They'll also look at how you achieve your CRA goals. Failure to substantially meet the goals set forth for satisfactory performance generally results in assignment of a rating of "needs to improve" or "substantial noncompliance."5. We work with thousands of themheres your one stop shop tostay on top of the issues relevant to you. Were hiring! In most organizations, the Community Reinvestment Act Officer is responsible for coordinating, developing, implementing and administering the CRA compliance program. The bank's strategic plan may also include measurable goals for any bank covered by the strategic plan that, if met, would constitute "outstanding" performance for that bank. The most important step in strategy execution may be the assignment of roles and responsibilities. As you finalize your CRA goals, make sure to get approval from the Board and Senior Management so that everyone is on the same page. There is no silver bullet when it comes to CRA compliance. Any CRA-related complaints received either by the institution or the regulators. How do you know if you are on track? After the comment period, the institution submits the plan to its regulator for review and approval. February 09, 2022, Transcripts and other historical materials, Federal Reserve Balance Sheet Developments, Community & Regional Financial Institutions, Federal Reserve Supervision and Regulation Report, Federal Financial Institutions Examination Council (FFIEC), Securities Underwriting & Dealing Subsidiaries, Types of Financial System Vulnerabilities & Risks, Monitoring Risk Across the Financial System, Proactive Monitoring of Markets & Institutions, Responding to Financial System Emergencies, Regulation CC (Availability of Funds and Collection of The OCC may extend the review period for good cause and notifies the bank in writing of any extension of the review period, the reason for the extension, and the date by which the agency expects to act on the request. Please refer to the guidelines for requesting approval for a strategic plan (PDF). Your institution's profile, including but not limited to: Historical data, including past CRA ratings. Fair Lending, For each assessment area for each bank covered by the strategic plan: The plan must include measurable goals that, if met, would constitute "satisfactory" performance. For each bank covered by the strategic plan, measurable goals for helping to meet the credit needs of each assessment area covered by the strategic plan, particularly the needs of low- and moderate-income geographies and individuals. For each bank, an identification of the assessment area(s) covered by the strategic plan, including a list of the geographies involved. In lieu of one of the three primary evaluation methods, the CRA regulations provide banks the option to develop a strategic plan with the input of the community. Foreign Banks, Charge-Off and Delinquency Rates on Loans and Leases at The primary purpose of the Community Reinvestment Act is to demonstrate that the bank is effectively working to meet the credit needs of its entire community, including low- and moderate-income neighborhoods in a safe and sound manner. Institutions with Strategic Plans | Public File Checklist, Click to share on LinkedIn (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to email this to a friend (Opens in new window), Institutions with Strategic Plans | Ratings, Institutions with Strategic Plans | Performance Criteria, Institutions with Strategic Plans | Performance Context, Institutions with Strategic Plans | Examination Scope. 10 Refer to 12 CFR 25.27(g)(1) (national banks and federal branches) and 12 CFR 195.27(g)(1) (savings associations). However, a CRA strategy that aligns products and services to the community's needs will help ensure success. From our yearly user conference to over 100 conferences around the country, whether virtual or in-person, Ncontracts will be therefind out our next stop and come see us! If the OCC fails to act within this time period, the strategic plan is considered approved.10. With vendors, what youdontknow canhurt you. Pursuant to 12 CFR 25.27(f)(2) (national banks and federal branches) and 12 CFR 195.27(f)(2) (savings associations), a bank may submit information along with its strategic plan to the OCC on a confidential basis, but the goals stated in the strategic plan must be sufficiently specific to enable the public and the OCC to judge the merits of the strategic plan. It is critically important that institutions regularly review the existing assessment area(s) and how they have been delineated. Our customer hub and the place where hundreds of users interact with each other and help solve issues, identify new opportunities, and build a great community! Banks may elect to have their performance under the CRA evaluated on the basis of a pre-approved strategic plan that addresses their CRA responsibilities. You should. The OCC evaluates the strategic plan and all supporting information under the evaluation criteria set forth in 12 CFR 25.21(b) and 12 CFR 25.27(g)(3) and appendix A(e) (national banks and federal branches) or 12 CFR 195.21(b) and 12 CFR 195.27(g)(3) and appendix A(e) (savings associations). Infrastructures, Payments System Policy Advisory Committee, Finance and Economics Discussion Series (FEDS), International Finance Discussion Papers (IFDP), Estimated Dynamic Optimization (EDO) Model, Aggregate Reserves of Depository Institutions and the Lending Compliance, CRA does, however, reinforce the long-standing expectation that financial institutions will serve the needs of their respective communities fairly and without bias. Here's how: The institution informally seeks suggestions from the public while developing the plan. Keep in mind that it's not required for compliance to set goals, and examiners do not measure performance against goals. Review, Update and Organize Your Public File, Test the Integrity of the Data (Pull Samples and Compare to Source Data). If a strategic plan covering multiple banks must be approved by more than one regulatory agency, each agency issues a decision approving or denying the request with respect to the bank(s) for which that agency has primary supervisory responsibility. The OCC reviews public comments to determine if the bank offered the opportunity for community input into the strategic plan, the public's degree of support for the bank's goals, and the appropriateness of the strategic goals. Monetary Base - H.3, Assets and Liabilities of Commercial Banks in the U.S. -
