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Assessment Areas under the new CRA rule – Estimated Standards to be available soon

There has been much understandable confusion about many aspects of the new CRA rule. But perhaps there’s been no greater confusion and anxiety than about the Assessment Areas. And this anxiety has become more acute the closer we get to April 1, 2024, the effective date for the new rule and the “applicable” date for […]

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Changes to 2024 MSAs Have Implications for CRA

In July 2023, the Office of Management & Budget published an update to “Core Based Statistical Areas, Metropolitan Divisions, and Combined Statistical Areas”. That document contains the latest definitions of Metropolitan Statistical Areas or “MSAs’) which play a big role in CRA Assessment Area delineation. The FFIEC adopted the new MSAs effective January 1, 2024. […]

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The Potentially Adverse Fair Lending Implications of the New CRA Rule

There has been much understandable handwringing about the new CRA and its complexity as well as the high CRA exam failure rate predicted by regulators based on the new assessment areas and the higher performance standards embedded in the new rule. But there is a greater potential regulatory threat that goes beyond the CRA performance […]

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How to Figure Out How the New CRA Affects Your Bank

I’ve written at least a dozen articles about the dramatic impact the new CRA is going to have on banks. Until now, only about 1.2% of bank CRA examinations end with a failing grade. But, by the estimates of the regulators, if the new rule had been in effect during 2018-2020 that failure rate could […]

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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 the Court rules on the 1071 challenge which will be this June. I suggest speaking […]

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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 mistakes and inconsistencies will have immediate consequences for about 200 US banks. What we are […]

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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 Garland stated, “We know full well that redlining is not a problem from a bygone […]

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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 require banks to develop climate-related risk assessments. The Chairperson of the Federal Reserve and various […]

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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 very little information available about the Community Development Loan Market. GeoDataVision has captured all the 2022 […]

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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 effective date of the new rule, the concomitant applicable date of §__.16 (the new Facility-Based […]

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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 CRA has a very serious, if not a fatal flaw, that will be devastating to […]

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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 mortgages, multifamily loans, small business loans, small farm loans, and automobile loans (if auto loans […]

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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 Rule. If you are wondering about who gets affected the most by the new […]

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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 Rule had been applied from 2018-2020 there would be nearly a 900% increase in the […]

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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 is the dramatic increase in the CRA exam failure rate that can be expected as […]

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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 rate in majority-minority tracts (or a variation thereof) and compare the lender’s MM tract penetration […]

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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 information (but it is not required, and lender may ignore aﬃliate GAR) Do you know […]

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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 and small farm loans under CRA will likely be discontinued being reported under CRA. I […]

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