78258 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

1Community Reinvestment Act of 1977, Public 

Law 95–128, 91 Stat. 1147 (1977), codified at 12 

U.S.C. 2901 et seq. 

(iii) In the case of a law graduate, he 

or she has filed a statement that he or 

she is appearing under the supervision 

of a licensed attorney or accredited 

representative and that he or she is 

appearing without direct or indirect 

remuneration from the alien he or she 

represents; 

(iv) An attorney or accredited 

representative physically accompanies 

the law student or law graduate who is 

appearing. The accompanying attorney 

or accredited representative must be 

authorized to practice before EOIR and 

be prepared to proceed with the case at 

all times; and 

(v) All filings by law students and law 

graduates are made through an EOIRregistered attorney or accredited 

representative. 

* * * * * 

James R. McHenry, 

Director, Executive Office for Immigration 

Review, Department of Justice. 

[FR Doc. 2020–26115 Filed 12–3–20; 8:45 am] 

BILLING CODE 4410–30–P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Parts 24, 25, 35, and 192 

[Docket ID OCC–2020–0025] 

RIN 1557–AE96 

Community Reinvestment Act 

Regulations 

AGENCY: Office of the Comptroller of the 

Currency, Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Office of the Comptroller 

of the Currency (OCC) is issuing a notice 

of proposed rulemaking to request 

comment on the OCC’s proposed 

approach to determine the Community 

Reinvestment Act (CRA) evaluation 

measure benchmarks, retail lending 

distribution test thresholds, and 

community development minimums 

under the general performance 

standards. The proposal further explains 

how the OCC would assess significant 

declines in CRA activities levels in 

connection with performance context 

following the initial establishment of 

the benchmarks, thresholds, and 

minimums. Finally, the proposed rule 

would make clarifying and technical 

amendments to the CRA final rule. 

DATES: Comments must be received on 

or before February 2, 2021. 

ADDRESSES: Commenters are encouraged 

to submit comments through the Federal 

eRulemaking Portal, if possible. Please 

use the title ‘‘Community Reinvestment 

Act Regulations’’ to facilitate the 

organization and distribution of the 

comments. You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal— 

Regulations.gov Classic or 

Regulations.gov Beta 

Regulations.gov Classic: Go to https:// 

www.regulations.gov/. Enter ‘‘Docket ID 

OCC 2020–0025’’ in the Search Box and 

click ‘‘Search.’’ Click on ‘‘Comment 

Now’’ to submit public comments. For 

help with submitting effective 

comments please click on ‘‘View 

Commenter’s Checklist.’’ Click on the 

‘‘Help’’ tab on the Regulations.gov home 

page to get information on using 

Regulations.gov, including instructions 

for submitting public comments. 

Regulations.gov Beta: Go to https://

beta.regulations.gov/ or click ‘‘Visit 

New Regulations.gov Site’’ from the 

Regulations.gov classic homepage. Enter 

‘‘Docket ID OCC–2020–0025’’ in the 

Search Box and click ‘‘Search.’’ Public 

comments can be submitted via the 

‘‘Comment’’ box below the displayed 

document information or click on the 

document title and click the 

‘‘Comment’’ box on the top-left side of 

the screen. For help with submitting 

effective comments please click on 

‘‘Commenter’s Checklist.’’ For 

assistance with the Regulations.gov Beta 

site please call (877)-378–5457 (toll free) 

or (703) 454–9859 Monday-Friday, 9am5pm ET or email to regulations@

erulemakinghelpdesk.com. 

• Mail: Chief Counsel’s Office, 

Attention: Comment Processing, Office 

of the Comptroller of the Currency, 400 

7th Street SW, Suite 3E–218, 

Washington, DC 20219. 

• Hand Delivery/Courier: 400 7th 

Street SW, Suite 3E–218, Washington, 

DC 20219. 

Instructions: You must include 

‘‘OCC’’ as the agency name and ‘‘Docket 

ID OCC–2020–0025’’ in your comment. 

In general, the OCC will enter all 

comments received into the docket and 

publish the comments on the 

Regulations.gov website without 

change, including any business or 

personal information provided such as 

name and address information, email 

addresses, or phone numbers. 

Comments received, including 

attachments and other supporting 

materials, are part of the public record 

and subject to public disclosure. Do not 

include any information in your 

comment or supporting materials that 

you consider confidential or 

inappropriate for public disclosure. 

You may review comments and other 

related materials that pertain to this 

rulemaking action by the following 

method: 

• Viewing Comments Electronically— 

Regulations.gov Classic or 

Regulations.gov Beta: 

Regulations.gov Classic: Go to https:// 

www.regulations.gov/. Enter ‘‘Docket ID 

OCC–2020–0025’’ in the Search box and 

click ‘‘Search.’’ Click on ‘‘Open Docket 

Folder’’ on the right side of the screen. 

Comments and supporting materials can 

be viewed and filtered by clicking on 

‘‘View all documents and comments in 

this docket’’ and then using the filtering 

tools on the left side of the screen. Click 

on the ‘‘Help’’ tab on the 

Regulations.gov home page to get 

information on using Regulations.gov. 

The docket may be viewed after the 

close of the comment period in the same 

manner as during the comment period. 

Regulations.gov Beta: Go to https://

beta.regulations.gov/ or click ‘‘Visit 

New Regulations.gov Site’’ from the 

Regulations.gov classic homepage. Enter 

‘‘Docket ID OCC–2020–0025’’ in the 

Search Box and click ‘‘Search.’’ Click on 

the ‘‘Comments’’ tab. Comments can be 

viewed and filtered by clicking on the 

‘‘Sort By’’ drop-down on the right side 

of the screen or the ‘‘Refine Results’’ 

options on the left side of the screen. 

Supporting Materials can be viewed by 

clicking on the ‘‘Documents’’ tab and 

filtered by clicking on the ‘‘Sort By’’ 

drop-down on the right side of the 

screen or the ‘‘Refine Results’’ options 

on the left side of the screen.’’ For 

assistance with the Regulations.gov Beta 

site please call (877)-378–5457 (toll free) 

or (703) 454–9859 Monday-Friday, 9am5pm ET or email to regulations@

erulemakinghelpdesk.com. 

The docket may be viewed after the 

close of the comment period in the same 

manner as during the comment period. 

FOR FURTHER INFORMATION CONTACT: Ioan 

Voicu, Director, Compliance Risk 

Analysis Division, at (202) 649–5550; or 

Daniel Borman, Senior Attorney, Daniel 

Sufranski, Attorney, or Jean Xiao, 

Attorney, Chief Counsel’s Office, (202) 

649–5490, Office of the Comptroller of 

the Currency, 400 7th Street SW, 

Washington, DC 20219. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

On June 5, 2020, the OCC published 

a final rule in the Federal Register (2020 

final rule) to update the regulatory 

framework implementing the 

Community Reinvestment Act of 1977 

(CRA) 1 for national banks and savings 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78259 

2 85 FR 34734 (June 5, 2020). As used throughout 

this notice, the term ‘‘bank’’ or ‘‘banks’’ also 

includes uninsured Federal branches that result 

from an acquisition described in section 5(a)(8) of 

the International Banking Act of 1978 (12 U.S.C. 

3103(a)(8)). The rulemaking authority of the Office 

of Thrift Supervision (OTS) and the Director of the 

OTS, respectively, relating to savings associations 

was transferred to the OCC in Title III of the Dodd– 

Frank Wall Street Reform and Consumer Protection 

Act, Public Law 111–203, 124 Stat. 1376, 1522 

(2010). As a result, the OCC has CRA rulewriting 

authority for both Federal and state savings 

associations, as well as for national banks. The OCC 

also has rulewriting authority for Federal and state 

savings associations for purposes of the CRA 

specifically pursuant to 12 U.S.C. 2905. 

3 12 U.S.C. 1813(c)(2). 

4 85 FR at 34774. 

5Twelve CFR 25.10(a) of the 2020 final rule 

applies the general performance standards to banks 

with more than $2.5 billion in assets that are not 

evaluated under a strategic plan and that are not 

wholesale or limited purpose banks. Under 

§ 25.10(b) of the 2020 final rule, small, 

intermediate, wholesale, and limited purpose banks 

can opt into and elect to be evaluated under the 

general performance standards. For purposes of the 

Information Collection Survey, the OCC is not 

collecting data from any small, intermediate, 

wholesale, and limited purpose banks. 

6Under § 25.13 of the 2020 final rule, banks 

assessed under the general performance standards 

receive presumptive ratings at both the bank and 

assessment area level based on their performance 

on objective criteria (i.e., the CRA evaluation 

measure, retail lending distribution test 

performance, CD minimum calculation, and the 

percentage of assessment areas in which the bank 

received a satisfactory or outstanding assigned 

rating). Those presumptive ratings are adjusted for 

performance context and evidence of 

discriminatory or other illegal credit practices to 

determine the assigned rating pursuant to § 25.19 of 

the 2020 final rule. 

associations (collectively, banks).2 The 

2020 final rule was the culmination of 

a multi-year process of engagement with 

various stakeholders to ensure that the 

CRA remains a relevant and powerful 

tool for encouraging insured depository 

institutions to serve the needs of their 

entire communities, including low- and 

moderate-income (LMI) neighborhoods. 

The 2020 final rule strengthened and 

modernized the implementation of the 

CRA by making the regulatory 

framework more objective, transparent, 

consistent in application, and reflective 

of changes in the banking industry and 

how consumers bank. The OCC’s goal in 

implementing the 2020 final rule was to 

make the CRA framework a better tool 

to encourage banks to engage in more 

activities to serve the needs of their 

communities, particularly in LMI and 

other historically underserved 

communities. These goals are consistent 

with the statutory purpose of the CRA 

to encourage insured depository 

institutions 3 to help meet the credit 

needs of the local communities in 

which they are chartered, including LMI 

neighborhoods, consistent with banks’ 

safe and sound operations. 

