trending Market Intelligence /marketintelligence/en/news-insights/trending/3aooQrO7sx6M4BI4udDamg2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Regulators may broaden some banks' CRA assessment areas

Street Talk - Ep. 64: Coronavirus jumpstarts digital adoption

Street Talk Podcast

Street Talk - Ep. 63: Deal talks continue amid bank M&A freeze, setting up for strong Q4

Street Talk Podcast

Street Talk - Ep. 62: 'Brutal' outlook for oil demand offers banks in oil patch no relief

Amid Q1 APAC Fintech Funding Slump, Payment Companies Drove Investments

Regulators may broaden some banks' CRA assessment areas

Federal regulators might add to how they assess banks' Community Reinvestment Act commitments, but physical branches would remain a critical component of CRA tests, Federal Reserve Governor Lael Brainard said March 12.

The new structure could see larger banks assessed using an additional area with the aim of encouraging them to pursue community development activities in larger areas "that may not neatly overlap" with their current assessment areas, she said. The more expansive definition could include CRA activities in states where banks have assessment areas.

Doing so would mark a shift from today's approach of gauging banks' performance under the CRA, a decades-old law that looks to ensure banks are serving low- and moderate-income communities. Right now, regulators rely on banks' branches and deposit-taking ATMs to define the geographic areas to be tested.

Regulators would continue using that approach when examining a bank's retail activities, Brainard said in a speech at a National Community Reinvestment Coalition conference. But the potential plan would use a broader assessment area for certain banks' community development activities, she added.

The current approach to scoring such activities has "proven challenging in practice," with banks making community development investments and later finding out they would not receive CRA credit because the activity was outside their assessment area, Brainard said.

The new possible structure could benefit "credit deserts — those perennially underserved rural areas or small metropolitan areas that may not have a bank branch or, if they do, may not constitute a major market for purposes of banks' CRA evaluations," she said.

She listed as an example her visit to the Pine Ridge Reservation in the southwest part of South Dakota. Right now, only one bank's assessment area may extend into Pine Ridge. But under regulators' potential plan, banks in Aberdeen, South Dakota, near the opposite corner of the state, may "be inclined to make such a community development loan with confidence it would get CRA consideration."

Brainard has been the Fed's point person in its interagency discussions on the CRA with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

The OCC took the first step last year toward changing the current CRA framework, seeking feedback from the public on potential adjustments regulators should make. The Fed and FDIC did not participate in the OCC's move, though they are reviewing the comments the OCC received and are talking with stakeholders about the issue.

The OCC's effort prompted some concerns that the agency would put out a plan on its own if the three agencies cannot agree to a joint proposal. Asked about that possibility, Brainard noted that one consistent message that regulators have heard is that the three agencies must all agree on any CRA proposal.

"We are very hopeful that we can move forward with one set of proposed changes," she said.