Hi,
2021 was our first year to report CRA small business loan data. For HMDA data, we use 50-200% LAR rule to compare us vs peer's data.
Compared to HMDA public data, I don't see a lot of CRA small business public data available on FFIEC website.

My questions are: for Small Business data,
1. is it bank's best practice to compare our data to other banks?
2. if yes, what banks usually compare with? compare with all the bankers in the same MSA?
3. what's examiners exam rule to compare data when they perform small data (we are FRB Bank)

Appreciate any feedback/guidelines/comments!

Become familiar with the CRA Lending Tests for large banks
LT 1: AA Ratio
LT 2: Gap analysis
LT 3: Lending in your AA LMI tracts
LT4: Lending based on "borrower characteristics"

Examiners will compute your results under those tests and compare to all reporting lenders within your AA. They also will compare to certain demographic variables that become benchmarks. In the 2022 CRA NPR they refer to these as "calibrated benchmarks",

BTW they don't really compare you to peers. They compare you to all reporting lenders in your AA

Following up on MJZMJZ's original questions & Len S's response.

Are you saying that there is no point in identifying similarly situated institutions for a "peer comparison" when reviewing CRA data, including HMDA, SB & CD Activities. Meaning a good comparison is us against the aggregate of all lenders regardless of prudential regulator. It was my understanding that it was best to limit to your regulator (i.e., FDIC), pull in asset size, loan production, branch presence and then find those similarly situated FIs? What about the removal of 50/200% to eliminate the extremes?

The examiners use the standardized tables that capture the Aggregate and Disclosure data to compute benchmarks for lending in LMI tracts and for the borrowers characteristics tests. I have never seen the data filtered per regulator and I would be shocked if it ever was done (unlike fair lending which will compare to the market and to peers based on activity 50% to 200% of an institution's loan activity). Examiners will always consider a well-documented analysis that helps to explain a bank's CRA performance. But you have to start with the A&D data. Why is that? The answer is because CRA is all about measuring how well your institution is doing meeting the need for credit services in the communities you serve. What better indicator of the community's need for credit than the actual credit market data. Once you have ascertained that need if you want to refine your comparative performance you can filter the disclosure data to include only peers. But you must start with the complete market data.

I agree with Len. I always start with A&D data.