ELIZABETH WARREN

UNITED STATES SENATE
WASHINGTON DC 20510-2105
p 202 224 -4543

MASSACHUSETTS

COMMITTEES

BANKING, HOUSING, AND URBAN AFFAIRS
HEALTH, EDUCATION, LABOR, ANO PENSIONS

tinitrd ~tetcs ~mate

ARMED SERVICES

2400 JFK FEDERAL BUILDING
15 NEW SUDBURY STREH
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SPRINGFIELD, MA 011 03
p 413 788 2690

SPECIAL COMMITIEE ON AGING

Apri l 24, 20 18

www warren senate gov

The Honorable Joseph M. Otting
Office of the Comptroller of the Currency
400 7th Street, SW
Washington DC, 20219
Dear Comptroller Otting,
On March 30, President Trump declared April 2018 as National Fair Housing Month and
announced that his Administration "intends to deliver on the promise outlined by the Fair
Housing Act, by ending prejudice and unlawful discriminatory practices in the sale, lease, and
fi nancing of housing." 1 As one of the agencies charged with ensuring compliance with the
Community Reinvestment Act (CRA), a law designed to address the disgraceful historical
practice of redlining,2 the Office of Comptroller of the Currency (OCC) has a critical role in
making sure that the institutions it supervises are servi ng their customers fa irly. I am writing to
request information about how the OCC is executing this mission.
Fifty years after the Fair Housing Act became law, housing discrimination remains a
serious problem in the United States. According to a recent study by the Center for Investigative
Reporting and Reveal , minority borrowers are more likely to be denied a mortgage than similar
white borrowers in 61 metropolitan areas--even after controlling for loan amounts,
neighborhoods, and applicants' income.3 To combat housing and lending discrimination, it is
critical that federal regulators uphold and enforce the rules put in place to protect American
communities.
However, in spite of the nation's ongoing problem of housing discrimination, there are
efforts underway to weaken, rather than strengthen, key federal housing statutes. The OCC has
taken steps to undermine the CRA, a Jaw enacted to curb lending discrimination and to ensure
that banks help meet the credit " needs of the communities in which they are chartered to do
business.'"' The OCC, one of three primary regulators tasked with developing regulations and

1
President Donald J. Trump, " President Donald J. Trump Proclaims April 2018 as National Fair Housing Month,"
The White House (March 30, 2 0 18) (Online at: https://www.whitehouse.i?ov/presidential-actions/president-donald-jtrump-proclaims-april-2018-national-fair-housing-monthD.
2 " History of the CRA," Federal Reserve Bank of Minneapolis (Online at:
https://www.minneapolisfed.org/community/cra-resources/history-of-the-cra-new).
3 Aaron Glantz and Emmanuel Martinez, "For people of color, banks are shutting the door to homeownership,"
Reveal (February 15, 2018) (Online at: https://www.revealnews.org/article/for-people-of-color-banks-are-shuttingthe-door-to-homeownershipO.
4
12 U.S.C. § 2901

