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Community Reinvestment Act Modernization Is Needed: ICBA

Washington, D.C (Nov. 19, 2018) — The Independent Community Bankers of America® (ICBA) today called on regulators to improve consistency and transparency as they reform the Community Reinvestment Act framework. In a letter to the Office of the Comptroller of the Currency, ICBA said the CRA mission of maximizing the availability of financial services and credit in local communities is the essence of community banking.

Community Reinvestment Act
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“Community banks’ success depends on the success of their communities, so ICBA and the nation’s community banks have always supported fair, equitable, consistent and transparent implementation of the Community Reinvestment Act,” ICBA President and CEO Rebeca Romero Rainey said. “Current regulations and approaches are outdated and can serve as barriers to implementing CRA’s very mission, so we are encouraged by the modernization effort and encourage all banking regulators to participate.”

In today’s letter, ICBA said community banks are experiencing inconsistency and lack of transparency in the examination process. Examiner expectations are unclear, and CRA credit for loans and services can vary from exam to exam. This makes it difficult for community banks to plan and implement their CRA requirements and requires additional guidance from regulators detailing documentation and recordkeeping requirements. The Federal Deposit Insurance Corp. and Federal Reserve should be part of future modernization efforts to maximize regulatory consistency, ICBA said.

Among its other recommendations, ICBA’s letter also calls on regulators to:

  • ensure CRA assessment areas are identified and delineated by community banks rather than regulators, as required by existing CRA regulations,
  • update asset thresholds to reflect the current banking environment,
  • carefully consider the ancillary effects of any metric-based performance test—a “one-size-fits-all” metric may not allow for important differences in bank profiles and markets, and
  • release a list of activities that provide a presumption of CRA credit to promote transparency, consistency and clarity.