It’s not uncommon in my experience to hear bankers complain about Community Reinvestment Act compliance. You have to follow the law, so how can you take advantage by turning it into an opportunity? I encourage you to take a different perspective – make lemonade from lemons.
We all know why the CRA was passed, what it’s intended to do, and where you can get information on it from FDIC. But, how can I take a set of government requirements and make it better for business?
Doing CRA right requires a cohesive plan for strategic outreach, appropriate products and services with reasonable pricing and access, whether digital or physical. It’s more than just checking the boxes to make some politician happy. Of course, be sure to check the boxes but truly engage communities in a way to grow your business and bottom line.
Vetter helps with your regulatory compliance documentation, including CRA. Learn more here.
If you offer financial education courses in low- to moderate-income areas, do you have the right offers for the attendees, as well as education? Tailor mortgage, credit card and other offers to the community – your audience. Are you targeting the right customers in these areas? Make sure your brand becomes part of the community and get your message out there to earn a return for your efforts. Your program can ultimately go from cost center to profit center, and that’s just the start.
Like I said earlier, it’s about creating a cohesive program. Actually invest in the community. Many banks will do a few training courses, maybe fund the building of a new park, or partner with Community Development Financial Institutions. Sure, these will get you compliant, but can they grow your business? Be active! Run programs that will earn your CRA compliance, but also market to your community bank and draw in a new segment. Use CRA help drive parts of your business to improve your community and the people within it.
Consider modern demographics and psychographics: Volunteerism is growing leaps and bounds. Younger generations’ volunteer numbers are on the rise, according to the Corporation for National and Community Service, spanning more than 1.5 billion hours of service. Not only is getting involved helping the community rewarding (and help with compliance), it’s a great way to find local talent and boost your current employees’ morale. A study by Deloitte showed employees are “twice as likely to rate their corporate culture as very positive” if their company participates in volunteer activities. And wouldn’t you want to do business with a company that has happier employees who treat customers well? These employees become even more valuable to your business and help drive your marketing engine via word of mouth – plus attract additional top talent. It’s these little perks that can add up to really move your business forward.
I understand CRA is a beast, and it takes substantial work to be compliant but it’s also simply the cost of doing business today. Try a different perspective. Look at CRA as an opportunity. You have to do it, it’s the law. But if you do it right, your investors, customers, employees and community will thank you for it with an Outstanding CRA rating (and credits doesn’t hurt either).
Vetter can help you reach more consumers in more places. Contact us today!