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(iii) In the case of a law graduate, he eRulemaking Portal, if possible. Please rulemaking action by the following or she has filed a statement that he or use the title ‘‘Community Reinvestment method: she is appearing under the supervision Act Regulations’’ to facilitate the • Viewing Comments Electronically— of a licensed attorney or accredited organization and distribution of the Regulations.gov Classic or representative and that he or she is comments. You may submit comments Regulations.gov Beta: appearing without direct or indirect by any of the following methods: Regulations.gov Classic: Go to https:// remuneration from the alien he or she • Federal eRulemaking Portal— www.regulations.gov/. 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For help with submitting effective comments please click on Supporting Materials can be viewed by clicking on the ‘‘Documents’’ tab and 12 CFR Parts 24, 25, 35, and 192 ‘‘Commenter’s Checklist.’’ For assistance with the Regulations.gov Beta filtered by clicking on the ‘‘Sort By’’ [Docket ID OCC–2020–0025] site please call (877)-378–5457 (toll free) drop-down on the right side of the screen or the ‘‘Refine Results’’ options RIN 1557–AE96 or (703) 454–9859 Monday-Friday, 9am- 5pm ET or email to regulations@ on the left side of the screen.’’ For Community Reinvestment Act erulemakinghelpdesk.com. assistance with the Regulations.gov Beta Regulations • Mail: Chief Counsel’s Office, site please call (877)-378–5457 (toll free) Attention: Comment Processing, Office or (703) 454–9859 Monday-Friday, 9am- AGENCY: Office of the Comptroller of the of the Comptroller of the Currency, 400 5pm ET or email to regulations@ Currency, Treasury. 7th Street SW, Suite 3E–218, erulemakinghelpdesk.com. ACTION: Notice of proposed rulemaking. Washington, DC 20219. The docket may be viewed after the • Hand Delivery/Courier: 400 7th close of the comment period in the same SUMMARY: The Office of the Comptroller Street SW, Suite 3E–218, Washington, manner as during the comment period. of the Currency (OCC) is issuing a notice DC 20219. FOR FURTHER INFORMATION CONTACT: Ioan of proposed rulemaking to request Instructions: You must include Voicu, Director, Compliance Risk comment on the OCC’s proposed ‘‘OCC’’ as the agency name and ‘‘Docket Analysis Division, at (202) 649–5550; or approach to determine the Community ID OCC–2020–0025’’ in your comment. Daniel Borman, Senior Attorney, Daniel Reinvestment Act (CRA) evaluation In general, the OCC will enter all Sufranski, Attorney, or Jean Xiao, measure benchmarks, retail lending comments received into the docket and Attorney, Chief Counsel’s Office, (202) distribution test thresholds, and publish the comments on the 649–5490, Office of the Comptroller of community development minimums Regulations.gov website without the Currency, 400 7th Street SW, under the general performance change, including any business or Washington, DC 20219. standards. The proposal further explains personal information provided such as SUPPLEMENTARY INFORMATION: how the OCC would assess significant name and address information, email declines in CRA activities levels in addresses, or phone numbers. I. Introduction connection with performance context Comments received, including following the initial establishment of On June 5, 2020, the OCC published attachments and other supporting a final rule in the Federal Register (2020 the benchmarks, thresholds, and materials, are part of the public record minimums. Finally, the proposed rule final rule) to update the regulatory and subject to public disclosure. Do not framework implementing the would make clarifying and technical include any information in your amendments to the CRA final rule. Community Reinvestment Act of 1977 comment or supporting materials that (CRA) 1 for national banks and savings DATES: Comments must be received on you consider confidential or or before February 2, 2021. inappropriate for public disclosure. 1 Community Reinvestment Act of 1977, Public ADDRESSES: Commenters are encouraged You may review comments and other Law 95–128, 91 Stat. 1147 (1977), codified at 12 to submit comments through the Federal related materials that pertain to this U.S.C. 2901 et seq.

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associations (collectively, banks).2 The banks’ CRA activities by creating analyzes the public comments on this 2020 final rule was the culmination of uncertainty about which activities proposal and the data it receives, the a multi-year process of engagement with would qualify and how much those OCC plans to issue a final rule that will various stakeholders to ensure that the activities would contribute to banks’ adopt an approach for setting the CRA remains a relevant and powerful CRA ratings. Through hearings, benchmark, threshold, and minimum tool for encouraging insured depository outreach, and public comments during values that correspond to the institutions to serve the needs of their the rulemaking process, the OCC presumptive ratings 6 (i.e., outstanding, entire communities, including low- and learned that many banks engaged only satisfactory, needs to improve, and moderate-income (LMI) neighborhoods. in CRA activities for which they substantial noncompliance) for banks The 2020 final rule strengthened and previously received CRA consideration assessed under the general performance modernized the implementation of the and committed capital and credit only standards. In addition, once the OCC CRA by making the regulatory to activities for which they were has determined the specific framework more objective, transparent, confident that they would receive benchmarks, thresholds, and minimums consistent in application, and reflective consideration—at the cost of innovation according to the selected approach, the of changes in the banking industry and and responsiveness. In addition, the agency will take the appropriate steps to how consumers bank. The OCC’s goal in historical framework lacked consistent publicize the standards and engage implementing the 2020 final rule was to and objective evaluations and timely stakeholders regarding the specific make the CRA framework a better tool and transparent reporting, which benchmarks, thresholds, and to encourage banks to engage in more inhibited the public’s ability to minimums. Once finalized, the OCC activities to serve the needs of their understand how and to what extent expects to periodically review and communities, particularly in LMI and banks were meeting community credit adjust these benchmarks, thresholds, other historically underserved needs. and minimums, as necessary, to ensure communities. These goals are consistent By moving to a system that is that these measures are incentivizing with the statutory purpose of the CRA primarily objective and transparent banks to engage in appropriate levels of to encourage insured depository under the 2020 final rule, CRA ratings CRA activities, while taking into institutions 3 to help meet the credit will be more consistent, reproducible, consideration market conditions and needs of the local communities in and comparable over time. The agency’s changes in economic cycles. The OCC which they are chartered, including LMI 2020 final rule was designed so that also expects to take the appropriate neighborhoods, consistent with banks’ similar circumstances will be evaluated steps to publicize the future adjustments safe and sound operations. in a similar manner from bank to bank. to the benchmarks, thresholds, and The 2020 final rule made changes in In the 2020 final rule, the OCC minimums and engage stakeholders on four areas of the historical CRA finalized the framework for the general these adjustments. framework. Specifically, the 2020 final performance standards (i.e., the CRA II. Background rule: (1) Clarified and expanded the evaluation measure, retail lending bank lending, investment, and services distribution tests, community The OCC’s 2020 final rule that qualify for CRA consideration development (CD) minimums, and the incorporates many of the measures and (collectively, qualifying activities or percentage of assessment areas for methods the OCC historically has used CRA activities); (2) updated how banks which a bank must receive a satisfactory to assess CRA performance, but it also delineate the assessment areas in which or outstanding assigned rating to provides clarity about how the OCC will they are evaluated; (3) provided achieve a bank presumptive rating of use those mechanisms to assess a bank’s additional methods for evaluating CRA satisfactory or outstanding); however, CRA performance. Among other things, performance in a consistent and the OCC decided not to adopt the the 2020 final rule describes what objective manner; and (4) required specific CRA evaluation measure activities will qualify for CRA credit and reporting that is timely and transparent. benchmarks, retail lending distribution how they will be measured to assess The new framework incentivizes test thresholds, and CD minimums as CRA performance. Further, the 2020 banks to achieve specific performance initially proposed. As noted in the final rule explains that banks are goals. Timely and transparent CRA data, preamble of the 2020 final rule, the OCC expected to meet specific benchmarks, including CRA performance believes that it is appropriate to gather thresholds, and minimums in order to evaluations, will provide meaningful more information and further calibrate achieve presumptive CRA ratings. information to all stakeholders. these measures, and the agency stated The 2020 final rule made changes to that it would issue a proposal that evaluated under a strategic plan and that are not aspects of the historical CRA framework wholesale or limited purpose banks. Under would explain the process the OCC will § 25.10(b) of the 2020 final rule, small, that had unintentionally inhibited use to more precisely calibrate the intermediate, wholesale, and limited purpose banks benchmark, threshold, and minimum can opt into and elect to be evaluated under the 2 85 FR 34734 (June 5, 2020). As used throughout values.4 general performance standards. For purposes of the this notice, the term ‘‘bank’’ or ‘‘banks’’ also Information Collection Survey, the OCC is not includes uninsured Federal branches that result This proposal seeks comment on the collecting data from any small, intermediate, from an acquisition described in section 5(a)(8) of approach the OCC would use to set wholesale, and limited purpose banks. the International Banking Act of 1978 (12 U.S.C. these benchmarks, thresholds, and 6 Under § 25.13 of the 2020 final rule, banks 3103(a)(8)). The rulemaking authority of the Office minimums. As described further in this assessed under the general performance standards of Thrift Supervision (OTS) and the Director of the SUPPLEMENTARY INFORMATION receive presumptive ratings at both the bank and OTS, respectively, relating to savings associations section, the assessment area level based on their performance was transferred to the OCC in Title III of the Dodd– OCC is separately seeking data through on objective criteria (i.e., the CRA evaluation Frank Wall Street Reform and Consumer Protection an Information Collection Survey from measure, retail lending distribution test Act, Public Law 111–203, 124 Stat. 1376, 1522 banks subject to the general performance, CD minimum calculation, and the (2010). As a result, the OCC has CRA rulewriting 5 percentage of assessment areas in which the bank authority for both Federal and state savings performance standards. Once the OCC received a satisfactory or outstanding assigned associations, as well as for national banks. The OCC rating). Those presumptive ratings are adjusted for also has rulewriting authority for Federal and state 4 85 FR at 34774. performance context and evidence of savings associations for purposes of the CRA 5 Twelve CFR 25.10(a) of the 2020 final rule discriminatory or other illegal credit practices to specifically pursuant to 12 U.S.C. 2905. applies the general performance standards to banks determine the assigned rating pursuant to § 25.19 of 3 12 U.S.C. 1813(c)(2). with more than $2.5 billion in assets that are not the 2020 final rule.

