May Newsletter
Washington Policy Update
Allison Karakis, Government Relations Director
According to AAA®, more than 37 million people are expected to travel 50 miles or more this Memorial Day weekend. This is an increase of 60% from last year and 34 million of those planning to travel will drive. While many Americans will enjoy their much-needed vacation, few will be dwelling on the ongoing infrastructure spending debate in Washington. Congress too will be in recess but will continue negotiations in earnest.
President Biden and his administration have been meeting with a small group of Senate Republicans to find a path to a bipartisan infrastructure plan. The group is led by Senator Shelley Moore Capito (R-W.Va.) and includes Pat Toomey (R-Pa.). The group’s initial framework contained $568 billion in investments that was increased as negotiations continued to $928 billion with $506 billion allocated for roads and bridges, $98 billion for public transit systems, $46 billion for rail, and $65 billion for broadband. The Biden administration has reduced the American Jobs Plan to $1.7 trillion from $2.25 trillion making it clear the groups are still far from reaching an agreement.
Meanwhile, the second portion of Biden’s comprehensive infrastructure proposal, the $1.8 trillion American Families Plan, is unlikely to get bi-partisan support. The administration will need to negotiate with moderate democrats to move the package through reconciliation. The proposal includes: two years of free community college, universal preschool, childcare assistance, national paid family and medical leave and expanded nutrition assistance. Also included is extended child, earned income and dependent care tax credits. To pay for the plan, top income and capital gains tax rates are increased to 39.6%, tax breaks related to inheritance and investment funds are repealed and support for IRS tax enforcement is increased.
Senate Passes Repeal of OCC’s True Lender Rule through Congressional Review Act
The Senate recently passed a resolution introduced by Democrats from the Senate Banking Committee to repeal the Office of the Comptroller of the Currency’s (OCC) True Lender Rule under the Congressional Review Act. The October 2020 OCC rule determines who the “true lender” is when a national bank or federal savings association (bank) makes a loan in partnership with another bank or third party.
The rule specifies that a bank makes a loan and is the true lender if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan. The rule also specifies that if one bank is named as the lender in the loan agreement and another bank funds that loan, the bank on the loan agreement is the true lender. 
Senate Democrats are concerned the rule allows for predatory lenders to skirt state laws meant to provide consumer interest-rate protection and opens the doors for these lenders to take advantage of vulnerable consumers.

The House is expected to pass the resolution and President Biden is expected to sign.

OCC to Reconsider the June 2020 Community Reinvestment Act Rule
The OCC has determined that it will reconsider the June 2020 Community Reinvestment Act (CRA) rule. While this occurs, the OCC will not implement or rely on the evaluation criteria in the June 2020 rule pertaining to quantification of qualifying activities, assessment areas, general performance standards, data collection, recordkeeping, and reporting.
The OCC will continue to implement the provisions of the June 2020 CRA rule that had a compliance date of October 1, 2020.These implementation efforts include issuance of OCC Bulletin 2021-5 providing bank-type determinations, lists of distressed and underserved areas, and the median hourly compensation value for community development service activities. Additionally, OCC will continue deployment of the CRA Qualifying Activities Confirmation Request process for banks and other stakeholders to request confirmation whether an activity meets the qualifying criteria under the June 2020 CRA rule.
Federal Reserve System Proposed Guidelines to Evaluate Requests for Accounts and Services
The Board of Governors of the Federal Reserve System is requesting comment on proposed guidelines to evaluate requests for accounts and services at Federal Reserve Banks. Due to a recent increase in the number of non-traditional federal and state charter types being authorized across the country, the Reserve Banks are receiving more inquiries and access requests from institutions with such non-traditional charter types. The draft guidelines take the form of principles that Reserve Banks would be expected to consider when reviewing requests by depository institutions for accounts and services.
  • Each institution requesting an account or services must be eligible under the Federal Reserve Act, or other federal statute, to maintain an account and receive service at a Federal Reserve Bank.
  • Provision of an account and services to an institution should not:
  • Present or create undue credit, operational, settlement, cyber or other risks to the Reserve Bank or to the overall payment system.
  • Create undue risk to the stability of the U.S. financial system or overall economy by facilitating activities such as money laundering, terrorism financing, fraud, cybercrimes, or other illicit activity.
  • Adversely affect the Federal Reserve’s ability to implement monetary policy
Executive Order on Climate-Related Financial Risk
President Biden recently signed an executive order on climate-related financial risk. The order aims to help the American people better understand how climate change can impact their financial security and inform decisions that the federal government can take to mitigate the risks of climate change.
The order:
  • Requires the National Climate Advisor and the Director of the National Economic Council to develop a comprehensive, government-wide climate-risk strategy to identify and disclose climate-related financial risk to government programs, assets and liabilities.
  • Encourages the Treasury Secretary, in her role as the chair of the Financial Stability Oversight Council, to work with Council members to assess climate-related financial risk to the stability of the federal government and the stability of the U.S. financial system.
  • Directs the Labor Secretary to consider changing any rules from the prior administration that would have barred investment firms from considering environmental, social and governance (ESG) factors. This includes climate-related risks, in workers’ pensions investment decisions and to assess how the Federal Retirement Thrift Investment Board has taken these factors into account.
  • Directs the development of recommendations for improving how Federal financial management and reporting can incorporate climate-related financial risk, especially as that risk relates to federal lending programs. It also requires consideration of new requirements for major federal suppliers to disclose greenhouse gas emissions and climate-related financial risks and to ensure that major federal agency procurements minimize those risks.
  • Directs that the federal government develop and publish annually, an assessment of its climate-related fiscal risk exposure.