Proposed Community Reinvestment Act Amendments

After a joint review of the current Community Reinvestment Act (CRA), the Office of Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision are proposing revisions to their regulations implementing this Act. The agencies are seeking comments on these revisions, which are due by April 6, 2004.

These revisions include:

• The proposal would amend the definition of “small institution” to mean an institution that has total assets which do not exceed $500 million, regardless of the size of its holding company. A greater number of institutions would be eligible for evaluation under the small institution test while only slightly decreasing the portion of industry assets subject to evaluation under the large retail institution test.
• In order to address abusive lending practices, the proposal would require that while assessing the institution’s overall credit rating, the agencies take into account evidence that the institution has engaged in illegal credit practices, including deceptive practices, or the pattern of secured lending based on the liquidation value of collateral where the borrower cannot be expected to be able to make the payments required under the terms of the loan.

The agencies invite comment on all aspects of this proposal. Information about how to submit your comments is provided in the PDF: February 6, 2004, Federal Register, pages 5729-5747

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