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Under the 2020 final rule, banks average quarterly retail domestic evaluated at the assessment area level, assessed under the general performance deposits value plus the percentage of § 25.13 of the 2020 final rule provides standards will be evaluated based on (1) the bank’s branches in certain areas of that in order to achieve a satisfactory or the distribution of their retail loans (i.e., need multiplied by .02, subject to a cap outstanding presumptive rating at the home mortgage loans, small loans to on the value of branches of one bank level, a bank with more than five businesses, small loans to farms, and percentage point. The bank’s average assessment areas must receive an consumer loans) (retail lending annual CRA evaluation measure at both assigned rating of at least satisfactory or distribution tests); (2) the dollar value of the assessment area level and at the outstanding, respectively, in: (1) 80 qualifying retail loans and CD activities bank level will be compared to a percent of its assessment areas; and (2) and the distribution of their branches in specific quantitative benchmark, which assessment areas from which the banks each assessment area and at the bank is to be determined by the OCC. receives 80 percent of its retail domestic level (CRA evaluation measure); and (3) Under § 25.13 of the 2020 final rule, deposits that it receives from its the level of their CD activities in each the CD minimum calculation is assessment areas. For a bank with five assessment area and at the bank level determined by dividing the total or fewer assessment areas to achieve a (CD minimum calculation). quantified dollar value of a bank’s CD satisfactory or outstanding presumptive Twelve CFR 25.13 of the 2020 final loans and CD investments, including rating at the bank level, the bank must rule provides the general performance any applicable multipliers, by the receive an assigned rating of at least standards and describes how they are bank’s average quarterly retail domestic satisfactory or outstanding, respectively, applied to determine bank and deposits value. The bank’s CD minimum in: (1) 50 percent of its assessment areas; assessment area presumptive ratings. calculations at both the assessment area and (2) assessment areas from which the Section 25.13(d) of the 2020 final rule level and at the bank level will be bank receives 80 percent of its retail states that a bank’s presumptive compared to the CD minimums to be domestic deposits that it receives from assessment area rating is based on its determined by the OCC. its assessment areas. Banks that do not CRA evaluation measure, CD minimum Section 25.12 of the 2020 final rule meet these standards or the bank-level calculation, and performance on the describes the application of the retail CD minimum requirement will receive a retail lending distribution tests. Section lending distribution tests. The retail presumptive rating of needs to improve 25.13(c) of the 2020 final rule states that lending distribution tests evaluate the or substantial noncompliance, the bank-level presumptive rating is geographic and borrower distributions depending on the bank-level CRA based on the CRA evaluation measure, of a bank’s major retail lending product evaluation measure. CD minimum calculation, and assigned lines in assessment areas in which the ratings in its assessment areas. Sections bank has originated 20 or more loans in In the preamble to the 2020 final rule, 25.11 and 25.13 of the 2020 final rule those product lines per year during an the OCC indicated that it would set the require a bank to determine its CRA evaluation period. The geographic objective CRA evaluation measure evaluation measure and CD minimum distribution test evaluates the benchmarks, retail lending distribution calculation in each assessment area and percentage of a bank’s retail loan test thresholds, and CD minimums for at the bank level. As described in originations in LMI census tracts, and the level of performance necessary to § 25.11 of the 2020 final rule, the CRA the borrower distribution test evaluates achieve each presumptive rating evaluation measure is the sum of the the percentage of a bank’s retail loan category at a later date, and that it bank’s annual qualifying activities originations to LMI borrowers, CRA- would apply these benchmarks, values (including any applicable eligible businesses, and CRA-eligible thresholds, and minimums as of January multipliers 7) divided by its annual farms, as applicable. Section 25.13 of 1, 2023, which is the compliance date the 2020 final rule requires a bank to applicable to banks subject to the 8 7 The purpose of multipliers is to incentivize pass both the geographic and borrower general performance standards. This banks to engage in activities that are particularly distribution tests for each applicable proposal suggests an approach to valuable and important from a CRA perspective by determine those objective benchmarks, giving banks additional credit towards their CRA product line to receive a presumptive evaluation measures and CD minimum calculations rating of satisfactory or outstanding in thresholds, and minimums. for these activities. Under § 25.08 of the 2020 final an assessment area. Section 25.12 of the III. Information Collection Survey rule, banks may be eligible for multipliers for the 2020 final rule allows a bank to pass following: (1) Activities provided to or that support minority depository institutions, women’s each test based on its performance Separate from this proposal, the OCC depository institutions, Community Development relative to either the demographic will issue an Information Collection Financial Institutions, and low-income credit comparator, which is based on the Survey to obtain bank-specific unions, except activities related to mortgage-backed demographics of a given assessment information from banks subject to the securities; (2) other CD investments, except CD investments in mortgage-backed securities and area, or the peer comparator, which is general performance standards, which municipal bonds; (3) other CD services; (4) other based on peer performance in a given will assist the OCC in determining the affordable housing-related CD loans; (5) retail loans assessment area. The OCC will CRA evaluation measure benchmarks, generated by branches in LMI census tracts; and (6) determine the thresholds to pass the retail lending distribution test qualifying activities in CRA deserts. Pursuant to § 25.08(b)(4) of the 2020 final rule, qualifying borrower distribution test and thresholds, and CD minimums under activities that receive a multiplier may be eligible geographic distribution test for both the the 2020 final rule that will correspond for an additional multiplier based on the OCC’s demographic and peer comparators. to the presumptive ratings. This determination of the activity’s responsiveness, Although performance on the retail information collection will supplement innovativeness, or complexity. Further, to ensure that the use of multipliers does not reduce the level lending distribution tests is only existing OCC data and facilitate a of CD activities that banks conduct, a bank is not broader review of the framework going eligible for multipliers until the quantified dollar below, this proposal would clarify that to be eligible forward, which may inform additional values of its current period CD activities are for the multipliers described in § 25.08, the revisions in future years. approximately equal to the quantified dollar values quantified dollar value of a bank’s current of CD activities in its prior evaluation period. As evaluation period CD loans, CD investments, and described below, this proposal would make CD services must be ‘‘approximately equal to or 8 85 FR at 34736. The OCC would also apply clarifying edits to the multiplier for activities that greater than’’ the quantified dollar value of these these benchmarks, thresholds, and minimums for are determined to be particularly responsive, activities considered in the bank’s prior evaluation banks that opt into the general performance innovative, or complex. Additionally, as discussed period. standards at the time of opt in.

