What department should be responsible for CRA?

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Question:

As it pertains to responsibility for CRA for an institution, such as the CRA Officer, what department does this position usually fall under at most banks? We are $470 million and are reorganizing. Right now it's under our lending area and they are considering to make it a part of marketing...I think it should be a part of our compliance department. Of course marketing would provide updates to compliance on community outreach.

Answer:

Answer by Andy Zavoina:

It only depends on what works for you. Effectiveness.

Who is better to help assess and develop product needs for the community, to track the bank's progress in meeting these needs and to actually execute on these? Generally, I'd recommend one person in charge, supported directly by key managers in the other departments. And need I say the rest of the bank as well following that.

Answer:

Answer by Richard Insley:

The best result my bank ever obtained was when the agencies rolled out the "do CRA like something you WANT to achieve" position in the late 80's. I was VP in charge of company-wide compliance and had been responsible for CRA up until that point. When we saw the serious shift in agency attitude, our President assumed the role of CRA officer from me! The trick was to communicate the strategic importance of a good rating. Later, he handed this duty off to the Director of Marketing, one of his direct reports. We set production goals and continued to get strong performance because the lenders and other staff knew that CRA was important to the guys at the top.

Treating CRA like another regulation is the kiss of death. No matter who's at the helm, if you handle it like a business unit, you'll do much better.

First published on BankersOnline.com 07/14/03