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The Community Reinvestment Act (CRA), enacted in 1977, requires federally insured depository institutions to help meet the credit needs of their entire service area, particularly those low- and moderate income, economically distressed, and geographically isolated areas, in a manner that is consistent with safe and sound operation. The CRA, originally created as a response to discriminatory lending practices which primarily affected urban areas, is rarely discussed from a rural perspective despite the fact that the CRA evaluates all depository institutions.
The CRA is implemented by the three federal bank regulators through periodic lender examinations of all Federally insured depository institutions. These CRA examinations vary in occurrence and detail based on lender asset size with small lenders being evaluated less frequently (usually, once every five years) and less thoroughly (one test area instead of the three applied to large banks). Upon completion of the examination, regulators’ award banks ratings based on their compliance with the CRA. Regulators can then use a poor rating to deny lender applications for such things as opening a new office or acquiring another bank.
IA relatively small percentage of lenders, less than 10 percent, consistently earn the highest, “outstanding” ratings. This lenders regularly exceed federal requirements in meeting the credit needs of their services area. These lenders can then serve as examples of how a bank can ensure credit to all in a safe and sound manner. How might this type of behavior be achieved in other lenders?
This webinar, the third in a series of three, will explore CRA rated outstanding lenders. The webinar will include an evaluation of lenders that consistently earn CRA outstanding ratings. The presentation will identify consistently rated outstanding lenders, describe their characteristics, and identify key aspects that are related to their outstanding performance. The webinar will include a panel to discuss the CRA and rural communities.