OCC Issues Final Rule for Community Reinvestment Act Compliance
On May 20, the Office of the Comptroller of the Currency (OCC) published a Final Rule that amends regulations to the Community Reinvestment Act (CRA). The rule changes how CRA compliance is measured, clarifies what lending and investment activities are eligible for CRA credit, and requires online banks to finance CRA eligible activities in areas with a substantial number of customer deposits. The new regulations will likely impact banks’ affordable housing investment activities, including housing credits and housing bonds.
The new rule applies only to those banks supervised by OCC, which oversees all nationally chartered banks. The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, did not join the final rule. FDIC has stated that it will not move forward with final CRA changes while it and the banks it regulates focus on COVID-related issues. The Federal Reserve has not proposed any changes to its CRA guidance. Three community reinvestment groups have already stated they plan on suing OCC over the final rule for ignoring procedure and not providing opportunity for public feedback.
On the same day the rule was approved, OCC Comptroller Joseph Otting issued his resignation. Comptroller Otting, who was first appointed in 2017, is leaving before his five-year term expires, and no announcement has been made as to the reason for his departure. The final rule goes into effect on October 20, but banks will have until 2023 before they are evaluated under the new standards, while other provisions do not go into effect until January 1, 2024. NAHMA is currently analyzing the final rule and the impact it would have on affordable housing investments. To read the final rule, click here.
The Eviction Crisis Act Gets Attention
Last week, the House of Representatives approved H.R. 6800 (the Heroes Act), seeking to provide $3 trillion in emergency funding to federal agencies, state and local governments, small businesses, and individuals impacted by COVID-19. Included in the bill was a provision that would extend and expand the eviction moratorium for 12 months. In response, Senator Rob Portman (R-OH) and Senator Michael Bennet (D-CO) have resumed their push for enacting S. 3030, the Eviction Crisis Act. Introduced last December, the Eviction Crisis Act would create an eviction database as well as an eviction advisory council of HUD housing experts with the intent to stop preventable evictions from happening, collect and analyze more data on evictions, and mitigate the effect an eviction filing can have on a tenant’s ability to find new housing.
The bill would create a program to fund state and local governments that want to experiment with alternatives to traditional housing courts, such as landlord-tenant community courts that combine a legal process with social services to help both landlords and tenants. An Emergency Assistance Fund would be created and funded to provide one-time grants to tenants facing an extraordinary financial setback (these funds would receive matching contributions from the federal government). The bill would also require consumer reporting agencies to give tenants a copy of their tenant screening report, and require tenant background checks to not mention evictions where the tenant won their case in housing court. The Eviction Crisis Act has been referred to the Senate Banking, Housing, and Urban Affairs Committee, and is cosponsored by Senator Sherrod Brown (D-OH) and Senator Todd Young (R-IN). To read the full bill text, click here.
House Chairman Requests Answers from HUD Secretary Carson on Delayed CARES Funding
On Tuesday, Congressman David Price (D-NC), Chairman of the Transportation, Housing, and Urban Development Appropriations Subcommittee, and Ranking Member Mario Diaz-Balart (R-FL) sent a letter to the Secretary of Housing and Urban Development, Ben Carson, urging the department to immediately take steps to ensure CARES Act funding is promptly disbursed to states and local communities. CARES Act funding approved on a bipartisan basis that has yet to reach local grantees include: $5 billion for the Community Development Block Grant program, $4 billion for the Emergency Solutions Grant program, and $65 million for the Housing Opportunities for Persons with AIDS program. In the letter, Chairman Price raised his concern that, while HUD has been quick to announce funding allocations, the department has thus far failed to take additional steps, such as issuing necessary guidance and administrative requirements. Chairman Price’s letter to Secretary Carson can be found here.