Online Event Archive Recorded February 23, 2023
Banks have the capital to be a catalyst for change in your neighborhood and can be critical community partners. This presentation will cover how NCRC uses the Community Reinvestment Act (CRA) to secure community benefits agreements with banks and explore how CRA can be used to increase reinvestment in your communities.
This is crucial information for anyone working towards a Just Economy.
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
All right, so the chat function is live now you were able to use it. It’s gonna give everybody a few couple more minutes to join. But welcome to our theory basics webinar. Thank you for joining us. And then for those of you who are new to NCRC in the next slide, we are a coalition of more than 700 member organizations across the nation working to make adjust economy a national priority in a local reality. So if you’re interested in joining us and learning more, you can go to ncrp.org/membership, which I will also drop in the chat. In today’s presentation, we are going to go over the history of CRA the implementation issues when enforcement how to get involved in what NCRC is doing to help. We are holding this webinar in preparation for our annual just economy Conference, which is March 29 through the 30th this year. And then a few housekeeping things before we get started is please use the q&a function for any questions that you may have and they will be addressed after the presentation. And please remember to follow our code of conduct which I will also drop in the chat. And then feel free to introduce yourself in the chat and we will begin shortly.
Hi everyone. Welcome and good afternoon. My name is Katherine Petrus. I’m a senior CRA analyst with NCRC and very excited to have you in this webinar today. So I’ll go ahead and get started with a brief history of the Community Reinvestment Act. Before thinking about CRA, it’s always a helpful reminder to remember why banks exist. Banks are chartered by state and federal governments to serve a public purpose. You may have also heard the phrase safety and soundness and what that means is the safety and soundness or financial stability of our banking system is critical to the country’s stability and economic development. So while banks are private entities, and most of them are owned by holding companies who are owned by shareholders, it’s important to remember that they also serve a public purpose and your involvement in CRA is, is important to ensuring a proper balance between the bank’s needs and the needs of the community. My hope is that after today’s webinar, you’ll feel excited and empowered and also curious to learn more about CRA and engage with banks and regulators to strengthen CRA enforcement. Again, back to the public purpose of banks of good bank can be an anchor in the community. And an underlying principle behind CRA is that you can’t have a just economy without economic justice. You can’t have economic justice without access to affordable and safe capital. Homeownership is a key way that people build wealth, and capital can also empower people to start businesses. Banks have a really critical purpose and obligation to meet those credit needs not just for middle and upper income residents but for everybody in the communities where the banks are located. Like other laws, the CRA tells a story about history. And what the CRA tells us about history is that when Sarah was enacted in the 70s, the 1970s, banks were not fulfilling their obligations to all communities. CRA was a response to the practice of redlining, which was a decade’s long practice of refusing to make loans in certain communities based on class, race, or immigrant status of the residents who lived there. Redlining started during the Great Depression, with the formation of the homeowners Loan Corporation, that was an agency that did a lot of things to enhance the mortgage market. But they also created the practice of redlining. They would literally send employees to cities around the country to draw maps like this one of Los Angeles and they would color code different census tracts. If you lived in an area that was coded red, it was deemed hazardous and you could not get alone in that area. The Federal Housing Administration FHA, they largely use the same logic in their systems for appraisals. And of course, the result has been a decade’s long disinvestment in certain communities. Unfortunately, redlining is not a thing of the past. The impact of redlining continues in the practice itself continues today. In 2021, the Justice Department announced an initiative to combat redlining. And you can look online and find several recent redlining settlements. This map is a map of Los Angeles from January 2023 settlement. It shows the location of a certain bank’s branches in Los Angeles. And you can see the branches are all in yellow and orange areas on this map. It might be hard to see but the red areas are census tracts that are 60%, or more black or Hispanic. This is a pretty blatant example of what some banks continue to do, which is to choose bank branch locations based on race and income of the residents. Another link I wanted to share with you all today if you want to explore the current legacy of redlining. NCRC has a report on our website that shows the link between past redlining and current health outcomes in 140 cities. So clearly, we need to do better. Congress enacted the CRA in 1977. It was one of several laws aiming to end redlining and housing discrimination. The first of those laws was the Fair Housing Act, enacted in 1968. And Fair Housing Act prohibits discrimination. The Equal Credit Opportunity Act also prohibits discrimination in lending. In 1975, the home mortgage disclosure Act which people refer to as Honda required banks to collect and disclose data about the ethnicity and race of their mortgage applicants. And in 1977, the CRA was passed and CRA is the only one of these laws that carries with it an affirmative obligation. It requires banks again to serve the entire communities in the markets where they’re located. The CRA requires banks to serve the convenience and needs of communities where they’re located. I put the actual language from the statute here because you’ll hear the phrase convenience and needs over and over again. And this is where it comes from. It’s in the congressional findings in the CRA itself. And also, it’s part of the CRA Statement of Purpose The institutions are required to meet credit needs of local communities where they’re chartered, consistent with again, safety and soundness. So basically, when a bank takes deposits, it should be reinvesting those deposits by making loans into the community and to all the community, including low income through upper income residents. That reinvestment obligation is part of a bank’s public purpose. And again, a charter is a privilege that comes with special subsidies and benefits, one of them being deposit insurance and access to discounted loans from the Fed. Those privileges come with obligations.
