In 1977, Congress enacted the Community Reinvestment Act (CRA) to encourage federally insured banks and thrifts to help meet the credit needs of their entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations. The CRA requires each federal bank regulatory agency to assess each federally insured institution's record of helping to meet the credit needs of its entire community, consistent with safe and sound lending. The three federal bank regulatory agencies responsible for enforcing the CRA include the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve System, and the Office of the Comptroller of the Currency (OCC). The FDIC supervises insured state-chartered banks that are not members of the Federal Reserve System and insured state savings associations.
Revision of the CRA Regulation
In 1995, the CRA regulations were substantially revised to put greater emphasis on performance as opposed to process, and to establish different evaluation tests for different kinds of institutions: large institutions, small institutions, wholesale and limited purpose institutions. Streamlined procedures with an emphasis on lending were adopted for small institutions, while large banks are evaluated under a three-part lending, service and investment test. Wholesale and limited purpose banks are evaluated under a community development test. All institutions, no matter their size or business strategy, may take advantage of the strategic plan option, which allows an institution to develop with a plan for meeting its CRA responsibilities, subject to approval by its supervisory agency.
In 2005, additional revisions were made to the CRA regulations. Intermediate small banks ($250 million to $1 billion in assets, adjusted for inflation annually), which had been evaluated under the three-part test for large banks, are evaluated under a two-part test. The new test continues to focus on lending and adopts a new community development services component that evaluates a flexible combination of community development loans, investments and services tailored to community needs and the capacity of the bank.
Public Participation in the CRA Examination Process and Access to Ratings and Public Evaluations
To promote public involvement and input into the examination process, the revised CRA regulations require the agencies to publish a quarterly schedule of upcoming examinations. The quarterly schedule for FDIC CRA Examinations is available through the FDIC's Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226, by telephone: (877) 275-3342 or (703) 562-2200 (Select "Copies of FDIC publications or documents"), by fax: (703) 562-2296 or by e-mail: email@example.com.
A uniform four-tiered rating system is used by the federal banking agencies in assessing CRA performance. Since July 1, 1990, the agencies must make each institution's CRA rating and evaluation available to the public. The CRA performance rating does not reflect on an institution's financial condition. This rating deals strictly with how well the institution is meeting its responsibilities under the CRA. The CRA ratings and some of the public evaluations issued by the FDIC since July 1, 1990 are also available on the Internet.
How to Obtain Additional Information
Other CRA information, including the text of the revised CRA regulations and examination procedures and the list of approved wholesale and limited purpose banks, can be obtained directly or through links from the FDIC's Internet site. Additional CRA information, including ratings on institutions supervised by the other federal banking agencies, can be obtained through the Federal Financial Institutions Examination Council's CRA site. Questions relating to CRA and other consumer compliance matters may be e-mailed to the FDIC Information and Support Center or directed to the Division of Depositor and Consumer Protection at (877) 275-3342 or (877) ASK-FDIC. For the hearing impaired call 1-800-925-4618 or 1-703-562-2289 in Washington, D.C.