Podcast #71 discusses how banks can estimate their performance under the new Community Reinvestment Act (CRA) rules. Len highlights bankers' concerns about the increased difficulty in passing the CRA exam with the new rules, which predict a significant rise in failure rates. He emphasizes the importance of the Retail Lending Test, explaining that failing this test results in an overall unsatisfactory CRA rating.To estimate their performance, banks should first focus on the Retail Lending Test and identify their Retail Lending Assessment Areas. The next steps involve determining benchmarks based on geographic and borrower distribution tests and applying multipliers to create calibrated benchmarks for a low satisfactory rating. Banks then need to compute their penetration rates in different income tracts and compare them to these benchmarks.Dean asks about data sources for these calculations, and Len suggests using HMDA and CRA data, along with FFIEC demographic files. He also notes that GeoDataVision will publish relevant benchmarks on their website for further guidance. The podcast ends with an invitation for future topic suggestions from listeners.
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A Very Serious and Growing CRA Assessment Area Problem
Enterprise Risk Management
CRA Tips and Tricks for Intermediate-Small Banks
Overview of Flood Insurance Requirements
CRA Mistakes
Fair Lending and Commercial Applications
Assessment Area delineation your most important CRA decision
Fair Lending in 2021
What Community Development really means under CRA
National Defense Act impacts on BSA/AML
The Pandemic and CRA
Compliance Management Systems and COVID
Major changes contained in the Federal Reserve Board's Advanced Notice of Proposed Rule-Making regarding the Community Reinvestment Act.
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