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#2088450 - 07/18/16 12:12 PM Another Needs to Improve Rating
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Fifth Third's 2014 (yes 2014) CRA exam report was released last week. While the CRA ratings for lending, investments and services were outstanding and high satisfactory, fair lending and UDAAP factors brought that rating down to needs to improve. Those items were dealer pricing and credit card add on products, and allegations that the bank engaged in a pattern or practice of discrimination in violation of ECOA and the Fair Housing Act on the basis of disability and the receipt of public assistance.

The evaluation of the factors that are part of the actual CRA performance lists:

The major factors supporting the institution’s rating include:
• A good responsiveness to credit needs;
• An adequate geographic distribution of loans throughout the assessment area;
• A good distribution of loans among borrowers of different income levels and an adequate distribution of loans to businesses and farms of different revenue sizes;
• A leader in making community development loans;
• An excellent level of qualified community development investments and grants;
• A leadership role in providing community development investments and grants;
• Retail delivery systems that are accessible to all geographies and individuals of different income levels and businesses of different revenue sizes;
• A record of opening and closing banking centers that has improved the accessibility of delivery systems;
• Banking services and hours that do not vary in a way that inconveniences any portions of the assessment areas; and,
• A leader in providing community development services.

So of course any merger plans are on hold until the next examination, which hopefully won't take several years to complete and publish..

Another case showing that CRA is not just tasks completed in a vacuum. The excellent CRA work can get derailed by other actions.

The FRB has not published the exam report on its site yet. It is available on Fifth Third's website:

https://www.53.com/about/in-the-community/community-reinvestment-act.html
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2088541 - 07/18/16 03:53 PM Re: Another Needs to Improve Rating Kathleen O. Blanchard
Princess Romeo Offline

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Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
The document should be a must-read for every board of directors in banking. I can only imagine the "Product Leaders" or "Business Development" folks behind the dealer loans, the credit card "add-on"products, and the underwriting practices either trumping the Compliance system or going behind their backs with the tacit approval of executive management.

And of course, when all of this starts rolling down-hill, the compliance folks get blamed for not "catching" or preventing or somehow being able to stop the whiz-kids with their latest and greatest ideas.
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#2088552 - 07/18/16 04:34 PM Re: Another Needs to Improve Rating Kathleen O. Blanchard
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
It shows that no matter the strength of the CRA program, other factors can bring it down.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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