CRA Sunshine

Question 1

What are CRA Sunshine Requirements?

Answer 1

As part of the GLBA and FDI Act, they require non govt entities or persons, insured depository institutions, and affiliates that area parties to certain CRA agreements to make the agreements available to the public and the appropriate agency and file annual reports concerning the agreements.

Question 2

True or false:

GLBA and CRA sunshine give agencies the authority to enforce the provisions of a covered agreement.

Answer 2

False.

Question 3

What is a covered agreement? (5)

Answer 3

Any contract, arrangement or understanding that is:

• in writing
• includes one or more depository institutions or affiliates and Non Govt entities/persons
• provides for the bank or affiliate to:
• -give entities or individuals (don’t need to be part of agreement) cash, grants or other consideration (except loans) with a value greater than $10M/yr, or
• -Make to individuals or entities (dont need to be part of agreement) loans that have agg principal of more than $50M/yr
• agreement is made in connection, pursuant, or in fulfillment of CRA
• The agreement with a NGEP that has had a CRA communication prior to entering into the agreement.

Question 4

A covered agreement does not include what? (2)

Answer 4

1. Any individual loan that is secured by real estate; or
2. Any specific contract or commitment for a loan or
   extension of credit to an individual, business, farm, or
   other entity, or group of such individuals or entities if:
   a. The funds are loaned at rates that are not substantially below market rates; and
   b. The loan application or other loan documentation does not indicate that the borrower intends or is authorized to use the borrowed funds to make a loan or extension of credit to one or more third parties.

Question 5

What is a CRA affiliate?

Answer 5

A “CRA affiliate” of an insured depository institution is any company that is an affiliate of an insured depository institution to the extent, and only to the extent, that the activities of the affiliate were considered by the appropriate Federal banking agency when evaluating the CRA performance of the institution at its most recent CRA examination prior to the
agreement. An insured depository institution or affiliate also may designate any company as a CRA affiliate at any time prior to the time a covered agreement is entered into by
informing the NGEP that is a party to the agreement of such designation.

Question 6

What is a CRA communication? (3)

Answer 6

A “CRA communication” is any of the following that meet the timing and knowledge requirements of §346.3(b).

1. Any written or oral comment or testimony provided to a Federal banking agency concerning the adequacy of the performance under the CRA of the insured depository
   institution, any affiliated insured depository institution, or any CRA affiliate.
2. Any written comment submitted to the insured depository institution that discusses the adequacy of the performance
   under the CRA of the institution and must be included in the institution’s CRA public file.
3. Any discussion or other contact with the insured
   depository institution or any affiliate about:
   a. Providing (or refraining from providing) written or
   oral comments or testimony to any Federal banking
   agency concerning the adequacy of the performance under the CRA of the insured depository institution, any affiliated insured depository institution, or any CRA affiliate;
   b. Providing (or refraining from providing) written
   comments to the insured depository institution that
   concern the adequacy of the institution’s performance
   under the CRA and must be included in the institution’s CRA public file; or
   c. The adequacy of the performance under the CRA of the insured depository institution, any affiliated
   insured depository institution, or any CRA affiliate.

Question 7

What factors are considered to be in fulfillment of CRA? (2)

Answer 7

• Comments to federal banking agency or included in the CRA public file concerning CRA performance of a bank or affiliate that is party to a covered agreement or
• activities given favorable CRA consideration

Question 8

What activities are considered to have favorable CRA consideration for covered agreements in “fulfillment of CRA”? (7)

Answer 8

a. Home-purchase, home-improvement, small business, small farm, community development, and consumer lending, including loan purchases, loan commitments, and letters of credit;
b. Making investments, deposits, or grants, or acquiring membership shares, that have as their primary purpose community development
c. Delivering retail banking services,
d. Providing community development services

e. In the case of a wholesale or limited-purpose insured
depository institution, community development
lending, including originating and purchasing loans and making loan commitments and letters of credit, making qualified investments, or providing
community development services

f. In the case of a small insured depository institution, any lending or other activity

g. In the case of an insured depository institution that is
evaluated on the basis of a strategic plan, any element
of the strategic plan

Question 9

What is an insured depository institution?

Answer 9

any bank or savings
associations whose deposits are insured by the FDIC and
includes any uninsured branch or agency of a foreign bank or a
commercial lending company owned or controlled by a foreign bank for purpose of Section 8 of the FDI Act.

Question 10

What is a NGEP?

Answer 10

A nongovernmental entity or person (NGEP) is any
partnership, association, trust, joint venture, joint stock
company, corporation, limited liability corporation, company,
firm, society, other organization, or individual.