CRA regulations largely dictate what I’ll be going through today in terms of how banks are evaluated and how CRA is enforced. There was a 1989 update to CRA regulations that required banks to bank supervisors to disclose CRA rating. So you might be a little surprised I was to learn that for the first 12 years of CRA. Bank supervisors didn’t even have to publicly disclose CRA ratings. In 1995, most most of what we see in CRA exams, as we know them today, was created in a regulatory reform. And this year we expect the regulator’s to update CRA regulations. We don’t know when the update It will occur, but expect it to happen this year. And that’s the first CRA reform and over 25 years, we’re hopeful that it addresses a lot of the shortcomings of CRA that I’ll touch on today. Although the final rule will likely be published this year, we don’t know when it will be effective. So when regulators published final rules, they also give an implementation deadline, it could be six months from publication up to two years from publication, and they might take a phased in approach. So today’s presentation will cover the current CRA regulations. I just wanted to highlight that these will be changing, but we don’t know when. So we are still operating under the existing regulations. And a couple of things I wanted to note that are not in the current CRA regulations, what or statute, one is that CRA is colorblind. Its focus is on data about income in census tracts, so the focus is on ensuring banks are meeting the needs of low and moderate income census tracts. This is a little problematic, of course, because Congress chose to address the problem of redlining with a colorblind law. And we hope that that gap in CRA will change with the updated regulation. And one more thing is that CRA does not apply to credit unions, it only applies to banks, and banks are evaluated relative to each other. Since 1977, there have been numerous studies of the benefits of CRA these numbers are through 2018 and shows that CRA has resulted in $883 billion in loans for affordable housing and economic development in low and moderate income communities. Also over 970 billion in small business lending. An economists have found over and over again that CRA covered lending is actually safer and sounder than non CRA covered lending. So that means less risky and less prone to default, or to creating loss for banks. On to implementation and enforcement. CRA again, is enforced through evaluating banks relative to each other. The performance evaluation is the basic tool for enforcement and it’s also referred to as CRA exams. Exams happen at each bank every three years. They’re conducted three to four years sorry. They’re conducted by the bank’s primary federal regulator and exams provide an opportunity for public comment. So one of the ideas behind CRA is public participation. And so each CRA exam is an opportunity for the public to weigh in on banks performance, and regulators have to consider those comments when doing their examination. These exams evaluate how well banks are doing in lending to LMI borrowers and neighborhoods and the level of support for community development investments, as well as whether banks are maintaining branches in low and moderate income communities.
The three regulators charged with CRA enforcement are the FDIC, they regulate state chartered banks that do not belong to the Federal Reserve System. The Federal Reserve regulates bank holding companies and membership in the Federal Reserve System is required for national banks but optional for state banks. So state chartered banks that are part of the Federal Reserve System get examined by the Fed for CRA compliance, and finally OCC regulates national banks. I saw a question in the chat about credit unions there is not currently a CRA equivalent for credit unions, although there are some state C RAS that that do apply to credit unions or have been there’s been a lot of advocacy to Play states here is two credit unions. And I’ll touch on that at the end of the presentation.
