The power of a flexible CRA team: How to roll with the punches while remaining compliant

If you trust your team members to take your CRA program to the next level, chances are you can.

By Jaidyn Crookston

When you think of the Community Reinvestment Act, “flexibility” is probably not the first term that springs to mind. But the truth is that when it comes to the CRA, flexibility is key.

Rigid CRA programs don’t give your bank the leeway it needs to make a real impact and grow your program. In fact, an inflexible CRA program is the best way to stunt your growth and lag behind other financial institutions in your area.

While banks follow strict rules and regulations that can be quite rigid, it’s important to do everything in your power to build a flexible CRA program that can respond to situations as they arise – while ensuring you remain secure and make sound banking decisions.

Stay flexible with regulatory changes

As you build a flexible CRA program, keep in mind that regulatory changes are coming. We don’t yet know what the final rules will be, but we have some ideas (check out this 30-page summary from the Federal Reserve).

Regardless of regulatory changes, it’s important to remain flexible in these uncertain times. For example, the proposal suggests that partnerships with financial institutions could become even more important for community development in the future. If your institution has not yet partnered with a CDFI, it is time to pursue those partnerships. If you stay flexible, you could create some effective partnerships for your financial institution that will help your CRA program and the bank as a whole.

Communicate with your team and let them know it’s okay to change direction or update processes that worked in the past. This is the time to explore new approaches, try something out of the ordinary, and prepare to adapt your program.

You should also work to maintain a good relationship with your regulators, especially as new regulatory proposals are finalized and come into effect. Talk to your supervisor regularly and ask, “Hey, what do you think about this?” If you already do, fine — that’s a sign of a strong relationship.

Keep your team relaxed

No matter how big or small your CRA team is, everyone needs to know that it’s okay to make mistakes and try new things. Staying flexible means being responsive to suggestions from employees, community members and regulators. And don’t get stuck in old habits (as long as your program stays compliant). And urge your regulators to consider any investment, loan, or service you believe should qualify for CRA credit because you know your community better than anyone. You won’t always win the debate, but it’s worth a try.

If a team member has an idea for a better way to extract data from community development loans, give it a try! Leaving room for ideas creates a team that comes to you when they need help and isn’t afraid to speak their mind. When your team is worried about following the status quo and doing everything exactly as it’s been taught, it leaves no room for creativity or innovation. And creativity and innovation will take your CRA program to the next level.

Even the best CRA program will always be a masterpiece, but if you stay flexible and focus on what’s best for your community (while following safe and sound banking practices), things will fall into place. Your team must be ready to deal with anything that comes their way.

Roll with the punches

If your CRA program is to remain flexible, you must learn to deal with the blows. That CD loan you hoped would fall under the CRA actually doesn’t? That’s okay; on to the next. The financial education course you’ve been planning for days fell through because of a scheduling problem? Switch quickly and change moderators if possible. If that’s not possible, shake it off and start planning another great event.

Not every problem will have an obvious solution, but if you keep your options flexible and roll the punches, chances are your CRA program is in order. And this canceled event will still have an impact next time. If something goes wrong, just forgive yourself, change tactics, and get back out there. Your community needs you.

Automate your process

It’s much easier to be flexible when you don’t have to manage every part of your CRA program. Instead of spending all your time tracking and managing your CRA data, try to automate this process. This will help you stay compliant and spend more time doing what you love – serving your community.

The more time you spend in your community, the more you’ll see what’s going on and the better able you are to turn an underperforming program into something that is making a real impact. Not every program you start will be a huge success or qualify for CRA points, but to stay flexible you need to spot the mistakes and learn from them.

Hiding in your office to track and manage CRA data, plan events, and log employee volunteer hours is a waste of valuable time that you spend building connections in the community and learning first-hand see what the community members need. Automating your process gives you more time to spend in the community.

Don’t forget to have fun

CRA is often portrayed as a difficult, joyless job. But if you’re not having fun, you’re doing it wrong. Yes, running an effective CRA program, achieving the desired rating, and ensuring that your bank has a significant impact on the community is challenging, but that doesn’t mean it has to be boring.

There are many fun ways to grow your CRA program and impact your community. Start a financial education program with fun activities and events. Turn mining data from community development loans into friendly office competition. Create a hilarious video series that teaches community members how to invest, budget, and save for retirement. There are so many ways to have fun as a CRA team while staying flexible and compliant.

If you’re part of a small or newly established program, it may be easier to stay flexible than when your program is already ingrained in employees’ minds. New programs have the chance to start fresh from the beginning and be flexible. However, if you’re running an already established program, you need to move past your employees’ previous expectations and show them how to function as a flexible team. This can mean speaking to board members and persuading them to change lending standards while making sure they understand what falls under the CRA. The more flexible your board is, the more flexible you and the rest of the bank can be.

Not everything will go right for you or your program. And a flexible program will make it much easier to adapt during tough times. And the more you can adapt, the better you can serve and make a difference to your community members.

Jaidyn Crookston is Manager of Digital Marketing and Content at Kadince, a company that develops community engagement software for financial institutions.