Otting has taken the lead in making the first revision since the 1990s of a controversial law that banks and community groups have criticized as outdated given the advent of the internet. Banks have also sought more certainty as to what will count for CRA credit, saying the criteria are often arbitrary and sometime decided long after loans are made.
The law was passed in 1977 to combat discrimination against poor and minority communities, a historic practice known as redlining.
The FDIC board is not scheduled to meet this week, leaving open the possibility that Otting might be acting alone, an unusual approach considering the importance of the regulation.
The finalized version of the CRA rule, expected Wednesday, will include a number of changes sought by its critics, but it will still determine a bank’s presumptive CRA grade using broad measures of how many loans it has made to low-income borrowers and how much it has invested in poorer areas, according to sources. That aspect of the overhaul has been the target of its most intense criticism.
However, there will not be specific numeric targets set for those metrics until the agency has the necessary data, sources said. The size threshold below which community banks can opt out of the current framework is also being raised to $600 million in assets.
Otting’s planned departure was earlier reported by The Wall Street Journal.
Brian Brooks, another former executive at OneWest Bank, is the agency’s first deputy comptroller and chief operating officer.
Source: politico.com
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