Skip to content |
Filing Resources
Community Reinvestment Act (CRA) and the Applications Process
References
|
Community Reinvestment Act (CRA) and the Applications Process
Evaluation by the Federal Reserve System of CRA and other Consumer Issues in Conjunction with an Application The Opportunity for Public Input Submitting a Comment on an Application Related Links When the Federal Reserve System (FRS) accepts an application for which a financial institution's CRA record must be taken into consideration, the institution's most recent CRA performance evaluation and rating is a particularly important and often a controlling factor in the consideration of an institution's record of meeting the credit needs of its community because it represents a detailed, on-site evaluation of that institution by its federal supervisory agency. A financial institution’s record of CRA performance may be the basis for denying or conditioning approval of an application. In evaluating an application, FRS staff determine whether depository institutions affiliated with the applicant and target in the proposed transaction have satisfactory or better consumer compliance and CRA ratings. FRS staff conduct independent reviews of CRA and compliance performance when the financial institution(s) involved in an application have less than satisfactory CRA or compliance ratings or when the FRS receives comments or protests from interested parties on CRA or compliance grounds. Although applications are evaluated on a case-by-case basis, FRS staff commonly analyze and review the following information in conjunction with the institutions' CRA performance:
Following completion of the record, FRS staff review all the relevant information received in connection with the application. This review focuses on the financial institution’s CRA record of lending in low- and moderate-income (LMI) areas and to LMI applicants within the financial institution’s assessment areas. Although an applicant's lending in its entire assessment area is generally reviewed, FRS staff members will typically focus their scrutiny on issues raised in public comments received in connection with the application. HMDA data may also be reviewed to shed additional light on an institution's lending to LMI and minority areas and individuals. Specifically, an institution's home mortgage lending is compared with the overall aggregate lending within a specific geographic area. FRS staff evaluate additional factors that may influence an institution's lending in a particular area, including, but not limited to, the lending products offered by the institution, demographic characteristics of a geographic area, and competition within the institution's market. The FRS acts on an application based on the financial institution’s CRA and compliance record as a whole, and in light of public comments received in connection with an application. The Opportunity for Public Input
An important aspect of the applications process is the
opportunity for the public to comment in writing on any or all
of the factors the FRS must consider in evaluating an
application--including the applicant's CRA performance. In some
instances, public comments provide insight to a financial
institution’s CRA performance. Written comments received from
the public, which may express either support for or opposition
to the application, are reviewed by FRS staff, sent to the
applicant financial institution, and included as part of the public
record that the FRS carefully examines in the evaluation of an
application.
Submitting a Comment on an Application
Public comments may be submitted in connection with an
application currently under review by the FRS. Comments
need not be submitted in any particular format; however, they
should be supported with facts about the applicant's
performance and should be as specific as possible in explaining
the basis for the comment. The FRS maintains a list
(H.2A) of
applications and notices that have been filed or will be filed
shortly with the FRS under the Bank Holding Company Act or
the Change in Bank Control Act. The list briefly describes the
proposal, identifies the Reserve Bank that is processing the
proposal, and lists the date for the expiration of the Federal
Register comment period. Public comments can be sent to the
appropriate Federal Reserve Bank identified in the list, or to
the Federal Reserve Board. Contact information and
addresses are provided at the end of the listing.
Related Links
Federal Financial Institutions Examination Council (FFIEC) web site
The FFIEC is a formal
interagency body empowered to
prescribe uniform principles, standards, and report forms for
the federal examination of financial institutions by the Board of
Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation (FDIC), the National Credit
Union Administration (NCUA), the Office of the Comptroller
of the Currency (OCC), and the Office of Thrift Supervision
(OTS) and to make recommendations to promote uniformity in
the supervision of financial institutions.Additional HMDA and CRA related information, such as CRA Ratings and HMDA and CRA data for a particular institution, can be accessed at the FFIEC web site. CRA
HMDA
Financial Institution Structure and History
|