Feds Crack Down: Banks Under CRA Microscope

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) isn’t just insuring deposits; it’s digging into how banks serve all their communities. Today, the agency released the list of institutions facing a Community Reinvestment Act (CRA) examination for the fourth quarter of 2023 and the first quarter of 2024. This isn’t about catching criminals in the traditional sense, but about ensuring banks aren’t redlining or neglecting low- and moderate-income neighborhoods – a financial crime against communities that can have devastating consequences.

The CRA, a 1977 law, demands banks meet the credit needs of the areas they operate in. These aren’t voluntary suggestions; they’re requirements backed by rigorous examinations. The FDIC, along with other federal regulators, will be assessing each institution’s record. Think of it as a financial audit of social responsibility – and if a bank fails, it faces consequences that could impact its ability to expand or even operate.

The frequency of these exams isn’t random. Banks with assets of $250 million or less and a “Satisfactory” CRA rating can expect an examination no more than once every 48 months. Those with an “Outstanding” rating get a bit more breathing room – up to 60 months between audits. But don’t think a clean record guarantees immunity. The FDIC warns that schedules are subject to change. A bank applying for a new facility, or one requiring more investigation, can jump the line.

The agency is also throwing open the door to public input. Got a complaint about a bank’s lending practices? The FDIC wants to hear it. Comments should be directed to the institution itself or to the Deputy Regional Director of the appropriate FDIC regional office. This isn’t just bureaucratic procedure; it’s a chance for citizens to hold banks accountable and ensure they’re fulfilling their obligations to the community. The FDIC is serious about taking public feedback into account before completing a CRA examination.

The full schedule of institutions under review, covering October 1, 2023, through March 31, 2024, is available through several channels: by calling (703) 562–2200 or (877) 275–3342, faxing a request to (703) 562–2296, or writing to the FDIC Public Information Center at 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. Don’t expect a whitewash; the FDIC is actively seeking information to expose potential shortcomings in how these institutions serve their communities.

For more information, contact LaJuan Williams-Young at (703) 470-0201. This isn’t just about numbers on a balance sheet; it’s about the financial health and stability of neighborhoods across the country. The FDIC is sending a clear message: banks will be held accountable for investing in the communities they serve.