The 2020 final rule made changes in 

four areas of the historical CRA 

framework. Specifically, the 2020 final 

rule: (1) Clarified and expanded the 

bank lending, investment, and services 

that qualify for CRA consideration 

(collectively, qualifying activities or 

CRA activities); (2) updated how banks 

delineate the assessment areas in which 

they are evaluated; (3) provided 

additional methods for evaluating CRA 

performance in a consistent and 

objective manner; and (4) required 

reporting that is timely and transparent. 

The new framework incentivizes 

banks to achieve specific performance 

goals. Timely and transparent CRA data, 

including CRA performance 

evaluations, will provide meaningful 

information to all stakeholders. 

The 2020 final rule made changes to 

aspects of the historical CRA framework 

that had unintentionally inhibited 

banks’ CRA activities by creating 

uncertainty about which activities 

would qualify and how much those 

activities would contribute to banks’ 

CRA ratings. Through hearings, 

outreach, and public comments during 

the rulemaking process, the OCC 

learned that many banks engaged only 

in CRA activities for which they 

previously received CRA consideration 

and committed capital and credit only 

to activities for which they were 

confident that they would receive 

consideration—at the cost of innovation 

and responsiveness. In addition, the 

historical framework lacked consistent 

and objective evaluations and timely 

and transparent reporting, which 

inhibited the public’s ability to 

understand how and to what extent 

banks were meeting community credit 

needs. 

By moving to a system that is 

primarily objective and transparent 

under the 2020 final rule, CRA ratings 

will be more consistent, reproducible, 

and comparable over time. The agency’s 

2020 final rule was designed so that 

similar circumstances will be evaluated 

in a similar manner from bank to bank. 

In the 2020 final rule, the OCC 

finalized the framework for the general 

performance standards (i.e., the CRA 

evaluation measure, retail lending 

distribution tests, community 

development (CD) minimums, and the 

percentage of assessment areas for 

which a bank must receive a satisfactory 

or outstanding assigned rating to 

achieve a bank presumptive rating of 

satisfactory or outstanding); however, 

the OCC decided not to adopt the 

specific CRA evaluation measure 

benchmarks, retail lending distribution 

test thresholds, and CD minimums as 

initially proposed. As noted in the 

preamble of the 2020 final rule, the OCC 

believes that it is appropriate to gather 

more information and further calibrate 

these measures, and the agency stated 

that it would issue a proposal that 

would explain the process the OCC will 

use to more precisely calibrate the 

benchmark, threshold, and minimum 

values.4

This proposal seeks comment on the 

approach the OCC would use to set 

these benchmarks, thresholds, and 

minimums. As described further in this 

SUPPLEMENTARY INFORMATION section, the 

OCC is separately seeking data through 

an Information Collection Survey from 

banks subject to the general 

performance standards.5 Once the OCC 

analyzes the public comments on this 

proposal and the data it receives, the 

OCC plans to issue a final rule that will 

adopt an approach for setting the 

benchmark, threshold, and minimum 

values that correspond to the 

presumptive ratings 6 (i.e., outstanding, 

satisfactory, needs to improve, and 

substantial noncompliance) for banks 

assessed under the general performance 

standards. In addition, once the OCC 

has determined the specific 

benchmarks, thresholds, and minimums 

according to the selected approach, the 

agency will take the appropriate steps to 

publicize the standards and engage 

stakeholders regarding the specific 

benchmarks, thresholds, and 

minimums. Once finalized, the OCC 

expects to periodically review and 

adjust these benchmarks, thresholds, 

and minimums, as necessary, to ensure 

that these measures are incentivizing 

banks to engage in appropriate levels of 

CRA activities, while taking into 

consideration market conditions and 

changes in economic cycles. The OCC 

also expects to take the appropriate 

steps to publicize the future adjustments 

to the benchmarks, thresholds, and 

minimums and engage stakeholders on 

these adjustments. 

II. Background 

The OCC’s 2020 final rule 

incorporates many of the measures and 

methods the OCC historically has used 

to assess CRA performance, but it also 

provides clarity about how the OCC will 

use those mechanisms to assess a bank’s 

CRA performance. Among other things, 

the 2020 final rule describes what 

activities will qualify for CRA credit and 

how they will be measured to assess 

CRA performance. Further, the 2020 

final rule explains that banks are 

expected to meet specific benchmarks, 

thresholds, and minimums in order to 

achieve presumptive CRA ratings. 

78260 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

7The purpose of multipliers is to incentivize 

banks to engage in activities that are particularly 

valuable and important from a CRA perspective by 

giving banks additional credit towards their CRA 

evaluation measures and CD minimum calculations 

for these activities. Under § 25.08 of the 2020 final 

rule, banks may be eligible for multipliers for the 

following: (1) Activities provided to or that support 

minority depository institutions, women’s 

depository institutions, Community Development 

Financial Institutions, and low-income credit 

unions, except activities related to mortgage-backed 

securities; (2) other CD investments, except CD 

investments in mortgage-backed securities and 

municipal bonds; (3) other CD services; (4) other 

affordable housing-related CD loans; (5) retail loans 

generated by branches in LMI census tracts; and (6) 

qualifying activities in CRA deserts. Pursuant to 

§ 25.08(b)(4) of the 2020 final rule, qualifying 

activities that receive a multiplier may be eligible 

for an additional multiplier based on the OCC’s 

determination of the activity’s responsiveness, 

innovativeness, or complexity. Further, to ensure 

that the use of multipliers does not reduce the level 

of CD activities that banks conduct, a bank is not 

eligible for multipliers until the quantified dollar 

values of its current period CD activities are 

approximately equal to the quantified dollar values 

of CD activities in its prior evaluation period. As 

described below, this proposal would make 

clarifying edits to the multiplier for activities that 

are determined to be particularly responsive, 

innovative, or complex. Additionally, as discussed 

below, this proposal would clarify that to be eligible 

for the multipliers described in § 25.08, the 

quantified dollar value of a bank’s current 

evaluation period CD loans, CD investments, and 

CD services must be ‘‘approximately equal to or 

greater than’’ the quantified dollar value of these 

activities considered in the bank’s prior evaluation 

period. 

8 85 FR at 34736. The OCC would also apply 

these benchmarks, thresholds, and minimums for 

banks that opt into the general performance 

standards at the time of opt in. 

Under the 2020 final rule, banks 

assessed under the general performance 

standards will be evaluated based on (1) 

the distribution of their retail loans (i.e., 

home mortgage loans, small loans to 

businesses, small loans to farms, and 

consumer loans) (retail lending 

distribution tests); (2) the dollar value of 

qualifying retail loans and CD activities 

and the distribution of their branches in 

each assessment area and at the bank 

level (CRA evaluation measure); and (3) 

the level of their CD activities in each 

assessment area and at the bank level 

(CD minimum calculation). 

Twelve CFR 25.13 of the 2020 final 

rule provides the general performance 

standards and describes how they are 

applied to determine bank and 

assessment area presumptive ratings. 

Section 25.13(d) of the 2020 final rule 

states that a bank’s presumptive 

assessment area rating is based on its 

CRA evaluation measure, CD minimum 

calculation, and performance on the 

retail lending distribution tests. Section 

25.13(c) of the 2020 final rule states that 

the bank-level presumptive rating is 

based on the CRA evaluation measure, 

CD minimum calculation, and assigned 

ratings in its assessment areas. Sections 

25.11 and 25.13 of the 2020 final rule 

require a bank to determine its CRA 

evaluation measure and CD minimum 

calculation in each assessment area and 

at the bank level. As described in 

§ 25.11 of the 2020 final rule, the CRA 

evaluation measure is the sum of the 

bank’s annual qualifying activities 

values (including any applicable 

multipliers 7) divided by its annual 

average quarterly retail domestic 

deposits value plus the percentage of 

the bank’s branches in certain areas of 

need multiplied by .02, subject to a cap 

on the value of branches of one 

percentage point. The bank’s average 

annual CRA evaluation measure at both 

the assessment area level and at the 

bank level will be compared to a 

specific quantitative benchmark, which 

is to be determined by the OCC. 

Under § 25.13 of the 2020 final rule, 

the CD minimum calculation is 

determined by dividing the total 

quantified dollar value of a bank’s CD 

loans and CD investments, including 

any applicable multipliers, by the 

bank’s average quarterly retail domestic 

deposits value. The bank’s CD minimum 

calculations at both the assessment area 

level and at the bank level will be 

compared to the CD minimums to be 

determined by the OCC. 

Section 25.12 of the 2020 final rule 

describes the application of the retail 

lending distribution tests. The retail 

lending distribution tests evaluate the 

geographic and borrower distributions 

of a bank’s major retail lending product 

lines in assessment areas in which the 

bank has originated 20 or more loans in 

those product lines per year during an 

evaluation period. The geographic 

distribution test evaluates the 

percentage of a bank’s retail loan 

originations in LMI census tracts, and 

the borrower distribution test evaluates 

the percentage of a bank’s retail loan 

originations to LMI borrowers, CRAeligible businesses, and CRA-eligible 

farms, as applicable. Section 25.13 of 

the 2020 final rule requires a bank to 

pass both the geographic and borrower 

distribution tests for each applicable 

product line to receive a presumptive 

rating of satisfactory or outstanding in 

an assessment area. Section 25.12 of the 

2020 final rule allows a bank to pass 

each test based on its performance 

relative to either the demographic 

comparator, which is based on the 

demographics of a given assessment 

area, or the peer comparator, which is 

based on peer performance in a given 

assessment area. The OCC will 

determine the thresholds to pass the 

borrower distribution test and 

geographic distribution test for both the 

demographic and peer comparators. 

