CRA and the Applications Process

Evaluation by the Federal Reserve System of CRA and other Consumer Issues in Conjunction with an Application

The Opportunity for Public Input

Submitting a Comment on an Application

Related Links

The CRA requires the Federal Reserve (FR) to consider a depository institution's record of helping to meet the credit needs of its local communities in evaluating applications for mergers, acquisitions, and branches. An institution's most recent CRA performance evaluation is a particularly important, and often controlling, consideration in the applications process because it represents a detailed on-site evaluation of the institution's performance under the CRA by its appropriate federal supervisor.

In addition, in evaluating applications, the FR reviews the institution's record of compliance with consumer protection laws and regulations. The institution's most recent consumer compliance rating is central to this review because, like the CRA performance evaluation, it represents the detailed findings of the institution's supervisory agency. Less than satisfactory CRA or consumer compliance ratings can form the basis for denial of an application.

FR staff conduct independent reviews of CRA and consumer compliance performance when the financial institution(s) involved in an application have less than satisfactory CRA or compliance ratings or when the FR receives comments from interested parties that raise CRA or consumer compliance issues. FR staff's review of pertinent information may include the following:

  • CRA and compliance examination reports;
  • Enforcement actions, and/or any identified fair lending or other consumer protection-related referrals or investigations pending by federal or state agencies or authorities;
  • Recent actions taken to improve CRA and/or consumer compliance weaknesses;
  • Additional supervisory information;
  • Comments submitted by interested parties and the applicant's response to such comments. Depending on the nature of the comments, staff may review Home Mortgage Disclosure Act (HMDA) data and/or data regarding lending to small businesses and small farms reported by the financial institutions involved in the proposal; and,
  • Any additional information FR staff has requested from the applicant that is considered necessary to complete the record or to address concerns raised by the public.

The Opportunity for Public Input

An important aspect of the applications process is the opportunity for the public to comment in writing on any or all of the factors the FR must consider in evaluating an application--including the applicant's CRA performance. Public comments can provide insight to a financial institution's CRA performance. Written comments received from the public, which may express either support for or opposition to the application, are reviewed by FR staff, sent to the applicant financial institution, and included as part of the public record that the FR carefully examines in the evaluation of an application.

Submitting a Comment on an Application

The FR maintains a list (H.2A) of applications and notices that have been filed or will be filed shortly that are subject to public comment. The list briefly describes the proposal, identifies the Reserve Bank that is processing the proposal, and lists the date for the expiration of the Federal Register comment period. Public comments can be sent to the appropriate Federal Reserve Bank identified in the list, or to the Federal Reserve Board. Contact information and addresses are provided at the end of the listing. Comments need not be submitted in any particular format; however, they should be supported with facts about the applicant's performance and should be as specific as possible in explaining the basis for the comment.

Related Links

Federal Financial Institutions Examination Council (FFIEC) web site

The FFIEC is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision* (OTS) and to make recommendations to promote uniformity in the supervision of financial institutions. In 2006, the State Liaison Committee (SLC) was added to the Council as a voting member. The SLC includes representatives from the Conference of State Bank Supervisors (CSBS), the American Council of State Savings Supervisors (ACSSS), and the National Association of State Credit Union Supervisors (NASCUS).

Additional HMDA and CRA related information, such as CRA Ratings and HMDA and CRA data for a particular institution, can be accessed at the FFIEC web site.



Financial Institution Structure and History

* According to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) the OTS will be closed as of July 21, 2011. While most of its functions will be transferred to the OCC, certain other authorities of the OTS will be transferred to the FDIC and the FRB. Correspondingly, in accordance with the Dodd-Frank Act, the Director of the newly created Consumer Financial Protection Bureau will join the membership of the Council. Return to text.

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Last Update: October 14, 2022