Demystifying CRA : Leveraging Banking Partnerships - PowerPoint Presentation

1. Demystifying CRA :Leveraging Banking Partnerships

2. What Will We Cover Today?What is CRA?Why is CRA Important?How is CRA Measured?Community Development PurposeWhat Banks Are Looking For …Examples of Impactful PartnershipsBe Flexible Enough to PivotEssentials of Leveraging Bank PartnershipPresenters:Victor M. RamirezVP / CRA OfficerCesar TrellesVP / CommunityDevelopment Officer

3. What is CRA?Purpose of Community Reinvestment ActEncourages banks to help meet the credit and deposit needs of the communities in which they do business in, including low- and moderate-income (LMI) geographies, individuals, small businesses, consistent with safe and sound banking operationsRegulates and measures how well banks respond to these needs by providing loans, investments and services within the banks Assessment AreasRequires banks to provide and disclose certain information to the public as part of the CRA Public File

4. Why is CRA Important?A CRA Performance Evaluation (PE) is the process used by regulators to assess the Bank’s response to community needs under the CRA. The results of the PE are factored into applications to open a branch, merge with another institution.The Banks CRA Rating is the only regulatory rating that is public. CRA Regulators include: FDIC (non-Federal Reserve member state chartered banks)Federal Reserve Bank (state chartered member banks)Office of the Comptroller of the Currency (national charter banks)The Bank’s CRA Plan includes a Community Needs Assessment to determine the primary needs of the communities and residents where the Bank conducts business, and drives CRA activitiesThe CRA Plan includes qualitative input from community-based organizations through surveys and interviewsQuantitative data such as demographics and economic trends is also used to identify focus areas

5. How is CRA Measured?Banks are evaluated using three Performance Tests:Lending (50%)Service (25%)Investment (25%)The CRA Regulators provide one of Four Ratings:Outstanding Satisfactory Needs to Improve Substantial Noncompliance

6. Community Development Purpose To be qualified for CRA: Lending, service and investments activities must have the following PRIMARY PURPOSE of Community Development (CD) “Hooks”:Community services targeted to LMI individuals (education, childcare, health, social services);Affordable housing (including multifamily rental housing) for low- and moderate-income (“LMI”) individuals;Economic development providing financing to small businesses or farms (includes job creation or retention for LMI individuals or in LMI areas;Activities that revitalize or stabilize LMI geographies, designated disaster areas, or designated distressed / underserved middle income areasWhat determines LMI (Low- and Moderate-Income)?Low-income means an individual income that is less than 50% of the Area Median Income (AMI).Moderate-income means an income that is between 50 – 80% of AMI.

7. What Banks Are Looking For … It’s More Than PhilanthropyBanks provide charitable contributions and much more. Develop a full relationship w/ a bank and leverage additional resources:Human Resources: Volunteers, Board and Advisory CommitteeCapital Resources: Loans and InvestmentsFinancial Resources: Grants, other funding resources (i.e. FHLB)Intellectual Resources: Program Development, Capacity Building and Marketing, HR & IT Assistance

8. Examples of Impactful PartnershipsBoard member of a faith-based CDC located in East Los Angeles providing community services, small business training and financial empowerment to community membersDeveloped an Employment Readiness Program for jobseekers to acquire critical skills, resources and confidence to obtain and retain living wage jobs.Created a Workplace Mentoring Program where CBB associates partnered with high school youth for 13 weeks providing financial literacy and other soft skills preparing them for college/career.Developed the Resilient Leaders Non-Profit Capacity Building Program in partnership with USC to providing leadership and organizational development training to non-profit leaders

9. Be Flexible Enough to PivotPrepare for the unexpected. The COVID-19 Pandemic took the Nation by storm. Citizens Business Bank took immediate action to serve communities and small businesses in need.▪ Community Needs Assessment Survey addressing COVID-19 needs was distributed to 75 community organizations. The results helped to shape the direction of our CRA Plan.▪ Swift response was taken to approve and deploy charitable contributions targeting COVID-19 assistance.▪ Payroll Protection Program (PPP) was launched to assist thousands of clients secure funds.▪ Virtual Volunteer Programs were created to support social-distancing.

10. Essentials of Leveraging Bank PartnershipsBanks are focused on supporting Community-Based Organizations (CBOs). Strong CBOs have recognized the benefit of working closely and purposefully with banks.Developing a strong relationship with a bank is critical, as recently demonstrated during the Payroll Protection Program (PPP).

11. Risk Management DivisionVictor M. Ramirez | Vice President, CRA OfficerP 909.483.7291| C 909.294.0320vmramirez2@cbbank.com Cesar Trelles I Vice President, Community Development OfficerP 310.436.3486 ctrelles@cbbank.comCRA TEAM CONTACTSThank you and God Bless!