Identifying the needs of your Community Reinvestment Act (CRA) assessment areas is a first step toward increasing business and meeting your community’s specific credit needs. ADI performs comprehensive Community Credit Needs Assessments (CCNAs) that evaluate lending, housing, community development, revitalization/stabilization and economic development opportunities in the institution’s Reasonably Expected Market Area (REMA).
These detailed assessments encompass quantitative analysis and qualitative research, including aggregate and peer mortgage lending performance review and personal community outreach. By conducting a CCNA, your institution can uncover varying sets of needs across the market, based on neighborhood differences. This information, in turn, helps identify specific products and initiatives that would be most effective in the region.
ADI’s comprehensive CCNAs allow lenders to:
- Identify common threads that draw residents together within the REMA
- Evaluate aggregate and peer mortgage lending patterns
- Analyze demographic and socioeconomic characteristic of personal lending patterns
- Survey community organizations that assist underserved neighborhoods and residents
Assessments can target certain segments of a community, such as those with low mortgage loan penetration or a high concentration of minority and/or low-income census tracts. Furthermore, CCNAs provide lenders with opportunities to enhance the lender’s presence in their REMAs, based on those identified credit needs. The outcome of ADI’s research includes recommendations for loan products, educational programs, credit policy considerations, and marketing strategies to best address the identified needs.
ADI uses a Five-Step Plan to create each lender’s CCNA:
- Organize tract-level market segmentation data
- Identify distinctive tract segments
- Augment quantitative data with qualitative data
- Develop community profiles
- Draft and deliver final report
Given CCNAs’ historical importance under the CRA, their increasing relevance regarding Fair Lending, and regulators’ recent demands for institutions to conduct CCNAs to address redlining findings, these assessments have a significant role in a financial institution’s compliance management system.
ADI’s consultants have extensive experience in analyzing data and proposing effective measures to meet strategic business and regulatory objectives. To learn more about how ADI can meet your organization’s objectives, contact us at info@adiconsulting.com, or click the button below.
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