CRA Made Easy EARNING CREDIT WHILE “DOING GOOD” VIA INNOVATIVE NEW PROGRAM By IntraFi Federal regulators expect banks to make innovative CRA investments, so one bank in West Virginia elected to try a new program designed to place deposits at Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) in underserved communities. “We are aware that CRA regulations encourage banks to make a variety of different CRA investments,” said the investing bank’s treasurer. “So, when we heard about this program, we thought it would be a great way to earn CRA credit while also enhancing a low-income market.” The Advancing Communities TogetherSM (ACTSM ) Deposit Program offers banks a secure, efficient way to place funds into CDFI banks and MDI banks and earn CRA credit under the regulation’s investment and community development tests. “The ACT Deposit Program is a promising new tool for community and regional banks to earn CRA credit,” says Brian Blake, chief public policy officer at the Community Development Bankers Association and a former CRA officer. “ACT excels at meeting both the spirit and the letter of the CRA, and I believe it is very competitive compared with more complex, costly or time-consuming alternatives.” ACT’s minimum deposit is $1 million, and the CDFIs and MDIs in the program pay near-market rates on the funds. ACT deposits remain liquid and are eligible for millions in FDIC insurance across IntraFi® network banks because they are placed through the IntraFi Cash Service®. IntraFi has built a network of more than 3,000 banks, including CDFIs and MDIs, that can help keep funds local and provide much-needed financial access in rural, suburban and urban communities across the nation. Scan the QR code for a list of MDIs and CDFIs participating in the ACT Deposit Program. https://www.intrafi.com/act-deposit-program#find-a-bank The $3.4-billion-asset investing bank in this case study used the ACT Deposit Program to place $1 million into an MDI in Ohio for several reasons. “First, the interest rate on the deposit is much better than an alternative we had been evaluating,” said the bank’s treasurer. “We also wanted flexibility on the amount invested, so the $1-million minimum appealed to us. “And another thing that is attractive about the program is if you need access to the funding for some reason, you can bring the funds back at any time. All these factors were extremely attractive to our bank.” There are no MDIs in the bank’s home state of West Virginia, so it looked to neighboring Ohio to find a relatively new MDI. “The deposits we receive under the ACT Deposit Program are fuel for the bank to help the community grow and meet its financing needs,” said the MDI’s chairman and CEO. Opened in May 2023, the MDI is the reincarnation of a bank chartered in the early 20th century during the Great Migration of Black people moving north. “We named our bank after a historic bank that created the first Black hospital here, financed a theater that hosted every Jazz great and helped all those newly arriving workers get credit,” the MDI’s chairman and Colorado Banker 14
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