IT’S A NEVER ENDING CYCLE. You finish with one regulatory
exam and you already have to start planning for the next one. Your bank’s Community Reinvestment Act (CRA) Officer has the basic framework of the regulation
as a guide. But what does the future hold?
In April 2018, the Treasury Department issued a memorandum with specific
recommendations for modernizing the Community Reinvestment Act. Since
proposals have also been floated in the past, and nothing concrete has occurred, it
seems reasonable that there won’t be any regulatory changes for a while. But that
doesn’t mean that there won’t be other changes that could impact CRA compliance.
Let’s take a look at some tried and true practices, as well as some new ones, to help
prepare for your next CRA exam.
CRA Data Reporting
“In God we trust. All others must bring data.” —W. Edwards Deming
Data integrity remains critically important for a CRA evaluation to proceed successfully, and here are things
we must consider:
1. CRA small business and small farm reporting is based upon the instructions for reporting the “Call Report”—officially known as the Consolidated Report of Condition and Income (Schedule RC-C Part II Loans
to Small Businesses and Small Farms). You should discuss reporting changes with those responsible for the
Call Report to determine whether there are any new criteria that would impact your reporting. For example:
■ ■ ■ There was a change in the Call Report that required loans secured by non-farm, non-residential real estate
to be differentiated into two categories a few years ago: owner occupied, and non-owner occupied. That
change triggered some new reporting codes that would be CRA-reportable and could easily have been
excluded from reporting. Not all changes to the Call Report will impact CRA reporting, but when they
do, it is important to know it.