Identifying and Documenting CRA Community Development Activities

Given recent developments and the agencies’ intent to rescind CRA modernization’s final rule, clarity and precision in documenting community development activities is more critical than ever. 

This program outlines how to identify and document its community development activities in order to achieve the highest possible CRA rating. You’ll learn how to ensure your regulator gives proper credit for your FI’s community development initiatives, thereby securing a higher CRA rating and avoid the additional burden of a lower rating.

You’ll learn:

• The importance of community development activities for small, intermediate, and large banks.
• What pandemic related activities may be eligible for community development credit.
• Which loans, investments, and services receive CD credit
• The consideration given to CD activities that occur within and outside of your assessment area.
• Which community services are targeted to low- or moderate-income individuals.
• Which activities promote economic development by financing businesses and farms that meet certain size eligibility standards.
• Which activities earn credit for revitalizing or stabilizing certain areas.
• Best practices for documenting your FI’s community development activities.
• How banks of every size should report their CD activities, including public health related initiatives.
• How CD activities are handled in the current rule and in the proposed rule.

Who:

This session is designed for management of the loan department, compliance officers, CRA officers, marketing staff and auditors.

Background:

In May of 2022, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve Board jointly published proposed rules for the Community Reinvestment Act. CRA Modernization’s final rule is was issued in October of 2023. Now, however, agencies have indicted that they plan on rescinding that final rule.  There’s a lot of confusion and uncertainty surrounding CRA and community development, and this session is designed to help alleviate that.

Currently, every bank (small, intermediate small or large) needs to identify and document its community development (CD) activities in order to achieve the best possible CRA rating. Volume and distribution of loans are the primary factors that determine a bank’s overall CRA rating. A bank can achieve a great rating without any CD activities, but the likelihood of an outstanding or satisfactory rating increases with the volume of CD activities. While CD activities are not the primary factor in determining the overall rating many banks spend a disproportionate amount of time identifying and documenting CD activities.

The regulations and interpretations that define what qualifies as a CD activity are complex. In some cases, an activity that appears to be an obvious example of a CD activity may not qualify as a result of a small exception in the rules. It is not uncommon for an activity that does qualify as a CD activity to go without credit due to failure to document the activity and bring it to the attention of the examiner.

Reminder: The registration fee includes live attendance AND a playback recording of the session, available once the session concludes.

This session is eligible for Continuing Education (CE) credits by the American Bankers Association.