PROVIDENCE – Two banks operating in southeastern Massachusetts received positive grades from the Federal Deposit Insurance Corp. during recent evaluations for compliance with the Community Reinvestment Act.
The act, passed in 1977, encourages insured banks and thrifts to meet local credit needs, including those of low- and moderate-income neighborhoods. Congress requires disclosure of evaluations and ratings of banks subject to the CRA.
HarborOne Bank, headquartered in Brockton but with a commercial loan office in Providence, received an “outstanding” rating. The FDIC said, “An institution in this group has an excellent record of helping to meet the credit needs of its assessment area(s), including low- and moderate-income neighborhoods.” HarborOne got a rating of “high satisfactory” in its last evaluation, in August 2014.
North Easton Savings Bank, headquartered in Easton, received a “satisfactory” rating in meeting the credit needs of its area. Its last evaluation, from August 2014, also was “satisfactory.”
In the evaluation, three areas of activity are rated: lending, investment and service.
Criteria for the lending test include volume of lending; the distribution of loans among low-, moderate-, middle- and upper-income borrowers and businesses of different sizes; the number and dollar amount of community-development loans; the use of innovative and/or flexible lending practices.
Criteria for the investment test include the dollar amount of qualified investments; the innovativeness or complexity of investments; the responsiveness of investments to credit and community-development needs; the degree to which qualified investments are not routinely provided by private investors.
Criteria for the service test include distribution of the bank’s branches among geographies of different income levels; the record of opening and closing branches, particularly branches that primarily serve low- or moderate-income people; the availability and effectiveness of alternate systems for delivering retail banking services; the extent and innovativeness of the bank’s community-development services.
A copy of an individual bank’s CRA evaluation is available directly from the bank, as required by law, or from the FDIC’s Public Information Center and at www.fdic.gov.
Mary Lhowe is a PBN contributing writer.