CBAI Urges Modernization of the CRA

CBAI responded to the Office of the Comptroller of the Currency’s (OCC) Advance Notice of Proposed Rulemaking (ANPR) on reforming the Community Reinvestment Act (CRA or Act) regulatory framework. The CRA was enacted by Congress in 1977 to encourage insured depository institutions to help meet the credit needs of their communities, including low- and moderate-income (LMI) neighborhoods, consistent with the safe and sound operation, but has been little changed since then. This modernization effort is a historic opportunity to highlight and retain parts of the Act, identify missed opportunities for additional credit, reduce the regulatory burden on community banks and include many other financial service providers for compliance.

CBAI included in its comprehensive comment letter numerous observations and recommendations for improvement related to:

  • increasing lending and services to people and in areas that need it most, including in LMI areas;
  • clarifying and expanding the types of activities eligible for CRA consideration;
  • revisiting how assessment areas are defined and used;
  • establishing metric-based thresholds for CRA ratings;
  • making bank CRA performance more transparent;
  • improving the timeliness of regulatory decisions related to CRA; and
  • reducing the cost and burden related to evaluating performance under the CRA.
CBAI looks forward to working with the OCC and the other regulators in their joint rulemaking to modernize the CRA. Read CBAI’s Comment Letter.


Wubben and Estes Re-elected as ICBA State Delegates

Bill Wubben of Apple River State Bank (District 1) and Mike Estes of The Fisher National Bank (District 2) were both re-elected in their respective districts.

Messrs. Wubben and Estes are both former CBAI Chairmen and have already served one three-year term on the ICBA Board of Delegates. Their second and final three-year term will begin in March 2019 at the ICBA Convention in Nashville, Tennessee. CBAI endorsed Wubben and Estes and we congratulate them on their re-election. We look forward to working with them for three more years.


CBAI Attends OCC Central District Trade Association Outreach

CBAI attended the OCC’s Central District outreach meeting for trade associations on October 17, 2018. David Schroeder, CBAI’s senior vice president federal government relations, helped inform the OCC about community bank concerns and opportunities. Representing the OCC was Tony Bland (Senior Deputy Comptroller, Midsize and Community Bank Supervision), Blake Paulson (Deputy Comptroller, Central District) Ralph DeLeon (Director Banking Relations), and Ben Lemanski (Associate Deputy Comptroller, Central District).

The day-long outreach meeting began with a Central District Overview which included the District profile and performance, common examination findings, current and emerging risks, district priorities and hot topics. A regulatory relief (S. 2155 implementation) update was provided by the OCC’s Assistant Director of Legislative and Regulatory Affairs (via teleconference from D.C.), and a review of the OCC’s innovation initiative (fintech) was provided by their Innovations Officer (via teleconference from Washington, D.C.).

CBAI used the open discussion period to question the OCC about the implementation of CECL and how we are hearing continued calls from some about the need for community banks to purchase expensive modeling software to comply with the new requirements. The OCC was adamant about not requiring this purchase if a bank can develop an appropriate method for CECL compliance without using expensive software.

Other important issues raised during the open discussion period included the upcoming modernization of the CRA, payments system improvements, and the harm caused by the FDIC’s deposit rate caps. CBAI is actively engaged in each of these regulatory initiatives and encourages continued community banker involvement through member communications.


CBAI Encourages Participation in Faster Payments Assessment

CBAI is encouraging Illinois community bankers to provide critical feedback as the Federal Reserve considers its role in faster payments. The Fed is hosting a series of town hall meetings on facilitating real-time interbank settlement of faster payments and a liquidity management tool to support settlement services. Learn More About Faster Payments.

The town hall meetings begin next week in each of the Fed’s 12 regional districts. At these meetings, Fed representatives will provide an overview of the conceptual approaches, answer questions and facilitate stakeholder discussions. Register for Town Hall Meetings.

Also, the Fed is now accepting comments on its role in the future of faster payments. CBAI encourages Illinois community bankers to weigh-in on the importance of the Fed in providing fair and impartial access to the payments system for financial institutions of all sizes and charter types. Comments are due to the Fed by December 14th. See Instructions for Commenting.

CBAI has been actively engaged in representing the interest of community banks with Fed meetings in Chicago and St. Louis as well as sending detailed recommendations to the Fed and various other banking agencies highlighting the need for the Fed to play a leading role in payments system improvements. Read Article on Payments Forum. See CBAI Letter to the Fed.


Report on October CBAI Staff Visit to Washington, D.C.

CBAI’s SVP Federal Governmental Relations David Schroeder was in Washington, D.C. throughout the week of October 8. This quarterly visit came just weeks away from the upcoming general elections, near the end of the115th Congress and as the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) is being implemented by banking regulators. See Implementation Matrix.

In addition to Hill meetings with the Illinois Congressional Delegation, Schroeder focused on meetings with the Federal Reserve, Office of Comptroller of the Currency, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, Federal Housing Finance Agency and the Council of Federal Home Loan Banks to encourage the swift implementation of long-overdue, well-deserved and meaningful regulatory relief for community banks. Other topics discussed included additional regulatory-relief measures, payments-system improvements, FDIC deposit-rate caps, modernizing the CRA, GSE reform, agriculture and rural America and credit union/Farm Credit System expansion of powers. Schroeder also conferred with senior government-relations staff from the Independent Community Bankers of America (ICBA). Read More About the Policy Priorities Discussed at These Meetings.