2024 CRA Q&A
How will loan data collection change given the pause on the 1071 rule? If that’s not a topic for today, where can I find a good source for information regarding loan data collection? I would not make any changes until…
GeoDataVision
The new CRA Rule: Confusion Reigns
Our office has been inundated with inquiries about an aspect of the impact of the impending new CRA rule. As we have noted in previous articles there are mistakes and inconsistencies in the new CRA Rule, and some of these…
What is a “REMA” and why is it so important?
As I write this article the Department of Justice is pursuing a record-breaking number of “redlining” cases against banks and mortgage lenders. The “Anti-redlining Initiative” was announced October 22, 2021, by Attorney General, Merrick Garland. In his press release AG…
Coming Soon: Climate Risk Assessments for Banks – Are You Ready?
Climate Risk Assessments for banking purposes are in the early stages of development. No laws or regulations have been issued regarding the topic. Nonetheless, it is obvious that lawmakers and regulators are keenly intent on developing laws and regulations to…
2022 Community Development Report by State
2022 CRA data released by the FFIEC December 2023 Ordered Alphabetically by State One of the most important CRA responsibilities for Intermediate-Small Banks and Large Banks is “Community Development Lending”. But while Community Development Lending is critically important, there is…
Part VI: The New CRA Rule: Another Surprise – for Banks and maybe for the Regulators too (part of a series taking a critical look at the new rule)
The new CRA Rule has a number of surprises for banks and maybe a surprise or two for the regulators themselves. One of those surprises involves the transition rules in §__.51 as they pertain to the April 1, 2024, the…
Part V; A Critical Review of Serious Flaws in the New CRA
Most of the articles published about the new CRA rule have repeated the party line – that the new rule “modernizes” the Regulation, that it will make CRA exams more objective and CRA ratings more consistent, etc. But the new…
The Disastrous New CRA Rule: Part IV – Is the 80% Retail Lending Assessment Area Exemption Really a Break for Large Banks?
Dear Banker, The new CRA Rule contains a “break” for Large banks that would exempt them from having to declare Retail Lending Assessment Areas (“RLAAs”) for any calendar year in which the bank lends more than 80% of its home…
The Disastrous New CRA: Part III – It’s worse than you think and which banks are hurt the most
In Parts I and II I explained the devastating impact of the new CRA Rule and what the underlying reasons for that adverse impact are. In Part III I will touch upon what banks are most significantly impacted by the…
New CRA Rule is a Disaster for Banks Part II: Key Regulator says Goal was “to raise the bar for CRA performance”
In my previous email I explained the devastating impact of the new CRA Rule on the percentage of banks receiving a less than satisfactory CRA Performance Rating. The data in Table 32 within the new Rule demonstrate that if the…
New CRA Rule is a Disaster for Banks: Part I – And the Numbers Prove it!
With all the news stories circulating about the new CRA Rule, it’s surprising that not one article has addressed the topic that should be the biggest story of all – the catastrophic implications for banks! What I am referring to…
Section 1071 Q&As post twenty five
To determine the size of the small business do we include the entire relationship or just the information for the individual loan? It would be based on the GAR of the borrower and affiliates if borrower elects to provide that…
Section 1071 Q&As post twenty four
Will CRA Large Banks still need to report their loan data after this regulation take effect? It is reporting small business image likely that CRA reporting would continue during the transition period. But after that (beginning in 2026) small business…
Section 1071 Q&As post twenty two
Do loan applications and originations for natural persons (individual, DBA, or sole proprietorship) count as a covered application or covered transaction?
Section 1071 Q&As post twenty one
I do regulatory reporting for a bank as well as their loan loss reserve. Will this affect the allowance calculation?I do regulatory reporting for a bank as well as their loan loss reserve. Will this affect the allowance calculation? No.…
Section 1071 Q&As post twenty
The definition of a small business loan based on revenues and loan size. And how does that differ from the definition of a CRA small business loan? Thank you. Loan size will not be relevant under 1071 unlike CRA where…
Section 1071 Q&As post nineteen
If the owners of a minority owned business are not minority individuals, then how do we define a minority owned business? The key to your question is to understand that the Bureau has introduced “control” as an alternative to ownership.…
Section 1071 Q&As post eighteen
To be clear, 1071 is replacing CRA reporting or is it in conjunction with CRA reporting? The small business data collected under 1071 will replace small business and small farm data collected under CRA after 1071 is completely phased in.…
Section 1071 Q&As post seventeen
I’m confused. You have to ask if LGBTQ+ but you can’t ask about the ownership of the business to determine if there is a principal owner? You must ask if there are any principal owners and if so, you must…
What is statistical significance and how is it applied to “Redlining” for banks?
Many bankers hear the term “Statistical Significance” but don’t know what it means and how it is relevant to potential fair lending violations. Typically, when an examiner is evaluating if a bank is redlining, they will calculate a lender’s penetration…