Although performance on the retail 

lending distribution tests is only 

evaluated at the assessment area level, 

§ 25.13 of the 2020 final rule provides 

that in order to achieve a satisfactory or 

outstanding presumptive rating at the 

bank level, a bank with more than five 

assessment areas must receive an 

assigned rating of at least satisfactory or 

outstanding, respectively, in: (1) 80 

percent of its assessment areas; and (2) 

assessment areas from which the banks 

receives 80 percent of its retail domestic 

deposits that it receives from its 

assessment areas. For a bank with five 

or fewer assessment areas to achieve a 

satisfactory or outstanding presumptive 

rating at the bank level, the bank must 

receive an assigned rating of at least 

satisfactory or outstanding, respectively, 

in: (1) 50 percent of its assessment areas; 

and (2) assessment areas from which the 

bank receives 80 percent of its retail 

domestic deposits that it receives from 

its assessment areas. Banks that do not 

meet these standards or the bank-level 

CD minimum requirement will receive a 

presumptive rating of needs to improve 

or substantial noncompliance, 

depending on the bank-level CRA 

evaluation measure. 

In the preamble to the 2020 final rule, 

the OCC indicated that it would set the 

objective CRA evaluation measure 

benchmarks, retail lending distribution 

test thresholds, and CD minimums for 

the level of performance necessary to 

achieve each presumptive rating 

category at a later date, and that it 

would apply these benchmarks, 

thresholds, and minimums as of January 

1, 2023, which is the compliance date 

applicable to banks subject to the 

general performance standards.8 This 

proposal suggests an approach to 

determine those objective benchmarks, 

thresholds, and minimums. 

III. Information Collection Survey 

Separate from this proposal, the OCC 

will issue an Information Collection 

Survey to obtain bank-specific 

information from banks subject to the 

general performance standards, which 

will assist the OCC in determining the 

CRA evaluation measure benchmarks, 

retail lending distribution test 

thresholds, and CD minimums under 

the 2020 final rule that will correspond 

to the presumptive ratings. This 

information collection will supplement 

existing OCC data and facilitate a 

broader review of the framework going 

forward, which may inform additional 

revisions in future years. 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78261 

9See various studies using application 

information to understand credit supply such as: 

Antoniades, A. 2016. ‘‘Liquidity Risk and the Credit 

Crunch of 2007–2008: Evidence from Micro-Level 

Data on Mortgage Loan Applications.’’ Journal of 

Financial and Quantitative Analysis 51(6): 1795– 

1822; Mian, Atif, and Amir Sufi. 2009. ‘‘The 

Consequences of Mortgage Credit Expansion: 

Evidence from the U.S. Mortgage Default Crisis.’’ 

The Quarterly Journal of Economics 124(4): 1449– 

1496; Puri, Manju, Jorg Rocholl, and Sascha Steffen. 

2011. ‘‘Global Retail Lending in the Aftermath of 

the US Financial Crisis: Distinguishing Between 

Supply and Demand Effects.’’ Journal of Financial 

Economics 100(3): 556–578. 

10Stakeholders can make only educated guesses 

about the current level of bank CRA activities 

because there is no standardized set of data or 

information about the actual levels of bank CRA 

activities. The Information Collection Survey will 

assist the OCC in making a more informed estimate 

of the current level of bank CRA activities. 

11The population of banks being analyzed under 

this approach is the same population of banks 

subject to the Information Collection Survey (i.e., 

banks with assets of $2.5 billion or more that are 

subject to the general performance standards under 

the 2020 final rule). 

Specifically, the OCC will request 

four types of bank data or information. 

First, the OCC will collect data on 

banks’ main office presence, branch 

presence, deposit-taking facility 

presence, retail domestic deposit data at 

the county level, and what banks’ 

facility-based and deposit-based 

assessment areas would have been 

under the standards in § 25.09. This 

data will assist the OCC in determining 

how banks would have performed under 

the general performance standards and 

the banks’ presumptive ratings under 

§§ 25.10 through 25.13 of the 2020 final 

rule. Second, the OCC will collect data 

on what would have been the quantified 

dollar value of banks’ CRA qualifying 

activities under the 2020 final rule to 

determine what banks’ performance 

would have been on the CRA evaluation 

measure under § 25.11 of the 2020 final 

rule and the CD minimum under 

§ 25.13(c) and (d) of the 2020 final rule. 

Third, the OCC will collect data on 

retail loan applications and on what 

would have been the quantified dollar 

value of banks’ CRA qualifying retail 

loan originations to determine the CRA 

evaluation measure under § 25.11 of the 

2020 final rule. Obtaining information 

on retail loan applications and 

originations will, in the near term, help 

inform the OCC about banks’ credit 

supply decisions across geographies 

and, over time, assist the OCC in 

refining and improving the CRA 

framework.9 Finally, the OCC will 

collect information on banks’ branch 

locations to determine what would have 

been the branch distribution component 

of the CRA evaluation measure under 

§ 25.11 of the 2020 final rule. 

IV. Description of Proposed Rule 

A. Proposed Approach for Setting the 

Benchmarks, Thresholds, and 

Minimums 

The OCC is seeking to set CRA 

evaluation measure benchmarks, retail 

lending distribution test thresholds, and 

CD minimums that provide objectivity 

and transparency for banks evaluated 

under the general performance 

standards, while also encouraging banks 

to engage in CRA activities at a level no 

less than the status quo.10 To 

accomplish these goals, the OCC is 

proposing to establish benchmarks, 

thresholds, and minimums that 

correspond to a proportion of banks that 

would have received a hypothetical 

bank-level presumptive CRA rating of 

outstanding and satisfactory that is no 

greater than the historical proportion of 

banks that have received a bank-level 

assigned CRA rating of outstanding and 

satisfactory.11

Using banks’ responses to the 

information collection, the OCC would 

calculate CRA evaluation measures and 

CD minimum calculations for each 

bank’s assessment areas, as well as a 

bank-level CRA evaluation measure and 

CD minimum calculation for each bank. 

Similarly, for each major retail lending 

product line, the OCC would calculate 

the numerator used in determining each 

bank’s retail lending distribution test 

ratios for each bank’s assessment areas. 

After combining data from the Census 

and Dun and Bradstreet files of 

businesses, the OCC would then 

calculate the demographic comparator 

under the borrower and geographic 

distribution tests for each retail lending 

product line, if applicable, for every 

bank’s assessment areas. Similarly, the 

OCC would use data collected from all 

banks subject to the general 

performance standards to calculate the 

peer comparator under the borrower and 

geographic distribution tests for each 

retail lending product line, if applicable, 

for every bank’s assessment areas. Each 

bank’s numerators under the borrower 

and geographic distribution tests would 

be divided by the applicable 

demographic and peer comparators to 

calculate each bank’s retail lending 

distribution test ratios for each bank’s 

assessment areas. These calculations 

would result in (1) bank-level 

distributions of the CRA evaluation 

measure and CD minimum calculation 

and (2) assessment area-level 

distributions of the CRA evaluation 

measure, CD minimum calculation, and 

the borrower and geographic 

distribution test ratios. 

Using the dataset described above, 

possibly combined with other datasets, 

the OCC would examine possible 

combinations of benchmark, threshold, 

and minimum values. For each set of 

benchmarks, thresholds, and 

minimums, the OCC would iteratively 

calculate the proportion of assessment 

areas that would pass for each bank. 

Subsequently, the OCC would 

determine the proportion of banks that 

would meet or exceed the bank-level CD 

minimum and the bank-level CRA 

evaluation measure benchmark. The 

OCC would compare the results to the 

historical proportion of outstanding 

ratings under the prior CRA framework 

to ensure that the chosen set of 

benchmarks, thresholds, and minimums 

yields a proportion of outstanding 

ratings that is no greater than the 

historical proportion. The OCC would 

determine the appropriate set of 

benchmarks, thresholds, and minimums 

for a satisfactory rating using the same 

approach. In the OCC’s analysis, the 

banks that do not meet or exceed the 

benchmarks, thresholds, or minimums 

for satisfactory and outstanding ratings 

would receive a needs to improve or 

substantial noncompliance rating, 

depending on the criteria outlined in 

the 2020 final rule. 

If the OCC identifies multiple 

combinations of benchmarks, 

thresholds, and minimums that result in 

a similar proportion of banks that pass, 

the OCC would consider additional 

criteria, such as incentives to further 

increase CRA activities that benefit LMI 

individuals and distressed or 

underserved areas, to identify the most 

appropriate set of performance standard 

values. 

To maintain flexibility, the OCC 

would not require any of the 

benchmark, threshold, or minimum 

values to be similar to each other. That 

is, the information collection may reveal 

that distributions of the various CRA 

performance standards differ across 

retail lending product lines and 

aggregation levels. For example, the 

distribution of the mortgage product 

line may be significantly different from 

that of the automobile loan or small loan 

to a business product lines. Similarly, 

the distribution of the CRA evaluation 

measure at the assessment area level 

may differ from that at the bank level. 

As such, the OCC anticipates that there 

may be as many as 26 different 

calibrated benchmark, threshold, and 

minimum values under the general 

performance standards. Specifically, the 

retail lending distribution tests reflect 

six retail lending product lines for the 

borrower distribution test, three retail 

lending product lines for the geographic 

distribution test, and involve two 

different comparisons under each test, 

78262 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

12This proposed ten percent figure is based on 

the expert judgment of the OCC Economics 

Department and is a reasonable representation of 

what the OCC currently considers to be a 

precipitous decrease in a bank’s CRA activities. 

thus yielding up to 18 different 

threshold values. The CRA evaluation 

measure would involve six different 

benchmark values (one at the bank level 

and one at the assessment area level for 

needs to improve, satisfactory, and 

outstanding presumptive ratings, 

respectively), while the CD minimum 

would involve two values, one at the 

bank level and one at the assessment 

area level. 

B. Alternatives Considered to the 

Proposed Approach for Setting the 

Benchmarks, Thresholds, and 

Minimums 

The OCC recognizes that some extent 

of normative judgment is necessary for 

any approach the OCC chooses. The 

OCC considered proposing an 

alternative where instead of the 

proposed approach, the OCC would 

choose a set of benchmarks, thresholds, 

and minimums without reference to the 

historical distribution of ratings. The 

OCC chose not to propose this approach 

because the OCC believes that setting 

benchmarks, thresholds, and minimums 

in relation to the historic status quo 

minimizes the degree of normative 

judgment and provides a useful starting 

point for determining an expected 

distribution of CRA ratings. 

