Chicago Area Bank Hit With Unusual Censure Over federal Community Reinvestment Act

Crain's Chicago Business reports:

Federal regulators hit an Oak Park community bank for failing to comply with the federal Community Reinvestment Act, a highly unusual censure.

Community Bank of Oak Park River Forest, drew a rating of “substantial non-compliance” with the law that requires banks to lend and invest in low- and moderate-income neighborhoods. That's the worst CRA rating possible and very rare.

Over the past 12 months, the Federal Deposit Insurance Corp. has rated only two other banks nationwide so harshly, agency records show. Over the past ten years, just 14 of more than 7,500 banks nationwide have been rated substantially non-compliant with the CRA by the four federal bank regulatory agencies, according to Chicago-based National People's Action, a non-profit fair lending advocacy group.

Community Bank of Oak Park River Forest's transgression is particularly surprising in light of its home community. The 15-year-old bank, with $352 million in assets, is located in near west suburban Oak Park, known for racial diversity and left-leaning politics.

It's time to separate banking from state.