Community Reinvestment Act

Question 1

The Community Reinvestment Act was enacted in what year?

Answer 1

1977

Question 2

Poor performance on CRA examinations can result in:

a. Criminal penalties
b. Revocation of a federal banking charter
c. Denial of applications for mergers, acquisitions or expansions

Answer 2

c. Denial of applications for mergers, acquisitions or expansions

Question 3

T/F: A bank’s CRA performance rating must be made available to regulators but not to the public.

Answer 3

False

Question 4

T/F: The CRA compliance officer or compliance committee is responsible for seeing that the CRA policy is carried out on a day-to-day basis.

Answer 4

True

Question 5

T/F: All large retail banks are required to collect data about each small business or small farm loan they originate or purchase.

Answer 5

True

Question 6

T/F: A bank’s CRA rating is affected adversely if examiners find evidence of discriminatory or other illegal credit practices.

Answer 6

True

Question 7

T/F: Only members of the public who are properly authorized by federal regulators may review the public section of a bank’s CRA Performance Evaluation.

Answer 7

False

Question 8

Which one of the following is NOT one of the seven criteria considered when examiners develop a CRA performance context?

a. CRA public file and written comments
b. Customer surveys
c. Past performance of the institution
d. Lending, investment and bank service opportunities

Answer 8

b. Customer surveys

Question 9

T/F: A bank’s CRA rating reflects its financial condition.

Answer 9

False

Question 10

T/F: A bank’s assessment area does NOT include deposit-taking ATMs.

Answer 10

False

Question 11

All employees of banking institution covered by the CRA should know:

a. The name of the person(s) serving as the compliance officer or committee
b. How to handle customer requests regarding the CRA with respect and courtesy
c. The location of the CRA public file
d. All of the above

Answer 11

d. All of the above

Question 12

T/F: The CRA recognizes that CRA responsibilities should be addressed in keeping with safe and sound banking practices.

Answer 12

True

Question 13

T/F: The CRA public notice posted at a branch indicates where the complete public file is available for review.

Answer 13

True

Question 14

T/F: Noncompliance with the CRA does NOT jeopardize a depository institution’s efforts to establish or relocate branch facilities.

Answer 14

False

Question 15

All institutions affected by the CRA must compile and make available a public file that contains:

a. The most recent CRA Performance Evaluation
b. All written comments received from the public in the current year and the past two years relating to CRA efforts
c. Lists of branches and services provided at each location
d. All of the above

Answer 15

d. All of the above

Question 16

In assigning a CRA rating, examiners consider what three things?

Answer 16

a. The type of community served
b. The expertise of the institution
c. Local economic conditions

Question 17

Redlining is the perceived practice of

a. Refusing to lend money to people in poorer neighborhoods
b. Rejecting credit applications from non-creditworthy customers
c. Refusing to honor credit applications from customers outside a local community
d. None of the above

Answer 17

a. Refusing to lend money to people in poorer neighborhoods

Question 18

What banks does CRA apply to?

Answer 18

All federally insured commercial banks, savings banks and savings associations that are in the business of providing credit to the public.

Credit unions and some special purpose banks (that don’t perform commercial or retail banking services by granting credit to the public in the ordinary course of business) are exempt from CRA provisions.