N.Y. Banking Department Acts to Standardize CRA Regulations,

Responding to industry complaints, the New York State Banking Department has begun a massive review of its Community Reinvestment Act rules.

Bankers have asserted that the federal and New York CRA rules are so different that most institutions have to keep separate records for each regulator.

New York State Banking Superintendent Neil D. Levin said the revised rules will make the state "a national leader in the application and enforcement of CRA."

New York rules mirror the old federal CRA regulations, which emphasized paperwork and documentation. The new federal CRA rules, however, focus on actual loans made.

Empire State bankers have said they keep two different types of documentation for exams that often occur simultaneously.

Stacey Cooper, deputy superintendent of the New York banking department's consumer affairs division, said the new rules would deemphasize paperwork and focus on lending. She declined to discuss specifics, saying the review has just begun.

"The federal regulations make sense," Ms. Cooper said in an interview. "We're optimistic that we could have some sort of proposal to the state banking board in six months."

Bankers praised the move, saying the current system wastes resources that could be invested in low-income communities.

"It's a real positive step," said LuAnne Kingston, CRA officer at Marine Midland Bank in Buffalo. "It can be very difficult to have two regulators in the bank examining CRA in two different ways."

The New York department already has begun preparing examiners for the new rules, conducting briefings on the recently revised federal CRA regulations.

New York has made other changes to its CRA exams. The department has bought CRA Wiz, a geocoding and mapping software product, to help examine lending data more accurately.

It also has begun releasing more details about CRA compliance, including bank-funded programs.

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