The Community Reinvestment Act (CRA) was enacted in 1977 to encourage depository institutions to help meet the credit needs of the communities in which they operate, consistent with safe and sound operations. The Act is intended to affirm that depository institutions have an affirmative obligation to help meet the credit needs of the local communities in which they operate.
The CRA requires each federal depository institution to be evaluated in its most recent CRA performance examination on its record of helping to meet the credit needs of its entire community, including low- and moderate-income (LMI) neighborhoods. A depository institution's record of meeting community credit needs is assessed in light of its performance context, which includes the institution's size, its geographic distribution of offices, the composition of its local market areas, economic conditions in its local market areas, and other factors. The CRA does not mandate a single method of helping to meet community credit needs; instead, it provides flexibility to allow institutions to tailor their activities to local circumstances.
The federal depository institutions regulated by the CRA are insured banks, savings associations, and credit unions with total assets of $500 million or more, as well as their holding companies and subsidiaries. The agencies responsible for enforcing the CRA are the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.
The Community Reinvestment Act (CRA) is a federal law that encourages depository institutions to help meet the credit needs of the communities in which they operate, consistent with safe and sound operations. The law is intended to affirm that depository institutions have an affirmative obligation to help meet the credit needs of the local communities in which they operate. The CRA requires each federal depository institution to be evaluated in its most recent CRA performance examination on its record of helping to meet the credit needs of its entire community, including low- and moderate-income (LMI
What are the three tests used in a CRA examination? The three tests used in a CRA examination are the lending test, the investment test, and the service test.
The lending test assesses a bank's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods.
The investment test looks at a bank's investments in activities that help to revitalize or stabilize its community.
The service test measures the extent to which a bank is providing banking services to its community, including low- and moderate-income neighborhoods.
What happens if a bank receives less than satisfactory rating on CRA exam?
The answer to this question depends on the specific rating that the bank receives. If the bank receives a "Needs to Improve" rating, the bank will be required to develop and implement a plan to improve its performance in meeting the credit needs of its community. The bank will be closely monitored by the regulator and will be subject to additional exams in the future. If the bank receives a "Satisfactory" rating, it means that the bank is meeting the credit needs of its community and is not required to take any corrective action.
What information is found in the Community Reinvestment Act CRA public file that must be made available to the public upon request? The Community Reinvestment Act (CRA) public file must include:
1. A description of the bank's CRA program, including its policies and procedures.
2. A list of all CRA-related activities undertaken by the bank, including the date, dollar amount, and type of activity.
3. A description of how the bank evaluates the performance of its CRA program.
4. Any CRA-related complaints received by the bank, and the bank's response to those complaints. What is a bank's CRA disclosure statement? A bank's CRA disclosure statement is a document that is required to be filed with the FDIC that provides information about the bank's Community Reinvestment Act (CRA) performance. The statement must include information about the bank's assessment area, a description of the bank's CRA activities, and an evaluation of the bank's CRA performance. How do banks get CRA credits? CRA credits are given to banks in exchange for providing financing to businesses and individuals in low- and moderate-income communities. The credits are based on a percentage of the loan amount and are intended to encourage banks to invest in these underserved areas.