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Specifically, the OCC will request to engage in CRA activities at a level no the OCC would examine possible four types of bank data or information. less than the status quo.10 To combinations of benchmark, threshold, First, the OCC will collect data on accomplish these goals, the OCC is and minimum values. For each set of banks’ main office presence, branch proposing to establish benchmarks, benchmarks, thresholds, and presence, deposit-taking facility thresholds, and minimums that minimums, the OCC would iteratively presence, retail domestic deposit data at correspond to a proportion of banks that calculate the proportion of assessment the county level, and what banks’ would have received a hypothetical areas that would pass for each bank. facility-based and deposit-based bank-level presumptive CRA rating of Subsequently, the OCC would assessment areas would have been outstanding and satisfactory that is no determine the proportion of banks that under the standards in § 25.09. This greater than the historical proportion of would meet or exceed the bank-level CD data will assist the OCC in determining banks that have received a bank-level minimum and the bank-level CRA how banks would have performed under assigned CRA rating of outstanding and evaluation measure benchmark. The the general performance standards and satisfactory.11 OCC would compare the results to the the banks’ presumptive ratings under Using banks’ responses to the historical proportion of outstanding §§ 25.10 through 25.13 of the 2020 final information collection, the OCC would ratings under the prior CRA framework rule. Second, the OCC will collect data calculate CRA evaluation measures and to ensure that the chosen set of on what would have been the quantified CD minimum calculations for each benchmarks, thresholds, and minimums dollar value of banks’ CRA qualifying bank’s assessment areas, as well as a yields a proportion of outstanding activities under the 2020 final rule to bank-level CRA evaluation measure and ratings that is no greater than the determine what banks’ performance CD minimum calculation for each bank. historical proportion. The OCC would would have been on the CRA evaluation Similarly, for each major retail lending determine the appropriate set of measure under § 25.11 of the 2020 final product line, the OCC would calculate benchmarks, thresholds, and minimums rule and the CD minimum under the numerator used in determining each for a satisfactory rating using the same § 25.13(c) and (d) of the 2020 final rule. bank’s retail lending distribution test approach. In the OCC’s analysis, the Third, the OCC will collect data on ratios for each bank’s assessment areas. banks that do not meet or exceed the retail loan applications and on what After combining data from the Census benchmarks, thresholds, or minimums would have been the quantified dollar and Dun and Bradstreet files of for satisfactory and outstanding ratings value of banks’ CRA qualifying retail businesses, the OCC would then would receive a needs to improve or loan originations to determine the CRA calculate the demographic comparator substantial noncompliance rating, evaluation measure under § 25.11 of the under the borrower and geographic depending on the criteria outlined in 2020 final rule. Obtaining information distribution tests for each retail lending the 2020 final rule. on retail loan applications and product line, if applicable, for every If the OCC identifies multiple originations will, in the near term, help bank’s assessment areas. Similarly, the combinations of benchmarks, inform the OCC about banks’ credit OCC would use data collected from all thresholds, and minimums that result in supply decisions across geographies banks subject to the general a similar proportion of banks that pass, and, over time, assist the OCC in performance standards to calculate the the OCC would consider additional refining and improving the CRA peer comparator under the borrower and criteria, such as incentives to further framework.9 Finally, the OCC will geographic distribution tests for each increase CRA activities that benefit LMI collect information on banks’ branch retail lending product line, if applicable, individuals and distressed or locations to determine what would have for every bank’s assessment areas. Each underserved areas, to identify the most been the branch distribution component bank’s numerators under the borrower appropriate set of performance standard of the CRA evaluation measure under and geographic distribution tests would values. § 25.11 of the 2020 final rule. be divided by the applicable To maintain flexibility, the OCC demographic and peer comparators to would not require any of the IV. Description of Proposed Rule calculate each bank’s retail lending benchmark, threshold, or minimum A. Proposed Approach for Setting the distribution test ratios for each bank’s values to be similar to each other. That Benchmarks, Thresholds, and assessment areas. These calculations is, the information collection may reveal Minimums would result in (1) bank-level that distributions of the various CRA performance standards differ across The OCC is seeking to set CRA distributions of the CRA evaluation measure and CD minimum calculation retail lending product lines and evaluation measure benchmarks, retail aggregation levels. For example, the lending distribution test thresholds, and and (2) assessment area-level distributions of the CRA evaluation distribution of the mortgage product CD minimums that provide objectivity line may be significantly different from and transparency for banks evaluated measure, CD minimum calculation, and the borrower and geographic that of the automobile loan or small loan under the general performance to a business product lines. Similarly, standards, while also encouraging banks distribution test ratios. Using the dataset described above, the distribution of the CRA evaluation possibly combined with other datasets, measure at the assessment area level 9 See various studies using application may differ from that at the bank level. information to understand credit supply such as: Antoniades, A. 2016. ‘‘Liquidity Risk and the Credit 10 Stakeholders can make only educated guesses As such, the OCC anticipates that there Crunch of 2007–2008: Evidence from Micro-Level about the current level of bank CRA activities may be as many as 26 different Data on Mortgage Loan Applications.’’ Journal of because there is no standardized set of data or calibrated benchmark, threshold, and Financial and Quantitative Analysis 51(6): 1795– information about the actual levels of bank CRA minimum values under the general 1822; Mian, Atif, and Amir Sufi. 2009. ‘‘The activities. The Information Collection Survey will Consequences of Mortgage Credit Expansion: assist the OCC in making a more informed estimate performance standards. Specifically, the Evidence from the U.S. Mortgage Default Crisis.’’ of the current level of bank CRA activities. retail lending distribution tests reflect The Quarterly Journal of Economics 124(4): 1449– 11 The population of banks being analyzed under six retail lending product lines for the 1496; Puri, Manju, Jorg Rocholl, and Sascha Steffen. this approach is the same population of banks borrower distribution test, three retail 2011. ‘‘Global Retail Lending in the Aftermath of subject to the Information Collection Survey (i.e., the US Financial Crisis: Distinguishing Between banks with assets of $2.5 billion or more that are lending product lines for the geographic Supply and Demand Effects.’’ Journal of Financial subject to the general performance standards under distribution test, and involve two Economics 100(3): 556–578. the 2020 final rule). different comparisons under each test,

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thus yielding up to 18 different the LMI tracts nationwide, and the new benchmarks, thresholds, and threshold values. The CRA evaluation individual banks delineate their own minimums. This potential decrease in measure would involve six different assessment areas pursuant to § 25.09 of CRA activities by some banks may benchmark values (one at the bank level the 2020 final rule, it is unclear whether negate any increase in CRA activities and one at the assessment area level for this approach would be appropriate. that would result from other banks needs to improve, satisfactory, and Second, without further data analysis, increasing their CRA activities to meet outstanding presumptive ratings, the approach may be disproportionately the new benchmarks, thresholds, and respectively), while the CD minimum influenced by the activities of the largest minimums. Therefore, with the would involve two values, one at the banks assessed under the general proposed approach and alternative bank level and one at the assessment performance standards, which are approaches considered, the OCC area level. responsible for the majority of CRA recognizes the need to evaluate activities and deposits. Lastly, the OCC precipitous declines in CRA activity B. Alternatives Considered to the does not believe that this approach under performance context as banks Proposed Approach for Setting the would sufficiently capture the adapt to the new benchmarks, Benchmarks, Thresholds, and interaction between the benchmarks, thresholds, and minimums. Minimums thresholds, and minimums, making it As a general matter, it is appropriate The OCC recognizes that some extent difficult to predict a resulting for banks to adjust their CRA activities of normative judgment is necessary for distribution of presumptive ratings for a over time in response to regulatory any approach the OCC chooses. The set of chosen values. requirements. This is normal and OCC considered proposing an Having considered different acceptable. That said, precipitous alternative where instead of the approaches to setting the benchmarks, declines of ten percent or more in a proposed approach, the OCC would thresholds, and minimums, the OCC is bank’s performance on the general choose a set of benchmarks, thresholds, proposing an approach that would set performance standards as calculated and minimums without reference to the robust benchmarks, thresholds, and based on historical data, between the historical distribution of ratings. The minimums. The OCC believes that the establishment of the objective OCC chose not to propose this approach proposed approach will effectively benchmarks, thresholds, and minimums because the OCC believes that setting achieve the agency’s goals of providing and the bank’s first evaluation under the benchmarks, thresholds, and minimums objectivity and transparency in the general performance standards, that in relation to the historic status quo performance standards, while also cannot be explained by market minimizes the degree of normative encouraging banks to engage in CRA conditions or other performance context judgment and provides a useful starting activities at an aggregate level that is no criteria may result in the bank receiving point for determining an expected less than the status quo. an assigned rating that is no higher than distribution of CRA ratings. needs to improve at the assessment area C. Proposed Approach for Treating The OCC also considered proposing level as well as at the overall bank level. using the information collection to Declines in CRA Performance Following calculate the historical aggregate the Initial Establishment of the V. 2020 Final Rule Clarifying and distribution and dollar amount of CRA Benchmarks, Thresholds, and Technical Amendments activities for the components of the Minimums Following publication of the 2020 general performance standards to set The OCC is proposing to amend final rule, the OCC engaged in a review benchmarks, thresholds, and § 25.16 of the 2020 final rule to state process with the goal of providing minimums. This approach would that banks whose performance additional clarity to 12 CFR part 25, consider the CRA activities, branches, precipitously decreases by ten percent 12 effective October 1, 2020. The OCC and retail domestic deposits of all banks or more on the general performance seeks comment on revisions to aspects as if they were the CRA activities, standards after the establishment of the of the 2020 final rule, including branches, and retail domestic deposits initial benchmarks, thresholds, and compliance dates, some definitions, of a single hypothetical bank in order to minimums without an adequate multipliers, the general performance set the thresholds, benchmarks, and explanation under the performance standards opt out, the aggregate minimums that correspond to the context criteria, including consideration disclosure statement, and references to desirable level of CRA activity. of market conditions, risk having their the FDIC. In addition, the proposal The OCC chose not to propose this assigned ratings adversely impacted. contains various technical, clarifying, approach because of the additional The OCC recognizes that for any well- and conforming amendments. assumptions and constraints it would defined set of benchmarks, thresholds, entail. First, the OCC views this minimums, and CRA presumptive A. Compliance Dates for Banks approach as unworkable for the retail ratings, the current CRA activities of Evaluated Under a Strategic Plan lending distribution tests. Consolidating some banks will fall below, while the Under the 2020 final rule, all banks all banks would prevent the calculation current CRA activities of other banks have the option to be evaluated under of the peer comparator because the will exceed, the chosen set of a strategic plan, including banks that hypothetical, aggregate bank has no benchmarks, thresholds, and meet the small or intermediate bank peers. For the demographic comparator, minimums. The former set of banks definitions. The 2020 final rule also sets this approach would require either would be expected to increase CRA forth compliance dates for certain using nationwide demographics (i.e., activities, whereas the latter set of banks sections of the rule based on bank type. the proportion of LMI families, LMI could potentially decrease CRA Section 25.01(c)(4)(i) of the 2020 final tracts, or owner-occupied units in LMI activities while maintaining the same rule states that ‘‘[b]anks other than tracts in the entire United States) or rating or achieving a better rating under small, intermediate, wholesale, and assuming how the hypothetical limited purpose banks must comply aggregate bank would delineate its 12 This proposed ten percent figure is based on with §§ 25.07—25.13, 25.21, 25.25, and the expert judgment of the OCC Economics assessment areas. Because each bank’s Department and is a reasonable representation of 25.26 by January 1, 2023.’’ This lending activities likely do not cover all what the OCC currently considers to be a provision was intended to apply to areas in which LMI families reside or all precipitous decrease in a bank’s CRA activities. banks evaluated under a strategic plan,

