American Banker, February 15, 2018: BankThink digital banking needs to be front and center in CRA reform
Without question, the CRA serves a vital role in ensuring low- and-moderate income borrowers have access to safe and sound bank loans. However, it is time for the CRA to be reexamined to ensure it remains workable and relevant for underserved communities and the next generation of borrowers.
To accomplish this, regulators’ application of CRA must evolve by giving greater recognition to digital banking efforts during CRA performance evaluations. As it stands, regulators focus predominately on physical locations and branch networks — downplaying banks’ valuable contributions in the digital banking sphere.
Yet mobile and online banking options are becoming increasingly popular among consumers of all socioeconomic backgrounds. As the Federal Deposit Insurance Corp. has noted, mobile banking is well positioned to help an estimated 67 million unbanked and underbanked people gain access to needed financial services products.
Fortunately, key banking regulators are turning their attention to the law and are looking to modernize it. Recently, Treasury Secretary Steven Mnuchin said he wants to make sure CRA doesn’t turn into a “check the box” program used by banks simply to satisfy regulators. And Comptroller of the Currency Joseph Otting has echoed the need for reform. They are exactly right, and their commitment to the issue is music to the ears of those who advocate for a more effective approach to CRA. Going forward, we need to ensure CRA is interpreted and implemented in a manner which caters to the needs of 21st century consumers.