Schedules for third- and fourth-quarter Community Reinvestment Act (CRA) examinations by the Federal Deposit Insurance Corp. (FDIC) show a total of 444 banks slated for the evaluations, with 64% of those coming up in the third quarter.
The anti-redlining CRA, enacted in 1977, is intended to encourage insured banks and thrifts to help meet the credit needs of the communities in which they are chartered to do business, including low- and moderate-income neighborhoods, consistent with safe and sound operations.
The FDIC noted that CRA examinations are scheduled based on an institution’s asset size and CRA rating. The agency notes that absent reasonable cause, an institution with $250 million or less in assets and a CRA rating of “satisfactory” can be subject to a CRA examination no more frequently than once every 48 months. And absent reasonable cause, an institution with $250 million or less in assets and a CRA rating of “outstanding” can be subject to a CRA examination no more frequently than once every 60 months.
One of four ratings is possible from a CRA exam: outstanding, satisfactory, needs improvement, and substantial noncompliance.
The FDIC notes that the exam schedules are subject to change. For example, a regulated financial institution not otherwise scheduled for an examination may be examined in connection with the application for a deposit facility. Or some may require more time and resources than originally allotted, resulting in a delay of other scheduled examinations.