Curry observes how banks, OCC can sharpen community reinvestment focus

By Thomas G. Wolfe, J.D.

Speaking before the National Association of Affordable Housing Lenders (NAAHL) at its “Policy and Practice Conference,” Comptroller of the Currency Thomas Curry stressed the importance of Community Reinvestment Act (CRA) performance and compliance by financial institutions and noted how the Office of the Comptroller of the Currency is sharpening its focus on CRA supervision as well. In his Dec. 1, 2016, remarks, Curry noted that the OCC’s new “Compliance and Community Affairs” department reflected an allocation of resources to make the OCC’s “priorities and policies clearer internally and externally.”

Banks. Curry told the NAAHL members that “[b]anks that integrate CRA performance and compliance into their core business operations and commit the dedicated leadership, staff, and resources necessary to produce strong performance in these areas are best positioned to succeed and grow over the long term.” “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 strong compliance culture,” he stated.

Curry indicated that the impact of a financial institution having an insufficient compliance program or subpar CRA performance could prove to be “very significant.” For instance, when evaluating corporate applications concerning proposed mergers or acquisitions, the OCC considers CRA performance of both the acquiring bank and the target bank. An unfavorable CRA rating could greatly affect a merger or acquisition and the business goals of the companies involved, Curry related.

OCC. Turning to the efforts of the OCC, Curry commented that “it’s just as critical for regulators to dedicate resources to compliance and CRA as it is for financial institutions to do so.” Along these lines, Curry underscored the OCC’s new Compliance and Community Affairs department. According to Curry, one of the top priorities for the Compliance and Community Affairs department is “to improve the OCC’s CRA performance evaluation process.”

In addition, Curry observed that some of the changes that the OCC has implemented to improve its supervision of CRA performance and compliance are driven by technological developments in the financial services industry “that are reinventing how loans are made and bank account services are accessed.” “At the OCC, we are working to ensure 21st century banks have 21st century supervision,” he stated.

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