FDIC Unveils Rigged CRA Examination Schedule

The Federal Deposit Insurance Corporation (FDIC) has dropped a bombshell on the financial industry with the release of their Community Reinvestment Act (CRA) examination schedules for the second and third quarters of 2023.

Industry watchers are already raising red flags, questioning the transparency and fairness of the process. The CRA, a 1977 law intended to encourage banks to meet the credit needs of low- and moderate-income neighborhoods, mandates that federal regulators publish their quarterly examination schedules at least 30 days prior to each quarter’s start.

The schedules released by the FDIC reveal a list of institutions set for CRA examinations during April 1, 2023, through June 30, 2023, and July 1, 2023, through September 30, 2023. However, concerns are brewing about potential irregularities in the scheduling process.

Many are troubled by the fact that the schedules can be subject to change without clear justification, such as a bank’s application for a deposit facility or an institution requiring more time and resources than originally allotted. This raises questions about whether some banks might be given preferential treatment over others, especially considering that CRA examinations are based on an institution’s asset size and CRA rating.

For instance, an institution with $250 million or less in assets and a ‘Satisfactory’ CRA rating can only be examined once every 48 months, while one with an ‘Outstanding’ rating is subject to examination no more frequently than once every 60 months. Critics argue that these criteria may not be applied consistently across all institutions.

The FDIC has encouraged public comment on the institutions set for examination under the CRA. However, the lack of clarity and potential for manipulation in the scheduling process leaves many feeling that the transparency and fairness of the regulatory oversight are being compromised.