If an institution is not generating satisfactory numbers, it must take affirmative steps to reach out into the community and provide the services. In short, it is not enough for such an institution to stay within its own walls, even if it is meticulously careful about not discriminating against those who walk through its doors.

When federal CRA examiners evaluate the lending performance of an institution, they look at several indicators. They examine the loan to deposit ratio and investment practices of the institution to determine whether the institution is lending out a sufficient amount of the funds it has collected as deposits or is otherwise investing sufficiently in CRA qualified investments. Federal examiners also look at the percentage of loans and qualified investments which are made within the institution's assessment area as an indicator of whether the institution is meeting the credit needs of its assessment area or is directing its funds elsewhere. Taken together, the use of these tests strongly encourages financial institutions to lend and invest in the areas around their offices.

With regard to service and investment activities, institutions will receive CRA credit for activities directed toward low and moderate income census tracts or toward low and moderate income individuals. This credit may be earned whether or not the activities occur within the institutions' assessment areas.

The federal examining agencies (Federal Reserve, FDIC and OCC) conduct CRA examinations on a rolling basis throughout the year. At the conclusion of the CRA exam, the federal examiners will give one of four ratings to the institution: outstanding, satisfactory, needs to improve, or substantial non-compliance. Institutions which receive ratings of "needs to improve" or "substantial non-compliance" may have their applications for branches and mergers denied on that basis. For most institutions, the ability to branch and merge is a very important factor in maintaining the competitive position of the institution.

Following each examination, an examination report is written, reviewed and approved by the agency, and then sent to the institution. The rating given in the report remains confidential until 30 days after the report is sent to the institution, a delay which provides the institution an opportunity to appeal the rating. At the end of the thirty days, provided there is no appeal, the rating becomes public. In addition, each CRA examination report contains a public portion which may be read by members of the public and should be available upon request from the public file of the institution.