The Community Reinvestment Act (CRA) has traditionally only applied to federally insured banks, but that’s starting to change.
While mortgage companies and other non-bank lenders have previously been off the hook for CRA, New York state recently expanded its CRA framework to include non-bank mortgage lenders.
If you work for a mortgage company registered in New York, chances are you have a lot of questions. What is the CRA? Does it apply to us? What data do we have to track? What on earth is an assessment area? Is it too early for me to retire? That kind of thing…
Don’t panic quite yet. Here’s everything you need to know about the CRA and how it applies to mortgage companies (and other non-bank lenders) registered in New York.
What is the Community Reinvestment Act?
First things first…what is the Community Reinvestment Act (CRA)? Before the CRA, banks used to get away with “redlining” community members, or refusing to lend to them based on race or where they lived. Bankers saw these low-to-moderate income individuals as too risky, so they created maps with literal red lines around the communities they didn’t want to lend to. The people living in these areas had a very hard time qualifying for loans and learning about the financial services that should be available to them.
This redlining practice led to the Community Reinvestment Act of 1977. The CRA ensures that banks meet the credit needs of everyone in their communities, not just the wealthy or “less risky” individuals. Now all federally insured banks must reinvest capital by giving equal access to credit and other banking products while providing safe and sound loans, services, and investments. The key here is “safe and sound.” Banks aren’t forced to lend to just anyone who asks. That would defeat the purpose of a bank, wouldn’t it? The CRA rewards banks that help people living in low-to-moderate-income (LMI) communities, but doesn’t force banks to make bad investments or waste money.
Why don’t most mortgage companies have to comply with the CRA?
The Community Reinvestment Act (CRA) was originally written to apply only to depository institutions, like banks and thrifts. Mortgage companies are typically non-depository lenders, meaning they don’t take deposits from the public. Because of this, they were not included in the law when it was passed in 1977.
At the time, lawmakers focused on banks because they benefit from public deposits and federal support, and were therefore expected to reinvest in the communities they serve. Mortgage companies operate under a different model and regulatory framework, so they were not historically subject to the same requirements.
However, as mortgage companies have grown and now originate a significant share of home loans, regulators have started to reconsider that approach. In places like New York, this has led to new CRA-style requirements that bring mortgage companies into a framework that was traditionally limited to banks.
Feeling a bit picked on? You aren’t alone. While credit unions have also not historically been subject to the CRA, that is starting to change. As of March 2026, state-chartered credit unions in three states—Illinois, Massachusetts, and New York—have CRA rules similar to those of federally insured banks. If you’re curious about what credit unions in these states should know about the CRA, read this article.
How does the Community Reinvestment Act work for mortgage companies?
Knowing that your mortgage company has to comply with New York’s CRA requirements is one thing—but what does that actually mean in practice?
At a high level, it looks similar to how CRA works for banks and other institutions. Mortgage companies will undergo periodic CRA evaluations, where examiners assess how well they are meeting the credit needs of their communities, especially low- and moderate-income (LMI) individuals and areas.
These evaluations are conducted by the New York Department of Financial Services (NYDFS) and typically occur on a risk-based schedule, often every few years depending on size, activity, and prior performance.
During the exam, regulators will review things like:
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The company’s mortgage lending activity, including where loans are being made and who they are serving
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How well the company is reaching LMI borrowers and communities
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Any community development activities, such as partnerships, outreach, or support for affordable housing initiatives
Based on this review, the mortgage company receives a CRA rating (Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance), which is made public and can impact regulatory approvals, such as expansions or other business activities.
While the overall framework is similar to traditional CRA exams, the expectations are tailored to the business model of mortgage companies, with a heavier focus on lending patterns and less emphasis on full-service banking activities.
Who is in charge of CRA at a mortgage company?
While larger banks typically have a dedicated CRA Officer to oversee the institution’s CRA program and keep it on track, most mortgage companies registered in New York are unlikely to have this same structure—at least not yet. The rule is still very new, so until mortgage companies determine whether they need a dedicated CRA role, responsibility will likely fall to the broader Compliance team.
Whoever is responsible will take on a wide range of responsibilities, including:
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Identifying and tracking community development lending, services, and (where applicable) investments
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Managing large volumes of lending and activity data
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Managing all the data (and there’s A TON of data to manage)
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Reporting to stakeholders and the board of directors
And that’s just leading up to an exam. The Compliance team (or designated lead) will also work directly with examiners—responding to requests, pulling supporting documentation, and often spending hours tracking down specific data points or examples. After the exam, they review examiner findings, respond to any follow-up, and begin preparing for the next evaluation cycle.
Does the size of a mortgage company matter during a CRA exam?