These three regulators are responsible for issuing, not just doing CRA exams, but they they issue the regulations to implement CRA. And again, they’re in the process of finalizing a joint rule to update CRA regulations. The there are four CRA ratings and this is part of the statute. CRA tests or exams are basically pass fail. And when a bank fails a CRA exam, there are consequences, it’s more difficult for the bank to merge, it’s more difficult for them to acquire branches, and the bank is going to be subject to more frequent CRA exams than the usual three to four year exam schedule. Another thing that NCRC has called for in the CRA reform that we’re waiting for is that there should be a little more nuance to these ratings. There should be you know, maybe some subcategories and and we do expect to see a little bit more than four ratings for CRA exams that are in the final rule that comes out later this year. Ratings are based again on the CRA exam or performance evaluation. And the evaluation is a sort of three part component test which I’ll discuss in more detail a little bit later. But the three tests are lending investment and services. The lending test is the most heavily weighted part of the exam that accounts for 50% of the final CRA rating. And examiner’s look at Bank data, bank records and also public comments during the evaluation to come up with the final CRA review and final score. Another concept in CRA that’s important to understand is that exams measure bank performance within assessment areas. assessment areas are geographic areas where the bank has branches. It’s a pretty complex, the way banks determine assessment areas and actually under the regulations bank, banks define their own assessment areas. It’s based on locations of their branches and deposit taking ATMs. And basically, if there’s a bank branch in your community, then that bank has a serious obligation to the community. The assessment areas generally considered consist of metropolitan statistical areas, or they could be contiguous political subdivisions like County cities and towns. And under CRA regulations, assessment areas cannot arbitrarily exclude low and moderate income neighborhoods, I think of this as sort of gerrymandering rules. So probably a lot of you are familiar with gerrymandering of election districts. This the CRA regulations are designed to prevent that So banks can’t carve out areas that they want to want to serve or don’t want to serve. If if they have a branch in an area, then they have to serve the entire community.
On to the three component tests, I’ll start with the lending test, the most heavily weighted test on a cre exam. This test evaluates the amount of home mortgage loans, small business loans and small farm loans that the bank has made in their community.
The exam also looks at Community Development lending with an added emphasis on flexible complex or innovative lending. An example of that is low income housing tax credit loans, loans to CDFIs that demonstrate job creation. Generally the those types of loans can be more labor intensive for lenders. And so, examiner’s will give higher weight to innovative and complex loans that further or support economic development and reinvestment. And finally, the CRA lending test looks at income levels of both the assessment area that the geography and the borrowers receiving those loans. The investment test evaluates the amount of investments that a bank has in with a community development purpose the complexity of the investments and innovation of those investments. Grants are also not required but by CRA but most banks do. Do make grants and refer to as often you’ll hear CRA eligible philanthropy that also gets CRA credit. And then the examiners are supposed to look at the responsiveness of investments to the community development needs of each assessment area or community that they’re serving. And finally, the services test is feels a little more nebulous to me. The way I like to think about this, as is thinking about banking deserts, and you’ve all probably seen communities that are in banking deserts. And what you’ll see in those areas are a lot of check cashers. Payday lenders. markets with high cost ATMs that are operated by private parties that aren’t depository institutions. So the CRA exam will look at retail banking services. They’ll focus on the distribution of the bank’s branch network in particular, whether whether the bank is putting branches in low and moderate income census tracts within the banks assessment areas. Which if you’ll think back to the DOJ consent order map of Los Angeles earlier that was a bank that was not putting branches into LMI census tracts. The exam will also look at Community Development Services. Some examples are offering low cost checking accounts that make deposit services accessible to in individuals with low incomes. Also financial literacy programs for school children. And a lot of banks encourage their employees to volunteer and that also gets them CRA credit on the services test.
With that background on CRA enforcement, the rest of the webinar will cover advocacy, or public participation. Advocacy begins with research. Identifying a bank figuring out who their regulator is so that you can look up their CRA rating and CRA exam. Understanding what the bank’s assessment areas are, those are the areas that the examiners will focus on, and then exploring their lending data to see if their performance is subpar relative to peers in their market. And finally, that information all feeds into CRA advocacy, which could mean many different things. But today I’ll focus on the main tools we use which are comment letters and community benefits agreements. So beginning research into CRA starts with often particular bank and the first questions to ask are, who the bank’s regulator is and what’s their CRA rating.
