On June 5, 2020, the Office of the Comptroller of the Currency issued its new rule gutting the Community Reinvestment Act. This rule decreases investment in low- and moderate-income communities and communities of color — which is contrary to the purpose of the CRA. Former Comptroller of the Currency Joseph Otting made undermining the CRA the hallmark of his tenure as the head of OCC. His overhaul has been roundly criticized by other federal bank regulators, and neither the Federal Reserve nor the Federal Deposit Insurance Corporation (FDIC) — the two other agencies charged with administering the CRA — joined the final rule. One of his final acts as a Trump appointee, Otting immediately resigned after issuing the rule and returned to the private sector.

Amid a pandemic, the ensuing economic downturn, and urgent calls for racial justice, the Trump administration has unlawfully weakened measures meant to protect communities of color from the discriminatory practice of redlining. The CRA was enacted to address redlining and secure access to financial services for communities of color and low- and moderate-income communities — services that have long enabled affluent, white communities to build wealth. Banks are required to meet the financial needs of the communities in which they do business by reinvesting deposits back into that same area, instead of investing the community’s money elsewhere.

OCC’s unlawful new rule:

  • Is contrary to the text, history, and purpose of the CRA (and decades of implementation by the three agencies).
  • Is almost entirely unsupported by data or analysis and does not account for contrary data and analysis provided by stakeholders, the public, and even other federal agencies.
  • Is arbitrary and capricious, as it was finalized without meaningful consideration of the near-universal criticism OCC received from stakeholders.
  • Was issued without publication by OCC of the underlying input, data, and analysis that supposedly support it.
  • Includes harmful new provisions that were not presented for public comment in OCC’s proposed rule.

These changes were rammed through despite widespread concern voiced by community groups, a coalition of 22 states led by California, and even the banks themselves — which voiced “serious concerns” about the changes.

Furthermore, the OCC kept the public in the dark throughout the rulemaking process as it worked to weaken the CRA’s protections. In violation of the Administrative Procedure Act, the OCC withheld key data and analysis about its decision-making. To make matters worse, OCC publicly criticized and tried to silence groups like NCRC and CRC for their opposition to the proposed changes. It has repeatedly failed to comply with Freedom of Information Act requests submitted by Democracy Forward, NCRC, and CRC, necessitating litigation to compel compliance.

To ensure the OCC follows the law and protects lower- and middle-income communities as the CRA requires, we’ve filed suit on behalf of the National Community Reinvestment Coalition and the California Reinvestment Coalition. Our lawsuit was filed on June 25 with Farella Braun + Martel in the U.S. District Court for the Northern District of California.

2019 - 2020

We repeatedly called for OCC to release records related to CRA rulemaking.

We had sent 2 FOIA requests and filed 2 lawsuits on behalf of NCRC and CRC to compel the OCC to follow federal transparency laws. OCC failed to release: all data and analysis related to the rollback of the CRA regulations; the unusual steps the agency took to silence CRC and other groups that oppose changes to the CRA; a full accounting of Comptroller Otting’s off-the-record calls with 17 bank executives on gutting the CRA.

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May 21, 2020

We announced our intent to sue the day after OCC announced new CRA rules.

The OCC pressed ahead to force an even more complex and confusing experiment on low- and moderate-income families and communities of color in the middle of the COVID-19 crisis and at a time when the racial wealth gap has been widening.

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Jeffrey Dubner

Managing Senior Counsel

Challenging unlawful executive branch actions through a wide range of legal strategies

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