By Jaidyn CrookstonThe new year comes with plenty of exciting possibilities and is a great time to reflect on your Community Reinvestment Act program. It’s time to look back at what your program has accomplished in the past year and look forward to what impact you can forge in a new year. Creating an annual CRA strategy is an industry best practice and lets you manage your strategic priorities along with the resources available for the year ahead.
Here are some tips for crafting your 2022 CRA strategy and action plan:
Align your CRA strategy with the bank’s corporate strategy
Your bank is steadfast in serving your community. As the CRA officer, you’re responsible for leading programs and building support in the community that makes a difference. As such, key stakeholders and the executive management team should see you as a leading player in carrying out the bank strategy.
Before you can build your own CRA plan or strategy, it’s important to consider the bank’s corporate strategy and priorities. Once you understand the bank’s key initiatives, you can then align your CRA program’s priorities to impact the entire institution, as well as the community.
When making your CRA strategy and action plan, ask yourself these questions:
- How is the CRA program already supporting the bank’s priorities? Are your CRA initiatives supporting new products and services? What deals have you referred to the bank based on your community development activities?
- How can your CRA program support the core initiatives within the bank? Do you lead nonprofit partners towards bank services?
- Who do you need to coordinate with when planning around the bank’s corporate strategy? Have you reached out to the retail team? Commercial lending teams?
Once you answer these key questions, you’ll want to vet your proposed strategies with key internal stakeholders and executive management as well as external community stakeholders.
Consider all key elements of your CRA program
When planning and outlining your CRA strategy for 2022, keep all elements of your program in mind. Here are some pieces to consider:
- Collaborate with different business units to ensure you’re meeting the credit needs of the community. Engage the business units to help identify performance context or new initiatives to close performance gaps in your assessment areas.
- Engage key internal stakeholders in the bank to maximize the reporting of the bank’s community development services, loans and investments.
- Create a system to ensure technical compliance with all required deadlines and activities associated with public file, public notices, sunshine provision reporting, etc.
- Acknowledge where you are in the CRA exam cycle. Your priorities will shift depending on whether your bank is in year one of your exam cycle or if your exam is looming in the next quarter.
- Develop a plan to train key internal stakeholders, such as commercial loans officers, retail staff members and CRA team members embedded in different departments.
A solid CRA strategy acknowledges the importance of ongoing training for key stakeholders responsible for carrying out the bank-wide commitment to the CRA. It’s crucial that you spend time each year training the members of your CRA team and key bank employees working in departments that you rely upon to ensure the bank performance targets. The more people there are in your bank who know about CRA, the more likely they are to recognize an opportunity and bring it to your attention (and the more likely you are to get CRA credit). Carefully craft your training with your desired impact and results. This will support the key elements of your CRA program as well as the key priorities of the bank.
As you think about the parts of your CRA program, here are some questions to ask:
- How can you continue to innovate the CRA program while responding to the credit needs of the local community?
- How can you continue to promote community growth and stability through partnerships with nonprofits and government agencies?
- How can you leverage your unique community-based bank strategy to the greater good?
Do not make a plan before setting goals with your bank’s business units
If you regularly meet with your bank’s business units, great! Keep up the good work. If you aren’t meeting with business units, you need to prioritize this in the new year. Your relationship with these key departments is mission critical as they influence your CRA performance and the time you invest in deepening these relationships.
At the beginning of the year, you should reach out to each unit (especially commercial lending, retail and investment/treasury divisions) and set a time to meet. During this meeting, ask about their specific goals, priorities and initiatives for the new year. Now when you make your CRA action plan and set your own goals, you can ensure they align with the rest of the bank’s goals and help each business unit thrive.
And when each business unit thrives, so does your CRA program. But keeping these units involved in CRA is easier said than done. A couple ways to keep these units involved include setting shared goals, providing CRA training, sharing how they’ve helped your program in the past and routinely reporting on their performance.
- Set shared goals for the new year. Setting shared goals will help bank employees see that you care about their departments. When you set a goal that requires you to work together, you’re basically saying that you’re invested in their work and want them to be invested in yours.
- Give regular CRA training throughout the year. You should aim to give each team at least three CRA trainings a year, and this training can be deployed in various ways such as in-person, pre-recorded videos or email reminders and lessons. This will keep team members up-to-date on any new regulations and will help keep your program top of mind. Team members are more likely to forget about CRA when they haven’t heard from you in a long time. If you train team members to watch out for CRA opportunities, you’re almost guaranteed to come across new services, loans and investments that are eligible for CRA credit. A well-kept secret of CRA is that this program is not always about creating new opportunities, but is about finding the opportunities that already exist. These business units are crucial to this mission.
- Share how they’ve helped your program in the past. When you share how each business unit has helped the CRA program in the past, you’re both praising their hard work (which everyone loves) and reminding them what kinds of services, loans and investments you’re looking for. You can share these achievements with them during training, while setting goals, or while reporting on their performance.
- Report on their performance. When you report to business units about their performance, you need to look beyond the performance tables. This may be how you measure success, but these tables are a lot for team members to absorb and figure out. Instead, try presenting the three things they need to know from the table. This way, you won’t overwhelm them and can help them get their heads around what you’re saying.
Perform a self-assessment while making your CRA plan
Two key aspects of running a successful CRA program include performing self-assessments and creating a CRA plan. Your self-assessment helps you look backwards at what you’ve accomplished and where your strengths and gaps are, while your CRA plan looks forward at where your CRA program needs to go to meet your goals. Both of these allow you to advocate proactively for your program and get the support you need.
Performing a CRA self-assessment doesn’t have to be difficult. Simply compile the bank’s efforts in serving its assessment areas if you don’t have the time or resources to perform a full assessment. When compiling the highlights of your program, add initiatives that are in motion to elevate your CRA program performance. This will serve as a high-level overview for the examiners when it comes time for your onsite exam and shows intent as you continue to build your CRA program
Build your CRA plan
You aren’t required under the CRA to build a plan, so you will need to make this your own based on your internal resources. Keep it simple and don’t over complicate it. Your plan can be one page, or it can be 20.
Once you create a high level CRA strategic plan for the year, you can now share it with executive management, key internal business units, your compliance department and even your CRA examiners.
As a general rule, start your plan with an overview of your CRA program. Where are you in the exam cycle? Who’s your regulator? What are some of the past year’s accomplishments?
Next, list out your bank’s strategic priorities, both long and short term. Include your CRA performance goals, and make sure to mention goals for your lending, services and investment tests, as well as goals for fee and investment income, deposits and various business units.
You might include sections on how you’re going to conduct CRA training, any applicable regulatory changes, technical compliance, public relations and marketing.
At the very least, your plan needs to answer these questions:
- What are two or three areas of the bank you want to learn more about this year?
- How can your program support various business units?
- Which areas of the bank need more CRA training this year?
Here are your next steps:
- Get a copy of your bank’s strategic plans for 2021 or 2022, if available.
- Meet with executive management to learn their vision for the bank, and ask them to tell you their priorities.
- Meet with business units to learn about their goals and how your program can support them
- Identify several strategies that support the bank’s or business unit’s strategic plans while supporting your CRA program.
- Write it all down.
- Set target dates and implement.