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and the sections referenced in this C. Multiplier Clarifications be evaluated under part 25. The paragraph are applicable to banks Section 25.08(b) of the 2020 final rule proposal would add references to the evaluated under a strategic plan or the includes multipliers for some qualifying FDIC where they were inadvertently general performance standards (e.g., activities, including a multiplier for omitted in the 2020 final rule. § 25.21 includes the data collection activities that are determined to be F. Aggregate CRA Disclosure Statement requirements for banks evaluated under particularly responsive, innovative, or the general performance standards or a Section 25.27(b) of the 2020 final rule complex. The proposal would clarify provides for public disclosure of the strategic plan). In contrast, that this multiplier is applicable to any § 25.01(c)(4)(iii) of the 2020 final rule retail loan origination data reported to activity that received one of the other the OCC that is necessary to evaluate includes the compliance dates multipliers provided for in the 2020 applicable to small and intermediate banks’ performance under the retail final rule and that the maximum total lending distribution tests. The OCC banks. To eliminate any potential upward adjustment considering all confusion regarding which compliance intended to include all data reported to multipliers is four times the quantified the OCC regarding retail loan dates apply to banks evaluated under a dollar value of the qualifying activity. strategic plan that also meet either the originations in the aggregate disclosure Section 25.08(b)(1) also provides that to statement but inadvertently omitted small bank or intermediate bank be eligible for the multipliers in sections definition, the proposal would revise disclosure of banks’ number of home 25.08(b)(2) and (b)(3) of the 2020 final mortgage loans in LMI census tracts. § 25.01(c)(4)(i) to clarify that banks other rule, the quantified dollar value of a than those evaluated under the The proposal would add this disclosure bank’s current evaluation period CD requirement to the rule. performance standards applicable to loans, CD investments, and CD services small, intermediate, wholesale, and must be ‘‘approximately equal to’’ the G. Other Revisions limited purpose banks must comply quantified dollar value of these In addition to the revisions discussed with the applicable sections by January activities considered in the bank’s prior above, the proposal would make several 1, 2023. evaluation period. The proposal would non-substantive technical, clarifying, B. Definitions clarify that the quantified dollar value of and conforming revisions throughout a bank’s current evaluation period CD the 2020 final rule to improve clarity In § 25.03 of the 2020 final rule, the loans, CD investments, and CD services and consistency. The OCC is also definition of ‘‘compensation’’ refers to must be ‘‘approximately equal to or proposing revisions to regulations that ‘‘median hourly compensation value greater than’’ the quantified dollar value include cross references to the CRA (i.e., total salaries and benefits divided of these activities considered in the implementing regulations in effect prior by full-time equivalent employees).’’ It bank’s prior evaluation period. to October 1, 2020, including 12 CFR also describes the calculation as being part 24, 12 CFR part 35, and 12 CFR part based on aggregate Call Report data on D. General Performance Standards Opt 192. These revisions update the cross median salaries and benefits and the Out references to be consistent with the median number of full-time equivalent Section 25.10(b) of the 2020 final rule 2020 final rule and include transition employees. The OCC determined that permits a small, intermediate, provisions as appropriate. the two descriptions are inconsistent wholesale, or limited purpose bank that VI. Request for Comments and may result in different opted into the general performance compensation levels. The OCC intended standards a single opportunity to opt The OCC requests comment on all for the definition of ‘‘compensation’’ to out of evaluation under those standards. aspects of the proposed rule. The OCC reflect the median hourly compensation The 2020 final rule stated that banks specifically requests comments on the value based on each bank’s total salaries that elected to opt out of evaluation approach the OCC would use to and benefits and its full-time equivalent under the general performance determine the CRA evaluation measure employees. Therefore, the proposed rule standards would ‘‘revert’’ to being benchmarks, retail lending distribution would revise the definition of evaluated according to the small and test thresholds, and CD minimums ‘‘compensation’’ to clarify this approach intermediate performance standards or under the Community Reinvestment for determining compensation value. the wholesale and limited purpose Act’s general performance standards. Under the 2020 final rule’s definitions performance standards. This provision The OCC also seeks comment on its of ‘‘partially’’ and ‘‘primarily,’’ it is may lead to confusion in circumstances proposal to amend the 2020 final rule to possible that an activity could meet both where a bank meets a different bank size consider, under performance context, definitions if the activity has an express, or type definition when it opts into the declines of ten percent or greater on a bona fide intent, purpose, or mandate, general performance standards than it bank’s performance under the general consistent with a criterion in § 25.04(c) does when it elects to opt out. The performance standards following the of the 2020 final rule. To eliminate the proposal would revise the opt out establishment of the benchmarks, potential overlap in the definitions, the provision to clarify that banks are thresholds, and minimums. proposal would revise the definition of subject to the applicable performance VII. Regulatory Analyses ‘‘partially’’ to clarify that the definition standards based on the bank’s size or applies to activities that do not have an type when it opts out. A. Paperwork Reduction Act express, bona fide intent, purpose, or In accordance with the requirements mandate consistent with a criterion in E. References to the Federal Deposit of the Paperwork Reduction Act of 1995 § 25.04(c) of the 2020 final rule. The Insurance Corporation (FDIC) (PRA), 44 U.S.C. 3501 et seq., the OCC proposal also would revise the The 2020 final rule integrates 12 CFR may not conduct or sponsor, and definitions of ‘‘partially’’ and part 195 into 12 CFR part 25 and respondents are not required to respond ‘‘primarily’’ to clarify that the terms eliminates the former part 195. As of to, an information collection unless it apply to activities involving ‘‘families, October 1, 2020, national banks and displays a currently valid Office of businesses, or farms’’ to ensure Federal savings associations supervised Management and Budget (OMB) control consistency with the qualifying by the OCC and state savings number. The OCC has reviewed the activities criteria that use those terms. associations supervised by the FDIC will notice of proposed rulemaking and

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determined that it would not introduce Therefore, the OCC believes the costs including small depository institutions, any new or revise any existing associated with the proposal, if any, and their customers, and the benefits of collection of information pursuant to would be de minimis. For these reasons, the proposed rule that the OCC should the PRA. Therefore, no submission will the OCC certifies that, if adopted, the consider in determining the effective be made to OMB for review. proposed rule would not have a date and any administrative compliance B. Regulatory Flexibility Act significant economic impact on a requirements for a final rule. substantial number of small entities In general, the Regulatory Flexibility regulated by the OCC. Accordingly, an List of Subjects Act (RFA) (5 U.S.C. 601 et seq.) requires Initial Regulatory Flexibility Analysis is 12 CFR Part 24 an agency, in connection with a not required. proposed rule, to prepare an Initial Community development, Credit, Regulatory Flexibility Analysis C. Unfunded Mandates Reform Act of 1995 Investments, Low- and moderate- describing the impact of the rule on income housing, National banks, small entities (defined by the Small The OCC has analyzed the proposed Reporting and recordkeeping Business Administration for purposes of rule under the factors in the Unfunded requirements, Rural areas, Small the RFA to include commercial banks Mandates Reform Act of 1995 (UMRA), businesses. and savings institutions with total assets 2 U.S.C. 1501 et seq. Under this analysis of $600 million or less and trust the OCC considered whether the 12 CFR Part 25 companies with total assets of $41.5 proposed rule includes a Federal million of less). However, under section mandate that may result in the Community development, Credit, 605(b) of the RFA, this analysis is not expenditure by State, local, and tribal Investments, National banks, Reporting required if an agency certifies that the governments, in the aggregate, or by the and recordkeeping requirements, rule would not have a significant private sector, of $100 million or more Savings associations. economic impact on a substantial in any one year ($157 million as 12 CFR Part 35 number of small entities and publishes adjusted annually for inflation). The its certification and a short explanatory UMRA does not apply to regulations Community development, Credit, statement in the Federal Register along that incorporate requirements Freedom of information, Investments, with its rule. specifically set forth in law. National banks, Reporting and The OCC currently supervises As discussed above, the proposed recordkeeping requirements. approximately 1,067 insured depository rule, if implemented, would not impose institutions, of which 1,030 may be new mandates. The OCC concludes that 12 CFR Part 192 impacted by the proposed rule. if implemented, the proposed rule Reporting and recordkeeping Moreover, 745 of the institutions are would not result in an expenditure of 13 requirements, Savings associations, small entities. The OCC estimates that $157 million or more annually by State, Securities. the proposed rule’s technical local, and tribal governments, or by the amendments and updated cross private sector. Therefore, the OCC finds For the reasons set out in the references may impact approximately that the proposed rule does not trigger preamble, the OCC proposes to amend 708 of these small entities, which is a the UMRA cost threshold. Accordingly, 14 12 CFR chapter I as follows: significant number. However, because the OCC has not prepared the written the OCC estimates the costs, if any, statement described in section 202 of PART 24—COMMUNITY AND associated with the proposal would be the UMRA. ECONOMIC DEVELOPMENT ENTITIES, de minimis, the proposed rule would COMMUNITY DEVELOPMENT not have a significant economic impact D. Riegle Community Development and Regulatory Improvement Act of 1994 PROJECTS, AND OTHER PUBLIC on any small OCC-regulated entities. WELFARE INVESTMENTS Additionally, the other sections of the Pursuant to section 302(a) of the proposed rule do not impose new Riegle Community Development and ■ 1. The authority citation for part 24 mandates and primarily request Regulatory Improvement Act of 1994 continues to read as follows: comment on the OCC’s proposed (RCDRIA), 12 U.S.C. 4802(a), in approach for setting the benchmarks, determining the effective date and Authority: 12 U.S.C. 24(Eleventh), 93a, thresholds, and minimums as well as administrative compliance requirements 481 and 1818. how the OCC would consider decreases for new regulations that impose § 24.2 [Amended] in CRA activities following the additional reporting, disclosure, or other establishment of these standards.15 requirements on insured depository ■ 2. In § 24.2 amend paragraph (f) by institutions, the OCC will consider, removing ‘‘12 CFR 25.12(m)’’ and 13 Consistent with the General Principles of consistent with principles of safety and adding in its place ‘‘12 CFR 25.03’’. Affiliation 13 CFR 121.103(a), the OCC counts the soundness and the public interest: (1) assets of affiliated financial institutions when § 24.3 [Amended] determining if it should classify an institution as a Any administrative burdens that the small entity. The OCC used December 31, 2019, to proposed rule would place on ■ 3. Section 24.3 is amended by determine size because a ‘‘financial institution’s depository institutions, including small assets are determined by averaging the assets removing the phrase ‘‘12 CFR 25.23 as reported on its four quarterly financial statements depository institutions and customers of a ‘‘qualified investment.’’’’ and adding for the preceding year.’’ See footnote 8 of the U.S. depository institutions; and (2) the in its place the phrase ‘‘12 CFR 25.04 as Small Business Administration’s Table of Size benefits of the proposed rule. The OCC a ‘‘community development Standards. requests comment on any administrative investment.’’’’. 14 The OCC excluded entities with a CRA burdens that the proposed rule would examination type of ‘‘exempt’’ in an OCC supervisory information system. place on depository institutions, § 24.7 [Amended] 15 As noted above, these sections of the proposal ■ 4. In § 24.7 amend (paragraph (b) by are relevant to banks subject to the general assets that are not evaluated under a strategic plan performance standards, which generally only apply and that are not wholesale or limited purpose removing ‘‘12 CFR 25.23’’ and adding in to institutions that have more than $2.5 billion in banks. its place ‘‘12 CFR 25.04’’.

