Agencies Update FAQs on Coronavirus, CRA Activities

The banking agencies today updated a list of frequently asked questions related to the Community Reinvestment Act and the coronavirus pandemic. The five new frequently asked questions clarify that:

  • CRA regulatory criteria for the service test do not include loan processing and servicing activities for retail loans originated by the bank, and that the agencies will not extend CRA service test consideration for Paycheck Protection Program-related activities. However, the agencies acknowledged that PPP activities may be considered under the CRA lending test when evaluating flexible or innovative lending programs offered by the bank.
  • Banks should not report on their CRA loan register PPP loans that have been rescinded or returned under the SBA’s safe harbor, nor will examiners consider the loans in their CRA evaluations of banks during the applicable time period.
  • A PPP loan greater than $1 million in low- or moderate-income geographies or in distressed or underserved nonmetropolitan middle-income geographies will be considered an eligible community development activity.
  • The waiving of ATM fees, overdraft fees, and early withdrawal penalties on CDs, and withdrawal fees on savings accounts are examples of retail services considered responsive to the needs of low- and moderate-income individuals. Allowing a LMI individual to make draws from a home equity line of credit during the repayment period could constitute a flexible lending practice. Allowing an LMI individual to make a withdrawal from an IRA or to draw on a HELOC during the draw period are routine banking services and, as such, are not eligible for CRA consideration.
  • As an alternative to in-person services, the agencies will consider services provided virtually by bank representatives that have a primary purpose of community development and that are related to the provision of financial services.