The tools that you have are online. The FDIC maintains a website called bank find sweet and again these slides will be shared so you’ll have all of these links This site is a great resource for looking up basic details about a bank and also the branch locations. You can download a list of branches from this site into an Excel spreadsheet. The F fic, which is the Federal Financial Institutions Examination Council, they maintain a site that where you can look up CRA ratings for all banks. And you can also go to each individual regulators website to look up banks and pull their CRA performance evaluations, which should all be available for download. I’ll warn you that the exams are often posted. Well, after CRA exams are concluded, sometimes they don’t get around to it for a year, maybe even longer. And but if if you contact the agency, they will send it to you or posted if there’s an exam that you can’t find. I wanted to share a quick few slides about what this looks like what those searches look like. This is the and I’ll use US Bank as an example. This is the institution details page for US bank from the FDIC bank find site. This is the page I always start with when I’m looking into a bank. I’ve circled where the primary federal regulator is noted. And for US Bank, you can see it’s Comptroller of the Currency, which is OCC. And then there’s this somewhat hidden button at the top right, which is the button where you can download bank location data and financial data on the bank and the banks locations, branches are all listed on the site as well. Once you have figured out what the reg who the regulator is, you can go to their performance evaluation site and pull up the CRA ratings. And then the evaluation dates are actually for the OCC hyperlinks to the exam itself, and you can click on it and download. There. They’re often very large PDFs, but they’re all organized. pretty intuitively. There’s at the beginning of the exam, a report card and and then the exam discusses each different test for each assessment area. And at the end of the exam, there will be a list of assessment areas and a matrix showing how the bank scored in each of those tests in each particular assessment areas. So these appendix rating summaries are a really good way to look at your particular community to see if a bank has either a low satisfactory or needs to improve score in any of these areas. And that can tip you off into a really good way to get involved in care advocacy in your community.
I’ll pause now to just clarify what we mean when we say LMI or low to moderate income. The CRA regulations specifically define low and moderate income according to census bureau criteria. The moderate income criteria is 80% or below area median income. And so any anyone with 80% or below of census tract median income is considered a low or moderate income borrower.
And again, CRA is colorblind and the focus in CRA data and evaluations is on is on income, which hopefully we will see updated in the new regulations. The statute can’t be changed, but there could be various ways that the regulator’s increase focus on race in CRA exams. One One is fair lending should be an discrimination is supposed to be part of the CRA evaluation, although it hasn’t been a very robust part until now. And hopefully the new regulations will make that a bigger focus of CRA exams
How are the regulator’s doing I think we all know that CRA has not put an end to redlining and discrimination, but it has helped. There are countless studies and data to show that it has helped. But there’s also data to show that we need to do a lot more CRA grades are inflated. This is kind of an old slide, but the data is still the same 98% of banks pass their CRA exam. So I don’t know about you. But if I was taking a class in school, and I knew that 98% of the class would pass no matter what, I really wouldn’t try that hard. This is another area that really needs to be improved in updated CRA regulations.
Pause to take a few questions now. I have a few questions in the chat. The final rule, we don’t know when the final rule will be completed, we expect it to be or hope that it’ll be finalized in the first half of 2023. But we really won’t know until until it’s published.
I think I answered the question about credit unions, there is no CRA equivalent for credit unions. And someone asked about credit union who monitors credit unions credit unions are regulated by the National Credit Union Administration NCUA. And I think the logic but behind not requiring them to comply with CRA is that credit unions are member owned cooperatives. So there’s a field of membership and they’re they’re designed to serve a narrower group of people. Although some people would argue that some credit unions have gotten so big that they should be regulated by CRA just like banks.