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PART 25—COMMUNITY ■ c. Revising the definition of Partially means 50 percent or less of REINVESTMENT ACT AND Compensation; the dollar value of the activity or of the INTERSTATE DEPOSIT PRODUCTION ■ d. In the definition of Essential individuals, families, businesses, farms, REGULATIONS community facility removing the word or census tracts served by the activity, ‘‘means’’ and adding the word ‘‘means’’ if the activity does not have an express, ■ 5. The authority citation for part 25 in its place; bona fide intent, purpose, or mandate continues to read as follows: ■ e. In the definition of Essential consistent with a criterion in § 25.04(c). Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, infrastructure: * * * * * 93a, 161, 215, 215a, 481, 1462a, 1463, 1464, ■ i. Removing the word ‘‘means’’ and 1814, 1816, 1828(c), 1835a, 2901 through adding the word ‘‘means’’ in its place; § 25.04 [Amended] 2908, 3101 through 3111, and 5412(b)(2)(B). and ■ 9. In § 25.04 amend paragraph (a)(3) ■ 6. Section 25.01 amended by: ■ ii. Adding the word ‘‘and’’ before the by removing the phrase ‘‘on the date’’ ■ a. In paragraph (b)(1) adding the word ‘‘tunnels’’ in paragraph (1); and adding in its place the word phrase ‘‘or the Federal Deposit ■ f. Moving the definition of Low- ‘‘conducted’’; Insurance Corporation (FDIC)’’ after income credit union to follow the ‘‘(OCC)’’; definition of Limited purpose bank; § 25.06 [Amended] ■ b. In paragraph (b)(2) adding the ■ g. In the definition of Metropolitan ■ 10. In § 25.06 amend paragraph (c)(2) phrase ‘‘or FDIC’’ after ‘‘OCC’’; division adding the word ‘‘the’’ before by removing the word ‘‘activity’’ and ■ c. In paragraph (c)(1) removing the phrase ‘‘successor publication adding in its place the word ‘‘area’’. ‘‘§ 25.03’’ and adding ‘‘§ 25.03,’’ in its thereof’’; ■ 11. Section 25.08 is amended by: place; ■ h. In the definition of Metropolitan ■ a. Adding the phrase ‘‘or greater than’’ ■ d. Revising paragraph (c)(4)(i); and statistical area adding the word ‘‘the’’ after the phrase ‘‘approximately equal ■ e. In paragraph (c)(5): before the phrase ‘‘successor publication to’’ in the first sentence of paragraph ■ i. Removing ‘‘October 1, 2020.’’ and thereof’’; (b)(1); adding ‘‘October 1, 2020,’’ in its place; ■ i. Revising the definition of Partially; ■ b. Removing the word ‘‘conducted’’ in ■ ii. Adding the phrase ‘‘or FDIC’’ after ■ j. In the definition of Primarily the second sentence of paragraph (b)(1) ‘‘OCC’’ in the introductory text; and removing the phrase ‘‘individuals or and adding ‘‘conducted,’’; ■ iii. Removing the word ‘‘element’’ and census tracts’’ from paragraph (1) and ■ c. Removing the word ‘‘activity’’ and adding in its place the word ‘‘elements’’ adding in its place the phrase adding in its place the word ‘‘activities’’ in the introductory text. ‘‘individuals, families, businesses, in paragraph (b)(2); and The revision reads as follows: farms, or census tracts’’; ■ d. Revising paragraph (b)(4). ■ § 25.01 Authority, purposes, scope, and k. In the definition of Retail domestic The revision reads as follows: severability. deposit: ■ i. Removing ‘‘FDIA’’ in the § 25.08 Qualifying activities value. * * * * * * * * * * (c)* * * introductory text and adding in its place (4) Compliance dates. (i) Banks other the phrase ‘‘Federal Deposit Insurance (b)* * * (4) The quantified dollar value of than banks evaluated under the Act’’ in the first sentence of the qualifying activities that receive a performance standards applicable to definition; ■ multiplier under paragraphs (b)(2) or small, intermediate, wholesale, and ii. Removing ‘‘FDIA’’ and adding in its (b)(3) of this section may also be subject limited purpose banks must comply place ‘‘Federal Deposit Insurance Act’’ to an additional upward adjustment, for with §§ 25.07–25.13, 25.21, 25.25, and in paragraph (2)(i)(A); and ■ a maximum total upward adjustment of 25.26, as applicable, by January 1, 2023. iii. Adding quotation marks to the phrase ‘‘reciprocal deposit’’ in up to 4 times the quantified dollar value * * * * * paragraph (2)(ii); of the qualifying activity based on the § 25.02 [Amended] ■ l. In the definition of Metropolitan OCC’s or FDIC’s determination of the ■ 7. Section 25.02 is amended by: division removing the phrase ‘‘the activity’s responsiveness, ■ a. Adding the phrase ‘‘or FDIC’’ after center of the census tract if the census innovativeness, or complexity. ‘‘OCC’’ in paragraph (a) introductory tract’’ in paragraph (2)(i)(D) and adding * * * * * text; in its place the word ‘‘the center of the § 25.09 [Amended] ■ b. Adding the phrase ‘‘or FDIC’’ after census tract if it’’; and ‘‘OCC’’ in the second sentence of ■ m. In the definition of Wholesale bank ■ 12. Section 25.09 is amended by: paragraph (b); and adding the word ‘‘loans’’ after the word ■ a. Adding the phrase ‘‘or FDIC’’ after ■ c. In paragraph (c): ‘‘mortgage’’. ‘‘OCC’’ wherever it appears in paragraph ■ i. Adding the phrase ‘‘or FDIC’’ after The revisions read as follows: (a); ■ b. Removing the word ‘‘it’’ from ‘‘OCC’’; and § 25.03 Definitions. ■ ii. Removing the phrase ‘‘OCC’s paragraph (c)(2)(v) and adding in its procedures set forth in part 5 of this * * * * * place the phrase ‘‘the bank’’; chapter’’ and adding in its place the Compensation means the median ■ c. In paragraph (e): phrase ‘‘applicable comment hourly compensation value (where ■ i. Removing the phrase ‘‘will consist’’ procedures’’. compensation value equals total salaries from the first sentence and adding in its ■ 8. Section 25.03 is amended by: and benefits divided by full-time place the word ‘‘consists’’; and ■ a. In the definition of Affiliate equivalent employees) for the banking ■ ii. Adding the phrase ‘‘assessed under removing the phrase ‘‘October 1, 2020’’ industry based on Call Report data for— the general performance standards in and adding the phrase ‘‘October 1, (1) Salaries and employee benefits § 25.13’’ after the word ‘‘bank’’ in the 2020,’’ in its place; from Schedule RI, Item 7.a; and second sentence; and ■ b. In the definition of Automated (2) Number of full-time equivalent ■ d. Adding the phrase ‘‘or FDIC’’ after teller machine (ATM) removing the employees from Schedule RI, ‘‘OCC’’ wherever it appears in paragraph phrase ‘‘cash dispersed’’ and adding the Memorandum Item 5. (g) phrase ‘‘cash is disbursed’’ in its place; * * * * * ■ 13. Section 25.10 is amended by:

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■ a. Adding the phrase ‘‘or FDIC’’ after ■ ii. Removing the phrase ‘‘demographic from banks that are subject to the ‘‘OCC’’ in paragraph (a) introductory borrower comparator or the associated’’ general performance standards, the OCC text; and adding in its place ‘‘borrower will calculate historic CRA activity ■ b. Adding the phrase ‘‘or FDIC’’ after demographic comparator or the levels and corresponding performance ‘‘OCC’’ in paragraph (a)(1)(i); associated borrower’’; ratings under the general performance ■ c. Adding the phrase ‘‘or FDIC’’ after ■ g. In paragraph (c)(3): standards had they been in place. Based ‘‘OCC’’ in paragraph (a)(1)(ii); ■ i. Adding the phrase ‘‘or FDIC’’ after on this analysis, the OCC will set the ■ d. Adding the phrase ‘‘or FDIC’’ after ‘‘OCC’’; and CRA evaluation measure benchmarks, ‘‘OCC’’ in paragraph (a)(1)(iii); ■ ii. Removing the phrase ‘‘demographic retail lending distribution test ■ e. Adding the phrase ‘‘or FDIC’’ after borrower comparator or the associated’’ thresholds, and community ‘‘OCC’’ in paragraph (a)(2)(i); and adding in its place ‘‘borrower development minimums such that the ■ f. Adding the phrase ‘‘or FDIC’’ after demographic comparator or the proportion of banks receiving ‘‘OCC’’ in paragraph (a)(2)(ii); associated borrower’’; hypothetical presumptive ratings of ■ g. Adding the phrase ‘‘or FDIC’’ after ■ h. In paragraph (c)(4) introductory outstanding and satisfactory is no ‘‘OCC’’ in paragraph (a)(2)(iii); text: greater than the historical proportion of ■ h. Adding the phrase ‘‘or