Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, made the following statement in response to the Office of the Comptroller of the Currency’s (OCC) issuance of a final rule weakening the implementation of the Community Reinvestment Act (CRA):
“It is simply outrageous that in the midst of the Coronavirus pandemic and on his way out the door, Comptroller Otting has rushed out a final Community Reinvestment Act (CRA) rule that will be harmful for so many communities across the country at a time when they are under severe distress due to the pandemic. The CRA is a critical law that was designed to combat discriminatory practices, such as redlining, by requiring banks to lend responsibly and make investments in the communities where they are located. This ill-advised rule badly weakens the implementation of the law and ultimately turns the Community Reinvestment Act into the Community Disinvestment Act.
“Gutting CRA has been Otting’s priority from day one. Now that he’s done that with this rule, it appears that he will be resigning from the OCC. This confirms my long-held suspicions that his singular focus on CRA was simply a vendetta against a program and an agency that held him accountable for his poor management of OneWest’s CRA program. Otting may be done with his rule dismantling CRA but this is by no means the end of the story. Congress will not let this final rule stand.”
On April 7, 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 March 6, 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 February 24, 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 February 6, 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 January 29, 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 January 15, 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 14, the Subcommittee on Consumer Protection and Financial Institutions, 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.”
In December 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 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.