By Jaidyn Crookston | July 20, 2021 | 5 Minute Read

How to Earn CRA Credit: 7 Ideas to Get You Started

Are you looking for ways to get CRA credit for your financial institution? With so many possible activities and so few details about what counts for CRA credit, it can be difficult to figure out which activities will be the most beneficial for your community and your bank.  

Here are 7 ideas to get you started:

1. Participate in low-income housing projects


A great way to get CRA credit is to participate in low-income housing projects. These projects are meant to build and/or develop housing for low-income families. This work serves to bring your area together and provide more options for these struggling members of the community. You can get this CRA credit by providing grants to nonprofits or by partnering with existing organizations. Some organizations you may be able to partner with include Mercy Housing, National Housing Trust, Habitat for Humanity, and NHP Foundation.

2. Invest in small businesses


Your bank can promote economic development and earn CRA credit when you invest in small businesses in your community. Small businesses in low-income areas may need loans or entrepreneurial training to keep their business afloat, and this is a great way for banks to get involved. One way to get this credit without starting from scratch is to partner with existing organizations such as The National Foundation for Teaching Entrepreneurship or the Small Business Administration. Click here to find the SBDC nearest you.  

3. Participate in the Volunteer Income Tax Assistance (VITA) program 


When your employees volunteer for the VITA program, your bank can earn CRA credit. VITA is a program designed to help low-to-moderate income (LMI) individuals file their taxes at no charge. The VITA program is run by the IRS, but there are many partners spread out around the country. Whether your bank partners with this program or bank employees volunteer on behalf of the bank, this is a great way to earn CRA credit and help people in your community. 

Read this article to learn more about how to get involved with the VITA program.  

  

4. Serve on the board of a nonprofit organization


Another great way to get CRA credit is for bank executives to serve on the board of a nonprofit organization. The hours bank executives spend on these boards should count towards your bank’s CRA credit. This is an easy way to get CRA credit, and allows your bank and your executives to do a lot of good in the community.

To find nonprofits near you, take a look at this database

5. Sponsor or run a youth financial education program


The CRA puts a lot of emphasis on educating young people about finances, especially those from LMI families. Your bank can earn CRA credit by spending time and resources developing financial education programs for these young people. Not only will you be earning CRA credit, but you’ll also be preparing these young people to make smart financial decisions in the future.   

One way to earn CRA credit is by sponsoring a school on Banzai, an online financial education course that provides free training to students with the help of their bank sponsors.

For more information on how to get started, check out the ABA’s Financial Literacy page.

6. Partner with a Community Development Financial Institution (CDFI)


Partnering with a Community Development Financial Institution (CDFI) can provide many CRA credit opportunities. CDFIs are usually nonprofit organizations that don’t have the same regulatory oversight and restrictions as a normal bank. This means that they may be able to provide more flexible funding than your bank can. And they work primarily with low-to-moderate income communities, which is exactly what you need for CRA credit. Some other options include partnering with a Community Development Credit Union (CDCU) or a Low-Income Credit Union (LICU). 

To learn more about partnering with a CDFI, check out this article

  

7. Provide credit counseling services to LMI individuals


Your bank can provide financial assistance (such as credit counseling) to LMI individuals for CRA credit. This goes along with the CRA’s goal of developing low-income communities and providing financial education. If your bank has the resources, you can do a lot of good in the community by advising people financially. You could provide counsel on home foreclosure, financial planning, budgeting, and much more. 

Some credit counseling organizations include the NFCC, the CCCS, and the ACCC


Now that you have some ideas on how to get credit for the CRA, it’s time to go out there and put these ideas into practice. Not only will you be building your bank’s CRA credit, you’ll be helping your community and making it a better place. 

*These ideas and more can be found in this list of CRA-eligible loans, investments, and services provided by the OCC. 

Kadince can help!


If you’ve tracked your bank’s community development efforts or CRA compliance before, then you know that this can be a very manual and time-consuming process. With Kadince software, you’ll save time and money tracking your CRA data. Kadince makes it easy to track, manage, and report community development loans, investments, and services. To learn more about how Kadince can save you time and money, schedule a personalized demo


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.

Jaidyn Crookston | Content Writer, Kadince


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