The Office of the Comptroller of the Currency (OCC) issued new guidance to the Policies and Procedures Manual providing a ‘framework’ for determining what impact evidence of discrimination or other illegal credit practices would have on the assigned CRA rating for national banks. IBAT General Counsel Karen Neeley sees this as a significant—and welcome—change in tone from the OCC.
This policy change appears to remove the probability of an automatic CRA ratings downgrade, despite the fact the bank had already addressed any alleged discriminatory or illegal credit practices and/or their impact on the bank’s CRA activity was inconsequential.
Acting Comptroller of the Currency Keith Noreika issued the following statement regarding the changes to OCC PPM 5000-43, “Discriminatory and Illegal Credit Practices.”
“Today’s changes to an internal OCC policy ensure a logical nexus between our CRA performance evaluation ratings and banks’ CRA-related activities. The revisions make certain we give full consideration to the corrective actions taken by banks during our evaluation. The revised policy ties a CRA rating, and any downgrade, to CRA lending activities so that banks have incentive to improve their CRA activity and are held accountable for any discriminatory or other illegal credit practices related to their CRA activities.”