On December 14, the Office of the Comptroller of the Currency (OCC) released its final rule on the Community Reinvestment Act (CRA), which states that it will continue to recognize digital inclusion efforts as 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 low- and moderate-income (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, as a result of NDIA’s advocacy, the following four examples were added to the 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.”
A recent OCC proposal would have rescinded these four new illustrative examples. In response, on October 29, NDIA submitted comments urging OCC leaders to take steps to preserve the CRA-qualifying status of the four activities listed above. You can read more about our initial comments here.
The Final CRA rule takes our comments into account, stating:
“One commenter [NDIA] requested that the OCC preserve the four illustrative examples of qualifying activities that involve access to digital services as part of any amended guidance on CRA qualifying activities. These examples will remain on the illustrative list; however, new activities consistent with these examples that are conducted after January 1, 2022 will only receive consideration to the extent that they also are consistent with the retail or CD definitions in the final rule.”
Per the last sentence of this excerpt, we analyzed the community services criteria outlined in the order. Our assessment is that the definitions do not nullify the CRA qualifying status of the four example activities listed above.
NDIA, the 26 organizational co-signers to our comments, and the larger digital inclusion community can take satisfaction in the fact that the OCC will continue to recognize digital inclusion efforts as CRA qualifying activities.