The public evaluations of CRA performance, together with the fact that the performance evaluations are considered by regulators in connection with a bank or thrift’s application to merge or acquire another institution, have provided incentives for depository institutions to lend in all parts of the neighborhoods they serve, including lowand moderate-income areas.
The CRA regulations were amended in 1995 to make the evaluation standards more performanceoriented while still taking into account the diversity of business strategies among depository institutions and the variety of economic and demographic characteristics of neighborhoods. As a result, four different evaluation methods were established, and each method considers the context in which the institution operates.