Global: OCC Recognizes Three Financial Institutions with ‘Outstanding’ Ratings in CRA Evaluations

The Office of the Comptroller of the Currency (OCC) has awarded “outstanding” ratings to three out of 19 financial institutions in its latest Community Reinvestment Act (CRA) performance evaluations. The remaining 16 institutions were rated as “satisfactory,” with none falling into the categories of “needs to improve” or “substantial noncompliance,” according to a press release issued on Monday, Dec. 2.

Top Performers in CRA Compliance

The three institutions earning the top distinction for their commitment to community reinvestment are:

• Santander Bank, National Association, based in Wilmington, Delaware.
• FCN Bank, National Association, headquartered in Brookville, Indiana.
• Evergreen Federal Bank, located in Grants Pass, Oregon.

Under the CRA, the OCC evaluates financial institutions on their ability to meet the credit needs of their entire communities, with a particular focus on low- and moderate-income neighborhoods, while maintaining safe and sound banking practices.

CRA Evaluations and Methodology

CRA ratings are determined based on performance tests and standards established by the CRA rule. These evaluations take into account both the specific needs of the communities served and the institution’s capacity to address those needs effectively.

First enacted in 1977, the CRA was designed to counteract discriminatory lending practices, often referred to as redlining, which historically excluded minority neighborhoods from access to credit. The act encourages banks to expand their services and financial support to underserved and low-income areas.

Modernizing the CRA

In October 2023, federal banking agencies, including the OCC, adopted an interagency final rule aimed at modernizing the CRA framework. The updated rule emphasizes a data-driven approach, acknowledges banking activities beyond physical branches, and addresses issues such as “grade inflation” in CRA assessments.

Acting Comptroller of the Currency Michael J. Hsu emphasized the importance of implementing the new CRA rule to promote equitable access to financial services. “The OCC will now turn its efforts to perhaps the most important step toward reducing inequality, which is the implementation of the new rule,” Hsu stated during a hearing with the House Financial Services Committee in November 2023.

Latest Evaluations

The OCC’s CRA performance evaluations include assessments of national banks, federal savings associations, and insured federal branches of foreign banks. The current list reflects evaluations made public between Nov. 1 and Nov. 30, 2023, as detailed in the press release.

The CRA remains a critical tool for encouraging financial institutions to invest in the communities they serve, particularly those historically underserved, reinforcing the OCC’s mission to ensure fair and equitable access to credit across the nation.