SARC-98-03 (June 2, 1998)
On May 28, 1998, the Supervisory Appeals Review Committee (鈥淐ommittee鈥) of the Federal Deposit Insurance Corporation considered the appeal by [Bank] (鈥淏ank鈥) of the Community Reinvestment Act (鈥淐RA鈥) rating assigned at the examination conducted as of December 9, 1996.
The Committee first considered the Bank鈥檚 request to appear before the Committee for purposes of presenting evidence in support of its appeal. Based upon the comprehensive nature of the Bank鈥檚 April 8, 1998, submission to Carmen J. Sullivan, Director, Division of Compliance and Consumer Affairs, the Committee concluded that the record relating to the Bank鈥檚 appeal was sufficiently complete and that an oral presentation would not be productive.
The Committee then gave careful consideration to the issues you raised in your appeal letter of April 8, 1998, and concluded that the 鈥淣eeds to Improve鈥 CRA rating should be affirmed. The Committee based its determination on 12 C.F.R. 搂 345.28 (c), which discloses the effect of evidence of discriminatory or other illegal credit practices on a bank鈥檚 CRA rating:
鈥淓vidence of discriminatory or other illegal credit practices adversely affects the 多宝游戏下载鈥檚 evaluation of a bank鈥檚 performance. In determining the effect on the bank鈥檚 assigned rating, the 多宝游戏下载 considers the nature and extent of the evidence, the policies and procedures that the bank has in place to prevent discriminatory or other illegal credit practices, any corrective action that the bank has taken or has committed to take, particularly voluntary corrective action resulting from self- assessment, and other relevant information.鈥
The Committee determined that the nature and extent of the evidence, described in the Report of Examination, supports findings of substantive violations of the Fair Housing Act and the Equal Credit Opportunity Act constituting a pattern and practice of disparate treatment involving 鈥渙verages鈥. The policies and procedures in place during the examination period from August 1995 to December 1996 were insufficient to prevent these substantive violations. The Bank did not implement adequate corrective action until entering into a remediation agreement with the New York State Banking Department on February 17, 1998, more than one year after the period of the examination as of December 9, 1996, for which the CRA rating of 鈥淣eeds to Improve鈥 is assigned. Based on consideration of these facts, the Committee concludes that the assignment of a 鈥淣eeds to Improve鈥 rating for performance as of December 9, 1996, is appropriate.
The effect of the recent corrective action resulting from the remediation agreement on current CRA performance will more appropriately be considered at the next examination and during consideration of any application. In this regard, the Committee noted the otherwise satisfactory evaluation of the Bank in the other CRA performance categories and was encouraged to learn of the positive developments in performance outlined in the appeal letter.
This determination is considered the Federal Deposit Insurance Corporation鈥檚 final supervisory decision.
By Direction of the Supervisory Appeals Review Committee of the Federal Deposit Insurance Corporation.