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By Linda Ezuka | March 30, 2021 | 3 Minute Read

CRA Service Fundamentals

Remember the days when we were volunteering for nonprofit fundraising dinners or waking up early on Saturday morning to participate in a community walk fundraiser? The pandemic has changed many of the ways we volunteer, but the core concepts of Community Reinvestment Act service provisions haven’t changed. Let’s recap the fundamentals.
I'm sure you can recite the community development hooks in your sleep. If, however, you're new to CRA, keep it handy by downloading it now!

At the core, a CRA-qualified service is defined as having a primary purpose of community development, is related to the provision of financial services, is performed on behalf of the bank, has not been considered in the evaluation of the bank’s retail banking services, and benefits the bank’s assessment area or a broader statewide or regional area that includes the bank’s assessment area. 
For some ideas on how to earn CRA credit, check out this article. 

So how does the bank deploy critically needed CRA services in a pandemic? 

Many banks are leveraging technology to deploy community development services during the pandemic with a focus on financial literacy. American Savings Bank, FSB deployed financial literacy via Zoom meetings to students at Title One Schools (schools with a majority of lower-income students as measured by free- and reduced lunch) that participated in the 2019 Bank for Education School Program. The Bank for Education program is an ongoing program with specific local schools to provide support through grant awards, financial literacy education, and volunteer projects. Even though the program wasn’t held last year due to the pandemic, American Savings Bank continued to deploy financial literacy services to the students who previously participated in their program. They are also gearing up to relaunch the program later this year. 
In partnership with two local nonprofit organizations, American Savings Bank, FSB also continued to offer Individual Development Accounts (IDAs). The program provides savings accounts to support matched savings for lower-income individuals to seed small business formation and first-time homeownership, and to help individuals acquire a post-secondary education. For more information on Individual Development Accounts, check out Prosperity Now’s overview of Individual Development Accounts.
Have you reviewed your bank’s involvement in the Federal Home Loan Bank (FHLB) programs lately? Most banks utilize their regional FHLB for liquidity purposes (see this short overview of the FHLB system). The FHLB also offers Affordable Housing and Community Investment Programs to bolster your bank’s CRA service initiatives and drive community development impact. 

Want to learn more? 

We share the core principles of the Community Reinvestment Act from the basics to the most complex. Learn how to maximize CRA credit for community activities, how to use modern technology to collect qualified activities, and how to engage in programs like the Federal Home Loan Bank programs and Community Development Financial Institutions (CDFIs) to take your CRA program to the next level!
Don't forget to download those community development hooks so you're never left wondering again!
And if you want to better track, manage, and report your institution's CRA data, check out Kadince. Kadince makes it easy to track CRA services, investments, loans, and more. Schedule a demo to learn more.
None of Kadince, Inc., its affiliates, or its respective employees, directors, officers, and agents (collectively, “Kadince”) are responsible or liable for any content or information incorporated herein. Read full disclosure.

Linda Ezuka | Owner, CRA Today

With over 29 years of community development experience, with an emphasis in CRA, compliance, training, community development lending, and CDFI initiatives, Linda works with financial institutions to provide comprehensive CRA training, up-to-date resources, and proven strategies to remain compliant. She helps CRA professionals master the art of the CRA and transform communities through the power of economic development. To learn more about Linda & CRA Today, visit her website.

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