FDIC Scrutinizes Banks Over Community Lending Practices

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t busting drug lords or tracking stolen cash, but their recent actions hint at a different kind of financial crime: systemic inequality. Today, the FDIC dropped a list of state nonmember banks recently put under the microscope for compliance with the Community Reinvestment Act (CRA). The move, while seemingly bureaucratic, exposes which institutions are – and aren’t – serving the financial needs of all their communities, not just the wealthy ones.

The CRA, a 1977 law, isn’t about locking up perps; it’s about accountability. It forces the FDIC to assess whether banks are adequately meeting the credit needs of their entire footprint, including low- and moderate-income neighborhoods. Think about it: redlining wasn’t just a historical footnote. It was a deliberate policy that starved communities of capital. The CRA is supposed to prevent a repeat. The FDIC evaluations released cover June 2024 and assign ratings based on how well these banks are living up to that promise.

This isn’t just about good PR for the FDIC. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) mandates public disclosure of these CRA evaluations. Since July 1, 1990, every bank and thrift undergoing a CRA examination has to have its report made available to the public. The FDIC is essentially shining a light on financial institutions, forcing them to answer for where they’re putting their money – and, crucially, from whom they’re withholding it.

Want to see who made the grade – or didn’t? The FDIC offers a consolidated list of all state nonmember banks evaluated since 1990, complete with their 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). Don’t expect a quick read, though. This is a deep dive into the financial arteries of our nation.

And if you want to know how a specific bank is performing, you don’t even need to contact the FDIC. By law, each bank is required to make its CRA evaluation available upon request. But let’s be real: most people won’t bother. That’s why the Grimy Times is digging through these reports. We’re looking for patterns, for disparities, for evidence that some banks are still playing favorites – and leaving entire communities behind.

The September 2024 List of Banks Examined for CRA Compliance, along with the Monthly List of Banks Examined for CRA Compliance, are now publicly available. Contact LaJuan Williams-Young for further information. This isn’t about individual criminals; it’s about a system that can perpetuate inequality, one loan application at a time. And we’ll be watching.

RELATED: FDIC Scrutinizes Banks Over Community Lending Practices

RELATED: FDIC Scrutinizes Banks for Community Lending Practices