Q: § __.24(e) – 2: In evaluating community development services, what quantitative and qualitative factors do examiners review?
A: The community development services criteria are important factors in the evaluation of a large institution’s service test performance. According to the regulation, the Agencies evaluate the extent to which the financial institution provides community development services as well as the innovativeness and responsiveness of such services. Examiners consider both quantitative and qualitative aspects of community development services during the evaluation. Examiners assess quantitative factors to determine the extent to which community development services are offered and used. The review is not limited to a single quantitative factor. For example, quantitative factors may include the number of
• low- or moderate-income participants;
• organizations served;
• sessions sponsored; or
• financial institution staff hours devoted.
Examiners will also consider qualitative factors by assessing the degree to which community development services are innovative or responsive to community needs. See Q&As § __.21(a) – 4 and § __.21(a) – 3. These performance criteria recognize that community development services sometimes require special expertise and effort on the part of the institution and provide benefit to the community that would not otherwise be possible. Such an assessment will depend on the impact of a particular activity on community needs and the benefits received by a community. See Q&A § __.28(b) – 1. For example, a financial institution employee’s unique expertise and service on the board of a community organization may demonstrate these qualitative factors when the employee’s ongoing engagement significantly improves the products, services or operations of the community development organization.
Examiners will consider any relevant information provided by the institution and from third parties that documents the extent, innovativeness, and responsiveness of community development services.
This Interagency Q&A, and others, was released in July 2016.
The 2016 Q&As consolidates and supersedes all previously published “Interagency Questions and Answers Regarding Community Reinvestment,” and were noted as being effective immediately. They may be found here: http://www.ffiec.gov/cra/qnadoc.htm