After what has seemed like an endless series of irregular periods of action, including the issuance of a Final Rule (that was later revoked) by the OCC, the OCC, Federal Reserve, and FDIC have finally issued their long-awaited amendments to the Community Reinvestment Act (CRA) regulations. Banking has come a long way since 1977, when the original CRA regulations were issued – we’ve seen the evolution into digital products and services, the incredible new array of products and services, and major changes in the way those products are delivered.
But the core concepts of the CRA remain: banks are evaluated on their performance within their communities, particularly on the lending side, with a particular focus on Low- and Moderate-Income (LMI) areas within its assessment area. The CRA regulations have long needed to be updated to reflect the new realities of banking, and we finally know what those responsibilities are. The good news is that the Final Rule is not dramatically different than the Proposal we’ve been studying for some time. However, as always, there are important differences we must understand and incorporate.
Also as expected, the compliance responsibilities are divided into three distinct categories, depending on bank asset size: small, intermediate, and large. The larger a bank is, the more changes to its CRA responsibilities it will see. But change will impact all banks to some degree.
What You’ll Learn
- The four chief goals of the new rules
- New tests and revised data collection for large and intermediate banks
- Small banks – continue to be evaluated under existing standards, or opt into the new framework?
- Evaluation of lending activities outside a bank’s assessment area
- Evaluation of activities in non-branch delivery systems
- Framework to evaluate digital delivery of products and services
- The new “metrics-based approach” to CRA evaluations and CRA-eligible activities
- The new Retail Lending Test, Retail Services and Products Test, the CD Financing Test, and the CD Services Test
- Use of HMDA data within the new CRA framework
- Transparency with the public, including encouraging public input on community needs and opportunities
Who Should Attend
This webinar will be useful for anyone in the bank who has any sort of direct responsibility under the CRA, including compliance professionals, risk managers, auditors, legal counsel, and others. As well, anyone on the lending side of the bank who will be responsible for any of the many activities, products, services, and activities that will be evaluated under the new standards, will benefit from the discussion. And of course senior management and Boards of Directors will benefit by understanding what the new requirements entail and the timeframes for compliance with the new standards.