Under the Consumer Reinvestment Act (CRA) of 1977, federally insured banks in the United States are required to meet the credit needs of the entire community in which they serve -- including low- and moderate-income community members -- through the use of safe and sound banking operations.
CRA evaluations are meant to ensure financial institutions are meeting these expectations.
The Federal Reserve Board (FRB) and The Federal Deposit Insurance Corporation (FDIC) oversee evaluations of state-chartered financial institutions. Evaluations for national banks are handled by the Office of the Comptroller of the Currency (OCC).
Regulators follow one of three evaluation plans based on the institution's size, including: large banks with $1.25 billion in assets (investment test, lending test and service test); intermediate banks with at least $313 million in assets but less than $1.25 billion (lending test and community development test); and small banks for institutions with less than $313 million in assets (streamlined lending test).
At a financial institution's request, regulators will alternatively offer evaluations based on community development (business strategy) for wholesale and limited purpose banks; and strategic plans (open to any bank).
Financial institutions are typically evaluated every three years, although small banks may be reviewed less often. Banks with assets of $250 million or less and CRA ratings of "outstanding" or "satisfactory" in their last evaluations can not be evaluated more than once every 5 or 4 years, respectively unless there is reasonable cause or the institution has applied for a depository facility through a bank merger, new branch opening or acquisition.
Winchester Banks Receiving CRA Ratings in 2018