Which of the following institutions is exempt from the coverage of CRA?
Click on the arrows to vote for the correct answer
A. B. C. D.B
The Community Reinvestment Act (CRA) is a federal law that requires banks and other financial institutions to help meet the credit needs of the communities they serve, particularly low- and moderate-income neighborhoods. The law applies to banks and thrifts that are insured by the Federal Deposit Insurance Corporation (FDIC) or the Office of the Comptroller of the Currency (OCC).
In this question, we are asked to identify which of the given institutions is exempt from the coverage of CRA. Let's review each option:
A. State National Bank of Ashgrove, a $15 million bank in a rural community, not located in an MSA: This bank is located in a rural community and not in a Metropolitan Statistical Area (MSA), which means that it may be exempt from certain reporting requirements under the CRA. However, it is important to note that exemption from reporting requirements does not necessarily mean exemption from CRA compliance.
B. Trust Company, Inc., an institution offering only trust services located in a large urban area: This institution offers only trust services and is not a bank or thrift, which means it is not subject to the CRA.
C. ACME Savings Association, a federal thrift institution located in a medium-sized Midwestern city, included in an MSA: This thrift institution is located in an MSA and is therefore subject to the CRA.
D. First National Bank, a $250 million bank located in a rural area, not in an MSA: This bank is located in a rural area and not in an MSA, which means that it may be exempt from certain reporting requirements under the CRA. However, like option A, exemption from reporting requirements does not necessarily mean exemption from CRA compliance.
Based on the options provided, the institution that is exempt from the coverage of CRA is option B, Trust Company, Inc., since it offers only trust services and is not a bank or thrift. However, it is important to note that other laws and regulations may apply to this institution depending on its activities and the types of clients it serves.