Understanding Community Reinvestment Act (CRA) and Banking Partnerships

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This presentation sheds light on the importance of the Community Reinvestment Act (CRA) in encouraging banks to support communities, how CRA performance is measured, and the key elements of leveraging banking partnerships. It discusses the purpose of CRA, why it is crucial, how it is evaluated by regulators, and the community development initiatives required for banks to qualify. The emphasis is on fostering impactful collaborations to meet the credit and deposit needs of diverse communities efficiently.


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  1. Demystifying CRA : Leveraging Banking Partnerships

  2. What Will We Cover Today? 1 What is CRA? Why is CRA Important? How is CRA Measured? Community Development Purpose What Banks Are Looking For Examples of Impactful Partnerships Be Flexible Enough to Pivot Essentials of Leveraging Bank Partnership Presenters: Victor M. Ramirez VP / CRA Officer Cesar Trelles VP / Community Development Officer Citizens Business Bank

  3. What is CRA? 2 Purpose of Community Reinvestment Act Encourages banks to help meet the credit and deposit needs of the communities in which they do business in, including low- and moderate-income (LMI) geographies, individuals, small businesses, consistent with safe and sound banking operations Regulates and measures how well banks respond to these needs by providing loans, investments and services within the banks Assessment Areas Requires banks to provide and disclose certain information to the public as part of the CRA Public File Citizens Business Bank

  4. Why is CRA Important? 3 A CRA Performance Evaluation (PE) is the process used by regulators to assess the Bank s response to community needs under the CRA. The results of the PE are factored into applications to open a branch, merge with another institution. The Banks CRA Rating is the only regulatory rating that is public. CRA Regulators include: FDIC (non-Federal Reserve member state chartered banks) Federal Reserve Bank (state chartered member banks) Office of the Comptroller of the Currency (national charter banks) The Bank s CRA Plan includes a Community Needs Assessment to determine the primary needs of the communities and residents where the Bank conducts business, and drives CRA activities The CRA Plan includes qualitative input from community-based organizations through surveys and interviews Quantitative data such as demographics and economic trends is also used to identify focus areas Citizens Business Bank

  5. How is CRA Measured? 4 Banks are evaluated using three Performance Tests: Lending (50%) Service (25%) Investment (25%) The CRA Regulators provide one of Four Ratings: Outstanding Satisfactory Needs to Improve Substantial Noncompliance Citizens Business Bank

  6. Community Development Purpose 5 To be qualified for CRA: Lending, service and investments activities must have the following PRIMARY PURPOSE of Community Development (CD) Hooks : Community services targeted to LMI individuals (education, childcare, health, social services); Affordable housing (including multifamily rental housing) for low- and moderate-income ( LMI ) individuals; Economic development providing financing to small businesses or farms (includes job creation or retention for LMI individuals or in LMI areas; Activities that revitalize or stabilize LMI geographies, designated disaster areas, or designated distressed / underserved middle income areas What determines LMI (Low- and Moderate-Income)? Low-income means an individual income that is less than 50% of the Area Median Income (AMI). Moderate-income means an income that is between 50 80% of AMI. Citizens Business Bank

  7. What Banks Are Looking For Its More Than Philanthropy 6 Banks provide charitable contributions and much more. Develop a full relationship w/ a bank and leverage additional resources: Human Resources: Volunteers, Board and Advisory Committee Capital Resources: Loans and Investments Financial Resources: Grants, other funding resources (i.e. FHLB) Intellectual Resources: Program Development, Capacity Building and Marketing, HR & IT Assistance Citizens Business Bank

  8. Examples of Impactful Partnerships 7 Board member of a faith-based CDC located in East Los Angeles providing community services, small business training and financial empowerment to community members Developed an Employment Readiness Program for jobseekers to acquire critical skills, resources and confidence to obtain and retain living wage jobs. Created a Workplace Mentoring Program where CBB associates partnered with high school youth for 13 weeks providing financial literacy and other soft skills preparing them for college/career. Developed the Resilient Leaders Non-Profit Capacity Building Program in partnership with USC to providing leadership and organizational development training to non-profit leaders Citizens Business Bank

  9. Be Flexible Enough to Pivot 8 Prepare for the unexpected. The COVID-19 Pandemic took the Nation by storm. Citizens Business Bank took immediate action to serve communities and small businesses in need. Community Needs Assessment Survey addressing COVID-19 needs was distributed to 75 community organizations. The results helped to shape the direction of our CRA Plan. Swift response was taken to approve and deploy charitable contributions targeting COVID-19 assistance. Payroll Protection Program (PPP) was launched to assist thousands of clients secure funds. Virtual Volunteer Programs were created to support social-distancing. Citizens Business Bank

  10. Essentials of Leveraging Bank Partnerships 9 Banks are focused on supporting Community-Based Organizations (CBOs). Strong CBOs have recognized the benefit of working closely and purposefully with banks. Developing a strong relationship with a bank is critical, as recently demonstrated during the Payroll Protection Program (PPP). Citizens Business Bank

  11. CRA TEAM CONTACTS Risk Management Division Victor M. Ramirez | Vice President, CRA Officer P 909.483.7291| C 909.294.0320 vmramirez2@cbbank.com Cesar Trelles I Vice President, Community Development Officer P 310.436.3486 ctrelles@cbbank.com Thank you and God Bless!

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