Community Reinvestment Act (CRA) compliance is often considered to be a burden rather than a blessing to many financial institutions. With ever changing, and sometimes ambiguous regulatory requirements, it can be tempting to roll our eyes when it comes time for an evaluation of CRA.
Like many things, if we change our mindset to see the ways CRA benefits our institutions and communities, we might find joy and meaning behind this work. At the end of the day, the heart of CRA is doing good in the communities where we live and work and serving our neighbors who have historically been left out of receiving fair banking services. Leaning in and having a passion for CRA can result in greater growth opportunities for the Institution. Let’s highlight a few ways to view CRA responsibility as a profitable business endeavor for your institution:
- By lending and investing in underserved communities, your Institution is exploring creative ways to serve populations which may not qualify for traditional financing and tapping into a whole new population of customers that otherwise might not have been considered.
- Forming relationships with majority minority and LMI communities through community development efforts serves to strengthen your reputation throughout the community and build customer loyalty and rapport.
- The future success of any financial institution depends upon successful CRA programs. Investing in passionate and motivated CRA professionals is crucial for the growth of your Institution when applying for new branches or mergers and acquisitions.
- The CRA has proven to have great success in the revitalization of neighborhoods through the investment of time, talent, and treasure into small businesses. By contributing to the growth of your local neighborhoods, you are planting seeds for future loan and business opportunities. This emphasizes the importance of maintaining relationships and understanding this does not happen overnight.
It is time to change the perspective on CRA compliance. Invest in teams who are passionate about community development work throughout your local community. Working from a place of passion, joy, and excitement will yield greater results than working from a place of pressure, necessity, and obligation. If we keep our eyes focused on the “why” of CRA, the path to success will be a much easier journey.
Is your institution working from a place of passion or of pressure when it comes to CRA? Let TCA help you find “A Better Way” to CRA compliance.
TCA – A Better Way!
