Be prepared – CRA data review

Answered by:

Question:

Should a bank review its loan data prior to an audit or examination or simply pull the data and provide it to the auditors or examiners?

Answer:

No matter the size of the bank, the loan data should be analyzed ahead of time so that an intelligent discussion can be had and hopefully any shortcomings addressed. Ideally, the data should be reviewed at least midway through each year to see if there are negative trends….fewer tracts with loans, a sharp decline in lending, more loans to large businesses or farm vs loans to smaller businesses or farms, etc. By evaluating data periodically, action can be taken to either address and resolve the negative trends, or to at least understand the trends and have logical explanations of the changes and information on positive activities that offset the negatives. A good practice is to never present data that is not fully understood.
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Learn more about Kathleen Blanchard’s webinar CRA Success: Business and Ag Lending