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3 Steps to Develop a Community Reinvestment Act (CRA) Complaint Management Program

3 min read
Nov 24, 2021

Banks are required to have a compliance management system (CMS) capable of ensuring compliance with laws and regulations such as the Community Reinvestment Act (CRA). Complying with this directive is more than good regulatory compliance. It also is a smart compliance strategy from a reputation risk perspective, protecting your institution from violations and negative CRA ratings that could damage its standing in the community.  

Related: 8 Steps to a Successful Community Reinvestment Act Compliance Strategy 

A touchstone of an effective CMS is a consumer complaint program. Consumer complaints related to your bank’s CRA’s performance create additional regulatory responsibilities and should therefore be treated differently than general consumer complaints. For example, written CRA comments (which may qualify as consumer complaints) received from the public must be maintained in the bank’s public file.  

How to build a CRA complaint program in 3 steps 

Ensuring your complaint program has well-defined responsibilities when it comes to CRA complaints can bolster your bank’s overall CRA compliance track record. Building a Community Reinvestment Act complaint program requires three actions:

1. Understanding the directives of your primary federal regulator

2. Ensuring CRA complaints are really CRA complaints

3. Reviewing complaint procedures to ensure CRA complaints are handled properly 

Step 1: Understanding the directives of your primary federal regulator 

The first step in developing a CRA complaint program is ensuring your bank understands the directives of its primary Federal regulator as well as any applicable state CRA requirements. For example, state-chartered banks regulated by the Federal Reserve Board (FRB) should retain a record of appropriate actions taken in response to written comments/complaints that address a main purpose of the CRA. This includes comments or complaints relating to the bank’s performance in helping to meet the credit needs of its assessment area(s). 

Step 2: Ensuring CRA complaints are really CRA complaints 

The second step is ensuring complaints that are categorized as CRA complaints are indeed addressing one of main purposes of the CRA. This requires the judgment of a CRA officer or someone trained to understand CRA compliance.  

Questions that can help identify and categorize CRA complaints include:

1. Does the complaint address the bank’s exclusion or restriction of access to credit for areas with relatively high concentrations of minority residents? 

2. Does the complaint address a lack of availability of the bank’s branch services?

3. Does the complaint include questions that could fall under redliningdiscrimination, or application discouragement?

4. Does the complaint question the institution’s performance in meeting the needs of certain groups, such as racial or national origin minorities? 

Answering yes to any of these questions makes it likely that the complaint should be categorized as a CRA complaint. 

Step 3: Reviewing complaint procedures to ensure CRA complaints are handled properly 

The third step is monitoring and reviewing the bank’s complaint procedures to ensure CRA complaints are properly identified and addressed. The FFIEC’s Small Institution Examination Procedures Manual gives examiners instructions for reviewing CRA complaints.  

A bank may want to incorporate these instructions into its CRA complaint procedures. This includes:

1. Reviewing all consumer complaints and agency complaints relating to your institution's CRA performance.

2. Maintaining these consumer complaints in your institution's public file.

3. Discussing and reviewing CRA complaints with management to determine if any CRA complaints are substantiated.

4. Responding to substantiated CRA complaints by taking appropriate action.

5. Summarizing your institution's response to CRA complaints and recording your institution’s means of taking action, if warranted, in response to written complaints about its CRA performance. 

6. Including the total number of CRA complaints and resolutions (with examples that illustrate the nature, responsiveness to, and resolution of CRA complaints) in your internal record-keeping system and your public file. 

Remember, the federal agencies have stated that evidence of discriminatory or other illegal credit practices may adversely affect the evaluation of a bank’s CRA performance. With regulators very focused on fair lending, it’s essential that your complaint program is actively and successfully handing CRA complaints to meet regulatory expectations. 


How to Build a Strong Fair Lending & Redlining Compliance Management System


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