The Community Reinvestment Act (CRA) is a federal law enacted in 1977 that requires banks to meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. The law is designed to promote fair access to credit and financial services, and to prevent discrimination in lending practices.

Banks are required to develop a CRA risk management program to identify, assess, and manage the risks associated with their CRA activities.

The risk management program should include the following components:

1. CRA Risk Assessment: Banks should conduct a comprehensive assessment of the risks associated with their CRA activities, including the risks of non-compliance with CRA regulations, reputational risks, credit risks, and operational risks.
   
   
2. Policies and Procedures: Banks should have policies and procedures in place to address the risks identified in their CRA risk assessment. These policies and procedures should outline how the bank will manage its CRA activities and ensure compliance with the law.
   
   
3. CRA Compliance Monitoring: Banks should regularly monitor their CRA activities to ensure that they are in compliance with CRA regulations and the bank's own policies and procedures.
   
   
4. Training and Education: Banks should provide training and education to their employees to ensure that they understand their responsibilities under the CRA and the bank's policies and procedures.
   
   
5. Reporting and Recordkeeping: Banks should maintain accurate records of their CRA activities and provide regular reports to management and regulators.

Effective management of CRA risk is important for banks to maintain their compliance with CRA regulations, meet the credit needs of their communities, and protect their reputation.

Implementation of a CMS Program (Compliance Management System)

A Compliance Management System (CMS) is a program that organizations use to ensure they comply with legal and regulatory requirements. The CMS helps organizations identify, assess, and manage compliance risks. The CMS program includes policies, procedures, and controls that support compliance efforts.

The following are some key components of a CMS program:

1. Risk assessment: The CMS program should include a risk assessment that identifies and evaluates potential compliance risks.
   
   
2. Policies and procedures: The CMS program should include policies and procedures that guide employees in complying with legal and regulatory requirements.
   
   
3. Training and education: The CMS program should provide training and education to employees to help them understand their roles and responsibilities in complying with legal and regulatory requirements.
   
   
4. Monitoring and reporting: The CMS program should include monitoring and reporting mechanisms that enable the organization to identify compliance issues and take corrective action.
   
   
5. Auditing and review: The CMS program should include regular auditing and review to ensure that the program is effective in managing compliance risks.
   
   
6. Continuous improvement: The CMS program should include mechanisms for continuous improvement, such as feedback mechanisms that enable employees to provide suggestions for improving the program.

Implementing a CMS program can be challenging, but it is essential for organizations that operate in regulated environments. A well-designed CMS program can help organizations manage compliance risks, reduce the likelihood of non-compliance, and demonstrate to regulators and other stakeholders that the organization takes compliance seriously.

A sound compliance program is essential to the efficient and successful operation of the institution, much as a business plan.  

A compliance program includes the following components:

• Policies and procedures
• Training
• Monitoring and/or Audit
• Consumer complaint response

Compliance Officer A compliance officer’s duties include ensuring that an institution:

• Develops compliance policies and procedures
• Ensures that management and employees receive proper training in consumer protection laws and regulations
• Reviews policies and procedures for compliance with applicable laws and regulations and the institution’s stated policies and procedures
• Assesses emerging issues or potential liabilities
• Provides proper responses to consumer complaints
• Reports compliance activities and audit/review findings to the Board
• Ensures corrective action
  
  

Regulations Applied Compliance Services Can Assist With: 

Consumer Compliance Lending Issues

• Truth In Lending Act (Reg. Z)
• Real Estate Settlement Procedures Act (RESPA)
• Fair Housing Act (FHA)
• Home Mortgage Disclosure Act (HMDA)
• Servicemembers Civil Relief Act (SCRA)
• Military Lending Act (MLA)
• Flood Disaster Protection Act (FDPA)
• Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
• Equal Credit Opportunity Act (ECOA)

Consumer Compliance Depository Issues

• Expedited Funds Availability Act (Reg CC)
• Electronic Fund Transfer Act (Reg. E)
• Truth In Savings Act (Reg DD)
• Garnishment of Accounts Containing Federal Benefits

Unfair and Deceptive Practices

• Unfair, Deceptive, and Abusive Practices (UDAP)
• Fair Debt Collection Practices
• Third Party Risk

Privacy and Consumer Information

• Gramm-Leach Bliley Act (Privacy of Consumer Financial Information)
• Children’s Online Privacy Protection (COPPA)
• Right to Financial Privacy Act
• Telephone Consumer Protection Act
• Fair Credit Reporting Act (FCRA)

Other Consumer Compliance Issues

• Advertisement of Membership Part 328 of the FDIC
• Marketing & Advertisement Requirements
• Community Re-investment Act (CRA)
• BSA, AML, OFAC compliance
• Insider Lending (Reg. 0)