CRA: An Examiner's Perspective
COVID-19 and the Community Reinvestment Act (CRA) – Assessment Area Responsiveness

This article is part of a series on CRA best practices from an examiner’s perspective. Although this column focuses on CRA best practices for financial institutions, the content may provide insights for community development organizations working with financial institutions in meeting credit and community development needs. As a disclaimer, this series is meant only to represent best practices; financial institutions should consider the information presented in the context of the requirements or guidance of their primary regulators and the business needs of their financial institutions.

On March 19, 2020, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency published the Joint Statement on CRA Consideration for Activities in Response to COVID-19 (PDF).

This statement, effective for six months, encourages financial institutions to work with low- and moderate-income (LMI) individuals and families, small businesses and farms, communities located in LMI census tracts, and distressed and underserved geographies within their assessment area. The joint statement provides guidance on retail and community development activities that banks may consider to provide short-term relief in the interest of long-term financial stability for these communities in this time of national crisis.

The statement provides examples of accommodations to communities concerning lending, retail services and community development. Guidance for working with these LMI individuals includes consideration of easing restrictions to improve access to funds and credit products (e.g., waiving fees, accommodating customers with loan repayments during a time of hardship).

The guidance also provides examples of community development activities (loans, investments and services) that support providing food supplies; digital and health-care access for communities; and economic development activities that help sustain small businesses and farms.

Additionally, the joint statement encourages financial institutions to work with regulators to identify other activities that will assist LMI individuals and communities, small businesses and farms while ensuring these actions are consistent with safe and sound banking practices and applicable consumer protection laws. The statement emphasizes these examples are not an exhaustive list of activities that will be considered for CRA credit.

Douglas Yarwood is a senior consumer affairs examiner at the Federal Reserve Bank of St. Louis.