NYDFS discusses state CRA exams and Covid-19 considerations
On June 30, NYDFS issued two industry letters aimed at reminding New York regulated banking institutions of their responsibilities under New York State’s Community Reinvestment Act (NYCRA) with respect to minority-and women-owned businesses, as well as opportunities to receive NYCRA credit for Covid-19 pandemic activities.
The first industry letter discusses the state’s recent amendments to the NYCRA, which were effective January 11, 2020, and require NYDFS to consider “several aspects of banking institutions’ activities with respect to minority- and women-owned businesses.” These include, among other things, (i) “‘the banking institution’s participation, including investments, … in technical assistance programs for small businesses and minority- and women-owned businesses’”; and (ii) “‘banking institution’s origination of … minority-_and women-owned business loans within its community or the purchase of such loans originated in its community.’” NYDFS notes that later this year, it will begin to request information regarding programs related to minority- and women-owned businesses in order to begin evaluating banks under the new amendments. NYDFS also provided a spreadsheet with sample requests for guidance.
The second industry letter describes the circumstances in which regulated institutions may receive NYCRA credit for activities taken in response to the Covid-19 pandemic, which the announcement notes is consistent with the guidance federal regulators have issued on the same topic (covered by InfoBytes here and here).