Article by Rick Wartzman. Synopsis by Creative Investment Research. Copyright, 1996.
MetroBank is a small, Asian-American bank in Houston. The article cites the efforts made by the bank to provide credit across cultural lines. The 1995 Minority Bank Survey, our quarterly minority bank, thrift and brokerage firm study cited in the article, revealed that, of 66 Asian-owned banks and thrifts in the U.S., 13 received "Needs to Improve" ratings on their most recent CRA (Community Reinvestment Act) review.
The Community Reinvestment Act, passed in 1977, encourages financial institutions to meet the credit needs of all communities served, including low and moderate income areas. The Act was initially designed to eliminate redlining, the practice of denying credit to minority areas or to low income areas.
Regulatory agencies review the performance of banks in meeting the credit needs of the community served. Bank are ranked on CRA performance. The four grades are:
- Outstanding
- Satisfactory
- Needs To Improve
- Substantial Noncompliance.
80% of banks receive at least a Satisfactory CRA grade.
As the article noted, MetroBank makes a special effort to reach out to all members of the community.
