The power of a flexible CRA team: How to roll with the punches while remaining compliant

If you trust your team members to take your CRA program to the next level, chances are you’ll get there.

By Jaidyn Crookston

When you think Community Reinvestment Act, “flexibility” probably isn’t the first term that comes to mind. But the truth is that when it comes to the CRA, flexibility is key.

Rigid CRA programs do not allow the room your bank needs to have a real impact and grow your program. In fact, having an inflexible CRA program is the best way to stall your growth and fall behind other financial institutions in your area.

Even though banks follow strict rules and regulations that can be quite rigid, it’s important to do everything you can to build a fluid CRA program that can react to situations as they arise—while ensuring that you continue to make safe and sound banking decisions.

ABA recently provided comments on the joint agency Community Reinvestment Act modernizing proposal. Enacted in 1977, CRA’s last interagency revision was in 1995. The latest proposal identified five key goals. Follow ABA’s CRA resources and ABA Newsbytes for further coverage.

Stay flexible during regulatory change

Something to keep in mind as you build a flexible CRA program is that regulatory change is coming. We don’t yet know what the final regulations will look like, but we do have some ideas (check out this 30-page summary from the Federal Reserve).

No matter what regulatory changes occur, it’s important to stay flexible throughout these uncertain times. For example, the proposal suggests that partnering with community development financial institutions may become even more critical in the future. If your institution hasn’t yet partnered with a CDFI, it’s time to start pursuing these partnerships. If you stay flexible, you could build some effective partnerships for your financial institution that will help your CRA program and the bank as a whole.

Communicate with your team and let them know that it’s okay to change direction or update processes that have worked in the past. This is the time to explore new approaches, try something outside the box, and prepare to adjust your program.

You should also work to maintain a good relationship with your regulators, especially as new regulatory proposals are finalized and take effect. Speak to your regulator regularly and ask, “Hey, what do you think about this?” If you already do this, good—that’s a sign of a strong relationship.

Keep your team loose

No matter how large or small your CRA team is, everyone needs to know that it’s okay to make mistakes and try new things. Staying flexible means acting on suggestions from employees, members of the community and regulators. And not getting stuck in old habits (as long as your program stays compliant). And push your regulators on investments, loans or services you’re convinced should qualify for CRA credit, as you know your community better than anyone else. You won’t always win the debate, but it’s worth a try.

If a team member has an idea for a better way to mine data from community development loans, go ahead and try it! Allowing room for ideas creates a team that will come to you when they need help and won’t be afraid to speak their mind. If your team is worried about following the status quo and doing everything exactly as trained, this leaves no room for creativity or innovation. And creativity and innovation is what will take your CRA program to the next level.

Even the best CRA program will always be a masterpiece in the making, but as you stay flexible and focus on what’s best for your community (while following safe and sound banking practices), things will naturally fall into place. Your team needs to be ready to handle anything that comes their way.

Roll with the punches

If your CRA program is going to stay flexible, you need to learn to roll with the punches. That CD loan you hoped would count under the CRA actually doesn’t? That’s okay; move on to the next one. That financial literacy class you spent days planning fell through because of a scheduling issue? Pivot quickly and change presenters if possible. If not possible, shake it off and start planning another awesome event.

Not every problem will have an obvious solution, but if you keep your options flexible and roll with the punches, chances are your CRA program will be just fine. And that canceled event will still be impactful the next time around. When something goes wrong, simply forgive yourself, change tactics and get back out there. Your community needs you.

Automate your process

It’s a lot easier to be flexible when you don’t have to manage every part of your CRA program. Instead of spending all your time tracking and managing your CRA data, try automating this process. This will help you stay compliant and allow you to spend more time doing what you love—serving your community.

The more time you spend in your community, the more you’ll see what’s going on, and the better you can pivot a non-performing program into something that will have a real impact. Not every program you launch will be a big success or qualify for CRA credit, but part of staying flexible means recognizing the mistakes and learning from them.

When you’re holed up in your office tracking and managing CRA data, planning events, and logging employee volunteer hours, you lose valuable time spent in the community building connections and seeing first-hand what community members need. Automating your process will give you more time to spend in the community.

Don’t forget to have fun

CRA is often painted as a difficult, joyless job. But if you’re not having fun, you’re doing it wrong. Yes, running an effective CRA program, achieving your desired rating and ensuring that your bank has a significant impact on the community is challenging, but that doesn’t mean it has to be boring.

There are plenty of fun ways to grow your CRA program and impact your community. Start a financial literacy program with fun activities and events. Turn mining data from community development loans into a friendly office competition. Create a hilarious video series teaching community members how to invest, build a budget and save for retirement. There are so many ways to have fun as a CRA team while still staying flexible and compliant.

If you’re part of a small or newly established program, staying flexible may be easier than if your program is already ingrained into the minds of employees. New programs have the chance to start fresh and be flexible from the get-go. But if you are running an already established program, you will have to overcome your employees’ prior expectations and show them how to operate as a flexible team. This may mean speaking to board members and convincing them to modify lending standards while ensuring they understand what qualifies under the CRA. The more flexible your board is, the more flexible you and the rest of the bank can be.

Not everything will go right for you or your program. And having a flexible program in place will make it much easier to adjust if times get hard. And the better you’re able to adjust, the better you will be able to serve your community members and have an impact.

Jaidyn Crookston is the digital marketing and content manager at Kadince, a company that builds community involvement software for financial institutions.