Standards Used to Evaluate Your Bank's CRA Performance
Keeping in mind this general picture of your bank and community, the examiners use specific standards, amended in 1995, for reviewing your bank's CRA performance. While examiners' judgment is still an important part of the process, the standards are intended to be as objective as possible to help make evaluations of banks across the country more consistent.
The examiners apply these standards to rate your bank's overall record of helping to meet the credit needs of the specific area your bank has defined as its assessment area. Depending on whether your bank or thrift is large or small, the standards used to review it (described in the sections below) are somewhat different.
A bank may choose to develop its own strategic plan to be evaluated by rather than use the defined standards. Such a plan must be open to public comment and must be approved by the bank's federal regulatory agency before it can go into effect.
Wholesale banks, which do not make loans to retail customers, and limited purpose banks, which offer only a few products (such as credit cards or auto loans), also receive CRA ratings. These ratings, though, are based on different standards since the banks' activities are more limited.
Standards for Large Banks
Large banks—those with total assets of $250 million or more or that are affiliates of holding companies with assets of $1 billion or more—are evaluated in three areas: lending, investment, and service.
Lending. When evaluating a bank's lending activities and the borrowers it reaches, examiners analyze loans for home mortgages, small businesses, small farms, and community development (as well as consumer loans, in some cases). They look at information about
Investment. When evaluating a bank's investments, examiners look not only at a bank's assessment area but also at a broader statewide or regional area surrounding it. Examiners want to know
Service. When evaluating retail and community development services, examiners focus on how well these services help meet the credit needs of the institution's community. In the area of retail banking, examiners look at
Examiners also consider how responsive and creative a bank is in providing or helping other organizations provide financial services that address special credit needs in the community or region—for example, more affordable housing or more available credit.
Standards for Small Banks
Small banks—those with total assets of less than $250 million, either independent or an affiliate of a holding company with total assets of less than $1 billion—are evaluated by more streamlined standards than those used for larger banks. At a small bank, examiners look at