A practical guide to capturing CRA service credits for banks

The Community Reinvestment Act (CRA) was enacted in 1977 and serves to encourage banks to meet their community’s credit needs, particularly those of low- and moderate-income (LMI) communities. To incentivize banks to meet these needs, certain bank activities are eligible to receive CRA credits. These credits, or points, are then used to calculate the bank’s overall CRA rating which is made available to the public and considered by monitoring agencies during mergers or expansions.

Identifying and tracking CRA service credits are often largely untapped opportunities for banks. That is particularly true if your bank has corporate social responsibility (CSR) programs that also support your CRA efforts. If you have a software platform in place that tracks and reports on CSR initiatives like grantmaking, employee giving, and employee volunteering, you have a built-in mechanism for capturing CRA service credits that you might otherwise overlook.

In this guide, we’ll explore the connections between your CSR program and CRA service and how you can leverage software to track service to obtain more CRA service credits.

The alignment between CSR and CRA

In recent years, banks have started to build and execute their CSR programs in a much different way than in the past. Rather than viewing giving and service as a “responsibility,” CSR is seen as an opportunity to invest in local communities by creating a tangible impact. These investments can deliver demonstrable financial returns as well as improved brand equity, customer loyalty, and hiring. 

This new approach aligns well with CRA requirements. The top, most forward-thinking banks are paving the way with initiatives that they are tracking with CSR software and, at the same time, capturing for CRA service credit. 

Global needs, local imperatives

The need for corporate giving is greater than ever. For example, disasters associated with climate change alone cost the U.S. roughly $165 billion in 2022. This volatility means that large banks and corporations need to react to events on a national or global scale to make a positive change. At the same time, they must meet the local needs of LMI communities as required by the CRA.

Fortunately, the range of qualifying banking activities that meet the CRA service test has grown. Banks are becoming more innovative and creative in the services they provide to LMI communities. These activities can include areas like:

• Qualifying loans (typically made to small businesses and LMI communities)
• Financial literacy training
• Pro bono work for businesses and individuals
• Health and human services work
• Workforce readiness
• Nonprofit board service

With this expanding list of qualifying activities, your bank can weave together its CSR and CRA efforts to make the largest impact possible with your staff’s limited time and resources. CSR software helps you track these activities under one platform, ensuring nothing slips through the cracks.

Examples from our customers

Large banks like Wells Fargo and Bank of America have robust programs in place to give back to their communities. Bank of America employees, for instance, give more than $60 million annually to their communities through individual donations and matching gifts. These employee giving programs focus on meeting community needs, providing employee assistance, and aiding with disaster relief. 

In addition to employee giving programs, these banks donate to support local businesses, community centers, schools, neighborhoods, economic and workplace development, student leaders, and hunger relief. 

Wells Fargo and Bank of America both use Bonterra Corporate Social Responsibility's Giving & Matching solution (formerly CyberGrants) to execute their CSR programs while capturing their CRA activity. With this software in place, identifying and tracking data across this wide scope of activities is simple, making it easy to capture all service credits. So, how can you improve your own processes?

Steps your bank can take

We’ve created this practical guide with specific steps your bank can take to capture activity and maximize your CSR programs for CRA service credits:

• Add CRA eligibility questions to grant applications. For example, you might ask businesses applying for a grant if they fall within the small business size standards set by the Small Business Administration (SBA).
• Track all service and employee volunteer hours by CRA assessment area. If you provide services like school savings programs or foreclosure prevention counseling, make sure you track those service programs under the relevant assessment areas to ensure your bank gets credit.
• Consider your online seminars as a CRA service activity. Oftentimes, online programs provided to LMI groups are overlooked.
• Leverage nonprofit organization board service. Your bank’s executive team may commit time to local nonprofits by serving on boards. Make sure your CRA teams are aware of and actively tracking this service. A CSR platform allows employees to find available board service opportunities, express interest, log their service hours, and request a volunteer grant (if applicable).
• Integrate data sources. Your bank already has access to the sources of data — you just need to connect the dots to provide a full view of all CRA service activities.

These steps are a great starting point for making your bank’s existing CRA service-tracking processes more efficient. As you branch out into more innovative activities and expand CSR initiatives, be sure to look for additional ways you can maximize your programs.

Benefits of a robust CSR program

Studies show that 77% of consumers are motivated to purchase from or work with companies that are committed to making a positive difference through CSR. Those in the Millennial generation are more loyal to companies with strong CSR programs, and 41% of Millennial investors dedicate significantly more time and effort to researching a company’s CSR efforts compared to older generations. 

Bonterra Corporate Social Responsibility offers a single platform to manage all of your philanthropic giving. We help companies maximize their investment in CSR programs with software that allows them to achieve agile social impact. Banks with agile social impact can respond quickly to emerging needs, tightly align their programs and causes with corporate goals, report on the impact of their initiatives, and make compliance with the CRA simple.

To learn more, contact us.