Reuters Blog: Regulatory arbitrage of the day, CRA edition

National People’s Action have a fascinating report out today about America’s big four banks — Citi, JPM, Wells Fargo, and Bank of America — and how they all seem to be able to easily obtain “outstanding” ratings on their CRA exams.

The CRA, of course, is the Community Reinvestment Act, and it exists to ensure that America’s largest banks are doing a good job of providing the same (and not higher-priced) products in poor areas as they do in rich ones. Regulators have been examining fewer banks of late under the CFR, but one thing remains constant: the number of “outstanding” ratings is always very small as a percentage of the whole. And yet all four of the big banks always seem to be able to get that rating. How come?

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