Fifth Third Bank Falls Short of Their CRA Obligations
Earlier this month Cincinnati-based Fifth Third Bank received news that they have failed to meet the standards set forth the in the Community Reinvestment Act of 1977 (CRA). The CRA, which was enacted to address decades of banking negligence and redlining in low-income and minority communities, assesses banks primarily in three areas – lending, investment, and service. Failure to provide low-and moderate-income communities satisfactory access to these three areas can compromise their ability to open new branches or acquire other banks.Despite receiving scores of “high satisfactory” and “outstanding” in all three areas, the Federal Reserve has chosen to downgrade Fifth Third’s CRA score from “satisfactory” to “needs to improve.” The reason for the downgrade in the face of good performance in lending, investment, and service is violation of other laws on the books that protect borrowers, including the Equal Credit Opportunity Act and the Consumer Financial Protection Act. One example cited by the Fed, settled last year with the Consumer Financial Protection Bureau, was Fifth Third’s practice of allowing car dealerships to raise interest rates for minority car buyers regardless of creditworthiness.The bank, with over 1,200 branches in nearly a dozen Southeastern and Mid-Atlantic states, is the 16th largest in the nation. Fifth Third is only one of two banks in the United States with over $100 billion in assets to receive this score.