FDIC Scrutinizes Banks Over Community Lending Practices

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t cracking down on mobsters or drug lords, but they *are* putting the squeeze on banks. Today, the agency released its latest list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA) – a 1977 law demanding banks serve the financial needs of all communities, not just the wealthy ones.

The February report details evaluations conducted in November 2023, essentially a public shaming of institutions deemed lacking in their commitment to low- and moderate-income neighborhoods. While no arrests were made, the FDIC’s actions signal a heightened focus on whether banks are truly investing in the areas they claim to serve. This isn’t about headlines; it’s about where the money goes, and who gets left behind.

The CRA, born out of a desire to combat redlining and discriminatory lending practices, requires insured banks to meet the credit needs of the communities they operate in. It’s a complicated system, and the FDIC’s evaluations – assigning ratings to each institution – are made public under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Since July 1, 1990, every CRA examination has been subject to public disclosure. Transparency, they say, is key.

Grimy Times obtained a copy of the February 2024 list of banks examined for CRA compliance. The full consolidated list, dating back to 1990, is available to the public. Those wanting to dig deeper can access it directly from the FDIC or request a hard copy from their Public Information Center at 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200). Don’t expect a glamorous read, though; it’s a dense document filled with regulatory jargon.

Individual bank’s CRA evaluations aren’t hidden either. By law, each bank is required to make the materials available upon request. Or, again, you can hit up the FDIC’s Public Information Center. LaJuan Williams-Young at the FDIC (703-470-0201) is the contact for media inquiries. This isn’t a high-speed chase, but it’s a reminder that financial institutions are under constant surveillance.

While the FDIC isn’t putting anyone in handcuffs, these evaluations are a crucial part of ensuring banks aren’t neglecting the communities that need them most. The full February 2024 list of banks examined for CRA Compliance and the monthly list are available for review. It’s a slow burn, but the FDIC is determined to hold banks accountable, one evaluation at a time. Last updated February 2, 2024.

RELATED: FDIC Scrutinizes Banks for Redlining Practices

RELATED: FDIC Scrutinizes Banks for Redlining Practices