The OCC also considered proposing 

using the information collection to 

calculate the historical aggregate 

distribution and dollar amount of CRA 

activities for the components of the 

general performance standards to set 

benchmarks, thresholds, and 

minimums. This approach would 

consider the CRA activities, branches, 

and retail domestic deposits of all banks 

as if they were the CRA activities, 

branches, and retail domestic deposits 

of a single hypothetical bank in order to 

set the thresholds, benchmarks, and 

minimums that correspond to the 

desirable level of CRA activity. 

The OCC chose not to propose this 

approach because of the additional 

assumptions and constraints it would 

entail. First, the OCC views this 

approach as unworkable for the retail 

lending distribution tests. Consolidating 

all banks would prevent the calculation 

of the peer comparator because the 

hypothetical, aggregate bank has no 

peers. For the demographic comparator, 

this approach would require either 

using nationwide demographics (i.e., 

the proportion of LMI families, LMI 

tracts, or owner-occupied units in LMI 

tracts in the entire United States) or 

assuming how the hypothetical 

aggregate bank would delineate its 

assessment areas. Because each bank’s 

lending activities likely do not cover all 

areas in which LMI families reside or all 

the LMI tracts nationwide, and 

individual banks delineate their own 

assessment areas pursuant to § 25.09 of 

the 2020 final rule, it is unclear whether 

this approach would be appropriate. 

Second, without further data analysis, 

the approach may be disproportionately 

influenced by the activities of the largest 

banks assessed under the general 

performance standards, which are 

responsible for the majority of CRA 

activities and deposits. Lastly, the OCC 

does not believe that this approach 

would sufficiently capture the 

interaction between the benchmarks, 

thresholds, and minimums, making it 

difficult to predict a resulting 

distribution of presumptive ratings for a 

set of chosen values. 

Having considered different 

approaches to setting the benchmarks, 

thresholds, and minimums, the OCC is 

proposing an approach that would set 

robust benchmarks, thresholds, and 

minimums. The OCC believes that the 

proposed approach will effectively 

achieve the agency’s goals of providing 

objectivity and transparency in the 

performance standards, while also 

encouraging banks to engage in CRA 

activities at an aggregate level that is no 

less than the status quo. 

C. Proposed Approach for Treating 

Declines in CRA Performance Following 

the Initial Establishment of the 

Benchmarks, Thresholds, and 

Minimums 

The OCC is proposing to amend 

§ 25.16 of the 2020 final rule to state 

that banks whose performance 

precipitously decreases by ten percent 12

or more on the general performance 

standards after the establishment of the 

initial benchmarks, thresholds, and 

minimums without an adequate 

explanation under the performance 

context criteria, including consideration 

of market conditions, risk having their 

assigned ratings adversely impacted. 

The OCC recognizes that for any welldefined set of benchmarks, thresholds, 

minimums, and CRA presumptive 

ratings, the current CRA activities of 

some banks will fall below, while the 

current CRA activities of other banks 

will exceed, the chosen set of 

benchmarks, thresholds, and 

minimums. The former set of banks 

would be expected to increase CRA 

activities, whereas the latter set of banks 

could potentially decrease CRA 

activities while maintaining the same 

rating or achieving a better rating under 

the new benchmarks, thresholds, and 

minimums. This potential decrease in 

CRA activities by some banks may 

negate any increase in CRA activities 

that would result from other banks 

increasing their CRA activities to meet 

the new benchmarks, thresholds, and 

minimums. Therefore, with the 

proposed approach and alternative 

approaches considered, the OCC 

recognizes the need to evaluate 

precipitous declines in CRA activity 

under performance context as banks 

adapt to the new benchmarks, 

thresholds, and minimums. 

As a general matter, it is appropriate 

for banks to adjust their CRA activities 

over time in response to regulatory 

requirements. This is normal and 

acceptable. That said, precipitous 

declines of ten percent or more in a 

bank’s performance on the general 

performance standards as calculated 

based on historical data, between the 

establishment of the objective 

benchmarks, thresholds, and minimums 

and the bank’s first evaluation under the 

general performance standards, that 

cannot be explained by market 

conditions or other performance context 

criteria may result in the bank receiving 

an assigned rating that is no higher than 

needs to improve at the assessment area 

level as well as at the overall bank level. 

V. 2020 Final Rule Clarifying and 

Technical Amendments 

Following publication of the 2020 

final rule, the OCC engaged in a review 

process with the goal of providing 

additional clarity to 12 CFR part 25, 

effective October 1, 2020. The OCC 

seeks comment on revisions to aspects 

of the 2020 final rule, including 

compliance dates, some definitions, 

multipliers, the general performance 

standards opt out, the aggregate 

disclosure statement, and references to 

the FDIC. In addition, the proposal 

contains various technical, clarifying, 

and conforming amendments. 

A. Compliance Dates for Banks 

Evaluated Under a Strategic Plan 

Under the 2020 final rule, all banks 

have the option to be evaluated under 

a strategic plan, including banks that 

meet the small or intermediate bank 

definitions. The 2020 final rule also sets 

forth compliance dates for certain 

sections of the rule based on bank type. 

Section 25.01(c)(4)(i) of the 2020 final 

rule states that ‘‘[b]anks other than 

small, intermediate, wholesale, and 

limited purpose banks must comply 

with §§ 25.07—25.13, 25.21, 25.25, and 

25.26 by January 1, 2023.’’ This 

provision was intended to apply to 

banks evaluated under a strategic plan, 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78263 

and the sections referenced in this 

paragraph are applicable to banks 

evaluated under a strategic plan or the 

general performance standards (e.g., 

§ 25.21 includes the data collection 

requirements for banks evaluated under 

the general performance standards or a 

strategic plan). In contrast, 

§ 25.01(c)(4)(iii) of the 2020 final rule 

includes the compliance dates 

applicable to small and intermediate 

banks. To eliminate any potential 

confusion regarding which compliance 

dates apply to banks evaluated under a 

strategic plan that also meet either the 

small bank or intermediate bank 

definition, the proposal would revise 

§ 25.01(c)(4)(i) to clarify that banks other 

than those evaluated under the 

performance standards applicable to 

small, intermediate, wholesale, and 

limited purpose banks must comply 

with the applicable sections by January 

1, 2023. 

B. Definitions 

In § 25.03 of the 2020 final rule, the 

definition of ‘‘compensation’’ refers to 

‘‘median hourly compensation value 

(i.e., total salaries and benefits divided 

by full-time equivalent employees).’’ It 

also describes the calculation as being 

based on aggregate Call Report data on 

median salaries and benefits and the 

median number of full-time equivalent 

employees. The OCC determined that 

the two descriptions are inconsistent 

and may result in different 

compensation levels. The OCC intended 

for the definition of ‘‘compensation’’ to 

reflect the median hourly compensation 

value based on each bank’s total salaries 

and benefits and its full-time equivalent 

employees. Therefore, the proposed rule 

would revise the definition of 

‘‘compensation’’ to clarify this approach 

for determining compensation value. 

Under the 2020 final rule’s definitions 

of ‘‘partially’’ and ‘‘primarily,’’ it is 

possible that an activity could meet both 

definitions if the activity has an express, 

bona fide intent, purpose, or mandate, 

consistent with a criterion in § 25.04(c) 

of the 2020 final rule. To eliminate the 

potential overlap in the definitions, the 

proposal would revise the definition of 

‘‘partially’’ to clarify that the definition 

applies to activities that do not have an 

express, bona fide intent, purpose, or 

mandate consistent with a criterion in 

§ 25.04(c) of the 2020 final rule. The 

proposal also would revise the 

definitions of ‘‘partially’’ and 

‘‘primarily’’ to clarify that the terms 

apply to activities involving ‘‘families, 

businesses, or farms’’ to ensure 

consistency with the qualifying 

activities criteria that use those terms. 

C. Multiplier Clarifications 

Section 25.08(b) of the 2020 final rule 

includes multipliers for some qualifying 

activities, including a multiplier for 

activities that are determined to be 

particularly responsive, innovative, or 

complex. The proposal would clarify 

that this multiplier is applicable to any 

activity that received one of the other 

multipliers provided for in the 2020 

final rule and that the maximum total 

upward adjustment considering all 

multipliers is four times the quantified 

dollar value of the qualifying activity. 

Section 25.08(b)(1) also provides that to 

be eligible for the multipliers in sections 

25.08(b)(2) and (b)(3) of the 2020 final 

rule, the quantified dollar value of a 

bank’s current evaluation period CD 

loans, CD investments, and CD services 

must be ‘‘approximately equal to’’ the 

quantified dollar value of these 

activities considered in the bank’s prior 

evaluation period. The proposal would 

clarify that the quantified dollar value of 

a bank’s current evaluation period CD 

loans, CD investments, and CD services 

must be ‘‘approximately equal to or 

greater than’’ the quantified dollar value 

of these activities considered in the 

bank’s prior evaluation period. 

D. General Performance Standards Opt 

Out 

Section 25.10(b) of the 2020 final rule 

permits a small, intermediate, 

wholesale, or limited purpose bank that 

opted into the general performance 

standards a single opportunity to opt 

out of evaluation under those standards. 

The 2020 final rule stated that banks 

that elected to opt out of evaluation 

under the general performance 

standards would ‘‘revert’’ to being 

evaluated according to the small and 

intermediate performance standards or 

the wholesale and limited purpose 

performance standards. This provision 

may lead to confusion in circumstances 

where a bank meets a different bank size 

or type definition when it opts into the 

general performance standards than it 

does when it elects to opt out. The 

proposal would revise the opt out 

provision to clarify that banks are 

subject to the applicable performance 

standards based on the bank’s size or 

type when it opts out. 

