Community Reinvestment Act (CRA) Updates

At this year’s RegTech Enable, executives at top banks from Bank of America to Capital One spoke about the need for the financial services industry to focus first on its competencies and seek technology partners to accelerate industry-wide innovation. Mortgage bankers attempting to be technical experts on all facets of their operations will struggle to keep up, leading to a vicious cycle: outdated systems replacing outdated systems.

To ensure innovation, FIs can focus on results for their customers or improving processes and culture, while inviting technology vendors to partner on keeping pace with regulation and IT. The pairing of technology with human-driven change provides the optimal pathways to error reduction, efficient processes, and lower costs. Transformation comes from keeping this balance current.

The pairing of technology with human-driven change provides the optimal pathways to error reduction, efficient processes, and lower costs. Transformation comes from keeping this balance current.

In this issue, we discuss how updates to the Community Reinvestment Act (CRA) could equip banks to continue their investments into LMI communities despite the rise of digital banking. The USDA shares how single-close construction loans can reenergize investment into America’s rural communities. This is disruption coming from a different direction: a shift in policy or the retooling of an existing loan structure to meet a national housing need.

With innovation, there is no finish line. Constructing an ecosystem of forward-looking staff and service / tech partnerships is necessary for staying on top of consumer needs, regulations, markets, and the competition. Like building a healthier lifestyle, prescribing everyday solutions rather than one-time band-aids can yield a business infrastructure which is always forward-looking.

Like building a healthier lifestyle, prescribing everyday solutions rather than one-time band-aids can yield a business infrastructure which is always forward-looking.

Perhaps that’s a resolution we as an industry should add to our New Year’s list.