5 Refer to 12 CFR 25, appendix A(e), "Strategic Plan Assessment and Rating" (national banks and federal branches), and 12 CFR 195, appendix A(e), "Strategic Plan Assessment and Rating" (savings associations). 14 Refer to 12 CFR 25.27(f)(1)(i) (national banks and federal branches) and 12 CFR 195.27(f)(1)(i) (savings associations). This performance context information could include, as appropriate: demographic data on median income; distribution of household income; housing costs; lending, investment and service opportunities in the bank's assessment area(s); the bank's product offerings and business strategy; bank capacity and constraints (including the bank's size and financial condition and economic climate); the bank's past performance; and relevant information from the bank's public file. Once you've gotten that approval, think about including those CRA goals into compliance training, to help ensure a top-down and bottom-up approach to CRA compliance. Post was not sent - check your email addresses! H.8, Assets and Liabilities of U.S. Strategic plans allow banks to tailor their performance goals to the needs of their community by working directly with the community to develop the goals. To request the OCC's approval of a strategic plan or amendment of an approved strategic plan, a bank should submit its strategic plan(s) and supporting information by email to CRA WLP-SP Requests@occ.treas.gov using the subject line "CRA Strategic Plan." 9 Refer to 12 CFR 25.27(a)(4) (national banks and federal branches) and 12 CFR 195.27(a)(4) (savings associations). One way is to compare your goals against the results and identify reasons for variances. the nation with a safe, flexible, and stable monetary and financial Services, Sponsorship for Priority Telecommunication Services, Supervision & Oversight of Financial Market Smaller financial institutions have a unique set of challenges. Communications, Banking Applications & Legal Developments, Financial Stability Coordination & Actions, Financial Market Utilities & Infrastructures. CRA, Checks), Regulation II (Debit Card Interchange Fees and Routing), Regulation HH (Financial Market Utilities), Federal Reserve's Key Policies for the Provision of Financial Please note that a CRA strategy, as we're discussing here, is different than a formal CRA Strategic Plan. This allows them to fulfill their obligations to the community and to consider the bank's record in the evaluation of application for charters or for the approval of bank mergers, acquisitions, and branch openings. While CRA compliance is the responsibility of the entire financial institution, consistent execution is dependent on clarity of ownership. In addition, a bank may choose to have the Federal Reserve Board evaluate its performance under another appropriate evaluation method if the bank fails to substantially meet its planned goals for a satisfactory rating. Each request for approval of a strategic plan submitted to the OCC must contain a proposed effective date.8 The proposed effective date must be at least three months after the request is submitted to the OCC. 18 Refer to 12 CFR 25.27(f)(4) (national banks and federal branches) and 12 CFR 195.27(f)(4) (savings associations). Interested in joining forces? It can be up to five years between CRA Exams. These guidelines apply to all OCC-supervised banks subject to the CRA that wish to request CRA evaluation based on a strategic plan or to request approval to amend an approved strategic plan. This formal option allows you to create a plan that is tailored to the needs of the community by seeking public comment during development and publication. A CRA strategy demonstrates to examiners that you take responsibility for CRA compliance. We keep an eye on your vendors for you, from the most critical to the least. Find out how to join our company and supercharge your career with Ncontracts. Be a US law that encourages regulated insured depository institutions to meet the credit needs of low- and moderate-income (LMI) individuals and communities. The Federal Reserve, the central bank of the United States, provides Branches and Agencies of The regulators judge a banks performance in the context of information about the financial institution and its assessment areas. What are the Three Lines of Defense in a Compliance Management System? In fact, CRA contains no civil or criminal liability provisions. However, that doesn't mean there aren't repercussions for poor performance. The supervisory office schedules a consultation that generally includes staff from the supervisory office and other OCC offices. As you define those goals, and build your strategy to achieve them, compare and contrast products and services provided by your institution against the area(s) served. In determining the extent to which the institutions public files should be reviewed, consider the institutions record of compliance with the public file requirements in