Banking and Finance Law Daily Wrap Up, COMMUNITY DEVELOPMENT—Groups urge OCC to clarify guidance on CRA strategic plan process for community banks, (Feb 25, 2026)

By A. Bryan Gerepka

Banking and community reinvestment groups says the regulator must provide “significantly more detail on how it determined the proposed 'elective goals' for community development financing.”

The American Bankers Association (ABA) and National Community Reinvestment Coalition (NCRC) called on the Office of the Comptroller of the Currency (OCC) to enhance and clarify its recent proposed guidance for a simplified strategic plan process to help community banks comply with the Community Reinvestment Act (CRA). In separate comment letters sent to the OCC on Feb. 20, 2026, both groups raised concerns about how “elective goals” will be used to determine the adequacy of a bank’s CRA compliance, and requested a broader consultation process with the OCC before approval of the new rules.

The ABA warned in its letter that while the “elective goals” may serve as a helpful reference point for banks that choose the strategic plan option, there is a risk that “elective goals” may evolve into a “de facto performance metric.” The NCRC added that the regulator must provide “significantly more detail on how it determined the proposed 'elective goals' for community development financing.” The group argued that its analysis of publicly available CRA performance evaluation data indicates that the proposed goals would lower regulatory expectations and risk a significant decline in community development loans and investments if the goals are not raised.

Enhance, clarify guidance. To guard against “elective goals” defaulting to a performance metric, the ABA recommended that the OCC:

• Provide specific examples illustrating how banks may tailor the elective goals;

• Emphasize performance context in the final guidance, such as by using headings, bolded text, or call-out boxes;

• Provide additional examiner training to ensure consistent application of performance context; and

• Clarify that banks may carry forward excess community development performance to account for market fluctuations.

NCRC says “elective goals” should be raised. Meanwhile, the NCRC noted that the proposed “elective goals” do not compare well to previous performance levels and will lower regulatory expectations of satisfactory and outstanding community development performance if they are not raised. The group urged the OCC to consider the following:

• Banks must provide previous performance levels when drafting strategic plan goals to put proposed goals in context;

• The OCC should not move forward with accepting lower investment goals if at least half of the investments meet vaguely defined levels of high impact;

• Impact factors previously identified by the agencies in the 2023 CRA rule could help with the development of goals for high-impact activities;

• Goals should increase over time to account for growth, and raise easily surpassed goals;

• Banks must not be allowed to dictate how multiple goals will be weighed; and

• Small business and small farm data reporting requirements cannot be waived through guidance.

Broader participation in rule setting. Both groups questioned the adequacy of the feedback process during the drafting of the strategic plan and urged the OCC to revise the consultation process during the review period.

The proposed guidance misses an opportunity to provide common-sense updates to how the public participates in the development of strategic plans, the NCRC commented. Meanwhile, the ABA outlined a series of recommendations to include broader participation by the affected groups. The ABA recommended the OCC:

• Clarify that, at the bank’s option, consultation may occur in a series of discussions between the bank and the OCC, not a single meeting;

• Provide banks modifying or renewing their strategic plans with access to the same consultation process; and

• Update examiner training by adding instruction on how to provide feedback that advances the objective of the guidance—namely, making the strategic plan option more accessible to community banks.

The NCRC added that the OCC should post draft strategic plans online and encourage banks to post draft plans online during comment periods to improve the public’s ability to comment on draft strategic plans.

Background. Last December, the OCC issued proposed guidance for a simplified strategic plan process to help community banks comply with the CRA, noting that “community banks are important drivers of economic growth and require a tailored, proportional supervisory framework that reflects their critical role in local economies” (see Banking and Finance Law Daily, Dec. 18, 2025).

The current CRA regulation allows any bank to elect to have the OCC assess its CRA performance under an approved strategic plan, which allows for a tailored CRA examination based on community needs and the bank’s ability to address those needs based on its capacity and constraints, product offerings, and business strategy. However, the OCC noted that “the current strategic plan process can be complex and difficult to navigate. As a result, overall election of the strategic plan option remains limited.”

The proposed process would clarify the measurable goals and other components of a CRA strategic plan as well as simplify the method for drafting and submitting a proposed plan to the OCC for approval.

The ABA called the proposal an important step forward that showed that the OCC intends to encourage broader community bank use of the strategic plan option. The group noted that the proposal aims to make the strategic plan path more accessible and less resource-intensive for community banks with up to $30 billion in assets. This flexibility is increasingly important as community banks pursue fintech partnerships and niche lending strategies that often do not align neatly with the traditional CRA framework, the ABA added.

Companies: American Bankers Association; National Community Reinvestment Coalition

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