Commenting on the Office of the Comptroller of the Currency’s, Federal Reserve Board’s, and Federal Deposit Insurance Corporation’s joint proposal to amend their respective Community Reinvestment Act (CRA) regulations, the Consumer Bankers Association (CBA) asserts that the proposed rulemaking runs counter to the CRA’s purpose and “will negatively impact our members as they work to provide products and services meeting the most pressing needs of lower income families and communities.” In particular, the CBA’s October 2017 comment letter to the OCC maintains that home equity loans should be kept separate from the “home mortgage loans” category; home improvement loans should not be lumped together with “other secured” and “other unsecured” loans; and financial institutions should not be required to produce their CRA Loan Application Register documents under the proposed changes to “public file” requirements.
In September 2017, the OCC, Fed, and FDIC proposed amendments to their respective CRA regulations to align them with recent revisions made by the Consumer Financial Protection Bureau to Regulation C—Home Mortgage Disclosure (12 CFR Part 1003). Since the Bureau’s Reg. C modifications are slated to take effect Jan. 1, 2018, the proposed CRA rule amendments by the OCC, Fed, and FDIC target the same effective date as well. In addition, the federal regulators requested public comment on the proposed modifications to their CRA regulations.
Comment highlights. In its comment letter, the CBA underscores that:
- as a general rule, home equity loans should not be included with “home mortgage loans” for CRA purposes;
- home equity loans should be included in the CRA analysis “only at the option of the financial institution,” and should be reported as a separate category—apart from home mortgage loans—for easier identification;
- financial institutions could benefit from having the option to combine certain traditional CRA mortgage categories, “i.e. home purchase, home improvement, and home refinance,” for purposes of the financial institution’s CRA examination;
- home improvement loans should not be lumped with “Other Secured” and “Other Unsecured” categories for loans, but should be listed instead as a “fifth category of consumer loans;” and
- because the regulators’ proposal would allow financial institutions to maintain only the pertinent notice required under Regulation C for their CRA public files and would not require including data from their “HMDA Loan Application Register” files, financial institutions should similarly not be required to produce their “CRA Loan Application Register” files.
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