These changes are intended to reduce the costs borne by smaller banks and to increase flexibility while still achieving the community development objectives of CRA. To target examination resources and to limit the burden of on-site reviews, the Federal Reserve also has increasingly relied on automated off-site monitoring tools.
For example, since the late 1990s, the Federal Reserve has supervised many small bank holding companies using an off-site review program. We support this program with a targeted monitoring system that seeks to identify parent company and nonbank issues that may adversely affect affiliated insured depository institutions.