|Comptroller Joseph M. Otting||Chair Jelena McWilliams|
|Comptroller of the Currency||Federal Deposit Insurance Corporation|
|Comp 400 7th Street, SW||550 17th Street, NW|
|Washington, D.C. 20219||Washington, DC 20429|
Docket No. OCC-2018-0008
Dear Comptroller Otting & Chair McWilliams:
[Organization] submits these comments in response to the OCC/FDIC’s Notice of Proposed Rulemaking (the “Proposal”) regarding the Community Reinvestment Act (CRA). [Organization] opposes the Proposal’s drastic shift from qualitative to quantitative evaluation measures. Dollar amounts matter, but not to the exclusion of a qualitative assessment of banks’ activities in meeting local community needs. The net impact of the Proposal would be to reduce bank investments and services in low- and moderate-income (LMI) communities. This runs counter to the spirit of the law itself.
[Organizations: Write here about your mission and history – and how CRA has impacted your work.]
A pass-fail test for evaluating banks’ retail lending distribution would prompt many banks to do just enough to pass. Converting the CRA activities test into a dollar-based metric would encourage banks to cut down on many small, impactful loans and projects – which together may have higher transaction costs – and instead focus on fewer, high-dollar-value projects. Why, for example, would a bank expend resources [fill in with a CRA program applicable to your field] when it could spend millions improving an athletic stadium in an LMI Opportunity Zone?
The CRA is the most significant tool we have to ensure that banks meet the needs of low- and moderate-income (LMI) families [or “our clients,” if applicable] and communities. Modernization must preserve what works under the CRA. As Federal Reserve Gov. Brainard recently observed, one of the “core strengths” of the CRA is creating an ecosystem that “encourages banks to engage on the priorities identified by local leaders.” The Proposal would strip away this core strength in the name of supposed objectivity. To protect the CRA ecosystem, we urge you to suspend the rulemaking process, invite the Federal Reserve back to the table, and release a proposal only when all three regulators are on the same page. This approach is in the best interests of the LMI communities, non-profits, banks and the regulators.
[Organization leader’s name]
[Organization leader’s title]