Community Reinvestment Act (CRA) Compliance Flashcards

Which of the following BEST qualifies as a community development service under CRA?

Answer: Providing free financial literacy workshops to low- and moderate-income individuals

Financial literacy education and counseling services targeted to LMI individuals qualify as community development services under CRA.

Under CRA, the public file that a bank must maintain includes:

Answer: The bank's current CRA public notice and its most recent CRA performance evaluation

A bank's public CRA file must contain its current CRA notice and its most recent written CRA performance evaluation, among other items, but never confidential borrower or employee information.

The CRA lending test for large banks primarily evaluates:

Answer: Geographic distribution and borrower characteristics of home mortgage, small business, small farm, and community development loans

The lending test evaluates the full range of a large bank's home mortgage, small business, small farm, and community development lending, examining geographic distribution and the income levels of borrowers served.

Approximately how often are CRA performance evaluations typically conducted for banks in good standing?

Answer: Every 2 to 5 years, depending on bank size and prior rating

CRA examinations are generally conducted on a cycle of approximately every 2 to 5 years, with the frequency influenced by the bank's asset size and its most recent CRA rating.

The CRA strategic plan option allows a bank to:

Answer: Set its own measurable CRA goals, subject to public comment and regulatory approval

Under the strategic plan option, a bank may develop its own CRA goals, make the plan available for public comment, and then submit it to its regulator for approval, providing a customized compliance framework.

Which federal agencies are responsible for conducting CRA examinations?

Answer: The Federal Reserve, OCC, and FDIC

The three primary federal bank regulators — the Federal Reserve (state member banks), OCC (national banks and federal thrifts), and FDIC (state nonmember banks) — each conduct CRA examinations for their supervised institutions.

Which of the following would MOST likely qualify as a CRA investment under the investment test?

Answer: Investing in a Low-Income Housing Tax Credit (LIHTC) partnership in the assessment area

Investments in LIHTC projects that benefit LMI populations or areas in the bank's assessment area are a classic example of qualified CRA investments, satisfying the primary community development purpose requirement.