Podcast
Questions and Answers
What is considered in assessing an institution's community development performance?
What is considered in assessing an institution's community development performance?
- The number of branches in high-income areas
- The number and amount of community development loans and qualified investments (correct)
- The institution's profit margin
- The institution's advertising budget
What factors are considered in the responsiveness to community development opportunities?
What factors are considered in the responsiveness to community development opportunities?
- Customer satisfaction survey results
- Number of ATMs in urban areas
- Results of assessment of community development needs and opportunities provided by the institution (correct)
- Stock market performance
What is included in the extent of providing community development services?
What is included in the extent of providing community development services?
- Partnerships with high-end retailers
- Provision and availability of services to low- and moderate-income people (correct)
- Investment in luxury real estate
- Exclusive services for high-income individuals
What should be done with the conclusions regarding an institution’s community development performance?
What should be done with the conclusions regarding an institution’s community development performance?
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?
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?
When reviewing complaints relating to the institution’s CRA performance, what should be evaluated if there were any complaints?
When reviewing complaints relating to the institution’s CRA performance, what should be evaluated if there were any complaints?
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?
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?
When should preliminary findings in the lending test section be discussed with management?
When should preliminary findings in the lending test section be discussed with management?
How are ratings for Loan-to-Deposit Ratio determined?
How are ratings for Loan-to-Deposit Ratio determined?
What does the Intermediate Small Institution Community Development Test assess?
What does the Intermediate Small Institution Community Development Test assess?
What is considered when reviewing the Geographic Distribution of Loans?
What is considered when reviewing the Geographic Distribution of Loans?
How are ratings for Borrower’s Profile determined?
How are ratings for Borrower’s Profile determined?
What do examiners consider when assessing an institution's Community Development Test?
What do examiners consider when assessing an institution's Community Development Test?
What is involved in verifying the qualification of community development loans and investments?
What is involved in verifying the qualification of community development loans and investments?
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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.
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