Join us on LinkedIn Follow us on Twitter Like us on Facebook Follow us on Instagram
 
  OCTOBER RESEARCH STORE Already a subscriber? LOG IN
AddControlToContainer_DynamicNavigation6

Expert discusses preparing for CRA modernization

Email A Friend Printer Friendly Version
0 comments
Banking, Government Oversight
Wednesday, May 3, 2023

Jason Keller, associate director of U.S. Advisory Services with Wolters Kluwer Compliance Solutions, spoke with Dodd Frank Update about the upcoming Community Reinvestment Act (CRA) modernization rules and how lenders can prepare for any changes.

Before joining Wolters Kluwer, Keller spent over 20 years at the Federal Reserve Bank of Chicago. Most recently, he served at the Chicago Fed as a community and senior economic advisor responsible for overseeing and evaluating economic capacities and sustainable growth opportunities.

“Modernization, as others have publicly stated, is necessary,” Keller said. “It is a long time coming based on the fact that you are taking a regulation from 1977, when banking was only conducted in a brick-and-mortar environment where bankers literally sat in the community that they served. In today’s digital space and internet economy, financial institutions can still meet a CRA mandate, even if they’re not sitting in the community they serve.”

Though Keller was emphatic he had no insight into what a final modernization rule will or will not do, he did work on several of the Federal Reserve’s issues papers that framed the questions of the advanced notice of proposed rulemaking.

“As we were thinking about questions to ask the industry, it became evident that more transparency was necessary,” Keller continued. “Bankers wanted it; community groups wanted it; even regulators themselves wanted a better understanding of the metrics for success and the data points the industry should be relying upon to help determine whether an institution is meeting its CRA obligations.”

Though CRA modernization means new expectations and standards for banks to meet, Keller was confident they were up for the challenge.

“Banks want to comply,” Keller said. “Banks want to be good stewards of the community. Banks want to be strategic partners for the entities, the businesses, the homeowners, the nonprofits, the governments that live and work in the communities they serve.”

When asked if there was concern that those banks that recently fell below CRA standards might become victims of regulation changes, Keller was optimistic something like that was unlikely to occur.

“You can count on one hand, maybe two, how many true repeat offenders—i.e., banks rated ‘less than satisfactory’ or ‘substantial noncompliance’ multiple times—there are. When they get rated as such, they get it right. They bring in consultants; they bring in community groups; they work with the regulator; they fix their problems.”

While current CRA compliance is taken into consideration by regulators reviewing proposed bank mergers and acquisitions, Keller was not concerned modernized rules would make the mergers and acquisitions process more difficult. Instead, he thought there might be greater ease and clarity with new regulations. Keller opined banks would likely have a more transparent standard of what regulators expect when evaluating a merger or acquisition.

One of the most significant potential components Keller spoke of regarding a modernized CRA was the potential for a new impact test, which Keller stated he has been advocating for years.

“[If] there are new impact factors, banks will have to communicate with their regulator about their loans, their investments, their services, and how impactful they are to the market that they serve,” he said. “That’s a game changer because they’ve never been required to tell that story, which will be relied on by the examiner who either asked or inferred about what impact actually happened.”

Telling “the story,” Keller emphasized, is critical to providing the necessary context of an impact test, and modernization of the CRA rules will offer banks the clarity to tell their stories better.

“From an examiner’s mindset, there is nothing more important than the performance context of the numbers. Bankers have to be able to tell that story to an examiner who may or may not even live in that part of the country. If banks don't tell their own story, no one else will.”

The impact of plant closures, teacher strikes, or a global pandemic are all examples of stories banks can tell when CRA exams are being conducted.

Keller gave the hypothetical of a plant cutting its third shift, resulting in 75 people in the community suddenly becoming unemployed. If the bank steps in to offer relief to those community members suddenly without work, even if they aren’t necessarily “banking services,” they could help with things like credit counseling, workforce development, building their resume or LinkedIn profile, or connecting them with a new laptop so they could conduct better searches for jobs. If the bank hands over documents to CRA examiners which state it purchased 75 new laptops without the context or story, the bank is doing itself a disservice on any impact testing.

“Impact won’t be a score, but it will be taken into consideration through some level of bifurcating what is or is not impactful,” Keller concluded. “Performance context isn’t going away. I think it's going to become even more important.”

Today's other top stories
House committee votes to slash CFPB funding through Dodd-Frank amendments
CFPB will not prioritize Sec. 1071 enforcement, supervision
Mortgage industry supports raising FHA loan limit to improve housing affordability
Banking agencies withdraw guidance on crypto-asset risk management
Financial services trades focus on digital assets, mortgage technology


COMMENT BOX DISCLAIMER:
October Research is not responsible for the comments posted on its websites by readers. We will do our best to remove comments that include profanity or personal attacks or other inappropriate comments.
Comments:

Be the first to leave a comment.

Leave your comment
Please enter a comment.
CAPTCHA Validation
CAPTCHA
Code:
Please enter the word displayed in the image above. Please enter the word displayed in the image above.
: 
Please enter your name.
: 
Please enter your email address.
This field must contain a valid email address.
Your Email is for reporting purposes only. It will NOT be displayed.
Popularity:
This article has been viewed 23234 times.

