44 JULY / AUGUST 2021 William J. Showalter Senior Consultant Young & Associates Inc. wshowalter@younginc.com Young & Associates Inc. is an associate member of the Indiana Bankers Association. DIRECTORS / SENIOR MANAGEMENT Getting CRA Credit For pandemic responses Should you sit back and wait to see what examiners say about your bank’s Community Reinvestment Act performance? This may not be a good idea. Instead, you can be an active participant in shaping your bank’s CRA story. In addition to tracking how much of your lending is extended within your CRA assessment area and other factors, the banking agencies have now given banks yet another way to obtain CRA credit: Show how well your bank has responded to coronavirus-related needs within your community. Joint CRA Policy Statement On March 19, the Federal Deposit Insurance Corp., Federal Reserve Board and Office of the Comptroller of the Currency issued a Joint Statement on CRA Consideration for Activities in Response to COVID-19,1 to be effective through the six-month period after the national emergency declaration is lifted, unless extended by the agencies. In the statement, the agencies indicated that they recognized the potential for the coronavirus to adversely affect financial institutions’ customers and operations. The statement also: • Encouraged financial institutions to work with affected customers and communities, particularly those that are low- to moderate-income; and • Clarified that they will provide favorable consideration under the CRA for certain retail banking services, retail lending activities, and community development activities related to the pandemic. Banks were able serve the financial needs of their communities in many ways while dealing with the crisis, such as: • Keeping bank services operating during closure of lobbies through alternative delivery channels including drive-thrus, ATMs, online banking and mobile apps; • Reducing fees and penalties related to customer deposit accounts; • Working with borrowers to modify/extend loans or defer payments; • Participating in the Small Business Administration’s Paycheck Protection Program loan program. In order to receive appropriate CRA credit for pandemic-related assistance activities, banks should track and document what they have done, who has benefited and other relevant information. If this record has not been kept, the narrative can be pulled together after the fact. OCC on PPP Participation The OCC issued two bulletins in late April regarding PPP loans made by national banks and federal savings associations. Two days later, OCC Bulletin 2020-452 rescinded and replaced Bulletin 2020-44 and clarified the voluntary nature of documenting bank involvement. The OCC noted that PPP loans may qualify for credit on behalf of banks under the CRA. The OCC bulletin is directed to national institutions, but the information may be of interest to any bank, regardless of supervisory agency. While not requiring banks to obtain or maintain information beyond what is generated or exists in the ordinary course of business,
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