The FinReg Pod Reforming the Community Reinvestment Act
Dec 15, 2020
Jesse Van Tol, CEO of the National Community Reinvestment Coalition and long-time advocate for fair banking and housing access. He discusses modernizing the Community Reinvestment Act for a digital era. Topics include expanding CRA coverage to nonbanks, updating assessment areas for branchless banking, critiques of the OCC’s dollar-ratio approach, and the need for better data on small business and community investments.
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Update CRA Beyond Branch Footprints
- CRA's branch-based assessment areas are outdated as many banks take deposits and make loans beyond branches.
- Jesse argues CRA should measure activity where banks actually operate, not only by branch location.
Reject One-Size Ratio Metrics
- Avoid a single-ratio metric like the OCC proposed because it incentivizes large-dollar, potentially less meaningful activities.
- Jesse recommends keeping qualitative measures tied to community-identified needs.
OCC Went Solo On Controversial Rule
- Jesse recounts the OCC proceeding alone under Comptroller Joseph Otting to finalize a controversial CRA rule.
- He says the OCC lacked consensus and produced a rule he and others view as arbitrary and unsupported by data.