On September 8, the Office of the Comptroller of the Currency announced its intent to integrate “debanking” into the Community Reinvestment Act (CRA) exam process, which evaluates financial institutions based on how well they are meeting the lending and financial service needs of lower-income communities. In response to this abrupt policy change, Woodstock Institute President & CEO Horacio Mendez wrote a letter to the editor for the American Banker:
“At some point in the near future, I hope I learn not to open the American Banker app on my iPad with coffee in my mouth. If it’s not an article about the Consumer Financial Protection Bureau looking for reasons not to supervise the sector of the industry that is evolving the quickest (nonbanks), or an item on how the Federal Deposit Insurance Corporation wants to take branch applications out of the Community Reinvestment Act, or CRA, it’s an article about how the Office of the Comptroller of the Currency will need to staff up in order to handle the tsunami of fintech and crypto charter applications it’s receiving which, if Draft Kings had this on their system, a good parlay would be ‘next financial crisis’ combined with “tax payer bailout.’
“The latest ‘wipe coffee off my screen’ moment occurred when the OCC advised its regulated entities that it will consider “debanking” as part of its CRA examination process.”
