Topic: Community Reinvestment Act (CRA)
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For an OCC-supervised savings bank, under the new Illinois Community Reinvestment Act (Illinois CRA), is the required public notice separate from the one required under the federal CRA? Are we now required to have two separate policies related to the CRA, one for Illinois and one for federal? Also, the Illinois CRA states that covered financial institutions must meet the financial services needs of deposit-based assessment areas if they provide “all or a majority of its products and services via mobile and other digital channels.” Is this the same as a “majority” under the federal CRA?
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We do not recommend that your institution post an Illinois CRA public notice. The Illinois CRA does not apply to your bank — it applies only to Illinois-chartered banks (among other nonbank covered entities), and your institution is a federally-chartered savings bank. Additionally, the notice itself would contain misleading language because you are not a…
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Regarding the recently signed economic equity legislation, are banks exempt from the Predatory Loan Prevention Act? Also, must we immediately begin posting the public notices required under the new Illinois CRA, and will we be examined on the Illinois CRA each time we have a state exam? Currently, the FDIC examines us for the federal CRA every other examination. Will the IBA be offering any training on this new legislation?
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Predatory Loan Prevention Act State and national banks and savings banks are exempt from the provisions of the Predatory Loan Prevention Act, which caps the annual percentage rate (APR) on consumer loans at 36%. However, the law does apply to loans made by a covered lender and purchased by a bank, such as an indirect…
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Are Paycheck Protection Program (PPP) loans of $1 million or less reportable as small business loans for Community Reinvestment Act (CRA) purposes? Can the same loans also be considered community development loans (CDLs) for CRA purposes?
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Generally, PPP loans of $1 million or less may be reported as small business loans for CRA purposes, but we do not believe the same loans also may be reported as CDLs, subject to the caveats below. However, PPP loans over $1 million may qualify as CDLs for CRA purposes if certain criteria are met.…
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Can banks earn Community Reinvestment Act (CRA) credit for making Paycheck Protection Program (PPP) loans?
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Yes, banks can earn CRA credit for making PPP loans. The FDIC has published guidance stating that “in most cases” PPP loans will receive CRA credit. The federal banking agencies also released a Joint Statement on CRA Consideration for Activities in Response to COVID-19 confirming that “the agencies will favorably consider . . . retail…
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Are there any size requirements for the following lobby notices: CRA Notice, Annual Financial Disclosure Notice, Equal Housing Poster, HMDA Data Availability Notice, and Regulation CC Funds Availability Notice? Can these notices be displayed on an electronic board that switches between the notices? What does the term “prominently displayed” mean with respect to the Equal Housing Poster? Also, can you confirm that we are not required to disclose our rates on a rate board in our lobby?
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There are size requirements for some (but not all) of the notices listed in your questions. If there are no express size requirements, generally these notices should be sized and placed so that customers are able to see the notices and easily read their text. Each notice is addressed separately below. CRA Notice: The size…
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One of our branches currently is open on Saturdays, but we would like to start closing the branch for the entire day. We are planning to post a notice about the change and notify our customers. Are there any additional notification requirements that would apply?
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Yes, because this branch will remain closed for a full day every Saturday, we believe that your bank must follow the notification procedures in the Illinois Promissory Note and Bank Holiday Act (the “Act”) for regular bank closings. Under the Act, Saturdays are considered half holidays, and banks are permitted to remain closed after noon…
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We are a two-bank holding company, and we are considering a merger that would change our CRA classification from a small bank to an intermediate small bank. Our total assets would remain under $500 million after the merger. Are there any other regulatory implications besides CRA classification that we should be aware of? We use the FFIEC 051 for our Call Report, and the merger will not result in us crossing the $1 billion asset threshold. Both banks are HMDA reporters, and all of our customer forms and agreements are already identical.
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We are not aware of any other regulatory impact that might result from increasing your bank’s asset size to a level that remains under $500 million. As you noted, your bank will continue to use the FFIEC 051 Call Report for banks with domestic offices only and total assets less than $1 billion. Your bank…
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Our bank is located on the border of Missouri. Will it change our Community Reinvestment Act (CRA) assessment area if we put a non-deposit taking ATM in that state? We would not open any branches in that state.
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No, we do not believe that installing non-deposit taking ATMs in another state would alter your bank’s required CRA assessment areas. Your CRA assessment areas must include your bank’s main office, its branches, and its deposit-taking ATMs (as well as the surrounding geographies in which your bank has originated or purchased a substantial portion of…
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Is there a regulatory requirement to have a designated CRA officer? We have an employee who is the designated contact for CRA inquiries and issues.
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No, there is no regulatory or statutory requirement to designate a CRA officer. Your bank is required to designate an official to accept written comments about your CRA performance, but that individual is not required to have the title “CRA Officer.” For resources related to our guidance, please see: FDIC CRA Regulations, 12 CFR 345,…
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Does the Illinois Promissory Note and Banking Holiday Act require that we remain open at least four days a week? What does the law require to close a branch one day a week on a regular basis or to reduce the hours at a branch? We plan to notify our customers in advance of our planned changes and check our account agreements for any language that might address our hours of operation.
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The Illinois Department of Financial and Professional Regulation (IDFPR) has interpreted the Illinois Promissory Note and Bank Holiday Act to require banks to remain open at least four and a half days each week. According to the IDFPR, a bank may close on Sundays and at noon on Saturdays without notice. In addition, a bank…