Interagency Q & A Regarding Community Reinvestment

Greg Jones

CRCM—Director Regulatory Compliance Services

May 7, 2017

The FDIC, Federal Reserve and OCC released final revisions to the Interagency Questions and Answers Regarding Community Reinvestment on July 15, 2016. In this release they adopted proposed questions from September 10, 2014, made some revisions to other questions and added new questions.

The questions address alternative systems for delivering retail banking services, community development-related issues and qualitative aspects of performance. Outlined below is a summary of the changes to the questions.

Revised Questions

  1. Clarified what is meant by “promote economic development.”
  2. Added “an activity related to a new or rehabilitated communications infrastructure” as a new activity to revitalize or stabilize underserved nonmetropolitan middle-income geographies.
  3. Added an example of how renewable energy facilities could benefit low- or moderate-income individuals in an affordable housing development loan.
  4. Added small dollar loan programs and utilization of alternative credit histories as additional examples of innovative or flexible lending practices for the lending test.

New Questions

  1. Explained that examples included throughout the Q&A are not complete, but rather examples to illustrate the types of activities and that other activities could receive CRA consideration (related to 2 above).
  2. Addressed how examiners evaluate whether retail services are tailored to meet the needs of geographies of different income levels.

Previously Proposed Questions (adopted)

  1. Retail and community development services questions clarified to help differentiate retail services that are also community development services.
  2. Clarification of how community development services are quantitatively and qualitatively evaluated.
  3. General guidance as to how examiners evaluate whether a financial institution has been “responsive” to credit and community development needs.
  4. Clarification of the “innovativeness” standard in the CRA regulations.

As you can see, a lot has now been clarified and answered in regards to Community Reinvestment. Hopefully these final revisions will clear up any confusion!

If you happen to need further explanation to any of this information, please contact Bill Pitt.

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