Federal Reserve Chairman Jerome Powell told the Senate Banking Committee that diverging regulatory paths on Community Reinvestment Act reform wouldn't harm Fed-regulated banks.
In his second day of congressional testimony, Powell noted that the OCC-FDIC reform proposal would allow certain community banks to continue using the current system, so Fed-regulated banks would be in a similar position if it doesn’t join with those agencies on a final rule.
The OCC-FDIC plan, which is open for comment through March 9, includes a provision that would allow community banks with $500 million or less in assets to opt into the revised framework. The Fed could still join in on an interagency final rule.
Powell told the House Financial Services Committee on Tuesday that the Fed hasn't yet adopted a CRA plan and that he is comfortable with Fed Governor Lael Brainard's approach. Brainard last month laid out the Fed's efforts to develop new CRA metrics and tests.
Before the Senate panel, Powell also discussed the challenges of low inflation and interest rates in setting monetary policy. He said the Fed plans to update its policy framework to ensure it continues to have tools to address economic downturns.
ICBA is closely reviewing the OCC-FDIC proposal and continues to work closely with all relevant policymakers on this years-long CRA initiative.
View the testimony