Academic journal article ABA Banking Journal

Handling Major Headaches: CRA

Academic journal article ABA Banking Journal

Handling Major Headaches: CRA

Article excerpt

This month we've invited Rhonda Lockhart, vice-president and compliance officer at $200 million-assets Miners & Merchants Bank & Trust Co., Grundy, Va., to provide some tips regarding the Community Reinvestment Act as it applies to smaller banks. Lockhart is a member of ABA's Compliance Executive Committee.

Small banks have just completed their first year under the new streamlined CRA examination procedures. In many ways it has been a year of anxiety and relief. The anxiety: anticipation and uncertainty of what the first streamlined exams would really entail. The relief: for those of us who have been through one, that examiners are basically performing evaluations in the manner promisec.

In speaking with colleagues across the country, most have been pleased with their examination experiences. Overall, the exams are taking less time on site than before, and performance context factors are evaluated and considered when assigning the bank's rating. As far as ratings go, community banks have done well. Close to 30% of us have scored Outstanding, with another 68% or so obtaining a Satisfactory rating. Less than 2% have fallen into the Needs to Improve and Substantial Noncompliance categories.

Whether you're preparing for an exam this year or just trying to organize your CRA program, consider the following:

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