§__.21(a) Evaluation of Responsiveness
§__.21(a) – 3 Q: “Responsiveness” to credit and community development needs is either a criterion or otherwise a consideration in all of the performance tests. How do examiners evaluate whether a financial institution has been “responsive” to credit and community development needs? A3. There are three important factors that examiners consider when evaluating responsiveness: quantity, quality, and…
§__.21(a) Innovativeness Definition
§__.21(a) – 4 Q: What is meant by “innovativeness”? A4. “Innovativeness” is one of several qualitative considerations under the lending, investment, and service tests. The community development test for wholesale and limited purpose institutions similarly considers “innovative” loans, investments, and services in the evaluation of performance. Under the CRA regulations, all innovative practices or activities will be…
§__.21(b) Performance Context Definition
§__.21(b) – 1 Q: What is the performance context? A1. The performance context is a broad range of economic, demographic, and institution- and community-specific information that an examiner reviews to understand the context in which an institution’s record of performance should be evaluated. The Agencies will provide examiners with some of this information. The performance context is not…
§__.21(b)(2) Institution-Provided Performance Context
§__.21(b)(2) – 1 Q: Will examiners consider performance context information provided by institutions? A1. Yes. An institution may provide examiners with any information it deems relevant, including information on the lending, investment, and service opportunities in its assessment area(s). This information may include data on the business opportunities addressed by lenders not subject to the CRA. Institutions…
§__.21(b)(2) Examiner-Conducted Community Contact Interviews
§__.21(b)(2) – 2 Q: Will examiners conduct community contact interviews as part of the examination process? A2. Yes. Examiners will consider information obtained from interviews with local community, civic, and government leaders. These interviews provide examiners with knowledge regarding the local community, its economic base, and community development initiatives. To ensure that information from local leaders…
§__.21(b)(4) Factors Outside the Institution’s Control
§__.21(b)(4) – 1 Q: Will examiners consider factors outside of an institution’s control that prevent it from engaging in certain activities? A1. Yes. Examiners will take into account statutory and supervisory limitations on an institution’s ability to engage in any lending, investment, and service activities. For example, a savings association that has made few or no qualified investments due…
§__.21(b)(5) Past Poor CRA Performance Adverse Affect on Current Rating
§__.21(b)(5) – 1 Q: Can an institution’s assigned rating be adversely affected by poor past performance? A1. Yes. The Agencies will consider an institution’s past performance in its overall evaluation. For example, an institution that received a rating of “needs to improve” in the past may receive a rating of “substantial noncompliance” if its performance has not improved….
§__.21(b)(5) Consideration of Similarly Situated Lenders
§__.21(b)(5) – 2 Q: How will examiners consider the performance of similarly situated lenders? A2. The performance context section of the regulation permits the performance of similarly situated lenders to be considered, for example, as one of a number of considerations in evaluating the geographic distribution of an institution’s loans to low-, moderate-, middle-, and upper-income geographies….
§__.21(f) Minority- and Women-Owned Institutions & Low-Income Credit Unions
§__.21(f) – 1 Q: The CRA provides that, in assessing the CRA performance of nonminority- and non-women-owned (majority-owned) financial institutions, examiners may consider as a factor capital investments, loan participations, and other venues undertaken by the institutions in cooperation with minority- or women-owned financial institutions and low-income credit unions (MWLI), provided that these activities help meet…
§__.22(a) Scope of Lending Test
§__.22(a) – 1 Q: Are there any types of lending activities that help meet the credit needs of an institution’s assessment area(s) and that may warrant favorable consideration as activities that are responsive to the needs of the institution’s assessment area(s)? A1. Credit needs vary from community to community. However, there are some lending activities that are…