Recently, FDIC Chair Jelena McWilliams announced that bank regulators will release a joint draft proposal for reform measures to the Community Reinvestment Act (CRA). The regulators are expected to release a formal proposal on or around August/September 2019. The BDA has identified an issue related to certain community development activities concerning investments in loan-backed securities that may arise as a result of the proposed CRA reform measures, which will impact BDA member firms.
In August 2018, the Office of the Comptroller of the Currency (OCC) released an advanced notice of proposed rulemaking (ANPR) seeking comment on the best ways to modernize the regulatory framework for implementing the CRA.
The ANPR solicited comments on a number of questions, including question #18, “Should consideration for certain activities that might otherwise qualify as CD be limited or excluded? For example, how should investments in loan-backed securities be considered? The BDA believes that any CRA reform measures to investments in loan-backed securities could have broad market implications not limited to CRA investment performance, qualification, and ultimately volume.
You can read the BDA’s comment letter here.