The Modern CRA Service Test: 6 Trends That Banks Need To Know

Download This Article While banks have operated under the Community Reinvestment Act (CRA) for 40 years, the range of CRA Services they provide to meet the Service Test has grown.  Over this period, banks have responded in many creative and impactful ways to meet the needs of their communities, particularly in services. The Service Test [...]

December 18th, 2018|

The Investment Test: What Banks Need to Know

Banks have operated under the Community Reinvestment Act (CRA) for 31 years.  The CRA requires banks to help meet the needs of low- and moderate-income (LMI) persons and distressed geographies through lending, investment, and service.   Over this period, banks have responded in many creative and impactful ways to the needs of their communities, particularly in [...]

August 13th, 2018|

OCC Downgrades Wells Fargo to ‘Needs to Improve’ in Latest CRA Exam

On March 28, 2017, Wells Fargo & Co announced (Bloomberg, March 28, 2017) that the Office of the Comptroller of the Currency (OCC) downgraded the firm in its assessment of the firm’s performance under the Community Reinvestment Act (CRA). Under CRA, depository institutions are evaluated to determine their responsiveness in meeting the needs of low- [...]

March 30th, 2017|

Trend towards jumbo mortgages may raise risk exposure under Fair Lending, CRA

An article published by the Wall Street Journal (subscription required) on June 1, 2016 highlights a post-housing crisis trend towards jumbo mortgages within the mortgage market. The authors note that jumbo mortgages - home loans for amounts above $417,000 for most markets - allow lenders to satisfy one post-crisis mandate to take fewer risks within their portfolios, [...]

June 6th, 2016|

CFPB Publishes 2015 Report on Consumer Complaints

On April 1, 2016, the CFPB published its 2015 Consumer Response Annual Report. This annual report summarizes trends the CFPB has identified from 271,600 complaints that it accepted from financial product consumers during 2015. These complaint data can be a useful source of insight for banks and lenders to identify general areas that require attention [...]

April 5th, 2016|

Kansas City Lender to Pay 2.8 Million in Redlining Case with HUD

First Federal Bank of Kansas City has agreed to a $2.8 million settlement with the Department of Housing and Urban Development to resolve allegations of redlining in African-American neighborhoods.  As part of the conciliation agreement, First Federal agreed to originate $2.5 million in loans in majority African-American census tracts over a three-year period.  The settlement  also [...]

March 1st, 2016|

Return of Redlining and Steering Cases

The American Banker reported on September 4 that Justice Department and HUD officials signaled again that more redlining and steering cases are under investigation. "Based on what is on my docket right now, stayed tuned," said Steven Rosenbaum, chief of housing and civil enforcement at DOJ's civil rights division, during a HUD-sponsored Fair Housing conference. [...]

September 4th, 2015|

Down Payment Misperceptions May Be Limiting Fair Lending and CRA

According to a recent survey conducted by Wells Fargo, a majority of African Americans and Hispanics believe that a 20 percent down payment is required to purchase a new home (source:, 8/3/15): Consumers also overestimated the amount of money needed for down payment funds to qualify for a home loan, with 36 percent believing [...]

August 5th, 2015|

Q2 Results for Top Lenders Signal Strong Mortgage Market

Second quarter 2015 financial results for Wells Fargo and JPMorgan Chase signal a strong rebound in the mortgage market from 2014. This growth was attributed to healthy demand in the home purchase market, based on improving economic conditions, affordable home prices, and continued low interest rates (, 7/14/2015): “It was a strong quarter” for the purchase market, [...]

July 16th, 2015|

“Unreasonable” LTD Ratio Leads to a CRA Rating of NI for Miami-area Bank

The July 2015 release of CRA performance evaluations by the FDIC offers an example of how the loan-to-deposit (LTD) ratio test can over-shadow satisfactory performance in other tests under CRA. According to FDIC examiners, the LTD ratio for Intercontinental Bank of West Miami, FL did not meet expectations: The average net loan-to-deposit ratio of 21 percent is [...]

July 7th, 2015|