E. References to the Federal Deposit 

Insurance Corporation (FDIC) 

The 2020 final rule integrates 12 CFR 

part 195 into 12 CFR part 25 and 

eliminates the former part 195. As of 

October 1, 2020, national banks and 

Federal savings associations supervised 

by the OCC and state savings 

associations supervised by the FDIC will 

be evaluated under part 25. The 

proposal would add references to the 

FDIC where they were inadvertently 

omitted in the 2020 final rule. 

F. Aggregate CRA Disclosure Statement 

Section 25.27(b) of the 2020 final rule 

provides for public disclosure of the 

retail loan origination data reported to 

the OCC that is necessary to evaluate 

banks’ performance under the retail 

lending distribution tests. The OCC 

intended to include all data reported to 

the OCC regarding retail loan 

originations in the aggregate disclosure 

statement but inadvertently omitted 

disclosure of banks’ number of home 

mortgage loans in LMI census tracts. 

The proposal would add this disclosure 

requirement to the rule. 

G. Other Revisions 

In addition to the revisions discussed 

above, the proposal would make several 

non-substantive technical, clarifying, 

and conforming revisions throughout 

the 2020 final rule to improve clarity 

and consistency. The OCC is also 

proposing revisions to regulations that 

include cross references to the CRA 

implementing regulations in effect prior 

to October 1, 2020, including 12 CFR 

part 24, 12 CFR part 35, and 12 CFR part 

192. These revisions update the cross 

references to be consistent with the 

2020 final rule and include transition 

provisions as appropriate. 

VI. Request for Comments 

The OCC requests comment on all 

aspects of the proposed rule. The OCC 

specifically requests comments on the 

approach the OCC would use to 

determine the CRA evaluation measure 

benchmarks, retail lending distribution 

test thresholds, and CD minimums 

under the Community Reinvestment 

Act’s general performance standards. 

The OCC also seeks comment on its 

proposal to amend the 2020 final rule to 

consider, under performance context, 

declines of ten percent or greater on a 

bank’s performance under the general 

performance standards following the 

establishment of the benchmarks, 

thresholds, and minimums. 

VII. Regulatory Analyses 

A. Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(PRA), 44 U.S.C. 3501 et seq., the OCC 

may not conduct or sponsor, and 

respondents are not required to respond 

to, an information collection unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. The OCC has reviewed the 

notice of proposed rulemaking and 

78264 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

13Consistent with the General Principles of 

Affiliation 13 CFR 121.103(a), the OCC counts the 

assets of affiliated financial institutions when 

determining if it should classify an institution as a 

small entity. The OCC used December 31, 2019, to 

determine size because a ‘‘financial institution’s 

assets are determined by averaging the assets 

reported on its four quarterly financial statements 

for the preceding year.’’ See footnote 8 of the U.S. 

Small Business Administration’s Table of Size 

Standards. 

14The OCC excluded entities with a CRA 

examination type of ‘‘exempt’’ in an OCC 

supervisory information system. 

15As noted above, these sections of the proposal 

are relevant to banks subject to the general 

performance standards, which generally only apply 

to institutions that have more than $2.5 billion in 

assets that are not evaluated under a strategic plan 

and that are not wholesale or limited purpose 

banks. 

determined that it would not introduce 

any new or revise any existing 

collection of information pursuant to 

the PRA. Therefore, no submission will 

be made to OMB for review. 

B. Regulatory Flexibility Act 

In general, the Regulatory Flexibility 

Act (RFA) (5 U.S.C. 601 et seq.) requires 

an agency, in connection with a 

proposed rule, to prepare an Initial 

Regulatory Flexibility Analysis 

describing the impact of the rule on 

small entities (defined by the Small 

Business Administration for purposes of 

the RFA to include commercial banks 

and savings institutions with total assets 

of $600 million or less and trust 

companies with total assets of $41.5 

million of less). However, under section 

605(b) of the RFA, this analysis is not 

required if an agency certifies that the 

rule would not have a significant 

economic impact on a substantial 

number of small entities and publishes 

its certification and a short explanatory 

statement in the Federal Register along 

with its rule. 

The OCC currently supervises 

approximately 1,067 insured depository 

institutions, of which 1,030 may be 

impacted by the proposed rule. 

Moreover, 745 of the institutions are 

small entities.13 The OCC estimates that 

the proposed rule’s technical 

amendments and updated cross 

references may impact approximately 

708 of these small entities, which is a 

significant number.14 However, because 

the OCC estimates the costs, if any, 

associated with the proposal would be 

de minimis, the proposed rule would 

not have a significant economic impact 

on any small OCC-regulated entities. 

Additionally, the other sections of the 

proposed rule do not impose new 

mandates and primarily request 

comment on the OCC’s proposed 

approach for setting the benchmarks, 

thresholds, and minimums as well as 

how the OCC would consider decreases 

in CRA activities following the 

establishment of these standards.15

Therefore, the OCC believes the costs 

associated with the proposal, if any, 

would be de minimis. For these reasons, 

the OCC certifies that, if adopted, the 

proposed rule would not have a 

significant economic impact on a 

substantial number of small entities 

regulated by the OCC. Accordingly, an 

Initial Regulatory Flexibility Analysis is 

not required. 

C. Unfunded Mandates Reform Act of 

1995 

The OCC has analyzed the proposed 

rule under the factors in the Unfunded 

Mandates Reform Act of 1995 (UMRA), 

2 U.S.C. 1501 et seq. Under this analysis 

the OCC considered whether the 

proposed rule includes a Federal 

mandate that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year ($157 million as 

adjusted annually for inflation). The 

UMRA does not apply to regulations 

that incorporate requirements 

specifically set forth in law. 

As discussed above, the proposed 

rule, if implemented, would not impose 

new mandates. The OCC concludes that 

if implemented, the proposed rule 

would not result in an expenditure of 

$157 million or more annually by State, 

local, and tribal governments, or by the 

private sector. Therefore, the OCC finds 

that the proposed rule does not trigger 

the UMRA cost threshold. Accordingly, 

the OCC has not prepared the written 

statement described in section 202 of 

the UMRA. 

D. Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act of 1994 

(RCDRIA), 12 U.S.C. 4802(a), in 

determining the effective date and 

administrative compliance requirements 

for new regulations that impose 

additional reporting, disclosure, or other 

requirements on insured depository 

institutions, the OCC will consider, 

consistent with principles of safety and 

soundness and the public interest: (1) 

Any administrative burdens that the 

proposed rule would place on 

depository institutions, including small 

depository institutions and customers of 

depository institutions; and (2) the 

benefits of the proposed rule. The OCC 

requests comment on any administrative 

burdens that the proposed rule would 

place on depository institutions, 

including small depository institutions, 

and their customers, and the benefits of 

the proposed rule that the OCC should 

consider in determining the effective 

date and any administrative compliance 

requirements for a final rule. 

List of Subjects 

12 CFR Part 24 

Community development, Credit, 

Investments, Low- and moderateincome housing, National banks, 

Reporting and recordkeeping 

requirements, Rural areas, Small 

businesses. 

12 CFR Part 25 

Community development, Credit, 

Investments, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

12 CFR Part 35 

Community development, Credit, 

Freedom of information, Investments, 

National banks, Reporting and 

recordkeeping requirements. 

12 CFR Part 192 

Reporting and recordkeeping 

requirements, Savings associations, 

Securities. 

For the reasons set out in the 

preamble, the OCC proposes to amend 

12 CFR chapter I as follows: 

PART 24—COMMUNITY AND 

ECONOMIC DEVELOPMENT ENTITIES, 

COMMUNITY DEVELOPMENT 

PROJECTS, AND OTHER PUBLIC 

WELFARE INVESTMENTS 

■ 1. The authority citation for part 24 

continues to read as follows: 

Authority: 12 U.S.C. 24(Eleventh), 93a, 

481 and 1818. 

§ 24.2 [Amended] 

■ 2. In § 24.2 amend paragraph (f) by 

removing ‘‘12 CFR 25.12(m)’’ and 

adding in its place ‘‘12 CFR 25.03’’. 

§ 24.3 [Amended] 

■ 3. Section 24.3 is amended by 

removing the phrase ‘‘12 CFR 25.23 as 

a ‘‘qualified investment.’’’’ and adding 

in its place the phrase ‘‘12 CFR 25.04 as 

a ‘‘community development 

investment.’’’’. 

§ 24.7 [Amended] 

■ 4. In § 24.7 amend (paragraph (b) by 

removing ‘‘12 CFR 25.23’’ and adding in 

its place ‘‘12 CFR 25.04’’. 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78265 

PART 25—COMMUNITY 

REINVESTMENT ACT AND 

INTERSTATE DEPOSIT PRODUCTION 

REGULATIONS 

■ 5. The authority citation for part 25 

continues to read as follows: 

Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 

93a, 161, 215, 215a, 481, 1462a, 1463, 1464, 

1814, 1816, 1828(c), 1835a, 2901 through 

2908, 3101 through 3111, and 5412(b)(2)(B). 

■ 6. Section 25.01 amended by: 

■ a. In paragraph (b)(1) adding the 

phrase ‘‘or the Federal Deposit 

Insurance Corporation (FDIC)’’ after 

‘‘(OCC)’’; 

■ b. In paragraph (b)(2) adding the 

phrase ‘‘or FDIC’’ after ‘‘OCC’’; 

■ c. In paragraph (c)(1) removing 

‘‘§ 25.03’’ and adding ‘‘§ 25.03,’’ in its 

place; 

■ d. Revising paragraph (c)(4)(i); and 

■ e. In paragraph (c)(5): 

■ i. Removing ‘‘October 1, 2020.’’ and 

adding ‘‘October 1, 2020,’’ in its place; 

■ ii. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in the introductory text; and 

■ iii. Removing the word ‘‘element’’ and 

adding in its place the word ‘‘elements’’ 

in the introductory text. 

