Simpson Thacher Discusses U.S. Treasury Report on Reforming the Community Reinvestment Act

On April 3, 2018, the U.S. Treasury Department issued a report detailing a number of recommendations for reforming and modernizing the Community Reinvestment Act of 1977 (“CRA”) framework.  The report, which follows through on the commitment made by Treasury in its June 2017 report to the President to review the current CRA framework, includes recommendations for (i) changing the way CRA geographic assessment areas are defined to reflect the changing nature of banking arising from changing technology, customer behavior, and other factors; (ii) improving the CRA performance evaluation criteria to increase the transparency and effectiveness of CRA rating determinations; (iii) … Read more

Simpson Thacher discusses OCC Guidelines for Bank Risk Governance

On September 2, 2014, the Office of the Comptroller of the Currency (the “OCC”) issued final guidelines (the “Guidelines”) establishing risk management standards for large national banks, insured federal savings associations, and insured federal branches of foreign banks (each, a “bank”).[1] The Guidelines formalize and make enforceable five “heightened expectations” that the OCC developed and began communicating to large banks informally following the financial crisis, and which were eventually proposed as enforceable guidelines in January 2014. The five heightened expectations are:

  • for the board of directors of a bank to preserve the “sanctity of the charter” by ensuring that the

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