While banks have clearly defined asset tiers that determine which tests they undergo during a CRA exam, mortgage company evaluations will likely be more flexible and risk-based.
Examiners will still consider factors like:
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The company’s size and loan volume
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Its geographic footprint
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The complexity of its operations
However, instead of being assigned to strict categories like “small,” “intermediate,” or “large,” expectations will be tailored to what is reasonable given the mortgage company’s footprint, capacity, and business model, rather than tied to fixed asset thresholds.
In practice, larger mortgage companies may be expected to demonstrate broader reach, stronger performance in low- and moderate-income (LMI) communities, and more robust community development efforts. Smaller mortgage companies may face more limited expectations, with a heavier focus on core lending performance.
What do examiners look for in a mortgage company CRA exam?
Banks are evaluated under clearly defined CRA “tests” tied to asset size, but mortgage company evaluations in New York tend to be more focused on lending performance and market impact. Because mortgage companies are non-depository institutions, exams are generally structured around what is most relevant to their business model.
Before diving into those areas, it’s important to understand how geography plays a role. Like other institutions evaluated under CRA, mortgage companies are assessed within defined geographic areas—commonly referred to as assessment areas. For mortgage companies, these areas are typically based on where they originate a significant volume of loans. Examiners evaluate performance within these areas, with a particular focus on how well the company is serving low- and moderate-income (LMI) borrowers and communities.
Now, here are the primary areas examiners evaluate:
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Lending
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Community development (including lending, partnerships, and outreach)
Unlike banks, there is generally less emphasis on traditional service tests, since mortgage companies do not offer full-service banking products or operate extensive branch networks.
Lending
Lending is the core focus of a mortgage company’s CRA evaluation.
Examiners assess how well the company is meeting the credit needs of its community, particularly in LMI areas. This typically includes:
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Geographic distribution of loans (are loans being made in LMI areas?)
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Borrower distribution (are LMI borrowers being served?)
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Loan volume and market presence within assessment areas
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Responsiveness to community credit needs
Because mortgage companies primarily originate home loans, this analysis is often heavily driven by mortgage lending data (such as HMDA), which regulators use to evaluate borrower characteristics, geographic distribution, and overall lending patterns within assessment areas, especially in low- and moderate-income communities.
Community Development
In addition to lending, examiners also evaluate how a mortgage company supports its community through community development activities.
This may include:
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Affordable housing initiatives
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Partnerships with housing nonprofits or community organizations
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Outreach and education efforts, such as first-time homebuyer programs
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Participation in programs that support LMI borrowers or underserved communities
Compared to banks, mortgage companies may have fewer formal investment options, so more emphasis is often placed on lending and community engagement activities.
The CRA exam process for mortgage companies
Before the exam
There’s a lot of work that goes into preparing for a CRA exam. And since many mortgage companies have never gone through one before, the process can feel even more complex.
Before the CRA exam, the Compliance team (or whoever has been put in charge) should:
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Create a CRA strategy and action plan (optional, but helpful)
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Conduct a CRA self-assessment to understand current performance (also optional, but VERY helpful)
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Review lending activity to identify community development loans and qualifying activity
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Collect and manage all the necessary data
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Gather all documentation and build reports for CRA examiners
Sound overwhelming? It can be. Preparing for a CRA exam takes a lot of time, especially if your team doesn’t have a good system in place for collecting and managing data.
During the exam
Whether the exam is on-site or remote, your team will likely be very involved throughout the process. From regular check-ins with examiners to explaining and supporting your company’s CRA performance, it’s a busy and detail-oriented time.
If the exam is on-site, your team may also handle logistics like coordinating meeting space, building access, and schedules. Regardless of format, expect frequent requests for additional data, documentation, and clarification.
After the exam
Once the exam is over, your team should immediately start preparing for the next one (after a much needed vacation or some PTO, of course).
Start by reviewing your results. Whether you received a Satisfactory, Needs to Improve, or Outstanding rating, there are always opportunities to strengthen your program. Use this time to evaluate performance and build a plan for improvement.
If anything is unclear—such as why certain loans or activities didn’t receive CRA credit—you can follow up with your examiner. Building a strong working relationship with regulators is an important part of maintaining a successful CRA program.
Finally, revisit your CRA strategy, action plan, and self-assessment. Your executive team or board of directors will likely expect a summary of results, along with a clear path forward for the next exam cycle.
How to manage all this CRA data for mortgage companies
Believe it or not, many institutions subject to CRA requirements still rely on spreadsheets or outdated systems to manage the entire process. For mortgage companies, this often means tracking large volumes of lending data, along with any qualifying community development activities, outreach efforts, and supporting documentation.
