Photo by Matthew G. Bisanz | Wikimedia / CC BY-SA 3.0

The Office of the Comptroller of the Currency plans to revert back to the 1995 version of its Community Reinvestment Act rule and rescind the controversial update the previous, Trump-appointed permanent comptroller issued last year.

With the OCC returning to the 1995 amendments, banks will now be subject to the same CRA rules at all three bank regulators. The OCC had announced in July that it would rescind last year’s rule and work with the Federal Reserve and the FDIC on jointly developing new CRA regulations.

The OCC will accept comments on its plan to revert back to the 1995 rule until Oct. 29. In a summary of its notice of proposed rulemaking, the OCC said banks for the most part were still subject to the 1995 rule since many aspects of the 2020 update had not yet been implemented.

“Therefore, the OCC anticipates that the proposed rules would have a limited impact on national banks and savings associations,” the agency said.

Acting Comptroller Michael J. Hsu said in a statement that issuing the notice of proposed rulemaking was “an important step toward strengthening and modernizing the CRA.”

“The OCC is committed to working with the Federal Reserve and FDIC on a future joint rulemaking to develop a consistent framework across all banks that encourages higher levels of responsible lending, investments, services, and greater community engagement, particularly focused on helping to meet the needs of low- and moderate-income and other underserved communities across the nation,” Hsu said.

Adopted in 1977, the CRA had not been revamped since 1995. The regulations encourage financial institutions to meet community credit needs, including in low- and moderate-income neighborhoods, and prevent discrimination through redlining.

The OCC in 2018 had first released a proposal to update the CRA and provided a final version in late 2019. Despite efforts to have all three regulators agree on joint regulations, only the FDIC supported the 2019 proposal. When the OCC finalized the new CRA rules in May 2020, the FDIC dropped its support, citing the demands of the pandemic. The OCC’s final regulations did not include benchmarks for measuring banks.

The Federal Reserve continued to work on its own updates for the CRA, releasing in September 2020 an advanced notice of proposed rulemaking. The three agencies are now working together on new regulations.