WASHINGTON - Regulators from all agencies will get a crash course in new Community Reinvestment Act exam procedures starting Sept. 18 in Dallas.
Timothy R. Burniston, the Office of Thrift Supervision's deputy assistant director for policy, said the week-long CRA examiner training sessions will be also be conducted in San Francisco, Atlanta, and Chicago before winding up in Boston on Dec. 11. Mr. Burniston heads the Federal Financial Institutions Examination Council task force charged with writing the new exams.
Bankers can learn about the new procedures through a video question-and- answer session Oct. 19 broadcast by the American Bankers Association's Skylink satellite network.
The Skylink broadcast will be manned by Mr. Burniston along with three other senior regulatory officials: Steve Cross from the Office of the Comptroller of the Currency, Glenn Loney from the Federal Reserve, and Bobbie Jean Norris from the Federal Deposit Insurance Corp.
"We're dealing with new regulations. It's not like we took the old one and fixed it up," Mr. Burniston said. "We expect a fresh look to the exams."
Regulators gave hints of the new exam procedures last week at the Federal Reserve Bank of Dallas' fair-lending conference.
Ms. Norris said agencies will examine five factors at banks with less than $250 million in assets, which must begin complying with the new CRA rules on Jan. 1.
The agencies will determine if a bank's loan-to-deposit ratio is reasonable, if the bank extends credit in the community, and if it lends to people of all races and to small businesses. Regulators also will review the number of loans in low-income areas and the content of community group complaints.
Each of the five examiner-training sessions will run from Monday afternoon to Friday morning. Mr. Burniston said he expects 200 to 230 examiners to attend each session.
The sessions will explain the new regulations, providing case studies and hands-on exercises to "reinforce the rules in a practical sense," Mr. Burniston said. Also, in each city, regulators will invite three or four local bankers and community group activists to discuss the examinations.
The agencies' emphasis on performance over paperwork is a welcome one, said Kathy Curtis, compliance officer for Century National Bank in Washington.
"There was a real heavy emphasis on minutes of meetings, logs of contacts of board officers with the community, and marketing plans," Ms. Curtis said. "We were doing things, but they wouldn't believe it without the paperwork. Now they'll believe it just by looking at our hard data."
Karen Thomas, senior regulatory counsel for the Independent Bankers Association of America, said it is important new training procedures are uniform across all regulatory agencies.
"Joint training among the agencies...should help bring consistency to the exams," she said.
It is too soon to tell whether these exams will lead to lower scores, Mr. Burniston said. Currently, more than 90% of all banks receive a satisfactory CRA rating or better, prompting critics to question whether regulations work.
"I'll admit there are probably some institutions in the country that have satisfactory ratings because they have good results on process- oriented scores to compensate for poor lending records," Mr. Burniston said. "That may hurt some folks this time."
Jaret Seiberg contributed to this story.
