By Amy Huffman, policy director, and Josh Mimura, NDIA fellow

On October 29, NDIA submitted comments to the Office of the Comptroller of the Currency (OCC) urging them to continue recognizing digital inclusion projects and programs that serve low- and moderate-income (LMI) communities as Community Reinvestment Act (CRA) qualifying activities. 

The OCC is one of three federal agencies which regulate various types of lending institutions—banks, credit unions, thrift institutions, etc. These agencies (OCC, the Federal Reserve, and the FDIC) are responsible for enforcing the CRA’s requirement that financial institutions they regulate serve the credit needs of all communities in which they do business, especially LMI neighborhoods and households. Each regulator has detailed regulations for assessing CRA compliance, including lists of “illustrative examples” of “CRA qualifying activities” by which banks can get credit for serving LMI communities’ needs. CRA compliance is taken into account when the regulators review financial institutions’ applications for expansion, mergers, and acquisitions.

In June 2020, the OCC adopted a controversial revision of its CRA regulations, collectively known as its “CRA Rule.” OCC broke with normal practice by adopting its revised rule unilaterally, instead of collaborating with the other two regulators; and many of its changes were strongly opposed by cities, community groups, and housing advocates. As a result, the agency’s new leadership has proposed to rescind most of the June 2020 Rule and launch a new modernization process in partnership with the Federal Reserve and FDIC.

But OCC’s June 2020 rule included one set of changes that aren’t controversial but are very important to digital equity. It added the following examples to its “CRA Illustrative List of Qualifying Activities”:

  • “Grant to a nonprofit community program which assists LMI individuals to find and enroll in free or low-cost home broadband internet services for which they are eligible.” 
  • “Grant in support of a nonprofit program which refurbishes used computers in order to provide them to LMI individuals at no cost or at a very low cost.”
  • “Financial support of a nonprofit community program that provides digital literacy training to residents of an LMI neighborhood, in order to increase their ability to use online banking services.”
  • “Investment in a local cooperative to develop broadband infrastructure and expand access to LMI residents in the area.”

These illustrative examples, three of which were suggested directly by NDIA, provided the first clear guidance to OCC-regulated banks that supporting LMI digital inclusion efforts will help them meet CRA obligations.

The OCC’s current proposal would “rescind the qualifying activities criteria in the June 2020 Rule and replace it with the 1995 Rules’ home mortgage loan, small business loan, small farm loan, consumer loan, and CD definitions.” NDIA is concerned that this would result, perhaps inadvertently, in cancelling the four new illustrative examples quoted above, effectively eliminating digital inclusion support from banks’ community reinvestment agendas.

This concern led NDIA, along with 26 organizational co-signers, to submit a letter to OCC on October 29 responding to the agency’s proposal to rescind its June 2020 CRA Rule. 

Our comments strongly urge OCC leaders to take steps to preserve the CRA-qualifying status of the activities outlined in the four examples above, and continue to recognize that banks’ support for digital inclusion projects in LMI communities is an important way to meet those communities’ needs.

You can read our comments here.