A top federal bank regulator on Wednesday released a sweeping revision of anti-redlining rules Wednesday amid reports about his pending resignation, spurring alarm and confusion among the banking industry and its critics.
The Office of the Comptroller of the Currency (OCC) unveiled new rules for banks and regulators to follow under the Community Reinvestment Act (CRA), a 1977 law that requires banks to serve low-income communities and finance loans and projects in areas historically neglected by the financial sector.
The OCC and Federal Deposit Insurance Corporation (FDIC) unveiled a joint proposal in December to update CRA regulations, which are widely acknowledged by the industry and consumer advocates as outdated. The CRA regime has not been substantially revised since 1995, well before the internet fundamentally reshaped consumer banking.
But Comptroller of the Currency Joseph Otting released the final version of those rules Wednesday without the FDIC on board, and just hours after several media outlets reported that he planned to resign this week. Otting was also absent from a Wednesday call with reporters about the CRA proposal, a surprise given his intense focus on revamping the law and his history of accessibility with the media.
“He’s spent every waking day of his controllership on this rule but he’s not available,” said OCC chief operating officer Brian Brooks, the agency’s second in charge, when asked why Otting wasn’t on the call.
Bryan Hubbard, deputy comptroller for public affairs, said in an email that Otting “was making other calls on the subject” and the agency is “not confirming or commenting on what personal plans he may have.”
A financial industry source told The Hill that Otting had been expected to leave before his five-year term ended in 2022 and likely before January 2021.
Yet Otting’s decision to break from other financial regulators and release a controversial rewrite of federal banking rules on his way out the door in the middle of a pandemic left advocates and lawmakers scratching their heads.
“What the impact is, given they went alone and it is expected to face legal challenges, is questionable,” said the financial industry source.
Otting, a former banker and business partner of Treasury Secretary Steven MnuchinSteven Terner MnuchinBolton alleges Trump said it’d be ‘cool’ to invade Venezuela On The Money: Powell urges Congress to continue boosted jobless benefits ‘in some form’ | Trade chief denies Bolton claim that Trump asked Xi for election help | Trump administration releases new PPP loan forgiveness forms Overnight Energy: Senate passes major lands conservation bill | Mnuchin ordered to give Native American tribes full stimulus funding | Key Republican jeopardizes Trump consumer safety nominee MORE, made a rewrite of the CRA regulations the primary focus of his stint at OCC. Banks that fail to…