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Based on the document provided, here is a summary of the statement by FDIC Chairman Jelena McWilliams on December 12, 2019.

Summary of the Statement

This document is a statement from FDIC Chairman Jelena McWilliams supporting a Notice of Proposed Rulemaking to modernize the Community Reinvestment Act (CRA) regulations. The core argument is that the banking industry has changed dramatically since the last major revision in 1995, especially with the rise of digital banking, making the current rules outdated and less effective.

The principal goal of the proposed changes is to increase lending and investment in low- and moderate-income (LMI) communities.

Key Problems with the Current CRA Framework: * It is "out of sync" with modern technology and business practices. * It does not adequately account for digital banks that collect deposits from areas where they have no physical branches. * The ambiguity of what activities qualify for CRA credit can discourage banks from making certain investments.

Key Elements of the Proposed Rulemaking:

1. Clarifying and Expanding Qualifying Activities:

   • The FDIC and OCC would periodically publish a list of illustrative examples of activities that qualify for CRA credit and create a process for stakeholders to seek pre-approval for other activities.
   • The size of qualifying loans to small businesses and farms would be increased to $2 million.
   • CRA credit would be provided for activities in Indian Country.
   • Investments and loan participations with Community Development Financial Institutions (CDFIs) would qualify, regardless of the CDFI's location.

2. Modernizing Assessment Areas:

   • To address digital banking, banks would be required to establish assessment areas in locations where they have a significant concentration of retail deposits, even if they lack a physical branch there.
   • The existing rules for defining assessment areas around physical branches would remain intact.

3. Establishing New Performance Standards:

   • The proposal would create clear, metric-based standards to evaluate a bank's CRA performance. This includes assessing the distribution of loans to LMI individuals and small businesses, and the total value of a bank's qualifying activities relative to its deposits.

4. Providing Flexibility for Small Banks:

   • To avoid undue burden, small banks (with $500 million or less in assets) would have the option to be evaluated under the existing rules or opt-in to the new performance standards.

Inter-agency Collaboration and Next Steps: * The proposal was developed in collaboration with the OCC and the Federal Reserve Board. * However, the Chairman notes that the Federal Reserve Board had not joined the proposal at that time. * The statement concludes with a strong call for robust public comment from all stakeholders (banks, community groups, etc.) to help refine and finalize the new rules.