FDIC’’ after ■ i. Adding the phrase ‘‘or FDIC’’ after banks that received assigned ratings of ‘‘OCC’’ in paragraph (a)(3)(i); ‘‘OCC’’; and outstanding and satisfactory. ■ i. Adding the phrase ‘‘or FDIC’’ after ■ ii. Removing the phrase ‘‘demographic ‘‘OCC’’ in paragraph (a)(3)(ii); borrower comparator or the associated’’ § 25.14 [Amended] ■ j. Adding the phrase ‘‘or FDIC’’ after and adding in its place ‘‘borrower ■ 17. Section 25.14 is amended by: ‘‘OCC’’ wherever it appears in paragraph demographic comparator or the ■ a. Adding the phrase ‘‘or FDIC’’ after (a)(4); associated borrower’’. ‘‘OCC’’ in paragraph (a)(1); ■ k. Revising the last sentence of ■ 16. Section 25.13 is amended by: ■ b. Adding the phrase ‘‘or FDIC’’ after paragraph (b); and ■ a. Removing the word ‘‘in’’ and ‘‘OCC’’ in paragraph (a)(2); and ■ l. Removing the word ‘‘anticipates’’ adding in its place ‘‘in—’’ in paragraph ■ c. Adding the phrase ‘‘or FDIC’’ after and adding the phrase ‘‘and FDIC (c)(1)(ii)(B) introductory text; ‘‘OCC’’ in paragraph (d). anticipate’’ in paragraph (c). ■ b. Removing the word ‘‘in’’ and The revision reads as follows: § 25.15 [Amended] adding in its place ‘‘in—’’ in paragraph ■ (c)(2)(ii)(A) introductory text; 18. Section 25.15 is amended by: § 25.10 Performance standards and ■ a. Adding the phrase ‘‘or FDIC’’ after ratings, in general. ■ c. Removing the word ‘‘in’’ and adding in its place ‘‘in—’’ in paragraph ‘‘OCC’’ in paragraph (a); * * * * * ■ b. Adding the phrase ‘‘or FDIC’’ after (c)(2)(ii)(B) introductory text; (b)* * *A small, intermediate, ‘‘OCC’’ wherever it appears in paragraph ■ d. Removing the phrase ‘‘divided by’’ wholesale, or limited purpose bank that (b); in paragraph (c)(2)(iii) and adding opts out from the general performance ■ c. Adding the phrase ‘‘or FDIC’’ after ‘‘divided by’’ in its place; standards will be evaluated according to ‘‘OCC’’ in paragraph (c) introductory ■ e. Removing the phrase ‘‘substantial the performance standards described in text; noncompliance standard’’ in paragraph paragraphs (a)(2) and (a)(3) of this ■ d. Adding the phrase ‘‘or FDIC’’ after (c)(4) and adding in its place the phrase section, as applicable, unless the bank is ‘‘OCC’’ in paragraph (d)(1); evaluated under an approved strategic ‘‘substantial noncompliance ■ e. Adding the phrase ‘‘or FDIC’’ after plan as described under (a)(4) of this performance standard’’; ■ ‘‘OCC’’ in paragraph (d)(2); and section. f. Removing the phrase ‘‘average ■ f. Adding the phrase ‘‘or FDIC’’ after assessment area CRA evaluation * * * * * ‘‘OCC’’ in paragraph (e). measure’’ in paragraph (d)(2)(ii) and ■ 19. Section 25.16 is amended by: § 25.11 [Amended] adding in its place the phrase ‘‘average ■ a. Adding the phrase ‘‘or FDIC’’ after ■ 14. Section 25.11 is amended by annual assessment area CRA evaluation ‘‘OCC’’ in paragraph (a) introductory removing ‘‘§ 25.08(c);’’ in paragraph measure’’; text; (c)(1) and adding ‘‘§ 25.08(c)’’ in its ■ g. Removing the phrase ‘‘average ■ b. Adding the phrase ‘‘or FDIC’’ after place. assessment area CRA evaluation ‘‘OCC’’ in paragraph (b) introductory measure’’ in paragraph (d)(3) and text; § 25.12 [Amended] adding in its place the phrase ‘‘average ■ c. Removing the period at the end of ■ 15. Section 25.12 is amended by: annual assessment area CRA evaluation paragraph (b)(3) and adding in its place ■ a. Adding the phrase ‘‘or FDIC’’ after measure’’; a semicolon; ‘‘OCC’’ in paragraph (a) introductory ■ h. Removing the phrase ‘‘average ■ d. Adding the phrase ‘‘or FDIC’’ after text; assessment area CRA evaluation ‘‘OCC’’ in paragraph (b)(4); ■ b. Adding the phrase ‘‘or FDIC’’ after measure’’ in paragraph (d)(4) and ■ e. Adding the phrase ‘‘or FDIC’’ after ‘‘OCC’’ in paragraph (b)(1) introductory adding in its place the phrase ‘‘average ‘‘OCC’’ in paragraph (b)(5); text; annual assessment area CRA evaluation ■ f. Removing the phrase ‘‘including for ■ c. Adding the phrase ‘‘or FDIC’’ after measure’’; and each assessment area.’’ in paragraph (c) ‘‘OCC’’ in paragraph (b)(2) introductory ■ i. Adding paragraph (e). and adding in its place the phrase text; The addition reads as follows: ‘‘including for each assessment area.’’; ■ d. Adding the phrase ‘‘or FDIC’’ after and ‘‘OCC’’ in paragraph (b)(3) introductory § 25.13 General performance standards ■ and presumptive rating. g. Adding paragraph (d). text; The addition reads as follows: ■ e. Adding the phrase ‘‘or FDIC’’ after * * * * * ‘‘OCC’’ in paragraph (c)(1) introductory (e) OCC approach to setting CRA § 25.16 Consideration of performance text; evaluation measure benchmarks, retail context. ■ f. In paragraph (c)(2): lending distribution test thresholds, and * * * * * ■ i. Adding the phrase ‘‘or FDIC’’ after community development minimums. (d) Declines in CRA performance. In ‘‘OCC’’; and Based on the activity data collected assessing a bank’s performance, the OCC

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considers whether there has been a ■ b. Revising paragraphs (a)(2) and (b). paragraph (b) heading and adding in its decline of 10% or greater in a bank’s The revisions read as follows: place ‘‘community development service performance on the general performance data required’’; and § 25.19 Assigned ratings. standards as calculated based on ■ b. Removing the phrase ‘‘qualifies historical data between the (a)* * * under § 25.04(d)’’ in paragraph (b)(4) establishment of the objective (2) Assessment area assigned introductory text and adding in its place benchmarks, thresholds, and minimums rating(s). The OCC or FDIC determines the phrase ‘‘qualifies under and the bank’s first evaluation under the the assessment area assigned rating(s) § 25.04(a)(3)’’. general performance standards. Declines for a bank evaluated under § 25.13 based that cannot be explained by market on its assessment area presumptive § 25.25 [Amended] conditions or other factors under rating(s) under § 25.13, adjusted for ■ 26. Section 25.25 is amended by paragraph (b) of this section may performance context under § 25.16 and adding the phrase ‘‘or FDIC’’ after warrant a downward adjustment in consideration of discriminatory or other ‘‘OCC’’. determining the bank’s assigned rating. illegal credit practices under § 25.17. (b) Strategic plans assigned rating(s). § 25.26 [Amended] § 25.17 [Amended] A bank operating under a strategic plan ■ 27. Section 25.26 is amended by: ■ 20. Section 25.17 is amended by: will receive, as applicable, an assigned ■ a. Adding the phrase ‘‘or FDIC’’ after ■ a. Adding the phrase ‘‘or FDIC’s’’ after rating, assessment area assigned ‘‘OCC’’ in paragraph (a); ‘‘OCC’s’’ in paragraph (a) introductory rating(s), and state-level and multistate ■ b. Adding the phrase ‘‘or FDIC’’ after text; and metropolitan statistical area assigned ‘‘OCC’’ in paragraph (b)(1)(i) ■ b. Adding the phrase ‘‘or FDIC’’ after rating(s) of satisfactory or outstanding if introductory text; ‘‘OCC’’ in paragraph (b). it has met the measurable goals in the ■ c. Adding the phrase ‘‘or FDIC’’ after plan that correspond to those ratings ‘‘OCC’’ in paragraph (b)(1)(ii) § 25.18 [Amended] after considering performance context introductory text; ■ 21. Section 25.18 is amended by: under § 25.16 and discriminatory or ■ d. Adding the phrase ‘‘or FDIC’’ after ■ a. Adding the phrase ‘‘or FDIC’’ after other illegal credit practices under ‘‘OCC’’ in paragraph (b)(1)(iii); ‘‘OCC’’ in paragraph (a) introductory § 25.17. ■ e. In paragraph (c): text; ■ i. Adding the phrase ‘‘or FDIC’’ after § 25.20 [Amended] ■ b. Adding the phrase ‘‘or FDIC’’ after ‘‘OCC’’; and ■ ‘‘OCC’’ in paragraph (a)(1); 23. Section 25.20 is amended by: ■ ii. Removing ‘‘§ 25.21(e)’’ and adding ■ ■ a. Removing the phrase ‘‘assigned c. Adding the phrase ‘‘or FDIC’’ after in its place ‘‘§ 25.23(d)’’. rating’’ from the heading and adding in ‘‘OCC’’ in paragraph (a)(2); ■ 28. Section 25.27 is amended in ■ its place the phrase ‘‘assigned rating(s)’’; d. Adding the phrase ‘‘or FDIC’’ after paragraph (b) by: and ‘‘OCC’’ in paragraph (b)(2); ■ a. Removing in the