CRA Reform: So Far More Strategic Flexibility Than Binding Substance

In this report, we expand our initial analysis of the CRA rule finalized by the OCC shortly before Comptroller Otting’s departure. This report is in lieu of an in-depth analysis in our Financial Services Management format because we do not think the rule as finalized will be practically implemented by most national banks due to delayed timelines, many outstanding questions set for future OCC guidance that may or may not come, legal challenge, and overarching political uncertainty. However, the final rule nonetheless has implications for strategic planning, most importantly for national-bank/federal-thrift branch applications, and new charter applicants able now to file CRA plans likely to be more consistent with innovative and/or fintech-focused charters. This may to some degree increase interest in the OCC’s special-purpose charter (see FSM Report FINTECH20), but broader market considerations and continuing Fed opposition to payment-system access will generally prevail.