§__.28 – 1
Q: Are innovative lending practices, innovative or complex qualified investments, and innovative community development services required for a “satisfactory” or “outstanding” CRA rating?
A1. No. The performance criterion of “innovativeness” applies only under the lending, investment, and service tests applicable to large institutions and the community development test applicable to wholesale and limited purpose institutions. Moreover, even under these tests, the lack of innovative lending practices, innovative or complex qualified investments, or innovative community development services alone will not result in a “needs to improve” CRA rating. However, under these tests, the use of innovative lending practices, innovative or complex qualified investments, and innovative community development services may augment the consideration given to an institution’s performance under the quantitative criteria of the regulations, resulting in a higher performance rating. See also Q&A § .26(c)(4) – 1 for a discussion about responsiveness to community development needs under the community development test applicable to intermediate small institutions.
Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016