{"id":290234,"date":"2026-07-15T10:00:15","date_gmt":"2026-07-15T14:00:15","guid":{"rendered":"https:\/\/ncrc.org\/?p=290234"},"modified":"2026-07-14T12:11:03","modified_gmt":"2026-07-14T16:11:03","slug":"occs-proposed-rule-could-undermine-investment-in-communities-of-color","status":"publish","type":"post","link":"https:\/\/ncrc.org\/occs-proposed-rule-could-undermine-investment-in-communities-of-color\/","title":{"rendered":"OCC\u2019s Proposed Rule Could Undermine Investment in Communities of Color"},"content":{"rendered":"

The Office of the Comptroller Currency (OCC)\u00a0recently\u00a0<\/span>proposed a rule<\/span><\/a> that could reduce investment in communities of color and open the door for more lending discrimination. The agency aims to remove any references to \u201cminority and women-owned entities\u201d in their list of eligible public welfare investment activities that banks can undertake. The OCC is also proposing the removal of regulatory language regarding nondiscrimination requirements for federal savings associations (FSAs).<\/span>\u00a0<\/span><\/p>\n

The proposed rule aligns with the Trump administration\u2019s broader agenda to eliminate \u201c<\/span>discriminatory diversity, equity and inclusion practices<\/span><\/a>\u201d within the federal government, and the\u00a0OCC justifies the removal of this language by asserting that it \u201cimplicates matters of social, political and economic significance not authorized by clear statutory authority.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

These changes in the OCC\u2019s regulatory guidance could undermine progress in reducing wealth disparities with significant consequences for NCRC members and the communities they serve. Financial institutions may respond by directing less capital to minority and women-owned entities that build affordable housing and provide credit to small businesses. The removal of clear nondiscrimination guidance may also weaken accountability and embolden predatory lenders to discriminate against certain borrowers.<\/span>\u00a0<\/span><\/p>\n

NCRC\u00a0<\/span>submitted a comment\u00a0<\/span>letter<\/span><\/a>\u00a0to the OCC opposing these proposed changes\u00a0with\u00a0the\u00a0main points outlined below.<\/span>\u00a0<\/span><\/p>\n

The Impact of Public Welfare Investments\u00a0<\/span><\/b>\u00a0<\/span><\/h3>\n

OCC and Federal Reserve-chartered banks can invest up to 15% of their capital and\u00a0surplus\u2014<\/span>essentially a\u00a0bank\u2019s financial cushion\u2014<\/span>towards public welfare. Known as\u00a0<\/span>public welfare investments (PWIs)<\/span><\/a>, banks can invest in community development activities, like expanding affordable housing access, providing support to small businesses or bolstering workforce training programs. However, banks must seek regulatory approval for their PWIs to exceed 15%. PWIs qualify for Community Reinvestment Act (CRA) credit since the<\/span>\u00a0<\/span>bank\u2019s investment would\u00a0benefit\u00a0low-\u00a0to\u00a0moderate-income\u00a0communities.<\/span>\u00a0<\/span><\/p>\n

Regulators provide guidance to banks on how to effectively make PWIs, which includes a list of activities that qualify. The OCC\u2019s proposal removes \u201cminority and women-owned entities\u201d from this list of identified examples, although the OCC would continue to permit investments in those entities. That change weakens the guidance\u2019s emphasis on directing capital to communities and businesses that have historically been overlooked and underserved. <\/span>\u00a0<\/span><\/p>\n

The concern, therefore, is not that these investments would become ineligible. Rather, removing the explicit reference may discourage banks from pursuing them. In the current environment, some institutions may avoid investments specifically focused on minority- and women-owned entities out of concern that they could attract scrutiny under the administration\u2019s broader campaign against diversity, equity and inclusion initiatives.<\/span>\u00a0<\/span><\/p>\n

The Removal of\u00a0Nondiscrimination Requirements<\/span><\/b>\u00a0<\/span><\/h3>\n

In the same\u00a0proposed\u00a0rule,\u00a0the OCC\u00a0intends\u00a0to\u00a0remove\u00a0<\/span>nondiscrimination requirements for Federal Savings Associations<\/span><\/a>\u00a0(FSAs).\u00a0\u00a0The requirements\u00a0prohibit\u00a0discrimination\u00a0based on race or other protected characteristics in lending<\/span>.<\/span>\u00a0The OCC\u2019s\u00a0stated\u00a0rationale for removal\u00a0of these requirements\u00a0is that\u00a0<\/span>they were\u00a0excessive\u00a0<\/span>and\u00a0duplicative\u00a0of\u00a0the\u00a0existing\u00a0<\/span>Regulation B<\/span><\/a>, which implements the Equal Credit Opportunity Act (ECOA).\u00a0<\/span>Regulation B protects loan applicants from credit discrimination. <\/span>\u00a0<\/span><\/p>\n

The OCC\u2019s removal of the nondiscrimination language could send the wrong message to lenders that the nondiscrimination requirements do not need to be taken seriously.\u00a0On top of that, the CFPB\u00a0<\/span>recently weakened Regulation B<\/span><\/a> by eliminating <\/span>disparate-impact liability<\/span><\/a>.\u00a0This\u00a0means that it will be more difficult to challenge lending practices that appear facially neutral on paper but disproportionately harm or exclude\u00a0<\/span>a group of people\u00a0that share a\u00a0protected characteristic, like race or gender.\u00a0The combined effect of these changes\u00a0<\/span>could open the door for more lending discrimination\u00a0<\/span>against\u00a0<\/span>borrowers of color, amplified by <\/span>significantly reduced\u00a0accountability\u00a0and oversight<\/span>.\u00a0<\/span>\u00a0<\/span><\/p>\n

By removing explicit language concerning equity and nondiscrimination, the OCC would make its expectations less clear for federally chartered institutions.<\/span>\u00a0<\/span>Eliminating these provisions suggests that fair treatment of historically underserved borrowers and businesses is no longer a central supervisory priority. The OCC grants charters to lenders, obligating them to responsibly serve and treat all communities fairly, including minority and women-owned entities. OCC\u2019s proposed removal of equity and non-discrimination-focused language undermines its charters and the principle of public trust.\u00a0 <\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

Manan Shah is the Policy Advisor for NCRC’s Policy & Government Affairs team.<\/em><\/p>\n

Photo credit: Monstera Production via Pexels.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The Office of the Comptroller Currency (OCC)\u00a0recently\u00a0proposed a rule that could reduce investment in communities of color and open the door for more lending discrimination. The agency aims to remove any references to \u201cminority and women-owned entities\u201d in their list of eligible public welfare investment activities that banks can undertake. The OCC is also proposing 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Shah","author_link":""},"uagb_comment_info":0,"uagb_excerpt":"The Office of the Comptroller Currency (OCC)\u00a0recently\u00a0proposed a rule that could reduce investment in communities of color and open the door for more lending discrimination. The agency aims to remove any references to \u201cminority and women-owned entities\u201d in their list of eligible public welfare investment activities that banks can undertake. The OCC is also proposing…","_links":{"self":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/users\/4019"}],"replies":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/comments?post=290234"}],"version-history":[{"count":1,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290234\/revisions"}],"predecessor-version":[{"id":290243,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290234\/revisions\/290243"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media\/290239"}],"wp:attachment":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media?parent=290234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/categories?post=290234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/tags?post=290234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}