Question & Answer

Question: My CEO told me that he heard that small banks are exempt from CRA. My understanding is different. Could you clarify how small banks are treated under the new CRA regulation?

Answer: Glad you asked that! Many small banks believe themselves to be exempt from most of CRA. If you or your CEO is operating under this illusion, there are several important points to remember. First, small banks are not exempt but they will be evaluated differently. Although the examination of small banks is streamlined, it will cover all of the tests contained in the new CRA regulation. In fact, it will cover many of the 12 assessment factors of the current regulation. Therefore, small banks still need to maintain an effective CRA program.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 2, 1/96