More reasons to be concerned about the CRA NPR

In my previous email I explained two big reasons for bankers to be concerned about the radical changes in the CRA Notice of Proposed Rule-making

  1. the need to pass all 3 new performance tests or fail your CRA exam and
  2. the dramatic changes to Assessment Area delineation rules which will dictate unrealistic performance standards

Those changes alone should provoke every banker in the country to send in comments and concerns to the regulators. But there are other reasons for bankers to worry about what might be in the final rule. Among other big problems with the CRA NRP:

  1. the expensive costs to implement the NRP - "Large Banks" over $500 million in assets are estimated to incur average increased annual costs of $665,000 and even small banks are expected to add nearly $100,000 in annual costs to maintain their CRA program (FDIC estimates)
  2. all banks with more than $500 million in assets will have to formally self-rate their CRA "presumptive rating" annually according to rigid metrics. Failing any single test will result in a "needs to improve" or "substantial non-compliance" rating that banks will be forced to submit to regulators. Imagine the feeling of self-reporting your bank's failure to pass your own CRA performance evaluation!

We encourage you to become fully informed about the radical NPR by watching the recorded "Deep Dive Into the CRA NPR" webinar.