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 The
Community Reinvestment Act CRA
- Enacted in 1977
- Implemented by identical Regulations enacted by all four
federal bank regulatory agencies
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12 CFR parts
25, 228, 345, and 563e
- Does not apply to credit unions.
The NCUA has adopted its own regulations related to community lending. See
Community Development Development Loan Program for Credit Unions
infra
- Intended to encourage depository institutions
to help meet the credit needs of the communities in which they operate
- Due to controversies surrounding the alleged use
of the CRA by certain interest groups to "pressure" banks, Congress enacted, as
part of Gramm-Leach-Bliley, legislation requiring the public reporting of
CRA-related agreements -
CRA
Sunshine Act - and requiring the banking agencies to adopt
regulations
implementing the agreement-reporting legislation
 CRA
implementing regulations require that the appropriate
federal regulatory agency:
- Assess a financial
institutions record of helping to meet the
credit needs of its entire community, including
low- and moderate-income neighborhoods, consistent
with safe and sound operations
- Consider that
record in its evaluation of a banks application
for new branches or relocation of an existing
branch, bank mergers and consolidations, and
other corporate activities
CRA
Examinations
- Every three years
- Extended examination
cycle for smaller banks
- For banks with
an overall CRA rating of outstanding and aggregate
assets of $250 million or less, no sooner than
60 months after the most recent CRA examination
- For banks with
an overall CRA rating of satisfactory and aggregate
assets of $250 million or less, no sooner than
48 months after the most recent CRA examination
- Banks may be
removed from this extended CRA examination cycle
for reasonable cause or in connection with an
application for a depository facility
- Advance notice
of scheduled CRA examinations published quarterly
by agencies
- Written performance
evaluation of the banks CRA activities, including
a CRA rating, is prepared at the end of each
CRA examination and made available to the general
public
Agencies
encourage community and civic organizations, government,
and other members of the public to express their views
about a banks CRA performance to the bank and the agency Limited
purpose bank means a bank that offers only a narrow product line (such as
credit card or motor vehicle loans) to a regional or broader market and for
which a designation as a limited purpose bank is in effect Wholesale
bank means a bank that is not in the business of extending home mortgage,
small business, small farm, or consumer loans to retail customers, and for which
a designation as a wholesale bank is in effect
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