I’m looking at the questions. Someone asked what are our thoughts are my thoughts on special purpose credit programs? I think they’re very beneficial. Special Purpose credit programs are programs that banks can create to to make loans to a specific demographics. So a bank could have a special purpose credit program that is designed for black business owners or black and Hispanic mortgage borrowers. And if it’s created in compliance with Equal Credit Opportunity Act criteria, then it a special purpose credit program is not considered a violation of the general rule that you can’t discriminate in lending based on on race or ethnicity. We think we’re seeing more and more banks doing special purpose credit programs, even though it’s been in the last since the 70s. It really it’s only in the past five or six years that we’re seeing banks start launching these programs. A few banks I know that are doing them are several of our our banks that we have CBAS with US Bank, BMO Harris bank, TD Bank, so a lot of our larger national banks are starting to implement Special Purpose credit programs. And that’s really good news. Hopefully we’ll see that number snowball. That’s my hope that once the bigger banks adopt those programs, more and more national and regional and smaller banks will as well and that could actually have a bigger impact in in the racial wealth divide that CRA is really designed to, to change.
So one person asked how do you know who the bank’s primary federal regulator is? And what’s the difference? I think the question is going to what’s the difference between primary and secondary And I’ll share the slides after this presentation. But the primary federal regulator, you can look up on the FDIC bank sweet site, there’s a couple of links to that site in the slides. And there’s sometimes sometimes a bank will be regulated both by the OCC and the Federal Reserve. And that’s because the Federal Reserve regulates bank holding companies. And for purposes of CRA though, it just the primary regulator is the one that matters and the one that you would engage with if if you want to get into CRA advocacy. I see a few other questions but I’m going to move on to the next part of the presentation and hopefully have time at the end to address some more of those questions.
The rest second half of the webinar will be about CRA advocacy and how you can get involved.
Gilson Kado was an activist who’s been called the mother of CRA. She led the fight for Honda and CRA in the 1970s. And in that fight, she understood and really emphasized that CRA enforcement requires robust public participation. Some reasons to get involved are that when banks are engaged with the community and the community is really monitoring and engaging with the bank and regulators, bank performance does improve, especially if there are issues with the bank, they they tend to really make big increases when the community starts to engage. Increased CRA activity increases reinvestment in community development. It directs more resources into underserved neighborhoods, and it builds partnerships with financial institutions.
CRA advocacy begins with research again. So part of that research is once you’ve identified a bank and its regulator and you’ve looked at their CRA exam, the next step is to look at their data. And before I go into this chart, I will say that NCRC does help members evaluate bank data, the data is all available online, and I’ll share a link to it later. It’s pretty complex to download and analyze that data. And one thing NCRC does for our members and other groups is help with pulling and analyzing data for specific banks in your community. When you’re looking at data, again, the banks are evaluated against each other. So a bank is looked at in terms of how it’s performing relative to bank peers in the same markets. So we always pull when looking at home to data in an assessment area. We’d like to look at the banks data but also the aggregate data of all mortgage lending in that area. In this case, you can see the percentage point difference between the bank that this chart looks at versus aggregate data in the market. So you can see there 17% behind the average of all lenders for lending to minorities in in the community. And one thing I’ll note again, CRA is a colorblind statute. But we do always look at lending to racial and ethnic groups in our analysis because again, the goal of CRA is to combat redlining even though it’s it’s in imperfectly designed to technically focus on low and moderate income communities. It is important in the advocacy community to really also look at race and ethnicity.
Small Business Lending analysis uses a similar methodology banks are evaluated relative to peers. And the data available for small business lending is much narrower than hummed a data. Because there’s no federal law yet that requires less ders to disclose well to collect first of all and disclose the any demographic information on borrowers other than what you see here, which is lending to businesses with under a million dollars in revenue and loans to businesses located in census tracts. And again, oh, sorry, there’s a percentage point difference here that shows this bank is performing very, very badly relative to peers, in terms of its loans to businesses with under a million dollars and in revenue. And we definitely want to encourage banks to make loans to small businesses that have lower revenues, because those are the businesses that are just starting out that that really need that need capital to just stay afloat and to grow. And a side note about small business data is that this will be changing soon, we will be getting additional data under Section 1071 of the Dodd Frank Act. That section of the Dodd Frank Act requires the CFPB to issue regulations for the collection and reporting of demographic data for small business lending. So eventually, we’ll have we should have a data set similar to the hum to mortgage data which going back to the slide, you’ll see we have in addition to data on income tracks and borrower income hummed a data provides banks are required to collect and provide demographic information on borrowers and and demographics on census tracts. So we’ll have that same, hopefully, level of detail in small business lending and CFPB is actually working to issue a final rule in that should be finalized by March of 2023.
