NDIA has asked the Office of the Comptroller of the Currency (“OCC”), the U.S. Treasury Department agency which serves as the Federal regulator for many of the nation’s banks, to allow those banks to seek Community Reinvestment Act credit for their financial support of community digital inclusion programs serving low and moderate income households in their lending areas.

The Community Reinvestment Act (CRA) is a 1977 Federal law enacted “… to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation. To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions.” (Wikipedia) CRA oversight is shared among the Federal Reserve System, the Federal Deposit Insurance Corporation and the OCC. Generally, the OCC regulates national banks and Federal savings associations, while the Federal Reserve and FDIC have responsibility for state-chartered institutions.

On August 28th the OCC released an Advance Notice of Proposed Rulemaking (ANPR) seeking public comments on “modernizing” the regulatory framework by which it implements its CRA responsibilities. Responses were due on November 19.

Among other issues, OCC’s Notice asked for comment on on “clarifying and broadening the range of activities supporting community and economic development that qualify for CRA consideration”. Pointing to a central goal of the CRA – “to encourage banks to lend, invest, and provide services to LMI neighborhoods” – the OCC asked: “Does the current regulatory framework support these goals in light of how banks and consumers now engage in the business of banking?” And the OCC specifically invited comments on whether and how “financial education or literacy programs, including digital literacy, [should] be considered” as “qualifying activities”.

(Note: “LMI” is an abbreviation for “low and moderate income”.)

Executive Director Angela Siefer submitted comments for NDIA, responding to these questions from the perspective of our hundreds of local affiliates. Here are some key excerpts:

NDIA strongly supports OCC treatment of digital literacy programs, such as those operated and supported by our affiliates in low/moderate income communities throughout the U.S., as “activities supporting community and economic development that qualify for CRA consideration”, as suggested by Question 16. But we urge the OCC to adopt a broader perspective regarding this issue, in two important respects:


1. …NDIA regards access to digital literacy training as one of five key elements of “digital inclusion”, along with affordable, robust broadband internet service; affordable internet-enabled devices that meet the needs of the user; quality technical support; and applications and online content designed to enable and encourage self-sufficiency, participation and collaboration. All five elements are essential for our community residents to overcome the high digital barriers to full economic, educational, social, health and civic participation in 2018…


We ask the OCC to explicitly recognize the whole range of digital inclusion activities — not just digital literacy education — as “activities supporting community and economic development that qualify for CRA consideration”, to the extent that they serve low and moderate income residents in lenders’ CRA assessment areas.


2. Digital inclusion programs certainly “support community and economic development” in a variety of important ways, from employment access to homework support, and from better healthcare access to civic engagement.


But there’s a more direct reason for OCC to treat digital skills training, affordable device and broadband access services for residents of LMI communities as CRA-qualified activities: They enable underserved residents to adapt, like most Americans, to a banking market that increasingly relies on online and mobile channels rather than nearby branch locations to serve their “convenience and needs”.


For many lower-income, less-connected households and communities, digital inclusion services are a crucial bridge to continued access to financial services — especially in urban neighborhoods and rural communities where banks have eliminated or shifted branch locations, and many residents have very limited transportation options.

Siefer goes on to explain to the OCC that the “less connected” include million of poor urban as well as rural households, linking to NDIA’s most recent “Worst Connected Cities 2017” report, and sharing additional data on the large gaps in Internet connection rates in those cities between sub-$20,000 households and those with incomes of $50,000 or more.

Siefer also presents new NDIA research, based on FDIC data, which shows that all but one of the “Worst Connected Cities 2017” suffered net losses of local bank branches between 2008 and 2017. Fifteen of the twenty-five lost more than 10% of all their local branches, and six – Detroit, Memphis, Syracuse, Richmond, Macon and Dayton – lost more than 20%.

NDIA’s Worst Connected Cities are worrisome examples of the hundreds of urban communities where large numbers of residents, especially the poor, lack the knowledge, equipment and/or Internet access required to substitute online banking tools for dwindling neighborhood bank branches… As local bank branches become fewer and more distant for LMI residents in both urban and rural settings, and online services increasingly take their place, those residents who lack online skills and connections inevitably find themselves with less access to mainstream banking services.

Siefer’s comments conclude:

To the extent that the deterioration of local branch access for LMI communities can be mitigated by regulatory policy, we encourage the OCC to pursue that goal.


But given that the shift is already so far advanced, and is likely to continue, OCC and its fellow regulators need to recognize and help mitigate its consequences for the millions of Americans who lack the digital skills and tools to adapt to it.


A modest step in this direction would be language within the proposed Rule that:


A. encourages banks to invest in partnerships with community digital inclusion programs serving LMI households with training, affordable devices, affordable Internet access or technical support in their CRA assessment areas — specifically to enable those households to make effective use of online banking tools, along with other community and economic development purposes; and


B. makes clear that those investments of this type may qualify for CRA consideration.

View or download NDIA’s full comments submitted to the OCC here.