Question 11

An NGEP does not include what? (4)

Answer 11

A “NGEP” does not include:
1. the United States government, a state government, a unit of local government (including a county, city, town, township, parish, village, or other general-purpose subdivision of a state) or an Indian tribe or tribal organization established under federal, state or Indian tribal law (including the Department of Hawaiian Home Lands), or a department, agency, or instrumentality of any such entity;

2. a federally chartered public corporation that receives
   federal funds appropriated specifically for that corporation;
3. an insured depository institution or affiliate of an insured depository institution; or
4. an officer, director, employee, or representative (acting in his or her capacity as an officer, director, employee, or representative) of the above mentioned entities.

Question 12

What three things should examiners ensure banks are doing regarding the disclosure and reporting of CRA covered agreements?

Answer 12

To determine whether the institution:

1) is aware of its responsibilities under section 48 of the FDI Act and the implementing CRA Sunshine Regulation;

2) has identified any written agreements that would trigger the section 48
requirements; and

3) discloses covered agreements and files annual reports as required by the regulation.

Question 13

Which covered agreements must be reported to the public or supervisory agency?

Answer 13

Any covered agreements entered into after 11/12/1999

Question 14

What event triggers the obligation to disclose a covered agreement to a member of the public?

Answer 14

An individual or entity must request the bank or NGEP make a covered agreement available

Question 15

How should a NGEP disclose a covered agreement to the public?

Answer 15

You must promptly make a copy of the covered agreement available. You may withhold information that is confidential and
proprietary under FOIA standards. However,
you must disclose certain enumerated items of
information identified at §346.6(b)(3).

Question 16

How should a insured depository institution disclose a covered agreement to the public?

Answer 16

You must promptly make a copy of the covered agreement available. You may withhold information that is confidential and
proprietary under FOIA standards. However, you must disclose certain enumerated items of
information identified at §346.6(b)(3).

An IDI or affiliate may make
an agreement available by placing a copy of the covered agreement in the IDI’s CRA public file. The
IDI must make the agreement available in
accordance with the CRA rule on public files.

Question 17

When does the duty to disclose a covered agreement to the

public or supervisory agency end?

Answer 17

Twelve months after the end of the term of the agreement.

Question 18

When must a NGEP disclose a covered agreement to the supervisory agency?

Answer 18

Within 30 days after the agency requests a copy of the agreement.

Question 19

When must a insured depository institution disclose a covered agreement to the supervisory agency?

Answer 19

Within 60 days of the end of the calendar quarter after the agreement is entered into.

Question 20

How should a insured depository institution disclose a covered agreement to a supervisory agency?

Answer 20

You must provide the RSA with a complete copy of the agreement. If you propose the withholding of any information that can be
withheld from disclosure under FOIA, you must also provide a public version of the agreement that excludes such information and an explanation justifying the exclusion. The public version must include certain
information. See §346.6(b)3).

Alternatively, you may provide a list of all
covered agreements that you entered into during the calendar quarter, and include the information described at §346.6(d)(1). If the RSA requests a copy of an agreement referenced in the list, you must provide a copy of the agreement and a public version (if applicable) within seven calendar days.

Question 21

How should a NGEP disclose a covered agreement to a supervisory agency?

Answer 21

You must disclose a complete copy of the agreement. If you propose the withholding of any information that can be withheld from disclosure under FOIA, you must also provide a public version of the agreement that excludes such information and an explanation justifying the exclusion. The public version must include certain information. See §346.6(b)(3).

Question 22

When does the duty to disclose a covered agreement to the

supervisory agency end?

Answer 22

Twelve months after the end of the agreement for NGEP or banks.

Or for banks that file a list, the obligation terminates 36 months after the end of the term of the agreement.

Question 23

Which agreements are subject to annual reporting requirements?

Answer 23

Covered agreements entered into on or after 5/12/00

Question 24

What periods require an annual report?

NGEP vs Bank

Answer 24

You must report for each fiscal year in which you receive or use funds or other resources under the covered agreement. Alternatively, you may file your report on a calendar year basis.

Banks can alternatively file the report on a calendar year basis.

Question 25

When must the annual report be filed?

NGEP vs bank.

Answer 25

For fiscal years that end after 1/1/01, you must file the report with each RSA within six months after the end of the fiscal year covered
by the report.

Alternatively, NGEPs may, within this six-month period, provide the report to an IDI or affiliate that is a party to the agreement. You must
include written instructions requiring the IDI or affiliate to promptly forward the report to the RSA(s).

If a NGEP has provided its report to a bank, the bank
must also file that report with the RSA(s) on behalf of the
NGEP within 30 days of receipt.

Question 26

May they file a consolidated
annual report?

NGEP vs banks

Answer 26

If you are a party to two or more covered agreements, you may file a single consolidated annual report concerning all the covered agreements.

If a bank and affiliates are parties to the same covered agreement, they may file a
single consolidated annual report relating to the agreement.