So this, these are links to the 100 data and the current small business data that’s available to the public. And again, if you’re an NCRC member, you can take advantage of that by contacting us to help you download and analyze data about banks in your community. So we again, encourage membership, unless you’re you’re someone who’s really really interested in pulling huge, huge amounts of data and doing the analysis yourself. I see one more question about online lenders like Rocket Mortgage. Is there any indication that the rule revisions to CRA will include online lenders like Rocket Mortgage? I think the answer is well, I don’t know I don’t think I don’t think non bank lenders will be covered by the updated CRA although several states CRA statutes do address online lending and state. Honestly state CRA laws might be a another really good place for advocacy to increase the effectiveness of CRA.
So turning to advocacy, now that you have all this information about a bank, you’ve looked at their lending data and maybe identified some issues. The two main tools that I’ll discuss today for advocacy are comment letters and community benefits agreements. comment letters are my backup comment letters are or public comment letters or letters to federal agencies that provide feedback on sometimes it’s a proposed rule or regulation. But in the CRA context, its feedback to the FDIC, OCC or Federal Reserve regarding the CRA performance of a bank, there are three opportunities for comment letters in the CRA context. One is and this is probably the main opportunity when banks merge or acquire new branches and mergers being actually the key opportunity here. I’ll discuss that in greater detail soon. Another opportunity for comment letters are in CRA performance of valuations and then the public can comment on branch closures. Although that’s not not been the most effective advocacy tool just because regulators actually can’t stop a branch closure. I’ll discuss each of these a little bit more. So, public comment letters generally include a request or state a position that’s either support or opposition to a filing, so they they might oppose a merger. Comments can also request an extension to the comment period. I’ll talk a little bit more about the comment period, but they’re very short typically. comment letters also could request that the regulator’s convene a public hearing or meeting to hear from the public about a bank merger. And they can include I have OCC here, but it should be any regulator. comment letters can include a recommendation that the regulator, only grant approval of a merger under certain conditions. So often, when we engage with regulators on mergers, we asked them not to, not to approve a merger. If there there are issues with either the acquiring or target bank, without a meaningful community benefits plan in place. The content of the letter also usually includes information and data that backs up your position and requests that could be lending analysis, like the tables that we looked at other information relevant to the bank’s performance and your community. It’s important, I think, to tell stories about your community and paint a picture of what’s going on there. If there’s been disinvestment, or if there’s a bank with a branch there, that sort of invisible to the community and not really engaged in community development lending, that might be something to include. And it’s also helpful to describe your organization or coalition and how you can help improve for performance in collaboration with with the bank.
Mergers, we think of as election season in CRA banks are really required to show that their merger is going to have a public benefit and meet the convenience and needs of the community.
Regulators are required to look at the bank’s record, as well as how the expanded bank will serve the community going forward. And it’s again, it’s often an opportunity to negotiate community benefits plans and so, that is often something that we mentioned in comment letters. The comment period to keep in mind is usually 30 days from the receipt of a merger application and that that is very quick. So, this is the comment period for the US Bank Union Bank merger. You can see the comment period started on October 7 of 2021. It closed on November 6. So this is why often comment letters do request and extended comment period, which sometimes banks will will grant especially if they decide to do a public hearing or public meeting on the merger. And on that note, merger public meetings are have generally been very uncommon. But they are another opportunity to participate. And in the last year and a half, the OCC has held public meetings on three mergers. And this is a statement from Michael Chu, who’s the head of the OCC and also who will be keynote speaker at our conference at the end of March. So he’s saying that the OCC is considering adopting a presumption in favor of holding public hearings that might happen we don’t know. We don’t know what that would look like either. It could be just for large national banks. But it’s something to keep in mind if you’re interested in advocacy. I am pretty low on time. So I’m going to try to speed up a little bit here. These are links to CRA exam schedules. And this can tell you when you can comment on a CRA exam. Branch closures again are an opportunity to comment. But it’s it’s rare that you can see a big benefit from that. Although a public protest or comment could result in some benefits to the community like donation of building an equipment, which is eligible for CRA purposes if the branch is in a low or moderate income area. So the last section I have very little time for so I’ll try to go quickly. community benefits agreements are another major tool for