The revision reads as follows: 

§ 25.01 Authority, purposes, scope, and 

severability. 

* * * * * 

(c)* * * 

(4) Compliance dates. (i) Banks other 

than banks evaluated under the 

performance standards applicable to 

small, intermediate, wholesale, and 

limited purpose banks must comply 

with §§ 25.07–25.13, 25.21, 25.25, and 

25.26, as applicable, by January 1, 2023. 

* * * * * 

§ 25.02 [Amended] 

■ 7. Section 25.02 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a) introductory 

text; 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in the second sentence of 

paragraph (b); and 

■ c. In paragraph (c): 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’; and 

■ ii. Removing the phrase ‘‘OCC’s 

procedures set forth in part 5 of this 

chapter’’ and adding in its place the 

phrase ‘‘applicable comment 

procedures’’. 

■ 8. Section 25.03 is amended by: 

■ a. In the definition of Affiliate 

removing the phrase ‘‘October 1, 2020’’ 

and adding the phrase ‘‘October 1, 

2020,’’ in its place; 

■ b. In the definition of Automated 

teller machine (ATM) removing the 

phrase ‘‘cash dispersed’’ and adding the 

phrase ‘‘cash is disbursed’’ in its place; 

■ c. Revising the definition of 

Compensation; 

■ d. In the definition of Essential 

community facility removing the word 

‘‘means’’ and adding the word ‘‘means’’ 

in its place; 

■ e. In the definition of Essential 

infrastructure: 

■ i. Removing the word ‘‘means’’ and 

adding the word ‘‘means’’ in its place; 

and 

■ ii. Adding the word ‘‘and’’ before the 

word ‘‘tunnels’’ in paragraph (1); 

■ f. Moving the definition of Lowincome credit union to follow the 

definition of Limited purpose bank; 

■ g. In the definition of Metropolitan 

division adding the word ‘‘the’’ before 

the phrase ‘‘successor publication 

thereof’’; 

■ h. In the definition of Metropolitan 

statistical area adding the word ‘‘the’’ 

before the phrase ‘‘successor publication 

thereof’’; 

■ i. Revising the definition of Partially; 

■ j. In the definition of Primarily 

removing the phrase ‘‘individuals or 

census tracts’’ from paragraph (1) and 

adding in its place the phrase 

‘‘individuals, families, businesses, 

farms, or census tracts’’; 

■ k. In the definition of Retail domestic 

deposit: 

■ i. Removing ‘‘FDIA’’ in the 

introductory text and adding in its place 

the phrase ‘‘Federal Deposit Insurance 

Act’’ in the first sentence of the 

definition; 

■ ii. Removing ‘‘FDIA’’ and adding in its 

place ‘‘Federal Deposit Insurance Act’’ 

in paragraph (2)(i)(A); and 

■ iii. Adding quotation marks to the 

phrase ‘‘reciprocal deposit’’ in 

paragraph (2)(ii); 

■ l. In the definition of Metropolitan 

division removing the phrase ‘‘the 

center of the census tract if the census 

tract’’ in paragraph (2)(i)(D) and adding 

in its place the word ‘‘the center of the 

census tract if it’’; and 

■ m. In the definition of Wholesale bank 

adding the word ‘‘loans’’ after the word 

‘‘mortgage’’. 

The revisions read as follows: 

§ 25.03 Definitions. 

* * * * * 

Compensation means the median 

hourly compensation value (where 

compensation value equals total salaries 

and benefits divided by full-time 

equivalent employees) for the banking 

industry based on Call Report data for— 

(1) Salaries and employee benefits 

from Schedule RI, Item 7.a; and 

(2) Number of full-time equivalent 

employees from Schedule RI, 

Memorandum Item 5. 

* * * * * 

Partially means 50 percent or less of 

the dollar value of the activity or of the 

individuals, families, businesses, farms, 

or census tracts served by the activity, 

if the activity does not have an express, 

bona fide intent, purpose, or mandate 

consistent with a criterion in § 25.04(c). 

* * * * * 

§ 25.04 [Amended] 

■ 9. In § 25.04 amend paragraph (a)(3) 

by removing the phrase ‘‘on the date’’ 

and adding in its place the word 

‘‘conducted’’; 

§ 25.06 [Amended] 

■ 10. In § 25.06 amend paragraph (c)(2) 

by removing the word ‘‘activity’’ and 

adding in its place the word ‘‘area’’. 

■ 11. Section 25.08 is amended by: 

■ a. Adding the phrase ‘‘or greater than’’ 

after the phrase ‘‘approximately equal 

to’’ in the first sentence of paragraph 

(b)(1); 

■ b. Removing the word ‘‘conducted’’ in 

the second sentence of paragraph (b)(1) 

and adding ‘‘conducted,’’; 

■ c. Removing the word ‘‘activity’’ and 

adding in its place the word ‘‘activities’’ 

in paragraph (b)(2); and 

■ d. Revising paragraph (b)(4). 

The revision reads as follows: 

§ 25.08 Qualifying activities value. 

* * * * * 

(b)* * * 

(4) The quantified dollar value of 

qualifying activities that receive a 

multiplier under paragraphs (b)(2) or 

(b)(3) of this section may also be subject 

to an additional upward adjustment, for 

a maximum total upward adjustment of 

up to 4 times the quantified dollar value 

of the qualifying activity based on the 

OCC’s or FDIC’s determination of the 

activity’s responsiveness, 

innovativeness, or complexity. 

* * * * * 

§ 25.09 [Amended] 

■ 12. Section 25.09 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(a); 

■ b. Removing the word ‘‘it’’ from 

paragraph (c)(2)(v) and adding in its 

place the phrase ‘‘the bank’’; 

■ c. In paragraph (e): 

■ i. Removing the phrase ‘‘will consist’’ 

from the first sentence and adding in its 

place the word ‘‘consists’’; and 

■ ii. Adding the phrase ‘‘assessed under 

the general performance standards in 

§ 25.13’’ after the word ‘‘bank’’ in the 

second sentence; and 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(g) 

■ 13. Section 25.10 is amended by: 

78266 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a) introductory 

text; 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(1)(i); 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(1)(ii); 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(1)(iii); 

■ e. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(2)(i); 

■ f. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(2)(ii); 

■ g. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(2)(iii); 

■ h. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(3)(i); 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(3)(ii); 

■ j. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(a)(4); 

■ k. Revising the last sentence of 

paragraph (b); and 

■ l. Removing the word ‘‘anticipates’’ 

and adding the phrase ‘‘and FDIC 

anticipate’’ in paragraph (c). 

The revision reads as follows: 

§ 25.10 Performance standards and 

ratings, in general. 

* * * * * 

(b)* * *A small, intermediate, 

wholesale, or limited purpose bank that 

opts out from the general performance 

standards will be evaluated according to 

the performance standards described in 

paragraphs (a)(2) and (a)(3) of this 

section, as applicable, unless the bank is 

evaluated under an approved strategic 

plan as described under (a)(4) of this 

section. 

* * * * * 

§ 25.11 [Amended] 

■ 14. Section 25.11 is amended by 

removing ‘‘§ 25.08(c);’’ in paragraph 

(c)(1) and adding ‘‘§ 25.08(c)’’ in its 

place. 

§ 25.12 [Amended] 

■ 15. Section 25.12 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a) introductory 

text; 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1) introductory 

text; 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(2) introductory 

text; 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(3) introductory 

text; 

■ e. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c)(1) introductory 

text; 

■ f. In paragraph (c)(2): 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’; and 

■ ii. Removing the phrase ‘‘demographic 

borrower comparator or the associated’’ 

and adding in its place ‘‘borrower 

demographic comparator or the 

associated borrower’’; 

■ g. In paragraph (c)(3): 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’; and 

■ ii. Removing the phrase ‘‘demographic 

borrower comparator or the associated’’ 

and adding in its place ‘‘borrower 

demographic comparator or the 

associated borrower’’; 

■ h. In paragraph (c)(4) introductory 

text: 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’; and 

■ ii. Removing the phrase ‘‘demographic 

borrower comparator or the associated’’ 

and adding in its place ‘‘borrower 

demographic comparator or the 

associated borrower’’. 

■ 16. Section 25.13 is amended by: 

■ a. Removing the word ‘‘in’’ and 

adding in its place ‘‘in—’’ in paragraph 

(c)(1)(ii)(B) introductory text; 

■ b. Removing the word ‘‘in’’ and 

adding in its place ‘‘in—’’ in paragraph 

(c)(2)(ii)(A) introductory text; 

■ c. Removing the word ‘‘in’’ and 

adding in its place ‘‘in—’’ in paragraph 

(c)(2)(ii)(B) introductory text; 

■ d. Removing the phrase ‘‘divided by’’ 

in paragraph (c)(2)(iii) and adding 

‘‘divided by’’ in its place; 

■ e. Removing the phrase ‘‘substantial 

noncompliance standard’’ in paragraph 

(c)(4) and adding in its place the phrase 

‘‘substantial noncompliance 

performance standard’’; 

■ f. Removing the phrase ‘‘average 

assessment area CRA evaluation 

measure’’ in paragraph (d)(2)(ii) and 

adding in its place the phrase ‘‘average 

annual assessment area CRA evaluation 

measure’’; 

■ g. Removing the phrase ‘‘average 

assessment area CRA evaluation 

measure’’ in paragraph (d)(3) and 

adding in its place the phrase ‘‘average 

annual assessment area CRA evaluation 

measure’’; 

■ h. Removing the phrase ‘‘average 

assessment area CRA evaluation 

measure’’ in paragraph (d)(4) and 

adding in its place the phrase ‘‘average 

annual assessment area CRA evaluation 

measure’’; and 

■ i. Adding paragraph (e). 

The addition reads as follows: 

§ 25.13 General performance standards 

and presumptive rating. 

* * * * * 

(e) OCC approach to setting CRA 

evaluation measure benchmarks, retail 

lending distribution test thresholds, and 

community development minimums. 

