UPDATED: June 30, 2020: The House passed a resolution Monday, by a 230-179 vote, disapproving the Office of the Comptroller of the Currency’s rewrite of the Community Reinvestment Act. The measure moves on to the Senate, where it requires a simple majority to pass. But if that happens, President Donald Trump has vowed to veto it — essentially killing any chance for the OCC rule to be overturned.
The OCC released the May 20 rule without the backing of fellow regulators. FDIC Chair Jelena McWilliams told Bloomberg Law on Friday that her agency won’t issue its own revamp during the coronavirus pandemic.
Community Reinvestment Act rule revisions are better suited for “peacetime, when things are calm, the economy’s doing well,” she said.
- House Financial Services Chairwoman Maxine Waters, D-CA, and Rep. Gregory Meeks, D-NY, introduced a resolution Thursday to overturn the Office of the Comptroller of the Currency's (OCC) final rule revising the Community Reinvestment Act (CRA).
- The OCC rule, issued May 20, can be challenged under the Congressional Review Act within 60 days of its publication.
- The lawmakers' effort may be dead on arrival. Any initiative blocking a rule requires a majority vote from both chambers of Congress and a signature from President Donald Trump. Neither he nor the Republican-led Senate are likely to back the measure.
The CRA is meant to discourage banks from discriminating against borrowers in low-income areas. Reforming the 1977 rule was a long-held personal goal of former OCC chief Joseph Otting, who issued the final rule a day before announcing his resignation — and without backing from fellow regulators such as the Federal Deposit Insurance Corp. and the Federal Reserve.
The timing of the final rule drew Waters' attention. "It is completely unacceptable for the OCC to use the cover of a pandemic to rush out a rule that will be harmful to communities that are already suffering during this crisis," she said in a press release. "The Community Reinvestment Act is an essential law that was put in place to prevent redlining and to require banks to invest and lend responsibly in the communities where they are chartered."
Regardless of the resolution's chances to advance, the measure may serve as notice of intention if Democrats wrest control of the White House away from the GOP in November’s election. A new administration could appoint regulators who would rewrite the rule.