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#2259491 - 09/09/21 09:35 PM OCC proposes rescinding it 2020 CRA Rule!
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,966
Connecticut
The OCC has issued a NPR whereby it would rescind its 2020 CRA rule. The notice can be found here: OCC NPR to Rescind the 2020 CRA Rule
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#2261295 - 10/20/21 03:13 AM Re: OCC proposes rescinding it 2020 CRA Rule! Len S
Karen Tucker Offline
Junior Member
Joined: Mar 2007
Posts: 39
Washington, DC
Comments on OCC's NPR are due October 29th

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#2261338 - 10/20/21 09:55 PM Re: OCC proposes rescinding it 2020 CRA Rule! Karen Tucker
Reads Regs Offline
Diamond Poster
Joined: Nov 2004
Posts: 2,294
To see the comment letters than have have been submitted so far visit this link. https://www.regulations.gov/document/OCC-2021-0014-0001/comment
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.

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#2261342 - 10/20/21 10:41 PM Re: OCC proposes rescinding it 2020 CRA Rule! Len S
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,633
Galveston, TX
Wow - 14 comments and even one from an individual in Denmark and not a single national bank. And we complain about regulatory actions. "face-palm"
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#2261361 - 10/21/21 03:31 PM Re: OCC proposes rescinding it 2020 CRA Rule! Len S
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,966
Connecticut
One possible reason for the lack of comments is that many bankers regard the revocation as a good thing - and it is in that the 2020 Rule was beyond complicated - it was convoluted.

However, in the NPR the Agency posed some questions about possibly retaining some elements of the 2020 Rule, notably the process to get clarification on potential CD activity. That was one of the good things in the 2020 Rule. So some BOL readers may want to express support for that idea.

The 2020 Rule also expanded the definition of a renewal to include lines of credit evidenced by demand notes. Banks that extend lines of credit secured by the personal assets (AR and Inventory and equipment) typically use demand notes for the full amount of the line (to protect the seniority of the UCC filing). When those lines of credit are "renewed" (the conventional meaning of the word) by commercial lenders they are mot qualified as "renewals" under the 1995 Rule because the maturity of the note is not extended. This results in, what I suspect, underreporting of a large number of small business loans. I had written the OCC about this and they did reflect my concerns by expanding the definition of renewed loans. So that is another area that bankers may want to comment about (the Agency won't keep that if it reverts to the 1995 Rule but it will be an indicator to them that they should include that provision the next time they amend the CRA)..
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