OCC Issues Guidance on CRA Performance Evaluation Process

On June 15, 2018, the OCC issued a bulletin (2018-17) on supervisory policy and processes for Community Reinvestment Act (CRA) performance evaluations.  This bulletin was issued to inform national banks, federal savings associations, and federal branches and agencies (collectively, banks) regulated by the OCC about clarification to the OCC’s supervisory policies and processes regarding how examiners will now evaluate and communicate bank performance under the CRA.  This new guidance is effective immediately, though financial institutions that are currently in the middle of a CRA examination may see the use of transitional procedures.

Highlights of this guidance include:

  • Implementation of full-scope and limited-scope reviews;

  • Consideration of activities that promote economic development;

  • Use of demographic, aggregate, and market share data;

  • Evaluation of the borrower distribution of loans outside bank assessment areas (AA);

  • Evaluation frequency and timing;

  • The CRA performance evaluation period; and

  • Evaluation of home mortgage loans.

While this guidance will have the greatest impact on large financial institutions, all financial institutions (including small, and intermediate-small banks) regulated by the OCC should review this bulletin which outlines the OCC’s new approach to CRA evaluations.

The full bulletin can be found here.  

Reminder to Watch for New SAR Form

Excessive Obligations vs Insufficient Income