On April 24, the OCC issued an NPRM in the Federal Register proposing to rescind or amend regulations in 12 CFR parts 24, 43, and 128, citing Executive Order 14219, which directs agencies to identify regulations that are unnecessary, based on anything other than the best reading of underlying statutory authority, or lacking clear statutory authority (previously covered by InfoBytes here).

The proposed rule would make three changes. First, it would amend the public welfare investment regulations in 12 CFR part 24, which govern national bank investments benefiting low- and moderate-income communities that may qualify under the CRA, by removing references to minority- and women-owned entities from the examples. The OCC asserted that this change would align the text with the enabling statute while generally permitting the same investments. Second, it would rescind 12 CFR 43.9, which provides an alternative to the 5 percent credit risk retention requirement for lead arrangers of open market collateralized loan obligations (CLOs), contending that a 2018 D.C. Circuit decision effectively rendered the provision irrelevant by blocking risk retention requirements for open market CLO managers. Finally, it would rescind 12 CFR part 128, which imposes nondiscrimination requirements on federal savings associations, on the basis that the regulation lacks clear statutory authority and is duplicative of existing protections under the ECOA, the Fair Housing Act, and other federal laws. The OCC noted that the FDIC rescinded parallel nondiscrimination requirements for state savings associations in 2021 on similar grounds. Comments on the proposal are due by May 27.