Industry Letter

Potential CRA and Business Opportunities

March 22, 2010

To Financial Institutions

Across New York State, quality nonprofit organizations and local governments provide critical financial education and counseling services on issues pertaining to budgeting, saving, and successful bank account management. Collaboration with recognized service providers offers the potential for favorable consideration under the Community Reinvestment Act (“CRA”) and valuable opportunities to open accounts for underserved individuals.

These nonprofit organizations are often located in underserved communities with substandard access to mainstream financial services, and may provide a secure, appropriate location to help connect unbanked or underbanked residents to banking and credit union products and services.

The New York State Banking Department (“the Department”) encourages you to consider partnering with nonprofit financial empowerment organizations to increase your deposit revenue, promote CRA, and assist un- and underbanked individuals in taking their first steps towards asset building and accessing traditional banking services.

Many community-based organizations are eager to partner with a financial institution to offer their clients a facilitated opportunity to open a bank account. Your institution can offer the opportunity to start the process of opening a bank account at the location in which the community organization delivers services.

A suggested process for working with a nonprofit financial empowerment organization to open bank accounts is outlined below:

  1. Staff of the financial empowerment organization assists the consumer in choosing a financial institution and identifying an appropriate account.
  2. Staff of the financial empowerment organization assists the consumer in completing the account opening application.
  3. The financial empowerment organization will fax, or e-mail the completed application, unless it can be submitted online, together with copies of the required identification documents to the institution.
  4. The financial institution verifies the identification of the consumer and, assuming no issues arise, contacts the organization by email, fax, or telephone with the consumer’s account number and the bank’s routing number.
  5. No money is exchanged in the account verification process.
  6. The financial institution then contacts the consumer directly with additional account information and disclosures.
  7. Once funds are deposited into the consumer’s account, the account is considered open and the institution has gained another customer.

Under CRA regulations, banks can receive favorable consideration in the investment test (GRBB §76.9), or service test (GRBB §76.10) for qualifying activities.

For more information on finding opportunities to be involved with financial counseling and education organizations in your community, please contact the Department’s Deputy Superintendent for the Consumer Services Division, Dianne E. Dixon at 212-709-3591.



Richard H. Neiman
Superintendent of Banks
New York State Banking Department