introductory text ■ b. Adding the phrase ‘‘or FDIC’’ after ■ e. In paragraph (c): the phrase ‘‘subject to reporting under ■ ‘‘OCC’’. i. Adding the phrase ‘‘or FDIC’s’’ after this part’’ and adding in its place the ‘‘OCC’s’’; § 25.21 [Amended] phrase ‘‘evaluated under § 25.13’’; ■ ii. Adding the phrase ‘‘or FDIC’’ after ■ 24. Section 25.21 is amended by: ■ b. Redesignating paragraphs (b)(2) ‘‘OCC’’ wherever it appears; ■ a. Adding the phrase ‘‘or FDIC’’ after through (10) as paragraphs (b)(3) ■ f. Adding the phrase ‘‘or FDIC’’ after ‘‘OCC’’ in paragraph (a); through (11); and adding a new ‘‘OCC’’ in paragraph (d)(1); ■ b. Removing the phrase ‘‘evaluated in paragraph (b)(2). ■ g. Adding the phrase ‘‘or FDIC’’ after the assessment area’’ and adding in its The addition reads as follows: ‘‘OCC’’ in paragraph (e) introductory place the phrase ‘‘evaluated in each text; § 25.27 Public disclosures. ■ assessment area’’ in paragraph (b)(1); h. Adding the phrase ‘‘or FDIC’s’’ after ■ c. Removing the phrase ‘‘paragraph * * * * * ‘‘OCC’s’’ in paragraph (e)(1); (b) * * * ■ (c)(8) of this section’’ in paragraph (c)(1) i. Adding the phrase ‘‘or FDIC’’ after introductory text and adding in its place (2) The number of home mortgage ‘‘OCC’’ wherever it appears in paragraph the phrase ‘‘paragraph (c)(9) of this loans in low- and moderate-income (f); census tracts; ■ section’’; j. Adding the phrase ‘‘or FDIC’’ after ■ d. In paragraph (c)(7): * * * * * ‘‘OCC’’ wherever it appears in paragraph ■ i. Redesignating paragraphs (c)(7)(iii) (g)(3); through (viii) as paragraphs (c)(7)(iv) § 25.28 [Amended] ■ k. Adding the phrase ‘‘or FDIC’’ after through (ix); and ■ 29. Section 25.28 is amended by: ‘‘OCC’’ wherever it appears in paragraph ■ ii. Redesignating the second instance ■ a. Adding the phrase ‘‘or FDIC’’ after (g)(4); of paragraph (c)(7)(ii) as paragraph ‘‘OCC’’ wherever it appears in paragraph ■ l. Adding the phrase ‘‘or FDIC’’ after (c)(7)(iii); (a)(2); and ‘‘OCC’’ wherever it appears in paragraph ■ e. Removing the phrase ‘‘qualifies ■ b. Adding the phrase ‘‘or FDIC’’ after (h)(1); under § 25.04(a)(1)(3)’’ in paragraph ‘‘OCC’’ in paragraph (b)(1). ■ m. Adding the phrase ‘‘or FDIC’’ after (c)(9) introductory text and adding in its § 25.29 [Amended] ‘‘OCC’’ in paragraph (h)(2); place the phrase ‘‘qualifies under ■ n. Adding the phrase ‘‘or FDIC’’ after § 25.04(a)(3)’’; and ■ 30. Section 25.29 is amended by ‘‘OCC’’ in paragraph (h)(3); and ■ f. Removing the phrase ‘‘on the date’’ adding the phrase ‘‘or FDIC’’ after ■ o. Adding the phrase ‘‘or FDIC’’ after in paragraph (c)(9)(vii) and adding in its ‘‘OCC’’. ‘‘OCC’’ wherever it appears in paragraph place the word ‘‘conducted’’. (i). Appendix A to Part 25 [Amended] ■ 22. Section 25.19 is amended by: § 25.23 [Amended] ■ 31. Appendix A to part 25 is amended ■ a. Adding the phrase ‘‘or FDIC’’ after ■ 25. Section 25.23 is amended by: by: ‘‘OCC’’ and removing the comma after ■ a. Removing the phrase ‘‘community ■ a. Adding the phrase ‘‘or FDIC’’ after ‘‘§ 25.16’’ in paragraph (a)(1); and development service required’’ in the ‘‘OCC’’ in paragraph (a);

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■ b. Adding the phrase ‘‘or FDIC’’ after performance for that particular PART 35—DISCLOSURE AND ‘‘OCC’’ in paragraph (b)(1)(i) community; (2) branch addresses and REPORTING OF CRA–RELATED introductory text; associated branch facilities and hours in AGREEMENTS ■ c. Adding the phrase ‘‘or FDIC’’ after any assessment area; (3) a list of services ■ ‘‘OCC’’ in paragraph (b)(2)(i); 34. The authority citation for part 35 we provide at those locations; (4) our continues to read as follows: ■ d. Adding the phrase ‘‘or FDIC’’ after most recent rating in the assessment ‘‘OCC’’ in paragraph (b)(2)(ii); area; and (5) copies of all written Authority: 12 U.S.C. 1, 93a, 1462a, 1463, ■ 1464, 1831y, and 5412(b)(2)(B). e. Adding the phrase ‘‘or FDIC’’ after comments received by us that ‘‘OCC’’ in paragraph (b)(3)(ii)(B); specifically relate to the needs and § 35.1 [Amended] ■ f. Removing the phrase ‘‘assigned ■ rating’’ after ‘‘substantial opportunities of a given assessment 35. Section 35.1 is amended by noncompliance’’ in paragraph (b)(3)(iii); area, and any responses we have made removing the phrase ‘‘or part 195 ■ g. Adding the phrase ‘‘or FDIC’’ after to those comments. If we are operating (Community Reinvestment)’’ from ‘‘OCC’’ in paragraph (c) introductory under an approved strategic plan, you paragraph (c). ■ text; may also have access to a copy of the 36. Section 35.4 is amended by ■ h. Adding the phrase ‘‘or FDIC’’ after plan. revising paragraph (a)(2). The revision reads as follows: ‘‘OCC’’ in paragraph (c)(1) introductory At least 30 days before the beginning text; of each quarter, the [OCC or FDIC] § 35.4 Fulfillment of the CRA. ■ i. Adding the phrase ‘‘or FDIC’’ after publishes a nationwide list of the (entity (a)* * * ‘‘OCC’’ in paragraph (c)(2) introductory type) that are scheduled for CRA (2) Activities given favorable CRA text; examination in that quarter. This list is consideration. Performing any of the ■ j. Adding the phrase ‘‘or FDIC’’ after available from the [OCC Deputy following activities if the activity is of ‘‘OCC’’ in paragraph (c)(3) introductory Comptroller (address) or FDIC the type that is likely to receive text; and appropriate regional director (address)]. favorable consideration by a Federal ■ k. Adding the phrase ‘‘or FDIC’’ after banking agency in evaluating the ‘‘OCC’’ in paragraph (c)(4) introductory You may send written comments regarding the needs and opportunities of performance under the CRA of the text. insured depository institution that is a ■ any of the (entity type)’s assessment 32. Revise appendix B to part 25 to party to the agreement or an affiliate of area(s) to (name, address, and email read as follows: a party to the agreement— address of official at bank) and [OCC (i) Retail loans, community Appendix B to Part 25—Community Deputy Comptroller (address and email Reinvestment Act Notice development loans, community address) or FDIC appropriate regional development investments, and Under the Federal Community director (address and email address)]. community development services, as Reinvestment Act (CRA), the [Office of Your comments, together with any described in § 25.04 (12 CFR 25.04) or the Comptroller of the Currency (OCC) response by us, will be considered by 12 CFR part 25, Appendix C, § 25.22 or or Federal Deposit Insurance the [OCC or FDIC] in evaluating our § 25.23, as applicable; Corporation (FDIC)] evaluates our CRA performance and may be made (ii) Delivering retail banking services, record of helping to meet the credit public. as described in 12 CFR part 25, needs of this community, consistent You may ask to look at any comments Appendix C, § 25.24(d); with safe and sound operations. The (iii) In the case of a wholesale or received by the [OCC Deputy [OCC or FDIC] also takes this record into limited-purpose insured depository Comptroller or FDIC appropriate account when deciding on certain institution, community development applications submitted by us. regional director]. You may also request lending, including originating and Your involvement is encouraged. from the [OCC Deputy Comptroller or purchasing loans and making loan You are entitled to certain FDIC appropriate regional director] an commitments and letters of credit, information about our operations and announcement of our applications making community development our performance under the CRA, covered by the CRA filed with the [OCC investments, or providing community including, for example, information or FDIC]. [(We are an affiliate of (name development services, as described in about our branches, such as their of holding company), a (entity type) § 25.15(c) (12 CFR 25.15(c)) or 12 CFR location and services provided at them; holding company. You may request part 25, Appendix C, § 25.25(c), as the public section of our most recent from the (title of responsible official), applicable; CRA Performance