Podcast
Questions and Answers
What criteria do the Lending, Investment, and Service Tests cover?
What criteria do the Lending, Investment, and Service Tests cover?
- Institutions that have received approval as wholesale or limited-purpose institutions
- Institutions that meet large bank threshold criteria (correct)
- Institutions that meet small bank threshold criteria
- Institutions that have not been approved for evaluation under a strategic plan
Under what circumstances can examiners use economic and demographic data from one institution's examination for other institutions serving the same or similar assessment areas?
Under what circumstances can examiners use economic and demographic data from one institution's examination for other institutions serving the same or similar assessment areas?
- When the institutions are in the same market
- When it is consistent with a complete and accurate assessment of performance (correct)
- When requested by examination procedures
- When it minimizes the burden imposed by the examination process
When can community contacts be combined to cover more than one institution in a given market?
When can community contacts be combined to cover more than one institution in a given market?
- When examiners exercise judgment and common sense
- When covering more than one institution in a given market (correct)
- When requested by the institutions
- When institutions are similar in size
What should examiners do when an institution has analyzed its CRA performance?
What should examiners do when an institution has analyzed its CRA performance?
What should be ensured about community development loans, except for multifamily loans?
What should be ensured about community development loans, except for multifamily loans?
What should be reviewed to ensure the amount of the institution’s third party or affiliate lending?
What should be reviewed to ensure the amount of the institution’s third party or affiliate lending?
What information should be determined about community development loans?
What information should be determined about community development loans?
What should be ensured about community development loans to meet the definition of community development loans?
What should be ensured about community development loans to meet the definition of community development loans?
What type of loan data must large institutions collect and report?
What type of loan data must large institutions collect and report?
What does the automated form of data collection allow examiners to do?
What does the automated form of data collection allow examiners to do?
When can large institutions be examined under large institution examination procedures?
When can large institutions be examined under large institution examination procedures?
Under what conditions may any size institution opt to be examined as a large institution?
Under what conditions may any size institution opt to be examined as a large institution?
What factors are considered during examination under the Community Reinvestment Act (CRA)?
What factors are considered during examination under the Community Reinvestment Act (CRA)?
What is assessed particularly in low- and moderate-income areas during CRA examinations?
What is assessed particularly in low- and moderate-income areas during CRA examinations?
What is taken into account during CRA examinations regarding different assessment areas?
What is taken into account during CRA examinations regarding different assessment areas?
What is considered regarding the institution’s CRA performance during examinations?
What is considered regarding the institution’s CRA performance during examinations?
What does the examination scope for large institutions involve?
What does the examination scope for large institutions involve?
What type of data is reviewed to obtain relevant demographic, economic, and loan data for each assessment area?
What type of data is reviewed to obtain relevant demographic, economic, and loan data for each assessment area?
What information is documented for use in evaluating the institution’s performance during examinations?
What information is documented for use in evaluating the institution’s performance during examinations?
Who are contacted to update or supplement information during examinations under CRA?
Who are contacted to update or supplement information during examinations under CRA?
What is the assessment area for CRA evaluation?
What is the assessment area for CRA evaluation?
What happens if the assessment area fails to comply with the criteria?
What happens if the assessment area fails to comply with the criteria?
What is reviewed to assess an institution’s CRA performance?
What is reviewed to assess an institution’s CRA performance?
What should not account for more than the institution’s percentage share of the total loans originated by third parties or affiliates?
What should not account for more than the institution’s percentage share of the total loans originated by third parties or affiliates?
What does the lending test involve identifying for evaluation?
What does the lending test involve identifying for evaluation?
What is evaluated when considering the volume of each type of loan made or purchased within the assessment area?
What is evaluated when considering the volume of each type of loan made or purchased within the assessment area?
What is reviewed to determine the reasonableness of an institution's geographic distribution of lending?
What is reviewed to determine the reasonableness of an institution's geographic distribution of lending?
When is an independent analysis of geographic distribution conducted?
When is an independent analysis of geographic distribution conducted?
What is tested when verifying data collected and reported by an institution?
What is tested when verifying data collected and reported by an institution?
What must align with an institution’s business strategy and safe banking practices in its assessment area?
What must align with an institution’s business strategy and safe banking practices in its assessment area?
What should not arbitrarily exclude any low- or moderate-income areas from the assessment area?
What should not arbitrarily exclude any low- or moderate-income areas from the assessment area?
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Study Notes
Community Reinvestment Act (CRA) Examination Criteria
- The Community Reinvestment Act (CRA) examination process evaluates a financial institution's performance in meeting the credit needs of its entire community, including low- and moderate-income neighborhoods.
- The assessment area for CRA evaluation includes the institution's main office, branches, and surrounding geographies where it originated or purchased a substantial portion of its loans.
- The assessment area must consist only of whole census tracts and should not arbitrarily exclude any low- or moderate-income areas.
- Performance evaluations and financial data of similarly situated institutions are reviewed to assess the institution’s CRA performance.
- If the assessment area fails to comply with the criteria, a revised assessment area is developed based on discussions with management.
- The institution’s lending and community development opportunities in its assessment area must align with its business strategy and safe and sound banking practices.
- Large bank consortia or affiliate lending should not account for more than the institution’s percentage share of the total loans originated by the consortia, third parties, or affiliates.
- The lending test involves identifying the institution’s loans to be evaluated, including HMDA and CRA Disclosure Statements, interim HMDA Loan Application Register, and any interim CRA loan data.
- The volume of each type of loan made or purchased within the assessment area is identified and evaluated considering the institution’s resources, business strategy, and performance context.
- Analyses prepared by the institution for insight into the reasonableness of its geographic distribution of lending are reviewed, and the accuracy of the data is tested.
- An independent analysis of geographic distribution is conducted as necessary to determine the extent to which the institution is serving geographies in each income category.
- Sample loan files are tested to verify the accuracy of data collected and reported by the institution, ensuring that affiliate loans are not double-counted and all consumer loans in a particular category are included when evaluated.
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