Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, released the following statement on the Office of the Comptroller of the Currency’s decision to rescind the 2020 Community Reinvestment Act rule and work with the Federal Deposit Insurance Corporation and the Federal Reserve to draft a new rule.
“Civil rights laws like the Community Reinvestment Act (CRA) are supposed to ensure that communities that have long been ignored get the investment they need, families can access homeownership, and consumers and small businesses get credit on fair, equal terms.
“It is a shame that the Trump Administration, under former Comptroller Joseph Otting’s direction, attempted to gut the CRA, which would have prevented low- and moderate-income communities from getting access to credit and investment for generations to come. Moreover, Otting took a “go it alone” approach to this rewrite: refusing to work collaboratively with his fellow regulators, ignoring feedback from community groups, and dismissing the concerns of Congress. This is why I pulled out all the stops to kill Otting’s proposal. The Committee held extensive hearings on Otting’s proposal; Committee Democrats crashed a meeting of regulators on the proposal; and the House ultimately passed a resolution of disapproval of Otting’s misguided rule.
“Today, I am pleased to say that efforts have born fruit and Otting’s attempts to destroy the CRA have been short-lived. Under new leadership the OCC has rightfully determined that the appropriate place for Otting’s rule is in the dustbin of history.
“I look forward to working closely with the OCC, Federal Reserve, and FDIC as they develop a new proposed rule that should strengthen the law’s application. I also plan to develop legislation enhancing the CRA to ensure that we realize the law’s full potential to finally put an end to discriminatory practices, such as redlining.”
On April 9, 2019, the Consumer Protection and Financial Institutions Subcommittee convened a hearing entitled, “The Community Reinvestment Act: Assessing the Law’s Impact on Discrimination and Redlining.”
On December 12, 2019, Chairwoman Waters led a delegation of the Committee in attending a public meeting of the FDIC’s Board of Directors where CRA was on the agenda.
The Members’ trip to the FDIC followed a letter sent to banking regulators led by Chairwoman Waters and then Consumer Protection and Financial Institutions Subcommittee Chairman Gregory Meeks (D-NY) and signed by all 34 Committee Democrats, along with all 12 Senate Banking Committee Democrats led by Ranking Member Sherrod Brown (D-OH). The letter, addressed to FDIC Chairman McWilliams, Federal Reserve Chairman Jerome Powell, and OCC Comptroller Joseph Otting, calls on the regulators to, at a minimum, include a public comment period of at least 120 days for any proposal reforming CRA to ensure it gets a full vetting and that all interested parties have an opportunity to analyze and comment on the proposal.
On January 14, 2020, the Subcommittee on Consumer Protection and Financial Institutions, then chaired by Rep. Gregory Meeks (D-NY), convened a hearing with stakeholders testifying entitled, “The Community Reinvestment Act: Reviewing Who Wins and Who Loses with Comptroller Otting’s Proposal.”
On January 15, 2020, Chairwoman Waters opened an investigation into potential astroturfing efforts to influence the OCC and FDIC’s CRA rulemaking, demanding the agencies explain efforts to ensure legitimacy of the rulemaking process.
On January 29, 2020, Chairwoman Waters convened a hearing entitled, “The Community Reinvestment Act: Is the OCC Undermining the Law’s Purpose and Intent?” with Comptroller Otting testifying as the sole witness.
On February 6, 2020, the Oversight and Investigations Subcommittee, chaired by Rep. Al Green (D-TX), convened a hearing with stakeholders entitled, “Fake It Till They Make It: How Bad Actors Use Astroturfing to Manipulate Regulators, Disenfranchise Consumers and Subvert the Rulemaking Process.” As part of the hearing, witnesses discussed allegations that Comptroller Otting, when he was the CEO of OneWest Bank, may have been involved in fabricating comments in support of OneWest’s merger with CIT.
On February 24, 2020, in response to efforts by Chairwoman Waters and Committee Democrats to ensure the public had enough time to provide comment on the OCC and FDIC’s Notice of Proposed Rulemaking to overhaul CRA regulations, the agencies announced a 30 day extension of the comment period.
On March 6, 2020, the Subcommittee on Consumer Protection and Financial Institutions, chaired by Rep. Gregory Meeks (D-NY), convened a field hearing with stakeholders in Queens, New York, entitled, “Modern-Day Redlining: the Burden on Underbanked and Excluded Communities in New York.”
On April 7, 2020, Chairwoman Waters led a letter signed by all other Committee Democratic Members to Comptroller Otting and Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation (FDIC), urging them to prioritize a strong response to the COVID-19 pandemic and suspend efforts to revise the Community Reinvestment Act and any unrelated rulemakings.
On June 29, 2020, the House of Representatives passed H.J. Res 90, a Congressional Review Act resolution of disapproval to nullify the OCC’s harmful Community Reinvestment Act rule introduced by Chairwoman Waters and Rep. Meeks.