 evaluatit1g banks' complia11ce vvitl1 t11c CRA,5 issued a new Policies ai1d Procedures Mantia]
(PPM) in October 2017 "softe11[ing] a policy for pt1nishing banks suspected of discrimi11atory
lending." 6 Under this new policy, OCC \Vould not be able to downgrade a bank's rating by "more
tl1an one rating level," regardless of the severity or magnitude of its discri1ninatory or illegal
practice, and \vould not be able to downgrade a bank until "full consideration is given to the
rc1nedial actions taken by the bank. " 7 This means that if a bank ''has taken or l1as committed to
take'' corrective action, •'inclu<li11g voluntary corrective action resulting from self-assessn1ent," 8
it could potentially be exen1pt fron1 a downgrade. It is dangerous a11d wrong to let institutions
that have been accused of discrimination avoid penalization because they pron1ise to take
remedial action.
Gi\'en the OCC's recent efforts to weaken the enforcen1ent of federal housing statutes, I
a1n concerned abotit tl1e agency's ability to fulfill the President's vow to "deliver on the pron1ise
outli11ed by the Fair I-lousing Act." In order to better u11derstand the OCC's comn1itn1e11t to
combating housi11g discrin1i11ation I ask that you provide answers to the following questions no
later than May 8, 2018:
1. Recent repo11s indicate that OCC is close to releasing "an interagency redo" of the CRA
in coordi11ation with the Federal Reserve a11d tl1e Federal Deposit Insurance Corporation. 9
Please list any m1d all changes OCC plans on making to rules and regulations goven1ing
CRA enforcen1ent, and explain l1ow those cha11ges in1prove the agency's ability to stop
.. unlawful discriminatory practices in the sale, lease, and financing of housing."
2. Please provide a list of all meetings that have taken place as a resttlt of tl1e "interagency
redo," including topics of the meetings and the participants.
3. The Treasury Departn1ent recently released a set ofreco1n1nendations to tl1e primary
CRA regulators on hov., to "modernize" the CRA. 10 As the OCC works on changes to tl1e
CRA, \Vhat, if any, of the recommendations from the Treasury Department will you
incorporate in your refor1n?
1

s 12 u.s.c. § 2902
6 Ben Protess and Jessica Silver-Greenberg, "Under Trun1p, Banking \Vatchdog l'rades lts Bite tor a Tamer Stance,"
The Ne)V York Ti111es (Nove1nber 15, 2017) (Online at: https://\V\\'V.' .nythnes.con1/2017/l l /15/business/bankregu !ation.h tn1 I).
7
"Policies and Procedures Manual "llnpact of Evidence Discri1ninatory or Other Illegal Credit Practices on
Con11nunity Reinvcst1nent Act Ratings," Qffice of the Co1npfroller oj'rhe Currency (October 12, 2017) (Online at:
httrs://\vww.occ.gov/gub!ications/pub!ications-bv-tvpe/other-publications-reports/pptns/ppn1-5000-43.udf).
8
12 CFR 25.28(c){2)
9 Allison Bisbey "New CRA proposal scheduled for release in March; OCC's Otting" A111erica11 Banker (February
27, 20 18) (Online at: https://\V\V\v.a1nericanbankcr.com!ne~vs/ne\v-cra-proposal-scheduled-for-releasc-ncxt-1nonth­
occs-otting).
rn Depa1t1nent ofthe Treasury Press Release, "Treasury Releases Co1n1nunity Rcinvestinent Act Modc111ization
Reco1n1nendations," Deparflnent o.f the Treasury (April 3, 20 18) (Online at: https://ho1ne.treasu1y.gov/news/pressre lcascs/sn103 3 6).

 4. The PPM issued in October 2017 by your predecessor, Acting Comptroller Keith
Noreika, weakened the OCC's ability to impose penalties on banks under the CRA allowing banks to avoid double downgrades and penalties if they promise to take action
to address problems.
a. What analysis did the OCC conduct to determine how the changes outlined in the
October PPM would hinder the agency's ability to carry out its mission to ensure
"fair access and equal treatment to national banks customers"? 11
b. Please list any meetings that former Acting Comptroller Noreika, and any other
OCC employees, had with outside entities - including lobbyists or representatives
of the banking or financ ial services industry - to discuss changes to CRA
supervision policies prior to the release of the October PPM.
5. Are you, or are any other OCC employees, consulting with or discussing changes to CRA
enforcement policies with any outside entities - including lobbyists or representatives of
the banking or financial services industry - in revising the CRA enforcement rules? If so,
please provide a list of all meetings and all participants in these meetings where these
changes were discussed.
6. How does the OCC measure the effectiveness of the agency's efforts to reduce housing
discrimination? Please provide a detai led analysis of the agency's performance over the
last two years.
7. Please describe any initiatives the OCC has in place, beyond CRA enforcement, to
address housing discrimination.

Sincerely,

Unit d States Senator

11

" Consumer Protection," Office ofthe Comptroller ofthe Currency (Online at:
https://www.occ.treas.gov/topics/consumer-protection/index-consumer-protection.html).