News and Resources

The Worse News About Bad CRA Grades

Warren W. Traiger

February 18, 2011

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The Community Reinvestment Act grade deflation reported by American Banker ["Toughened CRA Marks Are a Threat to New M&A," Feb. 14] is real and consequential. But in many cases a lower grade has nothing to do with a bank's failure to adhere to traditional CRA performance standards, such as adequate lending within its assessment area or a sufficient volume of loans to lower-income individuals and neighborhoods. Instead, CRA rating downgrades are increasingly the result of regulatory findings that banks have engaged in illegal credit practices.

Published by American Banker, Feb. 2011