Whoever is responsible has to capture and organize a wide range of information, such as:
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Where loans are originated and who they serve
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Whether lending qualifies within assessment areas or LMI communities
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Details behind community development activities and why they qualify
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Supporting documentation for examiners
As you can imagine, this is a ton of work. And spreadsheets just don’t cut it anymore.
Kadince’s CRA Management software is built specifically for institutions managing CRA data, including mortgage companies registered in New York. Kadince makes it easy to track, manage, and report everything needed for your next CRA exam, with a strong focus on lending data, community development activity, and examiner-ready reporting.
If given the choice between archaic, difficult-to-use spreadsheets and easy, time-saving software, we know which one we’d pick.
To learn how Kadince can help your mortgage company manage CRA data, schedule a no-pressure, 30-minute demo.
The future of mortgage company CRA requirements
So how will all of this look in the future? Will the federal CRA ever be updated to include all mortgage companies? Will more states adopt their own CRA regulations for non-bank lenders?
Unfortunately, the answer to all those questions is “nobody knows.”
For now, most mortgage companies are not subject to CRA requirements. If you are at a CRA-regulated company (if you’ve read this far, we’re guessing you probably are), then you’re navigating a framework that is still new and evolving—and one with fewer established resources and best practices than traditional bank CRA programs.
Mortgage companies continue to grow and capture a larger share of the lending market, especially in home lending. That growth is one of the key reasons states like New York have stepped in to apply CRA-style expectations to non-depository lenders.
Whether that trend continues will likely depend on a mix of regulatory priorities, political pressure, and how the industry evolves. It’s entirely possible more states will follow suit—or that federal policymakers revisit the question—but any changes will likely happen gradually rather than all at once.
In the meantime, mortgage companies operating under CRA requirements have an opportunity to get ahead. Building strong processes, tracking the right data, and developing a thoughtful approach to community development now can make future exams much smoother—no matter how the regulatory landscape shifts.
Frequently Asked Questions
Do mortgage companies have to comply with the CRA?
Most mortgage companies do not have to comply with the federal Community Reinvestment Act (CRA). However, New York has expanded its CRA framework to include certain non-depository mortgage lenders, meaning some mortgage companies registered in New York are now subject to CRA-style requirements.
When did CRA requirements start applying to mortgage companies in New York?
New York expanded its CRA law to include mortgage companies in 2021, but the final rules were issued in January 2026, with requirements becoming effective later that year. This marks the first time many nonbank mortgage lenders have been subject to CRA-style evaluations.
What is a CRA exam for a mortgage company?
A CRA exam evaluates how well a mortgage company is meeting the credit needs of its community, particularly low- and moderate-income (LMI) borrowers and areas. Examiners review lending patterns, geographic distribution, and community development efforts before assigning a public rating.
How often do mortgage companies have CRA exams?
CRA exams for mortgage companies are conducted on a risk-based schedule, typically every few years depending on factors like size, lending activity, and prior performance. There is no fixed timeline for all institutions.
What do examiners look for in a mortgage company CRA exam?
Examiners primarily focus on:
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Mortgage lending activity, especially in LMI communities
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Borrower and geographic distribution of loans
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Performance within assessment areas
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Community development efforts, such as partnerships or outreach
Lending is the most heavily weighted component.
What are the CRA ratings for mortgage companies?
Like banks, mortgage companies receive one of four CRA ratings:
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Outstanding
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Satisfactory
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Needs to Improve
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Substantial Noncompliance
These ratings are public and can impact regulatory approvals.
What is an assessment area for a mortgage company?
An assessment area is the geographic area where a mortgage company’s CRA performance is evaluated. For mortgage companies, this is typically based on where they originate loans, rather than where they have physical branches.
Do mortgage companies need a CRA Officer?
Most mortgage companies do not yet have a dedicated CRA Officer. Instead, CRA responsibilities are typically handled by the Compliance team, often alongside fair lending and HMDA reporting functions. Larger organizations may create dedicated roles over time.
What counts as community development for mortgage companies?
Community development activities may include:
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Affordable housing initiatives
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First-time homebuyer programs
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Partnerships with housing nonprofits
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Outreach or education efforts benefiting LMI individuals
Activities must have a clear community development purpose to receive CRA consideration.
What happens if a mortgage company gets a low CRA rating?
A low CRA rating can lead to increased regulatory scrutiny and may impact approvals for certain business activities. It can also require the company to improve its CRA performance before the next evaluation.
How can a mortgage company prepare for a CRA exam?
Preparation typically includes:
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Conducting a CRA self-assessment
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Tracking lending and community development activity
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Organizing data and documentation
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Developing a CRA strategy aligned with community needs
Are federally regulated mortgage companies subject to CRA?
No, the federal CRA does not apply to non-depository mortgage companies. CRA requirements for mortgage lenders currently exist at the state level, such as in New York.
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.
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