Question 14
Can banks receive CRA service test consideration for processing Paycheck Protection Program (PPP) or other pandemic-focused loan applications and related loan servicing activities? (new FAQ added March 8, 2021)
Response 14
The CRA regulatory criteria for the service test do not include loan(7) processing and servicing activities for retail loans originated by the bank. Additionally, the agencies generally consider building new lending platforms and technical assistance provided to borrowers during a loan application process to be activities that banks engage in during the normal course of doing business. Therefore, the agencies will not extend CRA Service Test consideration for PPP-related activities.
The agencies do recognize the Paycheck Protection loan program is responsive to community credit needs. Therefore, these activities will be considered under the CRA Lending Test when evaluating flexible or innovative lending programs offered by the bank.
(7) The retail service test criteria include the current distribution of branches, the bank’s record of opening and closing branches, the availability and effectiveness of alternate systems for delivering retail banking services, and the range of services provided. See 12 CFR _. 24(d) for details.
Originally published in the “Community Reinvestment Act (CRA) Consideration for Activities in Response to the Coronavirus Pandemic Frequently Asked Questions (FAQs)” on May 27, 2020 and updated on March 8, 2021 by the Board of Govenors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.