The CRA was enacted in 1977 to encourage financial institutions to help meet the credit needs of their communities, including low- and moderate-income neighborhoods, consistent with safe and sound lending practices. It extends and clarifies the longstanding expectation that financial institutions will serve the convenience and needs of their local communities. The CRA and its implementing regulations require federal financial institution regulators to assess the record of each bank and savings association in helping to fulfill their obligations to the community and to consider that record in evaluating applications for charters or for approval of mergers, acquisitions and branch openings. The federal financial institution regulators are the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and the Office of Thrift Supervision.
The law provides a framework for financial institutions and community organizations to work together to promote the availability of credit and other banking services to underserved communities. Under its impetus, banks and savings associations have opened new branches, provided expanded services, adopted more flexible credit underwriting standards and made substantial commitments to state and local governments or community development organizations to increase lending to underserved segments of local economies and populations.
The CRA applies to federally insured depository institutions, national banks, savings associations, and state-chartered commercial and savings banks.
The CRA’s implementing regulation (12 CFR Part 563e) requires the OTS to assess a savings association’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It also mandates that the agency consider that record in its evaluation of a savings association’s application for new branches or relocation of an existing branch, mergers and consolidations and other corporate activities.
OTS publishes an advance notice of scheduled CRA examinations quarterly. A written performance evaluation of the savings association’s CRA activities, including a CRA rating, is prepared at the end of each CRA examination and made available to the general public 30 business days after its receipt by the savings association. OTS encourages community and civic organizations, government, and other members of the public to express their views about a savings association’s CRA performance to the savings association and OTS at the earliest possible time. This allows the savings association to address any concerns and the OTS to take the public’s views into account in evaluating the savings association’s CRA record and reaching conclusions about its performance ratings. If those comments are sent to OTS, OTS will also consider them when reviewing applications covered by the CRA.
In general, the OTS conducts a CRA examination of a large savings association every 24 months. A small savings association, as defined in 563e.12(u), is examined after 48 months if its last rating was "Satisfactory," or after 60 months if its last rating was "Outstanding."