Bank of America hit with downgraded Community Reinvestment Act rating

Bank of America's reputation suffered another blow this week as its Community Reinvestment Act rating was downgraded to "Satisfactory" from "Outstanding," ending a string of seven consecutive superior ratings.

Once again, Charlotte-based BofA can blame the acquisition of Countrywide Financial and allegations of mortgage improprieties.

Regulators at the Office of the Comptroller of the Currency on Monday released BofA's latest Community Reinvestment Act exam rating and slapped the bank with the downgrade. The rating is a key indicator of the bank's effectiveness in serving low- to moderate-income customers.

Bank of America is the largest bank in the Bay Area, as ranked by branch deposits, with more than 49 percent market share in the region.

BofA joins JPMorgan Chase & Co. and BNY Mellon as the only three banks among the nation's 10 largest lenders to be rated less than Outstanding, says Ken Thomas, a Miami-based consultant and leading expert on the Community Reinvestment Act.

"It's shocking. It's surprising," he says of BofA's downgrade.

"We expect the biggest banks to have outstanding ratings, especially the Too Big To Fail banks," he adds. "All the benefits they get from the government — they need to have outstanding ratings."

The periodic CRA exam is required by law to ensure banks are meeting the needs of low- to moderate-income constituencies where they conduct business. CRA ratings take account of loans made to low- to moderate-income borrowers, investments made toward community development and services provided to the community. Lending is weighted the most. That's also where BofA slipped.

Adam O'Daniel covers banking, entrepreneurs and technology for the Charlotte Business Journal.