NCLC and other consumer organizations submitted comments in connection with the Federal Reserve Board’s review under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of the Community Reinvestment Act and the Availability of Funds and Collection of Checks as set forth in Regulation CC, 12 C.F.R. Part 229.
The CRA needs to be modernized and strengthened to account for the changing nature of banking and to more effectively encourage investment in underserved communities. Reinvestment in struggling communities is more important today than ever. The impact of predatory lending practices, the foreclosure crisis, and the loss of wealth and assets have devastated lower and moderate income communities and communities of color. The approach to CRA examinations has also become antiquated and must be improved.
Regulation CC is outdated and needs to be updated. The FRB should (1) ban remotely created checks and remotely created payment orders for consumer transactions, (2) clarify the deposit hold times for check deposits to prepaid cards and by way of remote deposit capture, (3) help consumers avoid check scams. The lack of updates not only harms consumers but also imposes burdens on financial institutions.