FDIC Rates 5 Banks ‘Outstanding’ in CRA Compliance

the Federal Deposit Insurance Corporation (FDIC) rated five banks “outstanding” and one bank “requires improvement” in its latest monthly list of banks reviewed for Compliance with the Community Reinvestment Act (CRA)..

The rest of the 72 banks included in the monthly list released on Friday (Jan. 3) were rated “satisfactory.” None were rated “substantial noncompliance.”

the CRA ratings included in this list was assigned by the FDIC in October 2024, the agency said on Friday press release.

“The CRA is a 1977 law that requires the FDIC to review a bank’s record of meeting the credit requirements of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations,” the release said.

The five banks rated “outstanding” include Charlotte, North Carolina-based Truist Bank; Jordan, Montana based Bank of Garfield County; Fairbanks, Alaska based Mt. McKinley Bank; Based in Los Angeles Open Bank; and Brookfield, based in Wisconsin Spring Bank.

Weimar, based in Texas Hill Bank & Trust Co. (HBTC) is rated “needs improvement.”

In public disclosure of HBTC’s CRA performance evaluationThe FDIC said it gave the bank that rating because its loan-to-deposit (LTD) ratio was “less than reasonable” given the bank’s size, financial condition and assessment area. credit.

“HBTC needs to improve its performance on the Lending Test,” the FDIC said. “The bank’s less than reasonable record regarding the LTD ratio as well as the limited level of lending, primarily supports this conclusion.”

CRA ratings cover only banks’ performance in meeting their responsibilities under the CRA, according to an FDIC page about CRA performance evaluation.

The FDIC oversees insured state-chartered banks that are not members of the Federal Reserve System and state insured savings associations, per page. The Federal Reserve System and the Office of the Comptroller of the Currency (OCC) enforces the CRA among other types of banks.

In October 2023, the federal banking agencies issued an interagency final rule that modernized and strengthened the CRA. The final rule does this in part by recognizing banking activities that occur beyond physical branches and ATMs, becoming more data-driven and objective, and addressing concerns related to “grade inflation.” in CRA ratings.