In fact, of the 35 banks evaluated, 4 were given an "outstanding" and 31 were recognized as satisfactory. There were no "needs to improve" or "substantial noncompliance" ratings.
Grade inflation has run amok at the OCC for some time.
The OCC gave an outstanding rating to First National Bank of Audrain, located in Mexico, Missouri. This is in spite of the fact that FNB Audrain made no loans (zero) to low-income borrowers. There were plenty of low-income people in Mexico, Missouri. The OCC reports that it can characterize 16 percent of families in the area as low-income. FNB of Audrain made no loans in low or moderate income census
The CRA is supposed to make sure that banks meet the credit needs across all strata of a community.
First Merit Bank was given an outstanding. Here are some comments made by the OCC examiner about First Merit's home mortgage lending in low and moderate income areas in one of its assessment areas (Canton, Ohio):
The distribution of home refinance loans is poor. The percentages of loans in low- and moderate-income areas are well below the percentages of owner-occupied housing units located in those neighborhoods.
The distribution of home purchase loans is poor. The percentage of loans in moderate-income neighborhoods is well below the percentage of owner-occupied housing units located in
And here is what the examiner had to say about First Merit's lending in Cleveland:
The distribution of home purchase loans within the Cleveland AA is adequate. The percentage of loans in low-income neighborhoods is significantly below the percentage of owner-occupied housing units located in the AA’s low-income areas, and FirstMerit’s 2007 low-income market share was well below its overall home purchase market share in the AA. In moderate-income areas, the percentage of loans is below the percentage of owner-occupied housing units located in those neighborhoods.
Now, consider the result. First Merit got an Outstanding. That is "OUTSTANDING!!!" Imagine a big rubber stamp, positioned at the end of a printing press. "Outstanding!"