OCC’s Otting Will Appear Before House Financial Services Committee

He is scheduled to testify Jan. 29, two people familiar with the matter said
U.S. Comptroller of the Currency Joseph Otting addresses a conference on financial technology, or fintech, at the Federal Deposit Insurance Corp. on April 24, 2019, in Arlington, Va. Otting said Wednesday that he doesn’t see a compromise with the Federal Reserve on the Community Reinvestment Act before the OCC and the Federal Deposit Insurance Corp. release their joint final rule, despite a key Fed official’s call for an interagency process. (Chip Somodevilla/Getty Images)
December 20, 2019 at 5:33 pm UTC

Comptroller of the Currency Joseph Otting is scheduled to testify in front of the House Financial Services Committee on Jan. 29, two sources familiar with the matter said, setting up a potential fight between House Democrats and Otting on the Community Reinvestment Act overhaul. 

Otting missed appearing with other financial regulators in early December, although he submitted written testimony. His absence drew harsh criticism from committee Democrats, who have grown increasingly concerned over the Office of the Comptroller of the Currency’s plans to revamp the Community Reinvestment Act. 

The OCC has led efforts to overhaul, for the first time in a quarter-century, the Community Reinvestment Act. The more-than 200-page proposal released by the OCC and the Federal Deposit Insurance Corp. would allow banks more flexibility on meeting the government mandate for lending to poor neighborhoods.

In an added wrinkle, while the FDIC has signed on to the OCC’s plan, the Federal Reserve has not, creating potential compliance issues for banks if the regulators continue without a joint rule. 

House Financial Services Committee Chair Maxine Waters (D-Calif.) and other panel Democrats will likely question Otting on whether the new proposal would weaken the requirements for lending to underserved areas. 

While House Republicans and regulators have largely argued that the Community Reinvestment Act needs to be modernized, House Democrats have ramped up their critical focus on the overhaul since the oversight hearing in early December. 

“The CRA is a critical tool to combat redlining, a practice that still exists by which banks discriminate against prospective customers based primarily on where they lived, or their racial or ethnic background, rather than creditworthiness,” Democratic lawmakers, including Waters and Senate Banking Committee ranking member Sherrod Brown (D-Ohio), said in a Dec. 11 letter to financial regulators. 

In a rare move, Waters organized a caravan for panel Democrats on Dec. 12 to attend the FDIC board meeting where regulators released their proposal. 

Waters said in a tweet that she was going to the meeting to “make sure Trump’s bank regulators know that we’re keeping a close eye on them. They won’t let the banks off the hook on my watch!”

Claire Williams previously worked at Morning Consult as a reporter covering finances.

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