Expanded Table of Contents

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CHAPTER NUMBER CHAPTER TITLE PAGE NUMBER
   Preface xi
1 New Strategies for the New CRA 1
  • Different CRA Strategies for Different Goals
1
  • New CRA Strategies for Banks
3
  • New CRA Strategies for Community Groups
6
  • New CRA Strategies for Regulators
9
2 The New CRA Triangle                                                        13
  • The Myopic CRA Strategist
13
  • Revisiting the CRA Triangle
13
  • How "Friendly" Regulators Distort the CRA Triangle
14
  • The Best and Worst of the CRA Triangle
15
  • The Friends of CRA
22
  • The Enemies of CRA
25
3 CRA Wars: The CRA Triangle Battles Over the New CRA 33
  • New Records Set in the Making of the New CRA
33
  • Timing is Everything
34
  • The New, Newer, and Newest CRA
35
  • Strategic Options Under the New CRA
39
  • A CRA Exemption -- The Ultimate New CRA Loophole
39
  • Regulatory CRA Wars: FED vs. DOJ
46
  • Regulatory CRA Wars: FED vs. OCC
47
  • Natural Extension of Community Reinvestment Performance
48
  • The Author's Involvement in the Development of the New CRA
49
4 CRA Ratings Strategies 53
  • Different CRA Strategies for Different Goals
53
  • Botched CRA Grade Deflation at the OTS' Central Region
54
  • What We Have Learned from Six Years of Public CRA Ratings
56
  • The Best and Worst CRA States
59
  • Current Findings on the Five Worst CRA States
60
  • Current Findings on the Five Best CRA States
61
  • Identifying the Best CRA Banks
61
  • Appeals of Old and New CRA Ratings
72
5 CRA Enforcement Strategies 81
  • CRA Enforcement as an Oxymoron
81
  • Examining the Enforcers
82
  • Rating the Regulators on their FOIA Friendliness
84
  • CRA Application Denials
86
  • Job Description for a Friendly Regulator
90
  • CRA Protests and Denials
92
  • Formal and Informal Enforcement Actions
95
  • Disclosed Violations in CRA Exams
97
  • Referrals to the DOJ -- The "Regulator from Hell"
105
  • DOL Testing for "Fair Hiring"
110
6 CRA Megamerger Strategies   113
  • Alternative CRA Strategies for Megamergers
113
  • Recommended "C&N" Megamerger Strategies for the CRA Triangle
114
  • Possible Discrimination in Banking Colonies and Interstate Banking
120
  • Three C&N Comments on Three Largest Megamergers
124
  • Analyses of First Union's Alleged Fee Discrimination in Florida
125
  • Specific Fee Comparisons Documenting Fee Discrimination by First Union
127
  • Evaluation of an Interstate Fee Discrimination Strategy
129
  • Apparent Output Discrimination in Florida by First Union
131
  • The FED and OCC Ignore Alleged Interstate Fee and Output Discrimination
132
7 The CRA Exam from Hell -- Case Study of a Banker's Worst Nightmare 135
  • Excessive CRA and Fair Lending Enforcement Strategy
135
  • Record DOJ Settlement Keeps Getting Bigger!
135
  • The Road to Regulatory Hell
138
  • CRA Hell: Three Exams, Two Ratings, and One Appeal
139
  • Sensationalism at The Washington Post
139
  • The First CRA Exam That Wasn't
143
  • Chevy Chases Second and Third CRA Exams
144
  • Independent Assessment of the Chevy Chase CRA Exam
145
  • Assessment of What was in the Chevy Chase PE
146
  • Assessment of What was NOT in the Chevy Chase PE
148
  • Determination of "True" CRA Rating
149
  • Appeal Upholds Examiners' Rating
150
  • DOJ Dreams Up New Marketing Theory of Discrimination
150
  • DOJ Makes its Case
153
  • The Author's Past Consulting Work with Both DOJ and Chevy Chase Bank
154
  • Independent Study Shows Best Branching Record in African-American Communities
155
  • Why DOJ Would Have Lost the Chevy Chase Case
156
  • Why DOJ Wouldn't Drop the Chevy Chase Case
157
  • Life in Regulatory Hell
158
8 A Shared Bank Branch CRA Compliance Strategy   161
  • The Many Problems of Our Inner Cities
161
  • Existing Alternatives to Inner-City Banking are Unsatisfactory
162
  • Why Our Inner Cities Need Real Branches with Real People
164
  • Alternative Methods of Bringing Existing Banks to Inner Cities
165
  • Shared Delivery Systems are Increasingly Common in Other Industries
166
  • Shared Financial Institution Delivery Systems
167
  • Two Types of Shared Branches
169
  • The Evolution of the Shared Branch
169
  • How the Shared Branch Works
170
  • The Feasibility of the Shared Branch Concept
171
  • Implementation of a Shared Branch Strategy
172
  • A Dissenting and Protesting View on the Shared Branch
175
  • Overtown's Good News, Bad News, Ironies, and Lessons
180
  • Conclusion: Where Will the First Shared Bank Branch be Located?
183
9 New Rules and Tools for the CRA Strategist   185
  • The New CRA Library
185
  • Scheduling and Disclosure of New CRA Exams
186
  • Community Contact Strategies
191
  • Understanding the Loan-To-Deposit Ratio
192
  • Census Geographies in the New CRA
201
  • The LMI Focal Point of the New CRA
203
  • LMI Data for the New CRA
204
  • HMDA and the New CRA
209
  • Small Business and Farm Data Under the New CRA
213
10 Small Bank Strategies for the New CRA:  Exam Procedures and Ratings Analyses     

