All successful programs have support from the top, and CRA isn’t any different! It’s important to keep your bank board and executive management briefed on your CRA program. But how do you do this?
In this dated but still relevant article published by the Federal Reserve Banks of Boston & San Francisco, Eric Rosengren and Janet Yellen state that “the CRA remains today a key element of the regulatory framework.” I completely agree with this statement.
As with any other element of the regulatory framework, it’s important that your leaders are aware of the CRA and that they support your initiatives. Although you aren’t formally required to brief your board members or even your executive management on your CRA program, it’s a good idea to keep your leaders up to date on the risks and impact of your program.
What bank boards and executive leadership need to know
At the very least, your bank board and executive leadership need to know the basics of the CRA. By giving your leaders a basic understanding of the CRA and highlighting the key risks and opportunities, you’ll ensure that your leadership is able to make informed decisions and keep your program’s best interests at heart.
The Board of Governors of the Federal Reserve System offers several resources you can reference and pull from. Here is a link to their Education, Training, and Assistance page. Resources like “Ask the Fed” and “A Bank Directors Desktop” allow leaders to quickly understand their role in supporting the CRA program.
Not sure where to start? Consider watching this video that provides a general overview of the CRA. The video is 30 minutes long, so I recommend extracting key points and relating them to your specific bank and performance context in an executive-level tight presentation.
If any board member or executive leader wants to be more actively involved in CRA, CRA Today’s free CRA Fundamentals course will help them take a deeper dive into the foundational elements of the CRA.
Presenting your CRA program to the bank board and executive leadership
If you don’t have any key risks or performance issues associated with your CRA program, you might consider teaming up with the compliance department to present your program to leadership.
You’ll want to keep your report short and to the point. Visuals, such as a heat map, can be powerful and memorable tools for sharing your CRA story. Key information to share with your board includes where you are in the exam cycle, performance gaps you’ve identified, and 2 to 3 key initiatives with powerful stories of impact.
Addressing problems with the CRA program
What happens if you have lending performance or data integrity issues? Or what if you experience increased pressure from local advocacy groups?
If or when you encounter these key risks, you have an obligation to report to your board and executive management so they are adequately briefed. If your key risks are external, you want your executives to be prepared to address the issue with talking points (approved by your marketing department, of course).
Don’t forget to report all issues to key stakeholders, the board, and executive management so they are aware.
Taking the time to strategically educate and brief executives at the highest levels within your institution is not only a best practice, but a great way to elevate high-impact projects that will support your Outstanding CRA program.
How often should you report to executive leadership and bank boards?
If you have a well-established CRA program without any substantive issues, sharing CRA information once or twice a year should be sufficient. If your leadership needs frequent updates to fully understand your program’s impact on the bank and the community, then tailor your reports to this need. Simply put, report to executive leadership and bank boards as often as you need to keep them adequately updated and in the loop.
Most CRA Officers present their CRA program to leadership in accordance with their CRA exam cycle. As you know, once you’ve completed your exit meeting or received your finalized performance evaluation, it’s time to get started with a fresh new exam cycle filled with opportunities to serve. Sharing your goals and aspirations around your next exam cycle is a great way to get executive management to support your CRA program!
Interested in more best practices? Consider joining the CRA Hub, the place for CRA practitioners to learn more about CRA training, data integrity, exam prep, and more!
- Essential Steps Every CRA Officer Must Address to Ensure a Smooth CRA Exam - September 16, 2021
- The CRA Exam Cycle From a Regulator’s Perspective - September 9, 2021
- What Bank Boards and Executive Leadership Need to Know About the CRA - September 2, 2021