The Federal Deposit Insurance Corp. announced low Community Reinvestment Act grades Thursday for three institutions with more than $3 billion of assets and two smaller banks.

The FDIC made public its "needs to improve" ratings for Utah-based Advanta Bank Corp. and CIT Bank, and for $3.9 billion-asset Republic Bank and Trust Co. in Louisville. The agency gave the same grade to $445 million-asset West View Savings Bank in Pittsburgh and $16 million-asset Coldwater Native Bank in Coldwater, Kan.

The FDIC noted that CIT, a $3.5 billion-asset commercial bank in Salt Lake City that converted from an industrial loan company in December, bought $3.1 billion of subprime loans with "predatory characteristics." The report, dated May 2008, said the loans' features "greatly increased the risk that the borrowers would default, or otherwise be in a worse financial position."

Advanta, a $3.1 billion-asset ILC in Draper that specializes in small-business credit cards, violated a consumer law banning unfair and deceptive practices with a cash-back reward program that used "deceptive marketing practices," according to the FDIC's January 2007 report.

"As the CRA report indicates, we had outstanding results in all areas tested with the exception of marketing certain cash-back rewards offers," an Advanta spokeswoman said. The bank reported an earnings charge related to the rating, she said, "even though we believe that the offers complied with all applicable laws."

A May 2008 report said Republic Bank violated Regulation B, which enforces the Equal Credit Opportunity Act, through its tax refund anticipation loans. "We are certainly disappointed by this FDIC rating change, since two years ago we received a high satisfactory rating in the lending category," Republic chief executive Steve Trager said in a press release. The practice cited by the regulator — naming a borrower's spouse on a loan check even if the spouse had opted out of the loan — is discontinued, he said.

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