Federal regulatory body assesses poor Community Reinvestment Act ratings for banks in Ohio and Illinois
In a recent evaluation period spanning from January 2021 to December 2023, Ohio-based First Federal Savings & Loan Association of Lorain received a "needs to improve" Community Reinvestment Act (CRA) rating from the Office of the Comptroller of the Currency (OCC). Similarly, Palos Heights, Illinois-based United Trust Bank was also given a "needs to improve" CRA rating by the OCC during the evaluation period covering January 2020 to December 2022.
First Federal, with approximately $512 million in assets and seven branches, primarily focuses on home lending products such as purchase, refinance, home improvement, construction loans, home equity lines of credit, and credit cards. The main line of business for First Federal is the origination of 1-4 family residential mortgage loans. Additionally, First Federal owns a nonbank real estate management company, Lake Erie Financial Services.
During the evaluation period, First Federal made 10 community development donations totaling $13,000. These donations were aimed at benefiting low- and moderate-income individuals and households, affordable housing, and revitalization or stabilization in low-income areas. However, First Federal did not originate any community development loans within any assessment areas during the evaluation period.
United Trust Bank, with about $168 million in assets and one branch, specialises in loan and deposit products with a focus on residential real estate loans. The bank operates through five loan production offices: one in Illinois, two in Florida, one in Ohio, and one in Tennessee. Unfortunately, United Trust Bank did not originate any community development loans during the evaluation period, nor did they make any home mortgage loans to low- or moderate-income individuals between 2020 and 2021.
The OCC's evaluation for First Federal specifically calls out the lender on the community development front. United Trust Bank, on the other hand, was also operating under an enforcement action during the evaluation period. The enforcement action ordered United Trust Bank to improve weaknesses in its financial performance.
It's worth noting that neither First Federal nor United Trust Bank responded to requests for comment regarding these evaluations.
For those interested in obtaining the recent CRA ratings for these two financial institutions, it may be necessary to consult directly with the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, or the respective bank regulatory agencies, or visit official CRA performance evaluation websites such as the FDIC's Institution Directory or the Consumer Financial Protection Bureau (CFPB) resources, which regularly publish CRA exam results for banks and savings associations.
In light of the CRA evaluation period spanning from January 2021 to December 2023, First Federal Savings & Loan Association of Lorain may consider expanding its focus beyond home lending products towards personal-finance education, wealth-management, and investing, to address the community development concerns highlighted by the OCC. The enforcement action ordered upon United Trust Bank during its evaluation period (January 2020 to December 2022) suggests a need for improvement in its financial performance, perhaps necessitating a reevaluation of its business strategy, exploring avenues such as community development loans and investments, as well as supporting low- and moderate-income individuals in home mortgage lending.