previous examinations, its branching structure and changes to it since its last examination, complaints about the institutions compliance with the public file requirements, and any other relevant information. Better management builds a better bank. A request for approval of a strategic plan is deemed complete when all relevant information has been received. Your CRA strategy should help you better serve your community, improve compliance exam ratings, build internal support for CRA compliance, and ultimately help your financial institution grow. Ncontracts can help you think through your approach and help you to invest your time in the right resources. Our secure solutions work together to help your credit union with all aspects of risk and compliance management. Practices, Structure and Share Data for the U.S. Offices of Foreign Terms, Statistics Reported by Banks and Other Financial Firms in the Learn all about our integrated approach to risk and compliance for financial institutions around the country. The OCC considers information submitted by the bank along with information that the OCC obtains from community, government, or civic groups, and other sources. Also, make sure to integrate the CRA strategy into the banks overallfair lendingcompliance strategy and business plan. 4 12 CFR 25.27 (national banks and federal branches) and 12 CFR 195.27 (savings associations). Compliance. The OCC evaluates a CRA strategic plan in the context of information described in 12 CFR 25.21(b) (national banks and federal branches) and 12 CFR 195.21(b) (savings associations). The CRA regulations require that the strategic plan be developed in consultation with members of the public, be published for public comment, and contain measurable annual goals.1 The required contents of a strategic plan and the OCC's criteria for evaluating a strategic plan are specified in the CRA regulations.2 The CRA strategic plan evaluation option provides a bank with the opportunity to tailor its CRA objectives to the needs of its community and to its own capacities, business strategies, and expertise.
A copy of the required public notice and the name(s) of the newspaper(s) in which the required notice was published. If such an election is not made in the strategic plan, the OCC evaluates the bank only under the strategic plan. 2 Refer to 12 CFR 25.27 (national banks and federal branches) and 12 CFR 195.27 (savings associations). There is no one better positioned to craft your story and explain your performance to examiners and the community-at-large. Find out about our amazing partners and learn how we can work together here. Your weekly dose of insights into the world of risk and compliance from the industry expertssubscribe to get regular updates right to your inbox! As part of your CRA examination, the regulators will review your lending, investments, and service activities. Therefore, not all of the factors described in the regulations under other evaluation types3 would necessarily apply to each strategic plan. For each bank covered under the strategic plan, whether the bank elects in its strategic plan to be evaluated under another assessment method (e.g., small, intermediate small, or large bank assessment method) if the bank fails to meet substantially the strategic plan goals for a satisfactory rating. If information initially furnished with the request changes significantly during the processing of the bank's request, the bank should communicate those changes promptly. Get in touch and let us see how we can work together. Senior Deputy Comptroller for Bank Supervision Policy. An effective CRA strategy will consider both the institutions particular business advantages and the needs and opportunities that exist in its assessment area(s)," according to the regulators. system. The OCC determines whether information labeled "Confidential" warrants confidentiality and advises the requesting bank of any decision to make information labeled "Confidential" available to the public. The plan is submitted to the bank's regulator for review and approval at least three months before the proposed effective date. UDAAP Compliance: Defining Unfair, Deceptive, & Abusive Acts and Practices. Decades of industry and software experience all coming together to serve you. A bank must submit the information necessary to demonstrate that the strategic plan meets the criteria for approval.7 The OCC may require the bank to submit additional information that the OCC deems necessary to make a determination on the strategic plan. What sources do you use to qualify nonprofits? In general, your performance context should include the following: That said, every regulatory agency that conducts CRA exams (the OCC, FDIC, and Federal Reserve Board) has a slightly different approach to understanding your performance context. SOURCE: Strategic PlanCRA Examination Procedures | OCC, FRB, FDIC, and OTS | July 2007. How do you qualify nonprofits that appear in the search results? Assessment area reviews, analysis of market lending data, review of lending performance to benchmarks, branch location analysis, examining lending test ratios (e.g., in/out ratios), and reviewing mapped data to help you see your market performance are a few ways we can help you succeed with CRA. It's an important indicator to examiners that you are serious aboutCRA compliance. Make it easy to keep your employees up to date by managing and organizing the most current and important company information in one place. A bank generally does not need to supply more information regarding the performance context than the bank would normally develop to prepare a business plan or to identify potential customers, including low- and moderate-income individuals or