advocacy in the CRA. These are agreements between a bank and CRC and our members in which the bank commits to increases in CRA activity. Usually these are negotiated in connection with a merger. The agreements contain goals to increase CRA eligible lending. They include other commitments to activities that that address pressing needs identified by our members. And we believe CPAs are really an ideal model for bank community engagement in the CRA context. In an ideal situation, banks and community groups collaborate together to create metrics, evaluate performance, and also to develop strategies for meeting care for meeting the CBA goals. So the way we start a CBA process is with listening sessions. Our organizing team works with members throughout the bank’s footprint. And we put together listening sessions that are designed to identify local needs. We prepare our members for meetings with the bank. We usually have 100 to 200 groups, each making a three to five minute presentation in three two to five virtual meetings that lasts about two hours and usually the bank CEO attends some or all of those meetings. The the listening sessions are designed very carefully to show the bank that that the groups involved are an impressive network of nonprofits that can not only help the bank achieve their goals by collaborating with the bank, but if necessary, the network can be called upon to submit comments or take other actions to increase pressure if needed. Once we finish the listening sessions, and CRC sends a proposal to the bank. It’s got quantitative metrics and lending goals as well as a comprehensive list of the strategies identified by our members. And then we get a draft back from the bank and NCRC will share that draft with members for feedback and work with the bank to finalize the CPA. Typically, we get CPAs during bank merger reviews, because bank merger law requires that banks show public benefit through a merger. And sometimes we’ll have a CBA that expired and a bank will reach out to us to renew the CBA. And we treat those like new agreements, starting over with a new round of listening sessions. After announcement, the bank will typically form advisory councils and often we will work with the bank to to identify community leaders to sit on the Advisory Council and those those councils are really a way to ensure that the bank is responsive to local community credit needs. And then throughout the term of the CBA we we NCRC and in particular our organizing team work to deploy resources in a collaborative way that that keeps the bank engaged with key community groups and stay cool Realtors some results of our CBA work. And CRC has had CPAs with 22 banks since 2016, resulting in over $600 billion in lending and investment to underserved borrowers and communities, as well as 130 new bank branches in LMI communities. There’s a link here to our CBA explainer, which has a list of our CPAs with a hyperlink to each announcement. And each of those announcements at the bottom of the press release contains a detailed summary of the CBA commitments. I will go very quickly through these slides since we only have three minutes. Here are some results of our CBA work for First Tennessee bank, they increased financing for CDFIs very dramatically in the first year of their agreement. Huntington Bank and in the Midwest is also a bank that had very significant increases in mortgage lending to black borrowers during the first two years of the CBA term. And there has been an increased focus on CRA activity in merger review in the merger review process and also in bank merger applications they’re providing banks are providing much more detail in merger applications on how mergers will benefit the public. And we’re always advocating for more data and transparency. And some of the results of our CBA work we think have been increased transparency, we’ve had four banks since 2020. Commit to track how much of their CRA support is going to organizations led by people of color. And several banks have published their EEO one report on their website. That’s a report of bank staff demographics, it’s required to file with the EEOC, but banks don’t have to publish it unless they do so voluntarily. It’s something we always advocate for more transparency about in our CBA process. So we have one minute left. Again, some of the benefits of NCRC membership are are that we help with advocacy, we help with data analysis, sample comment letters and construction of community benefits agreements with our national coalition. These are some links for anyone interested in a deeper dive.
These are a list of states that have local CRA s or responsible banking ordinances. We have a video of a conversation about the upcoming CRA proposed rule. A link to the actual statute and then again, this is a link to the FDIC bank find suite which has location data and basic information on banks. I think we’re out of time for questions. But you all have my email from the chat, I believe and please do feel free to follow up with me if you have any questions and I’ll get back to you. And I will now turn it over to Kaylee.
Thank you so much, Catherine. And thank you everybody for joining. Again, I just wanted to note that we are holding this webinar in preparation for our annual just economy Conference, which is March 29 and 30th this year. If you register now we’re still offering a limited time this kind of ticket price. We do have some great content and speakers coming including sessions on CRA to deepen your knowledge about CRA. We’d love to see you there. And if you’re interested in joining membership, we will also drop that link in the chat and I will drop the conference registration. But we look forward to seeing you all there and have a great day