Consumer Compliance Outlook: Fourth Quarter 2010

Public Hearings on the Community Reinvestment Act (CRA) and Home Mortgage Disclosure Act (HMDA)

Congress enacted the CRA to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. The Board of Governors (Board) of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Office of Thrift Supervision (the agencies) have rulemaking authority under the CRA to issue implementing regulations for the institutions they supervise. The agencies are working together to update their regulations to reflect changes in the financial services industry, changes in how banking services are delivered to consumers today, and current housing and community development needs. To inform their revision of the CRA's implementing regulations, the agencies held four public hearings earlier this year in Arlington, VA; Atlanta; Chicago; and Los Angeles. The Board also invited members of the public to submit written comment on the hearing issues.

Each agency hosted a hearing. The hearing in Chicago, which the Board coordinated, focused on geographic coverage, CRA performance tests, asset thresholds, designations, and affiliate activities. The agencies also discussed and solicited written comment on the following topics: small business and consumer lending evaluations and data; access to banking services; community development; ratings and incentives; the effect of evidence of discriminatory or other illegal credit practices on CRA performance evaluations; and CRA disclosures and performance evaluations. The comment period closed on August 31, 2010. Information about the hearing, including comments, agendas, transcripts, and/or audio or video recordings, is available on the Board's website.

In addition to the CRA hearings, the Board conducted four public hearings in Atlanta, San Francisco, Chicago, and Washington, D.C., to gather information for its comprehensive review of Regulation C, which implements the HMDA. HMDA requires mortgage lenders to collect information about their mortgage lending activity and report it to their supervisory agency and the public.

Consumers, community and consumer advocacy organizations, mortgage lenders, and other interested parties were invited to participate in the hearings. HMDA discussion topics included data elements, including the new elements required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, coverage, scope, and compliance and technical issues as well as emerging issues. In addition, panelists were asked to identify ways to improve the quality and usefulness of HMDA data, including whether any data elements should be added, modified, or deleted, and their views on the burdens and possible privacy risks associated with collecting and reporting that information.

The HMDA comment period closed August 20, 2010; however, information about the hearings and public comments can be accessed on the Board's HMDA web page. External Link