Many large ILCs are chartered in Utah and are evaluated on their CRA performance in Salt Lake City, even though they lend nationally. The result is a saturated market for community development lending and investment in Salt Lake City. At the same time, other areas in Utah and beyond have important community development opportunities that may go unmet.
At a minimum, revised CRA regulations should allow banks with this type of business model to expand CRA activities beyond the area surrounding its branch so that the community and economic development needs of more underserved communities can be met. Branches are important vehicles for reaching small business customers and low-income consumers, but they are not the only way.