Mitigate Risk: Understand Your Lending Patterns

Examiners are more carefully scrutinizing banks’ lending penetration in low- and moderate-income census tracts for CRA and in substantially minority census tracts for Fair Lending in banks’ designated assessment areas. Examiners also expect banks to demonstrate a thorough understanding of their lending patterns.

For example, they analyze HMDA loan data and Small Business/Small Farm loan data and geocode loans to develop reports and maps.

The reports, containing banks’ lending patterns, are then compared to peer banks to ensure similar lending percentages in high-risk areas.

Banks showing below-peer performance during several exams and that fail to implement a strategy for increasing the percentage to line up with peer banks’ levels are at risk of being cited for redlining.

TCA – A Better Way!