Community Reinvestment Act box

Established in 1977 and revised in 1995, the Community Reinvestment Act requires federal bank and thrift agencies to assess whether insured depository institutions are meeting the credit needs of the entire community.

The institutions' CRA evaluations must be considered by the regulatory agencies when acting on certain applications for branches, office relocations, mergers, consolidations and other corporate activities.

The 1995 revision of the act eliminated a 12-point test that was a burden for banks of all sizes, and it further streamlined the process for small banks, which it defined as those with less than $250 million in assets.

In February, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Office of Thrift Supervision, announced they wanted input on raising the small-bank threshold from $250 million in assets to $500 million.

Since then, the OTS raised its threshold to $1 billion in assets for savings institutions, and the OCC and Federal Reserve withdrew their proposals. Aug. 16 the FDIC announced it is now considering raising its small-bank threshold to $1 billion in assets and is seeking comment on that proposal.