Regulators Seek Comments on Community Reinvestment Act Revisions

Forty-five years ago, Congress passed the Community Reinvestment Act to encourage banks to expand lending to poor and underserved areas as part of a large-scale effort to help eliminate redlining, a discriminatory practice where banks and insurance companies did not fully support black and minority communities. .

In essence, white neighborhoods were treated more favorably than minority areas. The ARC was an effort to bring equal treatment in lending practices.

The law was last updated almost 30 years ago, in 1995.

Financial institutions were required to report on lending in poorer regions, and regulators were given the option to reject expansions or mergers for banks that failed to meet ARC mandates.

Now, the nation’s top regulators are asking Arkansas lenders and others across the country for feedback on possibly revising the ARC.

Comments must be forwarded to regulators by August 5. The full review includes the Federal Reserve Board, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

State bankers are fairly tight-lipped about the initiative, noting that they just received the 678-page proposal a month ago and need time to review it. “It’s going to take time and resources that we haven’t spent on something like this right now to give any input or make any recommendations,” said a key executive at one of the biggest banks in the world. ‘Arkansas.

Acting FDIC Chairman Martin Gruenberg, in comments May 5 when the proposed rulemaking was released, said the review will strengthen and modernize the CRA’s rules. “It’s been an ambitious undertaking,” he said. “The proposed changes to the CRA are substantial.”

The initiative aims to broaden the scope and bring more rigorous analysis to ARC efforts by lenders.

In announcing the review, the federal agencies identified four key areas for improvement:

• Expanded access to credit, investment and basic banking services in low and middle income communities.

• Updated rules for online and mobile banking and branchless banking.

• Development of a metrics-based assessment of retail lending and community development finance.

• Recognition of the difference in size and business models of banks in order to more effectively assess their compliance with CRA rules. Small banks, for example, would be valued differently from banks with $10 billion or more in assets.

ARC was implemented and revised in a banking environment that relied on branches to serve distinct communities. Today, the world of lending is more flexible and banks give loans where they do not have a branch. Digital and online banking are transforming lending practices. Today, bank loans in communities where there is no local bank branch are generally not subject to CRA rules and reviews.

Overall, Gruenberg noted that the effort “represents a major overhaul of ARC intended to enhance its impact and increase its transparency and predictability.”

GROW BY YOURSELF

Are you a small or medium business interested in selling your products abroad?

Arkansas Manufacturing Solutions is sponsoring a seminar on June 22 to help with the effort. The “Grow Your Exports: A Virtual Exporting Bootcamp” is held in two sessions in conjunction with the Arkansas District Export Council.

Sessions are designed to support businesses that are new to exporting products as well as existing Arkansas exporters. The free course offers five hours of training to strengthen exporting with a focus on developing customer relationships, international logistics, managing payment and financing efforts, and an exploration of regulations and legal issues. faced by exporters.

Virtual sessions are scheduled from 9 a.m. to 11:30 a.m. and from 1 p.m. to 4:30 p.m. Details and registration information are available at exportarkansas.org.

HELP FOR VET COMPANIES

The United States Small Business Administration will host a one-day workshop on June 7 in Fort Smith to provide entrepreneurship training and support to military veterans and their spouses.

The Boots to Business Reboot program is an educational initiative that provides insight into the fundamentals of entrepreneurship and business ownership to veterans of all eras. Active duty members, including National Guard and Reserve, and spouses are eligible to participate.

Veterans will have access to the resources they need to start a business, develop a business plan, and receive information about SBA programs available to help them.

The class will begin at 7:45 a.m. at 70 S. 7th St. in Fort Smith. More information is available at sba.gov/ar.

ARKANSAS-BASED COMPANIES WANTED

The Conductor, a Conway business support organization, has opened the application process for its 10X Growth Accelerator, which targets high-potential technology and technology companies based in Arkansas.

The program provides participants with a growth-oriented curriculum that includes management assistance, access to capital, networking opportunities and customer connections. The program includes weekly topics focused on leadership, sales processes and scalability.

Participants must commit to having at least a C-level executive who can attend meetings and workshops during the 14-week program which runs August 9.

Arkansas businesses with annual revenues between $100,000 and $10 million are eligible.

More information is available by contacting Program Director Glenn Crockett at [email protected]

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