IN JULY 2016, the Federal regulatory agencies issued updates to the Interagency Questions & Answers on Community Reinvestment (“Q&As”). While the Community Reinvestment Act (CRA) and its implementing regulations are fairly short and focused on core requirements, the Q&As are a key guidance document in understanding their real-world application. Tallying over 200 pages, the
Q&As outline expanded definitions and examples of how banks can implement programs and services
and document community support to ensure positive consideration during their CRA examinations.
A lot has happened in the CRA industry in the two years since
the last set of Q&As were issued. The CRA marked its fortieth
anniversary. The country experienced historic natural disasters
including floods, wildfires, volcanic eruptions and hurricanes,
the latter of which prompted new guidance from the Agencies on
supporting disaster areas. The changes look to continue as well.
Just this past spring, the U.S. Treasury issued a memo outlining
its recommendations for modernization of the CRA, including
new thoughts on what should constitute a bank’s assessment area
and numerous ideas for improving the examination process.
While the CRA industry continues to seek innovative and
responsive ways to address the issues communities face around
the country, many bankers are still working to ensure that their
CRA programs are aligned with the guidance set forth in the 2016
updates to the Q&As. Some banks have already been examined
under this new guidance, but many banks have yet to undergo
their CRA examination since the publication of these revisions.
As a result, this has left uncertainty in how banks should document their performance in relation to these new and expanded
guidelines. Banks could even be conducting lending and other