Warren Calls on Acting Comptroller of the Currency Brian Brooks to Withdraw Rule That Guts Nation's Anti-Redlining Law
Senator Calls for OCC to Restart Rulemaking Process, Work With Other Regulators to Strengthen Community Reinvestment Act
Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, wrote to Acting Comptroller of the Currency Brian Brooks regarding the hastily finalized and widely opposed final rule issued by the Office of the Comptroller of the Currency (OCC) to weaken the Community Reinvestment Act (CRA). The senator is calling on Acting Comptroller Brooks to withdraw the CRA final rule-which would gut the CRA and make it easier for banks to ignore and discriminate against minorities and the communities in which they live-and restart the rulemaking process once the COVID-19 pandemic has passed.
"I am writing today to urge you to withdraw this hastily-finalized rule and reaffirm the Office of the Comptroller of the Currency's (OCC) mission to ensure that banks 'operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,'" wrote Senator Warren.
The CRA was enacted to prevent redlining, the practice where banks systemically deny access to financial services to communities with large numbers of minorities and low-to-moderate income (LMI) individuals. The Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC), and OCC implement the CRA and conduct examinations of their regulated entities and issue credits when banks engage in certain small business, consumer, and mortgage lending activities, including community investments that would benefit minority communities and LMI areas. The performance ratings based on these credits are required to be considered by regulators when banks apply for charters, branches, or mergers and acquisitions.
Mr. Brooks assumed the office of Acting Comptroller after the resignation of former OCC head Joseph Otting. Shortly before announcing his resignation last month, Mr. Otting unilaterally rushed the release of a final rule that would dilute the CRA. The rule would give substantial weight to a dollar ratio metric that would make it easier for banks to pass their CRA exams without making the smaller dollar transactions that provide critical services to LMI and minority communities.
"During a time of nearly-unprecedented political polarization, Comptroller Otting managed to unite consumer and community groups, elected officials, outside experts, and the banking industry with agreement over how fundamentally flawed his plans were," the senator continued. "Mr. Otting's rushed rewrite of the CRA during a nationwide public health and economic emergency has failed every test of ethics, fairness, and competence. You now have an opportunity to undo this damage, and you should do so immediately."
In her letter, Senator Warren called on Acting Comptroller Brooks to immediately withdraw the rule and recuse himself from all future CRA rulemakings given his experience at OneWest Bank, which was sued by community groups for housing discrimination in 2017 and where Mr. Brooks served as Vice Chairman from 2011 to 2014. The senator also called for OCC-once a new permanent Comptroller is confirmed and the pandemic has passed-to work with the Fed and FDIC to develop and issue a new proposal that modernizes the CRA in a way that strengthens, and not undermines, the law's original intent.
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