What are CRA ratings?

What are CRA ratings?

What is an outstanding CRA rating? “Outstanding” An institution in this group has an outstanding record of helping to meet the credit needs of its assessment area, including low- and moderate-income neighborhoods, in a manner consistent with its resources and capabilities.

Why are CRA ratings important? CRA ratings are public, which gives members of the community the opportunity to send comments to regulators about whether they think a bank is doing a good job investing in the community.

Which is a consequence of a poor CRA rating? A negative rating brings a higher level of scrutiny both from the bank’s regulator and the general public. Also, banks are expected to take immediate action to begin correcting the negative CRA rating. Therefore, the bank’s CRA regulator will often shorten the time frame before their next examination.

What are CRA ratings? – Related Questions

What qualifies as a CRA loan?

For CRA, community development is: affordable housing (including multifamily rental housing) for low- and moderate-income individuals; community services targeted to low- and moderate-income individuals; activities that promote economic development by financing small businesses or small farms (gross annual revenues of

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Who does CRA apply to?

CRA applies to FDIC-insured depository institutions, such as national banks, savings associations, and state-chartered commercial and savings banks.

Are CRA ratings public?

Examination ratings are not made public until 45-60 days after the examination has concluded.

Are CRA reports public?

The CRA disclosure statement, which is publicly available on the Federal Financial Institutions Examination Council (FFIEC) website,6 provides detailed information on the bank’s small-business and small-farm lending.

What is included in a CRA performance evaluation?

What is included in a CRA performance evaluation? The CRA performance evaluation (PE) generally includes a description of the institution and its assessment area(s); its CRA rating; and the facts, data, and analyses supporting the rating.

What is the primary purpose of the CRA?

The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.

What is a CRA performance evaluation?

Each Performance Evaluation includes: The bank’s CRA rating(s) Description of the bank and its community. Conclusions about the bank’s performance. Discussion of the facts and data supporting the conclusions.

Are banks required to keep a CRA public file?

Your bank must maintain a public file, updated as of April 1 each year, that includes the following information: The file must also include your bank’s response to these comments. A copy of the public section of your bank’s most recent CRA performance evaluation.

Which CRA test is weighted more heavily?

Evaluations are based on lending, investment and service tests; for most banks, the lending test is weighted most heavily in determining the overall rating.

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What can happen if a bank receives a less than satisfactory rating on their CRA exam?

A less than satisfactory CRA rating can pose a formidable and often insurmountable hurdle for an applicant. Denials are made public and therefore carry significant reputational risk.

What is the CRA service test?

The 1977 Community Reinvestment Act (CRA), originally enacted by Congress to combat credit “redlining” in low- and moderate-income neighborhoods, includes a “service test” that could provide powerful incentives to financial institutions for improving retail banking services for low-income unbanked and underbanked

What revisions were made to the focus of CRA in 1995?

The CRA regulations were substantially revised again in 1995, in response to a directive to the agencies from President Clinton to review and revise the CRA regulations to make them more performance-based, and to make examinations more consistent, clarify performance standards, and reduce cost and compliance burden.

Who is subject to CRA?

The CRA applies to FDIC-insured depository institutions, including national banks, state-chartered banks, and savings associations. However, credit unions backed by the National Credit Union Share Insurance Fund and other non-bank entities are exempt from the legislation.

How do banks meet CRA requirements?

The CRA requires that each insured depository institution’s record in helping meet the credit needs of its entire community be evaluated periodically by one of the federal bank regulatory agencies (agencies).

What is a small business loan under CRA?

So: A loan that is less than $1,000,000 going to a business whose revenue is less than $1,000,000 is considered a small business loan by examiners. BUT A loan that is less than $1,000,000 going to a business who has revenues greater than $1,000,000 is ALSO considered a small business loan.

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How often are banks examined for CRA?

Depository institutions undergo CRA exams about every 3 years, depending on past performance. Every business quarter, the Federal Deposit Insurance Corporation (FDIC) releases the CRA Examination Schedule by region and lists the information about each bank that is being examined.

What is the maximum fee a bank can charge for access to the CRA Public File?

You can ask to inspect this file, at no charge to you, any time the bank is open. If you do your banking at a branch office, you can ask to see its CRA file, which contains a copy of the public section of the bank’s most recent CRA performance evaluation and a list of services provided by your branch.

What is a CRA in Canada?

The Canada Revenue Agency ( CRA )’s mandate is to: administer tax, benefits, and related programs, and to ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians.

What is CRA reporting?

The purpose of CRA data collection and reporting is to enable examiners and the public to evaluate whether a bank is helping to meet the credit needs of its communities through its small business, small farm loans, consumer and home mortgage lending as applicable.

How do I find my CRA assessment area?

Answer: A bank’s assessment area should include the geographies in which the bank has its main office, its branches, and its deposit-taking ATM’s, as well as the surrounding geographies in which the bank has originated or purchased a substantial portion of its loans.

What is a CRA officer?

The CRA Officer is responsible for maintaining Brand Bank’s Satisfactory or better Community. Reinvestment Act regulatory rating and compliance with federal Community Reinvestment Act. regulations.

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