Examiners will guide banks to minority-owned banks, low-income credit unions for CRA credits

Examiner instructions on evaluating banks for compliance with anti-redlining rules will now include guidance urging the banks to consider partnering with minority depository institutions (MDI) and low-income credit unions for credits toward compliance , the board chairman for the federal insurer of bank deposits said Wednesday.

In remarks to the National Bankers Association (NBA, a group largely representing minority-owned banks) meeting in Washington, Federal Deposit Insurance Corp. (FDIC) Jelena McWilliams said the examiner guidance will now include a description of activities involving minority- or women-owned financial institutions or low-income credit unions under the applicable performance criteria under rules implementing the Community Reinvestment Act (CRA) if the activities are not discussed elsewhere in the evaluation.

“CRA officers at many larger institutions are not aware of how partnering with MDIs – whether through financial support, lending activities, or service activities including technical assistance – can count for CRA credit,” McWilliams said. “In addition, there may be differences in how examiners count these activities.”

In addition to updating the examiner guidance, McWilliams said the FDIC would continue to discuss the benefits of MDI partnerships with CRA officers at large banks during roundtables the agency plans to Oct. 17 (in Atlanta) and Nov. 7 (in Chicago). A similar roundtable was held in June. “And we plan to engage our network of community affairs specialists around the country to discuss these benefits at outreach events they participate in, including with bankers and state CRA officer associations,” she said.

McWilliams said the FDIC has also reached out to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve to ask them to “similarly consider updating the Performance Evaluation for MDI activities.”

The FDIC chairman also said a new subcommittee for MDIs is being formed (under the Community Banking Advisory Committee) to consider a draft update for the agency’s “Policy Statement Regarding Minority Depository Institutions.” The subcommittee will meet in December, she said, and that the updated policy statement will be issued for comment before the FDIC Board votes on it for final approval.

Remarks by FDIC Chairman Jelena McWilliams to the National Bankers Association 92nd Annual Convention; Washington, D.C.