geographies in the bank's assessment area(s). Note that the appropriate federal banking agencies approve a joint strategic plan only if the strategic plan provides measurable goals for each bank for each assessment area covered by the strategic plan. Find out about our newest releases here. Address discrimination in the access to loans and credit, aka prohibiting the illegal act of Redlining. Strategic plans that include more than one affiliated bank may designate a single contact person for all the banks covered by the strategic plan or may list separate contacts for one or more of the affiliated banks. Third-Party Relationships: Risk Management Guidance, Central Application Tracking System (CATS), Office of Thrift Supervision Archive Search, Office of the Comptroller of the Currency, Office of Enterprise Governance and the Ombudsman, Founding of the OCC & the National Banking System, Allowances for Loan and Lease Losses (ALLL), Current Expected Credit Losses (CECL) Methodology, BSA/AML Bulletins, FinCEN Advisories, & Related BASEL Information, BSA/AML Innovative Industry Approaches & Other Related Links, Links to Other Organizations BSA Information, Employee Benefits and Retirement Plan Services, GLBA/Reg R/Retail Nondeposit Investment Sales, Traditional and Alternative Investment Management Services, Legal Opinions Regarding Federal Savings Associations, CRA Qualifying Activities Confirmation Request, Credit Cards, Debit Cards, And Gift Cards, OCC Bulletin 1996-11, "Community Reinvestment Act: Guidelines for Approval for a Strategic Plan & Wholesale or Limited Purpose Institution. This bulletin rescinds. United States, Structure and Share Data for U.S. Offices of Foreign Banks, Financial Accounts of the United States - Z.1, Household Debt Service and Financial Obligations Ratios, Survey of Household Economics and Decisionmaking, Industrial Production and Capacity Utilization - G.17, Factors Affecting Reserve Balances - H.4.1, Federal Reserve Community Development Resources, Search Exam Schedules & Submit CRA Comments, guidelines for requesting approval for a strategic plan (PDF), Charles Schwab Premier Bank (#1893049) (PDF). 2. Providingyour organization with the information and capability to manage risk and compliance, making you a more attractive vendor to clients in the financial services industry. The proposed term of the strategic plan. Obtaining information from the public when developing the strategic plan helps to provide a bank access to the fullest possible information about the lending, investment, and service needs of its community and how those needs may be met. 3. 112 CFR 25.27 (national banks and federal branches) and 12 CFR 195.27 (savings associations). Be prepared to tell your story. Review of Monetary Policy Strategy, Tools, and The community may submit comments on the draft plan for up to 30 days during the process.
The names of each bank joining in the strategic plan and a description of how they are affiliated. You should know how your institution will be evaluated in order to prepare for an exam. 19 Refer to 12 CFR 25.27(h) (national banks and federal branches) and 12 CFR 195.27(h) (savings associations). 16 Refer to 12 CFR 25.27(f)(3) (national banks and federal branches) and 12 CFR 195.27(f)(3) (savings associations). A bank with more than one assessment area may prepare (1) a single strategic plan for all of its assessment areas or (2) one or more strategic plans for one or more of its assessment areas. For each assessment area for each bank covered by the strategic plan, copies of any information developed in the bank's normal business planning that it wants the OCC to consider regarding lending, investment, and service opportunities in the assessment area, including a description of any legal constraints or limitations that affect the type of loans, investments, or services that the bank may make or offer. It's important that you comply with both the letter and the spirit of CRA regulation. In any review of the public file undertaken, determine whether branches display an accurate public notice in their lobbies, a complete public file is available in the institutions main office and at least one branch in each state, and the public file available in the main office and in each state contains: a. How? If a strategic plan is being submitted on behalf of more than one bank, each bank must receive the approval of its own regulatory agency for the portions of the strategic plan relating to that bank's CRA responsibilities. You can also get access to the different examination procedures for each asset size here. Review Bank Model Characteristics and Overall Strategy, Type of Institution (consumer, business, full service), Business Trends (growing, stable, shrinking), Review Assessment Area Characteristics and Needs, Peer Analysis (e.g., Call Reports, CRA Public Evaluations, Annual Reports/10-Ks, etc. The requesting bank should follow this same procedure on confidentiality with regard to filing any supplemental information for which confidential treatment is sought. From conducting vendor reviews to onboarding your team, weve got you covered. Industry news and company updates sent straight to your inbox. Topics:
A bank may request confidential treatment for confidential commercial information, meaning records that arguably contain material exempt from release under Exemption 4 of the FOIA.11 For example, if the requesting bank believes that disclosure of commercial or financial information included with its request would likely result in substantial harm to its competitive position or that of its affiliates, confidential treatment of such information may be requested. > c e b #; bjbj *T / l ) ) ) 8 a } L ) 8 K K K 8 8 8 8 8 8 8 $ [: .