Next City, January 16, 2020: A Tale of Two Community Reinvestment Act Proposals
Martie North, a senior vice president at Simmons Bank, has read through the 240-page OCC/FDIC joint proposal three times since it was released on December 12. She says it would dramatically change her job in a number of ways, some of which still aren’t fully clear to her.
“This document has given me heart palpitations,” North says. “It would radically add not only to our reporting, it would definitely be a much more expensive proposition. And it has a lot of systems implications that I’m not really sure they had thought through.”
North is feeling much better about the Federal Reserve’s proposal to update CRA enforcement rules, unveiled last week by Federal Reserve Board Governor Lael Brainard at the Urban Institute in Washington D.C. “I think that the Fed is starting from a position that builds off of what was working and trying to address the areas that need to be updated, while the other one feels like is an attempt to rewrite CRA,” North says.
“One thing everyone was consistent on was this dollar volume metric was a bad idea,” says Jesse Van Tol, CEO of the National Community Reinvestment Coalition. “Nonetheless the OCC has pressed forward with something that adds some bells and whistles to the one metric, but ends up as still fundamentally the driving force behind the grading scheme.”