219

  • Multiple Levels of Analysis of Small Bank New CRA Strategies
219
  • 80-20 Rule Works for Small Banks Too
219
  • Previous Research on Small Bank CRA Performance
220
  • IBAA Succeeds with a Separate and Diluted New CRA Standard
220
  • OCC's Unpublished Examiner Guidelines
222
  • Small Bank Ratings Matrix
233
  • Four Key Ratios for the Streamlined Small Bank Exam
234
  • Performance Level Ratings Matrix
235
  • Relevant Benchmarks and Comps
235
  • Summary of Small Bank Exam Procedure
236
  • Method of Present Analysis of Small Bank Exams
236
  • Examiner Sampling Procedures
237
  • New CRA Ratings Analysis of Small Bank Exams
242
  • PE Quality and Quantity
250
  • Fair Lending Violations Under the New CRA
252
  • The "Old" CRA Spirit Lives On!
253
  • Complaints Under the New CRA
253
  • Community Contacts Infrequent and Inconsistent
255
  • Optional Investment and Service Tests
255
11 Small Bank Strategies for the New CRA:  Performance Test Ratio Analyses

259

  • Performance Test Ratios in the Small Bank Exam
259
  • Individual Performance Test Benchmarks
259
  • Test 1 -- LTD Ratio Analysis
261
  • Test 2 -- AA Concentration Ratio Analysis
269
  • Test 3 -- LMI Borrower Ratio Analysis
275
  • Test 4 -- LMI Geography Ratio Analysis
289
12 Small Bank Strategies for the New CRA:  Grade Inflation and Regression Analyses    

299

  • Previous CRA Research on Grade Inflation
299
  • New Grade Inflation Methodology for a New CRA
300
  • Inflation Analysis Methodology
300
  • CRA Grade Deflation
302
  • Inflation in Performance Test Ratings
306
  • Evaluating Overall Rating Inflation Based on Regulatory Guidelines
311
  • Evaluating Overall Rating Inflation Based on the Analysis of Individual Test Inflation
316
  • The Worst CRA Examiners in America
335
  • The Worst CRA Exams in America

338

  • Using Inflation Analysis to Evaluate New CRA Research

340

  • Results of Regression Analysis of Small Bank Exams

343

13 Large Retail Bank Strategies for the New CRA  

355

  • Large Banks Held to a Larger Standard
355
  • Large Retail Bank Rating Matrices
356
  • Who Opted in Early Under the New CRA?
360
  • New CRA Ratings
362
  • Why Did Banks Opt in Early Under the New CRA?
363
  • New CRA Data Availability Problems
364
  • New CRA Exam Procedures
365
  • Overview of Banks Opting in Early Under the New CRA
366
  • Method of Analysis of the Lending Test
368
  • Results of Analysis of the Lending Test
379
  • Method of Analysis of the Investment Test
386
  • Results of Analysis of the Investment Test
386
  • Method of Analysis of the Service Test
404
  • Results of Analysis of the Service Test
411
  • Summary of Inflation Analysis of Large Retail Bank Exams
415
14 Limited Purpose and Wholesale Bank Strategies for the New CRA  