Evaluation, prepared Federal Reserve Bank of (iv) In the case of a small insured by the [OCC or FDIC]; and comments lllll(address) an announcement depository institution, any lending or received from the public relating to of applications covered by the CRA filed other activity described in § 25.14(a) (12 assessment area needs and by (entity type) holding companies.)] CFR 25.14(a)) or 12 CFR part 25, opportunities, as well as our responses Appendix C, § 25.26(a), as applicable; or to those comments. You may review this Appendix C to Part 25 [Amended] (v) In the case of an insured information today by reviewing the depository institution that is evaluated ■ 33. Appendix C to part 25 is amended public file which is available at (web on the basis of a strategic plan, any by: address and/or physical address at element of the strategic plan, as which the public file can be reviewed ■ a. Removing the phrase ‘‘pursuant described in § 25.18(g) (12 CFR 25.18(g)) and copied). part 1003 of this title’’ in § 25.43(b)(2) or 12 CFR part 25, Appendix C, You may also have access to the and adding in its place the phrase § 25.27(f), as applicable. following additional information, which ‘‘pursuant to part 1003 of this title’’; and * * * * * we will make available to you after you ■ b. Removing the phrase ‘‘pursuant ■ 37. Effective January 1, 2024, revise make a request to us: (1) A map showing part 1003 of this title’’ in § 195.43(b)(2) paragraph (a)(2) to read as follows: the assessment area containing a select branch, which is the area in which the and adding in its place the phrase § 35.4 Fulfillment of the CRA. [OCC or FDIC] evaluates our CRA ‘‘pursuant to part 1003 of this title’’. (a)* * *

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(2) Activities given favorable CRA 195’’ in paragraph (c) introductory text instructions for submitting comments consideration. Performing any of the and adding in its place ‘‘under part 25’’. for NCUA 2020–0114. following activities if the activity is of • Brian P. Brooks, Fax: (703) 518–6319. Include the type that is likely to receive ‘‘[Your Name]—Comments on Acting Comptroller of the Currency. favorable consideration by a Federal ‘‘Proposed Rule: Capitalization of banking agency in evaluating the [FR Doc. 2020–26394 Filed 12–3–20; 8:45 am] Interest in Connection with Loan performance under the CRA of the BILLING CODE 4810–33–P Workouts and Modifications’’ in the insured depository institution that is a transmittal. party to the agreement or an affiliate of • Mail: Address to Melane Conyers- a party to the agreement— NATIONAL CREDIT UNION Ausbrooks, Secretary of the Board, ADMINISTRATION (i) Retail loans, community National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia development loans, community 12 CFR Part 741 development investments, and 22314–3428. [NCUA 2020–0114] community development services, as Public Inspection: You may view all described in § 25.04 (12 CFR 25.04); RIN 3133–AF30 public comments on the Federal eRulemaking Portal (http:// (ii) In the case of a wholesale or Capitalization of Interest in Connection www.regulations.gov) as submitted, limited-purpose insured depository With Loan Workouts and Modifications except for those we cannot post for institution, community development technical reasons. The NCUA will not lending, including originating and AGENCY: National Credit Union edit or remove any identifying or purchasing loans and making loan Administration (NCUA). contact information from the public commitments and letters of credit, ACTION: Proposed rule. comments submitted. Due to social making community development distancing measures in effect, the usual SUMMARY: The NCUA Board (Board) investments, or providing community opportunity to inspect paper copies of development services, as described in seeks public comment on a proposed rule to amend its regulations by comments in the NCUA’s law library is § 25.15(c) (12 CFR 25.15(c)); removing the prohibition on the not currently available. After social (iii) In the case of a small insured capitalization of interest in connection distancing measures are relaxed, visitors depository institution, any lending or with loan workouts and modifications. may make an appointment to review other activity described in § 25.14(a) (12 The Board has determined that the paper copies by calling (703) 518–6540 CFR 25.14(a)); or current prohibition on authorizing or emailing [email protected]. (iv) In the case of an insured additional advances to finance unpaid FOR FURTHER INFORMATION CONTACT: depository institution that is evaluated interest may be overly burdensome and, Scott Neat, Associate Director of the on the basis of a strategic plan, any in some cases, hamper a federally Office of Examination and Insurance, at element of the strategic plan, as insured credit union’s (FICU’s) good- (703) 518–6360; and Ariel Pereira and described in § 25.18(g) (12 CFR faith efforts to engage in loan workouts Gira Bose, Staff Attorneys, Office of 25.18(g)). with borrowers facing difficulty because General Counsel, at (703) 518–6540. of the economic disruption that the * * * * * SUPPLEMENTARY INFORMATION: COVID–19 pandemic has caused. I. Background § 35.6 [Amended] Advancing interest may avert the need II. Legal Authority for alternative actions that would be ■ 38. Section 35.6 is amended by III. Summary of the Proposed Rule more harmful to borrowers. The IV. Regulatory Procedures removing the phrase ‘‘set forth in proposed rule would establish § 25.43 (12 CFR 25.43)’’ in paragraph documentation requirements to help I. Background (b)(7) and adding in its place ‘‘set forth ensure that the addition of unpaid A. May 2012 Adoption of the Loan in § 25.28 (12 CFR 25.28) or 12 CFR part interest to the principal balance of a Workout and Accrual and TDR 25, Appendix C, § 25.43, as applicable’’. mortgage loan does not hinder the Requirements borrower’s ability to become current on § 35.11 [Amended] In May 2012, the Board published a the loan. The proposed change would final rule on loan workout policies and ■ 39. Section 35.11 is amended by apply to workouts of all types of monitoring requirements that applies to removing the phrase ‘‘described in member loans, including commercial all FICUs. The rule also established § 25.43 (12 CFR 25.43)’’ in paragraph (d) and business loans. The Board has also requirements for nonaccrual policies, and adding in its place the phrase taken this opportunity to make several and for regulatory reporting of troubled ‘‘described in § 25.28 (12 CFR 25.28) or technical changes to the Appendix to debt restructurings (TDRs).1 The Board 12 CFR part 25, Appendix C, § 25.43, as improve its clarity and update certain noted that the May 2012 final rule was applicable’’. references. For the convenience of similar to guidance set forth in an readers, the Board is republishing the interagency policy statement issued by PART 192—CONVERSIONS FROM Appendix in its entirety so that the the banking agencies of the Federal MUTUAL TO STOCK FORM changes may be viewed in the context Financial Institutions Examination of the full document. ■ 40. The authority citation for part 192 Council (FFIEC) on June 12, 2000,2 DATES: Comments must be received on continues to read as follows: though the NCUA did not join the or before February 2, 2021. agencies in issuing the statement. Authority: 12 U.S.C. 1462a, 1463, 1464, ADDRESSES: You may submit written The May 2012 final rule, codified in 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. comments, identified by RIN 3133– Appendix B to Part 741 of the NCUA’s 78c, 78l, 78m, 78n, 78w. AF30, by any of the following methods (Please send comments by one method § 192.200 [Amended] 1 77 FR 31993 (May 31, 2012). only): 2 FFIEC, Uniform Retail Credit Classification and ■ • 41. Section 192.200 is amended by Federal eRulemaking Portal: http:// Account Management Policy, 65 FR 36903 (June 12, removing the phrase ‘‘under 12 CFR part www.regulations.gov. Follow the 2000).

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