New Final Community Reinvestment Act (CRA) Regulations – What Do They Mean for Your Bank?

In this webinar, we’ll go over the details of the new rule. We’ll discuss who has to do what and when, and set the stage for individual banks’ formation of working groups and stakeholder meetings, so you can understand how these changes impact your bank. We’ll pay particular attention to the timeframes involved, as implementation will be somewhat of a phased process.

After what has seemed like an endless series of fits and starts, 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 large a bank is, the more changes to its CRA responsibilities it will see. But change will impact all banks to some degree.

New Final Community Reinvestment Act (CRA) Regulations – What Do They Mean for Your Bank? has been approved for 2.5 CRCM credits. This statement is not an endorsement of this program or its sponsor. Credits are redeemable for live attendance only. For questions on certificates, please email support@oncourselearning.com. Certification holders must report these credits at https://aba.csod.com.

What You’ll Learn

• The four chief goals of the new rules: (1) Encourage banks to expand access to credit, investment, and banking services in LMI communities; (2) Adapt to changes in the banking industry, including internet and mobile banking; (3) Provide greater clarity and consistency in the application of the CRA regulations; and (4) Tailor CRA evaluations and data collection to bank size and type
• How these goals will be accomplished, including new tests for large and intermediate banks, and revised data collection responsibilities, among many other changes
• Evaluation of lending activities outside a bank’s assessment area
• Evaluation of activities in “non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models.” What does this mean? What will be evaluated?
• Framework to evaluate digital delivery of products and services
• The new “metrics-based approach” to CRA evaluations, using benchmarks and peer data
• Listing CRA-eligible activities – what are these?
• More clarity with “community development”
• New asset-size thresholds – what are the responsibilities within each of these tiers?
• Small banks – continue to be evaluated under existing standards, or opt into the new framework?
• The new Retail Lending Test, Retail Services and Products Test, the CD Financing Test, and the CD Services Test – what do these mean, and who must do what here?
• Use of HMDA data within the new CRA framework
• Transparency with the public, including encouraging public input on community needs and opportunities
• Reinforcing the connection between CRA and fair lending – it’s always been there but now it’s explicit
• More objectivity in the evaluation process, including weighting of factors
• Maintains the strategic plan option
• Timeframes for compliance, including provisions allowing more times for banks to come into compliance with the new regulation

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.

Presenter

Carl Pry is a Certified Regulatory Compliance Manager (CRCM) and Certified Risk Professional (CRP) who is a Managing Director for Treliant Risk Advisors in Washington, D.C. Through his working career, as well as through his experience as a banking attorney and officer, he has provided a variety of regulatory compliance and financial performance services to financial institutions and other clients throughout the country. He has written extensively regarding consumer and commercial compliance, tax, audit, and financial institution legal issues, and is a frequent contributor to and currently serves on the Editorial Advisory Board for the ABA Bank Compliance magazine. He has spoken at scores of banking, compliance, and state bar associations, and has conducted training sessions for financial institutions across the country.

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