Monthly Newsletter

Dodd Frank Update May 2025

Cover Story:

Wolters Kluwer experts analyze shifts in banker compliance concerns


News by Topic   News by Edition   News by Agency   News by Industry   In-depth Reports   Events
Banking
Case Law
Conference Coverage
Consumer Protection
Data Privacy
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
 
Dodd Frank Update April 2025
Dodd Frank Update May 2025
Archives
 
CFPB NCUA
CFTC OCC
FDIC OFR
FHFA SEC
FRB States
FSOC Treasury
FTC  
 
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Land Title
Mortgage
Payday Lending
 
2025 State of the Industry
CRA and Affordable Housing
2025 State of the Industry
Who's My Regulator?
Fair Lending
Mortgage Technology
Marketing Compliance for Lenders
Archives
 
National Settlement Services Summit (NS3)
Women's Leadership Summit (WLS)
Webinars

Library   About   Subscribe   Other Publications
Data Privacy Vault Court Actions
Keys to Real Estate podcast Enforcement Documents
Blog - Tuesdays with Mary Guidance Documents
1071 Compliance Guide White Papers
eClosing Solutions Showcase Position Papers
Executive Interview Series Legislation
Lender Associations Regulations
The Dodd-Frank Act Reports, Studies and Surveys
Dodd-Frank Summary & History Federal Register Notices
 
Dodd Frank Update
Contact / Editors
Advertise
Request a Media Kit
Social Media
Are You An Expert?
Subscriber Agreement
 
Subscriptions
Free Email Updates
Try a Free Edition
 
The Title Report
The Legal Description
Valuation Review
RESPA News
Copyright © 2011-2025 Dodd Frank Update
An October Research, LLC publication
3046 Brecksville Road, Suite D, Richfield, OH 44286
(330) 659-6101, All Rights Reserved
www.doddfrankupdate.com | Privacy Policy
VISIT OUR OTHER WEBSITES
> The Legal Description
> RESPA News
> The Title Report
> Valuation Review
> NS3 The Summit
> Women's Leadership Summit
> October Research, LLC
> The October Store


Loading... Loading...
Featuring:
  • Delivery 3X a week plus breaking news as it happens
  • Comprehensive title insurance industry news
  • Recent acquisitions, mergers, real estate stats
  • Exclusive in-depth coverage of the industry's hottest stories
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Comprehensive Dodd-Frank coverage
  • The latest information from the CFPB
  • Full coverage of Congressional hearings
  • Updates on all agency actions
  • Analysis of controversial provisions
  • Release of newest studies and reports
Sign up today and...
  • Be one of the first to know where NS3 is being held
  • Learn about NS3 speakers and sessions
  • Save on registration with Super-Early Bird rates
  • Discover the networking opportunities NS3 offers
  • Find out if CE credits will be offered for your area
  • And much more
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Preview the latest RESPAnews.com Top Story
  • RESPA related headline news
  • Quote of the Week
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Legal, regulatory and legislative information impacting the settlement services industry
  • News from HUD, Congress, state legislatures and other regulatory agencies
  • Follow the lobbying efforts of all the major national real estate services organizations.
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • The industry's only full-time newsroom
  • Relevant, up-to-date appraisal industry news
  • Covering the hottest stories and industry trends
NEWS BY TOPIC
EDITION
AGENCY
IN-DEPTH REPORTS
INDUSTRY
EVENTS
LIBRARY
EMAIL UPDATES
ABOUT
SUBSCRIBE
Banking
Case Law
Conference Coverage
Consumer Protection
Data Privacy
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
Current Edition
April 2025
March 2025
February 2025
Archives
CFPB
CFTC
FDIC
FHFA
FRB
FSOC
NCUA
OCC
OFR
SEC
States
Treasury
2025 State of the Industry
Real Estate Compliance Outlook
CRA and Affordable Housing report
Who's My Regulator?
Fair Lending
Marketing Compliance for Lenders
Archives
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Land Title
Mortgage
Payday Lending
National Settlement
Services Summit (NS3)
Women's Leadership
Summit (WLS)
Webinars
CFPB's Shake-Up & Its Impact on You
2025 Economic Outlook Series
Data Privacy Compliance
Fintech Partner Compliance
Strategies post-NAR settlement
Industry and Regulatory Outlook
Securing Your Cyber Network
Compliant Marketing Tactics
2024 Economic Forecast Series
Webinar Archives
Data Privacy Vault
Keys to Real Estate podcast
Blog - Tuesdays with Mary
1071 Compliance Guide
eClosing Solutions Showcase
Executive Interview Series
Lender Associations
The Dodd-Frank Act
Dodd-Frank Summary
Court Actions
Enforcement Documents
Guidance Documents
White Papers
Position Papers
Legislation
Regulations
Reports, Studies and Surveys
Federal Register Notices
Proposals
Final Rules
GAO
Agency
Contact Us
Advertise
Request a Media Kit
Social Media
Are You An Expert?
Subscriber Agreement