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This two-hour on-demand 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.
- 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 COVID-19-related initiatives.
- How CD activities are handled in the current rule and in the proposed rule.
This program is designed for management of the loan department, compliance officers, CRA officers, marketing staff and auditors.
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. A final rule is expected in 2023. The rule will be effective on a rolling scale during the year or two following publications of the final rule. For the near future, all banks will continue to follow the current rules.
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.