Does "No Free Checking" effect Service Credit Test

Posted By: JUST CALL ME CRA

Does "No Free Checking" effect Service Credit Test - 08/29/11 12:57 PM

I am just wondering if anyone works for a bank that does not have a free checking product that has gone through an exam. How much does it impact the service test rating.
Posted By: JUST CALL ME CRA

Re: Does "No Free Checking" effect Service Credit Test - 09/13/11 03:10 PM

I would love to get a regulator's thoughts on this.
Posted By: Pale Rider

Re: Does "No Free Checking" effect Service Credit Test - 09/13/11 08:33 PM

The majority of banks do not offer free checking. More than 95% of those are rated O or S. My bank does not have free checking and we have 5 charters from 3 different federal agencies, all are rated O.
Posted By: JUST CALL ME CRA

Re: Does "No Free Checking" effect Service Credit Test - 09/14/11 05:04 PM

That's good to know. I guess it's just what is common in our market. Thank you for your response.
Posted By: Pale Rider

Re: Does "No Free Checking" effect Service Credit Test - 09/14/11 05:27 PM

You should be good if your branches serve the AA equally, your products and services are accessible to all geographies and income groups, and you haven't closed any branches, especially in LMI areas, without a sound written justification for doing so.

The service test is only 25% of the overall grade.
Posted By: Kathleen O. Blanchard

Re: Does "No Free Checking" effect Service Credit Test - 09/14/11 05:36 PM

For a large bank it is 25% of the grade. For a small bank or ISB where everything gets lumped, do a thorough analysis of your CD efforts overall and make the case that you adequately serve your community (hopefully you can!).

Highlight any low cost checking you offer if you eliminate no cost (and many banks do offer no cost..including some big banks still offering it).

Some states have requirements for low cost low opening balance checking (such as NJ). Check your state laws.

There is no one specific requirement...it is a balance.