FDIC Exposes Bank Compliance Failures Under CRA

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t known for making headlines about wrongdoing, but their recent move throws a spotlight on potential failures within the banking system. On June 3, 2022, the FDIC issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA), a law designed to ensure banks serve the financial needs of all communities – not just the profitable ones.

This isn’t a list of banks busted for skimming cash or laundering money. It’s more insidious. The CRA, enacted in 1977, demands that banks and thrifts meet the credit needs of the neighborhoods they operate in, especially low- and moderate-income areas. Think about that: are banks actually investing in the communities where their branches sit, or are they redlining, effectively denying services based on zip code? The FDIC’s public disclosure of these evaluations – mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) – is meant to hold them accountable.

The released list covers evaluations completed in March 2022. While the FDIC isn’t naming names of banks failing, the very fact these evaluations are public record is a signal. Each bank undergoes scrutiny, and receives a rating. The ratings aren’t about criminal activity, but about whether the bank is fulfilling its obligation to serve all segments of its community. A low rating isn’t a conviction, but it’s a flashing red warning sign.

For those digging deeper, the FDIC offers a consolidated list of all state nonmember banks evaluated since July 1, 1990, complete with ratings. You can find it online or request a hard copy from the FDIC’s Public Information Center at 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200). Individual bank evaluations are also available directly from the banks themselves – they’re legally obligated to provide them upon request.

This isn’t about a single, explosive case. It’s about systemic oversight. The FDIC is essentially saying: “We’re watching you.” The agency isn’t explicitly accusing any bank of wrongdoing, but the release of this information is a clear message that community reinvestment is being taken seriously. It’s a subtle power play, a way to pressure banks to do better without the drama of a courtroom battle.

LaJuan Williams-Young at the FDIC (703-470-0201) is the contact for further inquiries. The June 2022 list of banks examined for CRA Compliance and the monthly list are available for review. While the financial sector often operates in the shadows, the FDIC is attempting to bring a little daylight to the practices that impact everyday Americans. Whether it will lead to real change remains to be seen.

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