If your bank has been near or just topped $250MM and you had your fingers crossed, better brush up on the big bank rules.

NR 2004-60
WASHINGTON -- The Office of the Comptroller of the Currency (OCC) announced today its intention to withdraw proposed amendments to its Community Reinvestment Act (CRA) regulations. The OCC, together with the other federal banking regulators, proposed in February to raise the asset threshold for banks that are treated as "small banks" from $250 million to $500 million and to specify types of abusive lending practices that would adversely affect a bank's CRA evaluation. The OCC has been carefully reviewing these and other CRA-related issues since the agencies initiated a formal review of the CRA regulations in late 2001.



The OCC is very sensitive to the impact and potential burden on small banks from the CRA and other regulations, and recognizes the strong interest among community banks in raising the small bank asset threshold to address their concerns about regulatory burden. The OCC also recognizes and is very sensitive to the fact that many community organizations and others believe strongly that an increase in the small bank asset threshold would have a very significant, and detrimental, impact on CRA activities nationwide, including in rural communities. Resolution of these deeply divided views involves a balancing of political and economic considerations that can best be addressed in a legislative forum.



After giving all of the comments very careful consideration, the OCC has decided to withdraw its regulatory proposal and to submit a report to Congress that summarizes the comments received and provides an analysis of the issues considered in connection with its review of the CRA regulations.

Check what the OTS posted on their web site. http://www.ots.treas.gov/docs/7/77426.html The OTS is looking to increase the threshhold to $1 billion so that small institutions can devote their resources to BSA/AML.

Two things, 1) the FRB is also sending a notice it is withdrawing the proposal, no surprise, and

2) No, I don't have a switch kit on changing charters from the (list your agency here) to the OTS.

Will FDIC probably withdraw the proposal too?

The real question is when will credit unions have to comply with the Community Reinvestment Act?

For once I'm happy we're OTS regulated!

Do you think the OTS made a mistake and sent out the wrong release letter? Sounds too good to be true. Sure hope it is true! It seems almost certain they will be bombarded and pressured by community groups.

Where did they address the industry's request to clarify the Investment Test. I guess they punted on that too. Nothing will get done in Congress, a majority of the Democrats support the advocacy groups that argue the banking industry doesn't do enough in terms of meeting the credit needs of low to mod citizens and geographies. Oh well, back to work------------------

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Do you think the OTS made a mistake and sent out the wrong release letter? Sounds too good to be true. Sure hope it is true! It seems almost certain they will be bombarded and pressured by community groups.

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Surely, the OTS has hit the send button for the wrong message!!?? How can they jump to $1 billion when the other regulators are sticking with $250 million?? Oh well, it doesn't really matter. We are an OTS regulated institution that has been a large bank for several years and we are rapidly approaching $1 billion. So, we would probably be a "small bank" again for maybe only one exam. But, it was nice to dream for a bit.

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The real question is when will credit unions have to comply with the Community Reinvestment Act?

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Heh heh, good question.

On the investment test...I'm glad they didn't do anything frankly. I know it's a challenge, but with performance context I can answer it. If I was given specific guidelines for amounts, etc., I'd be in trouble.

So how does this work? Now that the OTS has made this this statement, but the other regulators take the opposite stand? Will the OTS have to reverse there position? Surely they knew before the press release that they were not in agreement?

Just a guess but it may be that savings associations have much fewer records to report than other types of institutions. Perhaps a lot of effort is being spent on CRA for little in the way of data return. This makes it easier to justify raising the threshold.

Plus it may be shown that with little CRA type lending they don't have the political problem other regulators have.

Again this is just a guess on my part

Notice this does not effect HMDA at all which IMO has more impact on thrifts than CRA.

I'm still waiting to hear from FDIC but I have a strong feeling that I will have job security as our CRA/HMDA reporter!! $500 million would have bought us an exam or maybe two...but $1billion - that would have been sweet!!

Like those Hobbit folks were told Shannon: "Hope Remains". The FDIC meets in September to vote on this issue. An article in today's American Banker indicates the FDIC may side with the OTS. This is all very strange and wierd, when was the last time the four Federal regulators couldn't come out with a joint final rule ?