14 Questions
What is considered in assessing an institution's community development performance?
The number and amount of community development loans and qualified investments
What factors are considered in the responsiveness to community development opportunities?
Results of assessment of community development needs and opportunities provided by the institution
What is included in the extent of providing community development services?
Provision and availability of services to low- and moderate-income people
What should be done with the conclusions regarding an institution’s community development performance?
Summarize conclusions and retain in the work papers
What should be included in the work papers when summarizing conclusions concerning the geographic distribution of loans and the distribution of loans by borrower characteristics?
Information about demographic characteristics that could affect loan demand
When reviewing complaints relating to the institution’s CRA performance, what should be evaluated if there were any complaints?
The institution’s record of taking action in response to written complaints about its CRA performance
What should be included in the work papers when summarizing conclusions regarding the institution’s record of taking action in response to written complaints about its CRA performance?
Total number of complaints and resolutions with examples illustrating nature, responsiveness, and resolution of complaints
When should preliminary findings in the lending test section be discussed with management?
If there were any complaints received by the institution relating to its CRA performance
How are ratings for Loan-to-Deposit Ratio determined?
Based on the reasonableness of the ratio given the institution's size, financial condition, and assessment area credit needs
What does the Intermediate Small Institution Community Development Test assess?
An institution's community needs, engagement in community development activities, and strategic application of community development resources
What is considered when reviewing the Geographic Distribution of Loans?
The dispersion of loans throughout the assessment area(s)
How are ratings for Borrower’s Profile determined?
Based on the penetration of borrowers from different income levels and business sizes in the assessment area(s)
What do examiners consider when assessing an institution's Community Development Test?
Assessment of community needs, along with information from community, government, civic, and other sources
What is involved in verifying the qualification of community development loans and investments?
Reviewing records in case of participation in community development lending by consortia or third parties
Study Notes
FDIC Community Reinvestment Act Intermediate Small Bank Ratings Matrix
- The FDIC provides a matrix for Intermediate Small Bank CRA ratings based on various characteristics.
- Loan-to-Deposit Ratio: Outstanding, Satisfactory, Needs to Improve, Substantial Noncompliance categories are based on the reasonableness of the ratio given the institution's size, financial condition, and assessment area credit needs.
- Assessment Area(s) Concentration: Ratings are based on the majority of loans and lending activities within or outside the institution's assessment area(s).
- Geographic Distribution of Loans: Ratings correspond to the dispersion of loans throughout the assessment area(s).
- Borrower’s Profile: Ratings are based on the penetration of borrowers from different income levels and business sizes in the assessment area(s).
- Response to Substantiated Complaints: Ratings reflect the institution's actions in response to complaints about its performance in meeting assessment area credit needs.
- Intermediate Small Institution Community Development Test: It assesses an institution's community needs, engagement in community development activities, and strategic application of community development resources.
- The test allows flexibility for intermediate small institutions to focus on meeting community needs through various activities.
- Examiners consider assessment of community needs, along with information from community, government, civic, and other sources.
- The process involves identifying and reviewing community development loans, qualified investments, and services, including those provided by affiliates or third parties.
- It also includes verifying the qualification of community development loans and investments, and reviewing records in case of participation in community development lending by consortia or third parties.
- Conclusions are formed based on the institution's capacity, constraints, and performance context review.
Test your knowledge on Community Reinvestment Act requirements for Intermediate Small Banks including the assessment of loan demand, borrower characteristics, and geographic distribution of loans.
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