Based on the activity data collected 

from banks that are subject to the 

general performance standards, the OCC 

will calculate historic CRA activity 

levels and corresponding performance 

ratings under the general performance 

standards had they been in place. Based 

on this analysis, the OCC will set the 

CRA evaluation measure benchmarks, 

retail lending distribution test 

thresholds, and community 

development minimums such that the 

proportion of banks receiving 

hypothetical presumptive ratings of 

outstanding and satisfactory is no 

greater than the historical proportion of 

banks that received assigned ratings of 

outstanding and satisfactory. 

§ 25.14 [Amended] 

■ 17. Section 25.14 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(1); 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(2); and 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (d). 

§ 25.15 [Amended] 

■ 18. Section 25.15 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a); 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(b); 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c) introductory 

text; 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (d)(1); 

■ e. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (d)(2); and 

■ f. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (e). 

■ 19. Section 25.16 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a) introductory 

text; 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b) introductory 

text; 

■ c. Removing the period at the end of 

paragraph (b)(3) and adding in its place 

a semicolon; 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(4); 

■ e. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(5); 

■ f. Removing the phrase ‘‘including for 

each assessment area.’’ in paragraph (c) 

and adding in its place the phrase 

‘‘including for each assessment area.’’; 

and 

■ g. Adding paragraph (d). 

The addition reads as follows: 

§ 25.16 Consideration of performance 

context. 

* * * * * 

(d) Declines in CRA performance. In 

assessing a bank’s performance, the OCC 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78267 

considers whether there has been a 

decline of 10% or greater in a bank’s 

performance on the general performance 

standards as calculated based on 

historical data between the 

establishment of the objective 

benchmarks, thresholds, and minimums 

and the bank’s first evaluation under the 

general performance standards. Declines 

that cannot be explained by market 

conditions or other factors under 

paragraph (b) of this section may 

warrant a downward adjustment in 

determining the bank’s assigned rating. 

§ 25.17 [Amended] 

■ 20. Section 25.17 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’s’’ after 

‘‘OCC’s’’ in paragraph (a) introductory 

text; and 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b). 

§ 25.18 [Amended] 

■ 21. Section 25.18 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a) introductory 

text; 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(1); 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a)(2); 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(2); 

■ e. In paragraph (c): 

■ i. Adding the phrase ‘‘or FDIC’s’’ after 

‘‘OCC’s’’; 

■ ii. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears; 

■ f. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (d)(1); 

■ g. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (e) introductory 

text; 

■ h. Adding the phrase ‘‘or FDIC’s’’ after 

‘‘OCC’s’’ in paragraph (e)(1); 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(f); 

■ j. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(g)(3); 

■ k. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(g)(4); 

■ l. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(h)(1); 

■ m. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (h)(2); 

■ n. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (h)(3); and 

■ o. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(i). 

■ 22. Section 25.19 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ and removing the comma after 

‘‘§ 25.16’’ in paragraph (a)(1); and 

■ b. Revising paragraphs (a)(2) and (b). 

The revisions read as follows: 

§ 25.19 Assigned ratings. 

(a)* * * 

(2) Assessment area assigned 

rating(s). The OCC or FDIC determines 

the assessment area assigned rating(s) 

for a bank evaluated under § 25.13 based 

on its assessment area presumptive 

rating(s) under § 25.13, adjusted for 

performance context under § 25.16 and 

consideration of discriminatory or other 

illegal credit practices under § 25.17. 

(b) Strategic plans assigned rating(s). 

A bank operating under a strategic plan 

will receive, as applicable, an assigned 

rating, assessment area assigned 

rating(s), and state-level and multistate 

metropolitan statistical area assigned 

rating(s) of satisfactory or outstanding if 

it has met the measurable goals in the 

plan that correspond to those ratings 

after considering performance context 

under § 25.16 and discriminatory or 

other illegal credit practices under 

§ 25.17. 

§ 25.20 [Amended] 

■ 23. Section 25.20 is amended by: 

■ a. Removing the phrase ‘‘assigned 

rating’’ from the heading and adding in 

its place the phrase ‘‘assigned rating(s)’’; 

and 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’. 

§ 25.21 [Amended] 

■ 24. Section 25.21 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a); 

■ b. Removing the phrase ‘‘evaluated in 

the assessment area’’ and adding in its 

place the phrase ‘‘evaluated in each 

assessment area’’ in paragraph (b)(1); 

■ c. Removing the phrase ‘‘paragraph 

(c)(8) of this section’’ in paragraph (c)(1) 

introductory text and adding in its place 

the phrase ‘‘paragraph (c)(9) of this 

section’’; 

■ d. In paragraph (c)(7): 

■ i. Redesignating paragraphs (c)(7)(iii) 

through (viii) as paragraphs (c)(7)(iv) 

through (ix); and 

■ ii. Redesignating the second instance 

of paragraph (c)(7)(ii) as paragraph 

(c)(7)(iii); 

■ e. Removing the phrase ‘‘qualifies 

under § 25.04(a)(1)(3)’’ in paragraph 

(c)(9) introductory text and adding in its 

place the phrase ‘‘qualifies under 

§ 25.04(a)(3)’’; and 

■ f. Removing the phrase ‘‘on the date’’ 

in paragraph (c)(9)(vii) and adding in its 

place the word ‘‘conducted’’. 

§ 25.23 [Amended] 

■ 25. Section 25.23 is amended by: 

■ a. Removing the phrase ‘‘community 

development service required’’ in the 

paragraph (b) heading and adding in its 

place ‘‘community development service 

data required’’; and 

■ b. Removing the phrase ‘‘qualifies 

under § 25.04(d)’’ in paragraph (b)(4) 

introductory text and adding in its place 

the phrase ‘‘qualifies under 

§ 25.04(a)(3)’’. 

§ 25.25 [Amended] 

■ 26. Section 25.25 is amended by 

adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’. 

§ 25.26 [Amended] 

■ 27. Section 25.26 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a); 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1)(i) 

introductory text; 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1)(ii) 

introductory text; 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1)(iii); 

■ e. In paragraph (c): 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’; and 

■ ii. Removing ‘‘§ 25.21(e)’’ and adding 

in its place ‘‘§ 25.23(d)’’. 

■ 28. Section 25.27 is amended in 

paragraph (b) by: 

■ a. Removing in the introductory text 

the phrase ‘‘subject to reporting under 

this part’’ and adding in its place the 

phrase ‘‘evaluated under § 25.13’’; 

■ b. Redesignating paragraphs (b)(2) 

through (10) as paragraphs (b)(3) 

through (11); and adding a new 

paragraph (b)(2). 

The addition reads as follows: 

§ 25.27 Public disclosures. 

* * * * * 

(b) * * * 

(2) The number of home mortgage 

loans in low- and moderate-income 

census tracts; 

* * * * * 

§ 25.28 [Amended] 

■ 29. Section 25.28 is amended by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ wherever it appears in paragraph 

(a)(2); and 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1). 

§ 25.29 [Amended] 

■ 30. Section 25.29 is amended by 

adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’. 

Appendix A to Part 25 [Amended] 

■ 31. Appendix A to part 25 is amended 

by: 

■ a. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (a); 

78268 Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 

■ b. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(1)(i) 

introductory text; 

■ c. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(2)(i); 

■ d. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(2)(ii); 

■ e. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (b)(3)(ii)(B); 

■ f. Removing the phrase ‘‘assigned 

rating’’ after ‘‘substantial 

noncompliance’’ in paragraph (b)(3)(iii); 

■ g. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c) introductory 

text; 

■ h. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c)(1) introductory 

text; 

■ i. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c)(2) introductory 

text; 

■ j. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c)(3) introductory 

text; and 

■ k. Adding the phrase ‘‘or FDIC’’ after 

‘‘OCC’’ in paragraph (c)(4) introductory 

text. 

■ 32. Revise appendix B to part 25 to 

read as follows: 

Appendix B to Part 25—Community 

Reinvestment Act Notice 

Under the Federal Community 

Reinvestment Act (CRA), the [Office of 

the Comptroller of the Currency (OCC) 

or Federal Deposit Insurance 

Corporation (FDIC)] evaluates our 

record of helping to meet the credit 

needs of this community, consistent 

with safe and sound operations. The 

[OCC or FDIC] also takes this record into 

account when deciding on certain 

applications submitted by us. 

Your involvement is encouraged. 

You are entitled to certain 

information about our operations and 

our performance under the CRA, 

including, for example, information 

about our branches, such as their 

location and services provided at them; 

the public section of our most recent 

CRA Performance Evaluation, prepared 

by the [OCC or FDIC]; and comments 

received from the public relating to 

assessment area needs and 

opportunities, as well as our responses 

to those comments. You may review this 

information today by reviewing the 

public file which is available at (web 

address and/or physical address at 

which the public file can be reviewed 

and copied). 

You may also have access to the 

following additional information, which 

we will make available to you after you 

make a request to us: (1) A map showing 

the assessment area containing a select 

branch, which is the area in which the 

[OCC or FDIC] evaluates our CRA 

performance for that particular 

community; (2) branch addresses and 

associated branch facilities and hours in 

any assessment area; (3) a list of services 

we provide at those locations; (4) our 

most recent rating in the assessment 

area; and (5) copies of all written 

comments received by us that 

specifically relate to the needs and 

opportunities of a given assessment 

area, and any responses we have made 

to those comments. If we are operating 

under an approved strategic plan, you 

may also have access to a copy of the 

plan. 

At least 30 days before the beginning 

of each quarter, the [OCC or FDIC] 

publishes a nationwide list of the (entity 

type) that are scheduled for CRA 

examination in that quarter. This list is 

available from the [OCC Deputy 

Comptroller (address) or FDIC 

appropriate regional director (address)]. 

You may send written comments 

regarding the needs and opportunities of 

any of the (entity type)’s assessment 

area(s) to (name, address, and email 

address of official at bank) and [OCC 

Deputy Comptroller (address and email 

address) or FDIC appropriate regional 

director (address and email address)]. 

