ICBA called on federal regulators to make needed changes to their proposal to reform Community Reinvestment Act regulations.
In a comment letter to the OCC and FDIC, ICBA said it generally supports modernizing CRA regulations and appreciates provisions that would create a list of pre-approved CRA activities and a process for regulators to confirm that a loan or activity qualifies for CRA credit.
However, ICBA said community banks are concerned the new regulatory framework is too complex and would impose new and excessive data-collection costs. Among its recommendations, ICBA called on regulators to:
- Allow community banks up to $5 billion in assets to opt into the revised framework.
- Exempt traditional, branch-based banks from tracking the location of deposits and delineating deposit-based assessment areas.
- Continue working with the Federal Reserve Board to create a uniform CRA rule.
- Publish examiner’s guidance on documentation requirements.
- Continue working with stakeholders to develop a metric that doesn't favor large loans and investments while avoiding nationwide benchmarks that aren't sufficiently tailored to community banks.