FDIC Scrutinizes Banks Over Community Lending Practices

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) quietly released a list of state nonmember banks subjected to Community Reinvestment Act (CRA) evaluations this week, raising eyebrows among financial watchdogs. The agency’s move, announced July 8, 2024, details ratings assigned to institutions following examinations conducted in April 2024. While framed as routine oversight, the release comes at a time of increasing scrutiny over bank lending practices and access to credit in underserved communities.

The CRA, a 1977 law, isn’t about sending anyone to jail, but it *is* about accountability. It forces the FDIC to judge whether banks are actually serving *all* their communities – not just the wealthy ones – while still operating safely. Banks are expected to meet the credit needs of low- and moderate-income neighborhoods. Fail to do so, and they face potential regulatory pressure, and a public shaming courtesy of lists like this one.

This isn’t new. Thanks to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the public has had the right to see these evaluations since July 1, 1990. The FDIC maintains a consolidated list of all such evaluations dating back to that time, available online or via a hard copy request. But the sheer volume of data can make it difficult to parse out meaningful trends or identify consistently problematic institutions.

The FDIC is offering up the full list of banks examined for CRA compliance. Interested parties can access a consolidated list of all state nonmember banks whose evaluations have been made publicly available since July 1, 1990, including the rating for each bank. Alternatively, a hard copy can be requested 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’s CRA evaluations are also available directly from the bank itself – they’re legally obligated to provide it if you ask. Or, you can go back to the FDIC’s Public Information Center. LaJuan Williams-Young at the FDIC (703-470-0201) is the contact for media inquiries. The list released covers evaluations from April 2024 and was last updated August 5, 2024. While the agency portrays this as transparency, critics argue it’s a bureaucratic exercise that rarely translates into real change for communities struggling with access to capital.

The release of this list is a reminder that while the big banks grab headlines, a significant portion of the banking sector operates outside the immediate glare of public attention. The FDIC’s CRA examinations, and the subsequent public disclosure of ratings, are intended to ensure that these smaller institutions are also held accountable for serving the needs of all their communities. Whether that accountability is truly effective remains to be seen.

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