchmarks, thresholds, and minimum values proposed in the January 2020 NPR
because the OCC believed that it was appropriate to gather more information to further calibrate these measures. To do so, the OCC undertook an Information Collection 27 and issued the December 2020 NPR, in which it proposed processes to calibrate the benchmark, threshold, and minimum values more precisely.
The OCC received 13 comments on the December 2020 NPR.28 Although one commenter generally supported the December 2020 NPRs approach to setting the benchmarks, thresholds, and minimums, most commenters expressed concerns with the proposal. These concerns included that the proposed approach would 1 lead to inflated ratings; 2 set arbitrary limits on ratings; 3 not account for local market conditions, which could penalize banks that operate in high-cost markets; 4 not adequately consider the innovative, 24 10

U.S.C. 987 et seq.
U.S.C. 3901 et seq.
26 12 U.S.C. 5531.
27 See supra note 16.
28 The OCC received eight comments from the banking industry or industry trade associations, two comment from community groups, two comments from the general public, and one comment from a state government.
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rapid, and flexible funding solutions offered by internet-based banks with national footprints; and 5 be speculative and complicated.
One commenter stated that there should be hundreds of ratios as opposed to the proposed 26 calibrated values.
Another commenter favored an approach where the OCC would take into consideration surpassing a threshold, but it would not initially grant a presumption of a specific rating.
The commenter asserted that this would be a more incremental change from the evaluation approach codified in the 1995 Rules and could be used until more data was available for a presumption-based approach. Other commenters stated that a one-size-fitsall model would not work, with one commenter suggesting that the OCC
should tie benchmarks to historical, local bank performance data, and community demographics, rather than set them at a nationwide level.29
Commenters also generally expressed concern with the Information Collection, stating that 1 it would result in substantial burden and costs for the banks responding to the survey;
2 the data requested were not routinely available or did not exist; and 3 the collection would likely yield inaccurate results. Due to these concerns, several commenters requested that the OCC
pause or rescind the Information Collection.
Given the specific concerns with the December 2020 NPR and the related Information Collection, the majority of commenters reiterated the request that the Agencies work together to create a consistent CRA framework. After considering these comments, the OCC
announced that it would not finalize the December 2020 NPR and would discontinue the Information Collection.30 In addition, as noted, the OCC later announced that it would work with the Board and FDIC on joint rules to modernize the CRA.31
C. June 2020 Rule Implementation Following publication of the June 2020 Rule, the OCC began its implementation by developing transition policies and procedures to address the phased compliance dates 29 Stakeholders also offered comments on other aspects of the December 2020 NPR, including the OCCs proposed approach for addressing declines in CRA performance and the proposed technical changes. Comments on the approach for addressing declines in CRA performance questioned how the OCC would measure declines in activities and whether the proposed ten percent decline was appropriate. Comments regarding the technical changes generally sought additional clarifications.
30 See supra note 17.
31 See supra note 7.

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