ANHD 2016 Building the Community Development Movement
Putting the Community back into the Community Reinvestment Act
The Community Reinvestment Act (CRA) states that banks have an affirmative obligation to help meet the credit needs of the low- and moderate-income communities in which they do business. The CRA examination evaluates whether the banks are meeting this obligation. Recent and upcoming examinations open to the public are:
- 4th Quarter 2012 exams with open comment periods: Goldman Sachs, Deutsche Bank. The deadlines for Wells Fargo, HSBC, and Signature Bank recently passed, but if you still want to comment, we encourage you to reach out to regulators to inquire about an extension
- 1st Quarter 2013 exams: Citibank (OCC exam in January), Emigrant Savings Bank (FDIC)
- The NY State Department of Financial Services 1st quarter 2013 exam schedule is not yet released.
The power of the CRA comes from the community’s input, both on exams and bank activities that relate to CRA (mergers/acquisitions, branch openings/closings). Exams are conducted by one of three federal regulators (OCC, FDIC, and Federal Reserve Bank). Some banks are also examined by NY State’s Department of Financial Services.
The few organizations chosen by the examiners to be community contacts have a unique opportunity to respond in person to the bank’s activities. But this is not the only way to provide feedback. While not widely known, CRA examiners are required to take into account public comments for each exam. Public participation can impact a bank’s rating and can also lead to CRA agreements whereby banks commit to increasing investments and services in low-income and working class communities.
Unfortunately, participation is easier said than done. For one thing, most exams only take place every 2-3 years and often cover very large geographic areas, making it difficult to understand how the bank is reinvesting in a particular community. Second, it is difficult to meaningfully participate when exam schedules are published barely a month before the quarter in which the examination is to take place, deadlines to comment are not readily available, agency contacts are often not published, and little of the bank’s CRA performance data is publically available for the community to review.
ANHD knows that local data is crucial to being able to provide meaningful feedback on our bank’s CRA activities. The CRA exam is the only formal mechanism for regulators to evaluate banks’ CRA performances. The public comments are an important way to help regulators understand how banks are operating in the local context to help meet the credit needs of our communities. The more comments they receive, the clearer picture they have to truly evaluate the banks’ performance.
We hope that the latest State of Bank Reinvestment in NYC: 2012 and future editions serve as useful tools for the community to provide public comments on the banks in their neighborhoods. We will also regularly track exam schedules and ways to comment and will publish them, so the public can more easily participate.