June 30, 2020

Industry Letter: Alert Regarding Amendments to the New York Community Reinvestment Act

To All Banking Institutions Subject to the New York Community Reinvestment Act:

New York State recently enacted amendments to the New York Community Reinvestment Act (CRA), Section 28-b of the New York Banking Law (NYBL).  This Industry Letter is a reminder to covered banking institutions, as defined in Section 28-b, of the amendments and a notification that the New York State Department of Financial Services (the Department) will make related changes to its CRA examination process in response to these amendments.  While the Department recognizes that banking institutions are focused on addressing immediate effects of the COVID-19 pandemic, given that these amendments are effective for examinations of 2020 activity, the Department is issuing this Industry Letter  now so that banking institutions can begin planning for upcoming Department CRA examinations and requests for information.

The recent amendments to the CRA require the Department to consider several aspects of banking institutions’ activities with respect to minority- and women-owned businesses.  In particular, NYBL § 28-b(3)(a) now directs the Department to consider “the record of performance of the banking institution in helping to meet the credit needs of its entire community, including … minority-_and women-owned businesses, consistent  with safe and sound operation of the banking institution” in CRA performance evaluations.  In addition, the factors the Department must consider “in assessing a banking institution’s record of performance” include “the banking institution’s participation, including investments, … in technical assistance programs for small businesses and minority- and women-owned businesses” (NYBL § 28-b(3)(a)(8)) and the “banking institution’s origination of … minority-_and women-owned business loans within its community or the purchase of such loans originated in its community” (NYBL § 28-b(3)(a)(9)).

The amendments were effective as of January 11, 2020. Therefore, as part of the Department’s CRA examinations covering calendar year 2020 and beyond, the Department will request information regarding banking institutions’ lending and other programs, including technical assistance programs, related to minority- and women-owned businesses.  In order to begin evaluating banking institutions’ record of performance concerning minority- and women-owned businesses, the Department expects to request related data from banking institutions later this year.  Consequently, the Department urges banking institutions to prepare in advance for the Department’s upcoming information requests.

The Department issued a separate Industry Letter today that describes circumstances in which institutions may receive credit for activities undertaken in response to the COVID-19 pandemic. Numerous reports and studies have found that people of color and minority- and women-owned businesses have been disproportionately impacted by COVID-19. The Department urges institutions to undertake activities that assist people of color and minority- and women-owned businesses impacted by COVID-19 in connection with implementing new programs to meet the obligations of the recent CRA amendments.

For guidance purposes only, the Department has created a spreadsheet with sample information requests concerning minority- and women-owned businesses.  Broadly, these sample requests concern the types of minority- and women-owned businesses loan programs at covered banking institutions, the number and dollar amount of loans originated and purchased under such programs for each of the past three years, and information on specific loans to minority- and women-owned businesses.

The Department invites comment from covered banking institutions as to the nature and availability of information related to minority- and women-owned businesses that would best fulfill the Department’s obligations under these amendments to the CRA.  Covered banking institutions may submit comments to [email protected].




Brian H. Montgomery, Deputy Superintendent
New York State Department of Financial Services