421

  • Need for a Special CRA Test for Special Purpose Banks
421
  • New Subjectivity with the New CD Test
421
  • Who Applied for Special Purpose Bank Designations?
424
  • Limited Purpose vs. Wholesale Banks
428
  • Processing Special Purpose Banks Requests at the FDIC vs. OCC
429
  • Processing Special Purpose Bank Requests at the FED and OTS
430
  • The "International Bank Loophole"
431
  • Wholesale Bank Designation by OCC Saves Bank From Likely NI Rating
432
  • Unwritten Rules for Special Purpose Banks?
433
  • FDIC vs. OCC Disparate Treatment of Nearly Identical LPB Applications
437
  • A CRA Greek Tragedy Averted
439
  • Lack of Information on Two OTS Denials
440
  • Bronx Community Group Protests Three LPB and WB Designations
441
  • Overview of Banks Analyzed in the CD Test
448
  • Method of Analysis of the CD Test
452
  • Results of Analysis of the CD Test
459
  • Summary of Inflation Analysis of Special Purpose Bank Exams
470
15 Strategic Plan Strategies for the New CRA  

475

  • Whose Idea was This, Anyway?
475
  • How Strategic Plans Differ from Other New CRA Exam Procedures
476
  • Bankers Vote on the Least Attractive New CRA Exam Procedure
477
  • Who Submitted Strategic Plans?
478
  • Why Banks Submitted Strategic Plans
480
  • Withdrawn Strategic Plans
482
  • Why 99.7% of Banks and Thrifts Did Not Submit Strategic Plans
486
  • Citibank's CRA Strategic Plan Slipups
488
  • Northern Trust's "Most Favored Bank" Status at the FED Helps First SP Approval
491
  • The FED's Plans to Allocate Credit in Ohio and West Virginia
492
  • The FED Finally Gets Something Right on CRA
494
  • FDIC Pokes Credit Allocation Holes in Swiss Avenue State Bank's Plan
495
  • OCC's Double Standard in a Tale of Two (Kansas) Cities
498
  • Household Bank Uses Strategic Plan to "Beat" the New CRA
502
  • Method of Analysis of Strategic Plans
504
  • Results of Analysis of Strategic Plans
506
  • Potential for Grade Inflation With Strategic Plans
518
  • GAO Criticizes Regulators' Own Strategic Plans!
519
16 Conclusions and Recommendations on New CRA Strategies  

545

  • Introduction
545
  • Major Conclusions on the New CRA
545
  • Major Recommendations for the New CRA
550
  • Recommended Strategies for Small Bank Exams
554
  • Recommended Strategies for Large Retail Bank Exams
556
  • Recommended Strategies for Limited Purpose and Wholesale Bank Exams
559
  • Recommended Strategies for Strategic Plans
562
  • Top Ten New CRA Mistakes by Banks
564
  • Top Ten New CRA Mistakes by Community Groups
565
  • Top Ten New CRA Mistakes by Regulators
566
   Appendices

569

  • Appendix 1: CRP Proposals for CRA Reform
571
  • Appendix 2: CRA Cost/Benefit Matrix
575
  • Appendix 3: FDIC Regions
576
  • Appendix 4: FED Districts
577
  • Appendix 5: OCC Districts
578
  • Appendix 6: OTS Regions
579
  • Appendix 7: LMI Median Family Income Data for MSAs and Nonmetropolitan Portions of States for 1990 and 1996
581
  • Appendix 8: Financial Institutions Participating in the Department of the Treasury's Minority Bank Deposit Program as of November 14, 1997
589
  • Appendix 9: Glossary of CRA Acronyms
595
   Index

597

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Copyright 2017 by Kenneth H. Thomas, Ph.D.