FDIC Exposes CRA Compliance Cheats

The Federal Deposit Insurance Corporation (FDIC) has unveiled a comprehensive list of state nonmember banks that have recently come under the microscope for compliance with the Community Reinvestment Act (CRA). This act, a 1977 law designed to promote lending in low- and moderate-income neighborhoods, has become a focal point as the FDIC assesses institutions’ adherence to these critical community needs.

The list, which covers evaluations assigned by the FDIC in February 2022, serves as a stark reminder of the ongoing struggle to ensure that banks are fulfilling their responsibilities to local communities. As part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), these assessments are now publicly disclosed.

While the CRA has been in place for decades, its significance remains as pertinent today as ever. The FDIC’s action underscores a commitment to transparency and accountability within the banking sector. The public availability of this list allows customers, investors, and regulators alike to hold institutions accountable and promote fair lending practices.

The CRA evaluation process covers a range of criteria, including lending services provided to low- and moderate-income neighborhoods, support for affordable housing, and assistance to small businesses. Any deficiencies in these areas can lead to a poor rating under the CRA, potentially impacting an institution’s reputation and ability to access federal funding.

Individuals seeking more detailed information can obtain a consolidated list of all state nonmember banks’ evaluations since July 1, 1990, from the FDIC’s Public Information Center. Additionally, individual bank evaluations are available directly from the respective institutions or through the FDIC’s Public Information Center.

This latest move by the FDIC is part of a broader effort to maintain the integrity of the financial system and ensure that banks are serving the needs of all communities. As the list highlights areas of concern, it serves as a call to action for both banks and regulators to address any gaps in compliance with the CRA.

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