Your comments, together with any 

response by us, will be considered by 

the [OCC or FDIC] in evaluating our 

CRA performance and may be made 

public. 

You may ask to look at any comments 

received by the [OCC Deputy 

Comptroller or FDIC appropriate 

regional director]. You may also request 

from the [OCC Deputy Comptroller or 

FDIC appropriate regional director] an 

announcement of our applications 

covered by the CRA filed with the [OCC 

or FDIC]. [(We are an affiliate of (name 

of holding company), a (entity type) 

holding company. You may request 

from the (title of responsible official), 

Federal Reserve Bank of 

lllll(address) an announcement 

of applications covered by the CRA filed 

by (entity type) holding companies.)] 

Appendix C to Part 25 [Amended] 

■ 33. Appendix C to part 25 is amended 

by: 

■ a. Removing the phrase ‘‘pursuant 

part 1003 of this title’’ in § 25.43(b)(2) 

and adding in its place the phrase 

‘‘pursuant to part 1003 of this title’’; and 

■ b. Removing the phrase ‘‘pursuant 

part 1003 of this title’’ in § 195.43(b)(2) 

and adding in its place the phrase 

‘‘pursuant to part 1003 of this title’’. 

PART 35—DISCLOSURE AND 

REPORTING OF CRA–RELATED 

AGREEMENTS 

■ 34. The authority citation for part 35 

continues to read as follows: 

Authority: 12 U.S.C. 1, 93a, 1462a, 1463, 

1464, 1831y, and 5412(b)(2)(B). 

§ 35.1 [Amended] 

■ 35. Section 35.1 is amended by 

removing the phrase ‘‘or part 195 

(Community Reinvestment)’’ from 

paragraph (c). 

■ 36. Section 35.4 is amended by 

revising paragraph (a)(2). 

The revision reads as follows: 

§ 35.4 Fulfillment of the CRA. 

(a)* * * 

(2) Activities given favorable CRA 

consideration. Performing any of the 

following activities if the activity is of 

the type that is likely to receive 

favorable consideration by a Federal 

banking agency in evaluating the 

performance under the CRA of the 

insured depository institution that is a 

party to the agreement or an affiliate of 

a party to the agreement— 

(i) Retail loans, community 

development loans, community 

development investments, and 

community development services, as 

described in § 25.04 (12 CFR 25.04) or 

12 CFR part 25, Appendix C, § 25.22 or 

§ 25.23, as applicable; 

(ii) Delivering retail banking services, 

as described in 12 CFR part 25, 

Appendix C, § 25.24(d); 

(iii) In the case of a wholesale or 

limited-purpose insured depository 

institution, community development 

lending, including originating and 

purchasing loans and making loan 

commitments and letters of credit, 

making community development 

investments, or providing community 

development services, as described in 

§ 25.15(c) (12 CFR 25.15(c)) or 12 CFR 

part 25, Appendix C, § 25.25(c), as 

applicable; 

(iv) In the case of a small insured 

depository institution, any lending or 

other activity described in § 25.14(a) (12 

CFR 25.14(a)) or 12 CFR part 25, 

Appendix C, § 25.26(a), as applicable; or 

(v) In the case of an insured 

depository institution that is evaluated 

on the basis of a strategic plan, any 

element of the strategic plan, as 

described in § 25.18(g) (12 CFR 25.18(g)) 

or 12 CFR part 25, Appendix C, 

§ 25.27(f), as applicable. 

* * * * * 

■ 37. Effective January 1, 2024, revise 

paragraph (a)(2) to read as follows: 

§ 35.4 Fulfillment of the CRA. 

(a)* * * 

Federal Register / Vol. 85, No. 234 / Friday, December 4, 2020 / Proposed Rules 78269 

1 77 FR 31993 (May 31, 2012). 

2FFIEC, Uniform Retail Credit Classification and 

Account Management Policy, 65 FR 36903 (June 12, 

2000). 

(2) Activities given favorable CRA 

consideration. Performing any of the 

following activities if the activity is of 

the type that is likely to receive 

favorable consideration by a Federal 

banking agency in evaluating the 

performance under the CRA of the 

insured depository institution that is a 

party to the agreement or an affiliate of 

a party to the agreement— 

(i) Retail loans, community 

development loans, community 

development investments, and 

community development services, as 

described in § 25.04 (12 CFR 25.04); 

(ii) In the case of a wholesale or 

limited-purpose insured depository 

institution, community development 

lending, including originating and 

purchasing loans and making loan 

commitments and letters of credit, 

making community development 

investments, or providing community 

development services, as described in 

§ 25.15(c) (12 CFR 25.15(c)); 

(iii) In the case of a small insured 

depository institution, any lending or 

other activity described in § 25.14(a) (12 

CFR 25.14(a)); or 

(iv) In the case of an insured 

depository institution that is evaluated 

on the basis of a strategic plan, any 

element of the strategic plan, as 

described in § 25.18(g) (12 CFR 

25.18(g)). 

* * * * * 

§ 35.6 [Amended] 

■ 38. Section 35.6 is amended by 

removing the phrase ‘‘set forth in 

§ 25.43 (12 CFR 25.43)’’ in paragraph 

(b)(7) and adding in its place ‘‘set forth 

in § 25.28 (12 CFR 25.28) or 12 CFR part 

25, Appendix C, § 25.43, as applicable’’. 

§ 35.11 [Amended] 

■ 39. Section 35.11 is amended by 

removing the phrase ‘‘described in 

§ 25.43 (12 CFR 25.43)’’ in paragraph (d) 

and adding in its place the phrase 

‘‘described in § 25.28 (12 CFR 25.28) or 

12 CFR part 25, Appendix C, § 25.43, as 

applicable’’. 

PART 192—CONVERSIONS FROM 

MUTUAL TO STOCK FORM 

■ 40. The authority citation for part 192 

continues to read as follows: 

Authority: 12 U.S.C. 1462a, 1463, 1464, 

1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 

78c, 78l, 78m, 78n, 78w. 

§ 192.200 [Amended] 

■ 41. Section 192.200 is amended by 

removing the phrase ‘‘under 12 CFR part 

195’’ in paragraph (c) introductory text 

and adding in its place ‘‘under part 25’’. 

Brian P. Brooks, 

Acting Comptroller of the Currency. 

[FR Doc. 2020–26394 Filed 12–3–20; 8:45 am] 

BILLING CODE 4810–33–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 741 

[NCUA 2020–0114] 

RIN 3133–AF30 

Capitalization of Interest in Connection 

With Loan Workouts and Modifications 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: The NCUA Board (Board) 

seeks public comment on a proposed 

rule to amend its regulations by 

removing the prohibition on the 

capitalization of interest in connection 

with loan workouts and modifications. 

The Board has determined that the 

current prohibition on authorizing 

additional advances to finance unpaid 

interest may be overly burdensome and, 

in some cases, hamper a federally 

insured credit union’s (FICU’s) goodfaith efforts to engage in loan workouts 

with borrowers facing difficulty because 

of the economic disruption that the 

COVID–19 pandemic has caused. 

Advancing interest may avert the need 

for alternative actions that would be 

more harmful to borrowers. The 

proposed rule would establish 

documentation requirements to help 

ensure that the addition of unpaid 

interest to the principal balance of a 

mortgage loan does not hinder the 

borrower’s ability to become current on 

the loan. The proposed change would 

apply to workouts of all types of 

member loans, including commercial 

and business loans. The Board has also 

taken this opportunity to make several 

technical changes to the Appendix to 

improve its clarity and update certain 

references. For the convenience of 

readers, the Board is republishing the 

Appendix in its entirety so that the 

changes may be viewed in the context 

of the full document. 

DATES: Comments must be received on 

or before February 2, 2021. 

ADDRESSES: You may submit written 

comments, identified by RIN 3133– 

AF30, by any of the following methods 

(Please send comments by one method 

only): 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments 

for NCUA 2020–0114. 

• Fax: (703) 518–6319. Include 

‘‘[Your Name]—Comments on 

‘‘Proposed Rule: Capitalization of 

Interest in Connection with Loan 

Workouts and Modifications’’ in the 

transmittal. 

• Mail: Address to Melane ConyersAusbrooks, Secretary of the Board, 

National Credit Union Administration, 

1775 Duke Street, Alexandria, Virginia 

22314–3428. 

Public Inspection: You may view all 

public comments on the Federal 

eRulemaking Portal (http://

www.regulations.gov) as submitted, 

except for those we cannot post for 

technical reasons. The NCUA will not 

edit or remove any identifying or 

contact information from the public 

comments submitted. Due to social 

distancing measures in effect, the usual 

opportunity to inspect paper copies of 

comments in the NCUA’s law library is 

not currently available. After social 

distancing measures are relaxed, visitors 

may make an appointment to review 

paper copies by calling (703) 518–6540 

or emailing OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Scott Neat, Associate Director of the 

Office of Examination and Insurance, at 

(703) 518–6360; and Ariel Pereira and 

Gira Bose, Staff Attorneys, Office of 

General Counsel, at (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

I. Background 

II. Legal Authority 

III. Summary of the Proposed Rule 

IV. Regulatory Procedures 

I. Background 

A. May 2012 Adoption of the Loan 

Workout and Accrual and TDR 

Requirements 

In May 2012, the Board published a 

final rule on loan workout policies and 

monitoring requirements that applies to 

all FICUs. The rule also established 

requirements for nonaccrual policies, 

and for regulatory reporting of troubled 

debt restructurings (TDRs).1 The Board 

noted that the May 2012 final rule was 

similar to guidance set forth in an 

interagency policy statement issued by 

the banking agencies of the Federal 

Financial Institutions Examination 

Council (FFIEC) on June 12, 2000,2

though the NCUA did not join the 

agencies in issuing the statement. 

The May 2012 final rule, codified in 

Appendix B to Part 741 of the NCUA’s