WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t known for making waves, but their recent release of CRA compliance evaluations is throwing a spotlight on banks potentially failing to meet the needs of their communities. The FDIC issued a list today, November 3, 2022, detailing state nonmember banks recently evaluated under the Community Reinvestment Act (CRA) – and the results aren’t pretty.
These aren’t indictments, not yet. But the CRA, a 1977 law, is designed to force banks to invest in low- and moderate-income neighborhoods. It’s a paper tiger with teeth, requiring banks to demonstrate they’re not redlining or otherwise neglecting the financial needs of vulnerable populations. The evaluations released cover ratings assigned in August 2022, meaning these institutions have been under the microscope for months. The public disclosure is mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), a law born from the savings and loan crisis.
The FDIC isn’t naming names outright in its press release. Instead, they’re directing the public to a consolidated list available online – a list that stretches back to July 1, 1990. You can dig through decades of evaluations to see which banks are consistently meeting CRA standards and which are consistently falling short. A hard copy can also be obtained from the FDIC’s Public Information Center in Arlington, VA, reachable at 877-275-3342 or 703-562-2200. Don’t expect a user-friendly interface; this is government bureaucracy at its finest.
What exactly are they looking for? The CRA demands banks show they’re making reasonable efforts to meet the credit needs of the communities they serve, including low- and moderate-income areas. This means loans, investments, and services. A poor rating doesn’t automatically trigger criminal charges, but it can lead to increased scrutiny, potential fines, and pressure to improve performance. It’s a public shaming, essentially, and for banks reliant on public trust, that can be devastating.
Individual bank evaluations are also available directly from the institutions themselves – they’re legally obligated to provide them upon request. The FDIC’s Public Information Center is another avenue for access. While the FDIC emphasizes these evaluations are about encouraging responsible lending, the release feels more like a warning. The financial sector is already facing heightened criticism, and these CRA ratings add another layer of accountability, or at least, the *appearance* of accountability.
Grimy Times will continue to investigate these CRA evaluations, digging deeper into the ratings and identifying the banks that are failing to deliver for the communities they’re supposed to serve. We’ll be watching to see if these evaluations translate into real action – or just more empty promises from an industry that often prioritizes profit over people. The November 2022 List of Banks Examined for CRA Compliance and Monthly List of Banks Examined for CRA Compliance are available for review. Contact LaJuan Williams-Young at (703) 470-0201 for further inquiries.
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