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Prep Community Reinvestment Act (CRA) Exam Questions & Answers 2024
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Prep Community Reinvestment Act (CRA) Exam Questions & Answers 2024 Purpose and Coverage - ANSWERSCRA is designed to encourage banks to meet the needs of their communities, including low and moderate income (LMI) groups. CRA covers all institutions governed by FDIC. CRA Tests - ANSWERSTh...

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  • September 18, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • prep community reinvestment act cra exam questio

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Prep Community Reinvestment Act
(CRA) Exam Questions & Answers 2024

Purpose and Coverage - ANSWERSCRA is designed to encourage banks to meet the needs of their
communities, including low and moderate income (LMI) groups.



CRA covers all institutions governed by FDIC.



CRA Tests - ANSWERSThree ways to meet LMI groups:

1. Lending

2. Investment

3. Service



The rating scheme for CRA evaluations is:

1. Outstanding

2. Satisfactory

3. Needs to Improve

4. Substantial Non-Compliance



Three Sizes of Banks:

1. Small Banks: as of December 31 of either of the prior two years, has assets of less than $313 million



2. Intermediate Banks: Assets between $313 million and $1.252 billion



3. Large Banks.



CRA Assessment Area - ANSWERS1. One or more Metropolitan Statistical Areas (MSA), metropolitan
divisions, or one or more contiguous political subdivision.

, 2. Must include geographies in which the bank has the main office, branches and deposit taking ATMs.



3. Include surrounding areas where the bank has originated a substantial portion of its loans.



CRA Assessment Area - Limitations - ANSWERS1. The area must consist of whole geographies (census
tracts).

2. Cannot reflect illegal discrimination.

3. Cannot arbitrarily exclude LMI.

4. Cannot extend substantially beyond the MSA or state boundaries (unless the bank does substantial
business in those surrounding areas)

5. Must be an assessment area for each state where the bank does business.



CRA Loan Data Reported - Small Business Loans - ANSWERS1. Loans of $1 million or less to a business.

a. The size of the business DOES NOT matter.

b. The size of the LOAN drives the reporting requirement.



2. Report loans separately if secured by

a. owner occupied, non-farm, non-residential property.

b. other non-farm, non-residential property.



3. Commercial and industrial loans to US addresses.



CRA Loan Data Reported - Small Farm Loans - ANSWERS1. Loans of $500,000 or less.

a. the size of the farm is irrelevant.

b. the size of the loan drives reporting.



2. Report loans separately if secured by Farmland.

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