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Why Your CRA Story Matters

Dec 29, 2017 by Brian Arnesen

Whether you are a large bank with assets of $1 billion or a small bank, your Community Reinvestment Act (CRA) story matters.

All state member and nonmember banks, national banks, and saving associations that meet or exceed the asset size thresholds as defined by the FFIEC for both of the last two calendar years are subject to the data collection and reporting requirements of the Community Reinvestment Act. Even if you’re not a submitting bank, you still need to perform under the Act.  

Think of your CRA score as a restaurant's health inspection rating — most customers will not eat at a restaurant that has a letter grade lower than “A”. Just like dining out, customers, activist groups, investors, and regulators are all interested in your CRA score. Why? Because they want to see if you are serving the needs of the local community or if you are possibly discriminating against a certain subsection of the community — especially if it was completely unintentional. 

Depending on your institution’s size, there are multiple evaluations and tests that you will be evaluated on (see “The CRA Examination Process Explained”). After the evaluation, you will receive a CRA score. This score is public record and can affect how often your institution undergoes examination. Your financial institution’s CRA record will be taken into account when submitting applications for deposit facilities, as well as during mergers & acquisitions.

Your CRA story is compiled from many different sources including policy & procedures, data collection, maintenance, proactiveness, and reporting. An examiner will look at all of these factors to piece together your CRA story.

Sometimes unintentional fair lending discrimination can be found in data, but that isn’t necessarily the whole story. Just like some people prefer to eat at restaurants that responsibly source their ingredients, examiners want to make sure that banks are lending to the local communities in which they hold branch locations. Being able to show an examiner that your financial institution did its due diligence to ensure fair lending practices were upheld will help to ensure that the examination process moves forward smoothly.


CRA compliance software such as QuestSoft’s Compliance RELIEF CRA module can help an institution measure its CRA performance like an examiner.

CRA data is aggregated based on the census tract level for each loan made. The data can be incorporated into mapping software to give a visual representation of an institution's lending area relative to its branch locations. Compliance officers can quickly see where an institution is lending and where gaps may be, relative to its location, and make the necessary recommendations to avoid any penalties. 


Using this data, companies can better see market opportunities or unintentionally neglected areas. Maximizing business opportunities while satisfying examiners — what could be better? Contact us today to see how QuestSoft’s Compliance RELIEF’s CRA software can help.