NDIA has submitted comments to the U.S. Treasury’s Office of the Comptroller of the Currency (OCC), asking the agency to include digital inclusion programs among the “community support services” for which a bank’s financial support can bolster its record of compliance with the Community Reinvestment Act.

The Community Reinvestment Act, or CRA, is the federal government’s regulatory framework for ensuring that regulated financial institutions provide equitable banking and credit services to all parts of their operating territories, especially low and moderate income (“LMI”) neighborhoods. CRA compliance oversight is divided among three federal agencies which regulate different categories of banking institutions: the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the OCC. (Learn more about the CRA at https://www.ffiec.gov/cra/.)

NDIA’s comments were submitted in response to an OCC Notice of Proposed Rulemaking, issued jointly with the FDIC as one of the final steps in an ambitious, controversial process aimed at “modernizing” the two agencies’ rules for CRA oversight. Final action on the rulemaking is expected in the next few months.

Here are some key passages from NDIA’s comments:

During the past three weeks, banks in communities across the country have closed their teller windows and lobbies, following state lockdown orders and the imperatives of social distancing in response to the COVID-19 pandemic. These actions have limited consumer banking access in many communities to drive-through windows (where they exist), ATMs and the internet.

At the same time, individuals across the country are being urged, and in many cases legally required, to stay at home to the maximum possible extent in order to limit the spread of COVID-19. Older adults are especially urged to avoid activities outside their homes, since they are particularly vulnerable to the virus. Even if banks were open, “going to the bank” would now be a risky and socially discouraged option…

For the majority of U.S. consumers, lack of access to bank lobbies and tellers is a minor inconvenience, if it matters at all. Online banking gives most of us easy access to our accounts, the ability to pay our bills electronically, even the ability to apply for credit and seek customer support – all without leaving home. But this is not true for the millions of Americans in both rural and urban communities who are still living without home Internet connections — even smartphone connections — and who are disproportionately lower-income themselves, and likely to reside in LMI areas…

Banking customers who are digitally literate and have the means to use online banking tools, including home broadband, are able to track and manage their finances normally without leaving their homes. Customers who lack the digital skills and/or tools to bank online, including home broadband, do not have this option; they may need to leave their homes and travel to a distant ATM or branch — possibly via public transportation — to carry out a routine deposit, withdrawal or balance inquiry, increasing the risk to their own and others’ health in the process.

No one knows how long the current emergency will keep bank branches closed and require consumers to shelter in place. We hope that normal branch access and public travel will resume long before any changes resulting from this proposed rulemaking take effect.

But even if it only lasts a few more weeks, this experience should provide a convincing demonstration to OCC and FDIC that the widespread shift of consumer banking activity to the internet, combined with persistent home broadband gaps that disproportionately affect LMI residents and communities, have created precisely the kind of systemic inequity in access to banking services that the CRA is intended to prevent.

… [B]anks should recognize a rational business interest in supporting, or even helping to lead, community digital inclusion efforts that will enable more LMI households and communities to take advantage of their online and mobile channels. And OCC and FDIC should recognize a strong public policy rationale to encourage them, rooted in the CRA’s core purpose of promoting equitable access to mainstream banking services for residents of LMI communities.

OCC and FDIC can provide that encouragement, in the framework of the proposed Rule, by adding appropriate examples to the proposed Qualifying Activities Illustrative List.

The added examples should affirm that a bank’s support for community digital inclusion initiatives (i.e. community initiatives that provide digital literacy training, affordable Internet access, access to affordable computing devices, or related technical or learning support), for LMI households or residents of an LMI neighborhood, may be considered a “Community support service” covered by proposed qualifying regulatory criteria §§ 25.04(c)(4) and 345.04(c)(4).

The added examples should also affirm that digital literacy training which is wholly or partly aimed at enabling the trainees to use online banking services may be a qualifying “Financial literacy program” within the meaning of criteria §§ 25.04(c)(9) and 345.04(c)(9).

NDIA’s full comments can be read or downloaded here.