FDIC Rates 5 Banks ‘Outstanding’ in CRA Compliance

The Federal Deposit Insurance Corporation (FDIC) rated five banks “outstanding” and one bank “needs to improve” in its latest monthly list of banks examined for Community Reinvestment Act (CRA) compliance.

The remainder of the 72 banks included in the monthly list released Friday (Jan. 3) were rated “satisfactory.” None were rated “substantial noncompliance.”

The CRA ratings included in this list were assigned by the FDIC in October 2024, the agency said in a Friday press release.

“The CRA is a 1977 law that requires the FDIC to assess a bank’s record of meeting the credit needs of its entire community, including those of low- and moderate-income neighborhoods, consistent with safe and sound operations,” the release said.

The five banks rated “outstanding” include Charlotte, North Carolina-based Truist Bank; Jordan, Montana-based Garfield County Bank; Fairbanks, Alaska-based Mt. McKinley Bank; Los Angeles-based Open Bank; and Brookfield, Wisconsin-based Spring Bank.

Weimar, Texas-based Hill Bank & Trust Co. (HBTC) was rated “needs to improve.”

In the public disclosure of HBTC’s CRA performance evaluation, the FDIC said it gave the bank that rating because its loan-to-deposit (LTD) ratio is “less than reasonable” given the bank’s size, financial condition and assessment area credit needs.

“HBTC needs to improve its performance regarding the Lending Test,” the FDIC said. “The bank’s less than reasonable record regarding its LTD ratio as well as the limited lending levels, primarily support this conclusion.”

The CRA ratings cover only the banks’ performance in meeting their responsibilities under the CRA, according to an FDIC page about CRA performance evaluations.

The FDIC supervises insured state-chartered banks that are not members of the Federal Reserve System and insured state savings associations, per the page. The Federal Reserve System and the Office of the Comptroller of the Currency (OCC) enforce the CRA among other types of banks.

In October 2023, the federal banking agencies issued an interagency final rule modernizing and strengthening the CRA. The final rule did this in part by recognizing banking activities that take place beyond physical branches and ATMs, being more data driven and objective, and addressing concerns related to “grade inflation” in CRA ratings.