ABA Banking Journal - April 2011 - (Page 40)
compliance clinic | the new consumer bureau
CRA: roll of the D.C. dice?
While CRA stays with bank regulators, officially, the CFPB won’t stay out of it, and its role must be considered by lucy griffin, contributing editor
he Community Reinvestment Act is one of only a few “compliance” laws that will not move to the new Consumer Financial Protection Bureau. Responsibility for CRA examinations remains with the prudential bank regulators. Leaving CRA with the prudential regulators makes a lot of sense. Evaluating CRA performance requires putting the bank’s loans, services, and investments for low- and moderateincome areas into the context of the bank’s overall business and market. CRA consideration includes loans to small farms and small businesses, community development projects, and
investments that help to meet CRA’s purposes. It doesn’t make sense to put this responsibility into the hands of a bureau that is concerned primarily with financial products for consumers. In addition, the enforcement aspect of CRA is embedded in the regulatory application process. CRA directs the agencies to consider CRA ratings when reviewing and making a decision on applications. That—and the potential bad publicity that could be generated by a low CRA rating—is the enforcement tool. Consideration of applications is a function that the new bureau will not have. So, will the CRA examination
| AbA bAnKing JournAl | april 2011
illustrAtion by MelissA ZAyAs
If you would like to try to load the digital publication without using Flash Player detection, please click here.