Correction

Federal regulators are not proposing to change the way banks and thrifts choose which, if any, mortgage affiliates they want included in their Community Reinvestment Act review, as reported Friday by MortgageWire.However, the regulators are proposing to expand and clarify that a bank's CRA score would be adversely affected by findings that the affiliate engaged in discriminatory, illegal, or abusive lending practices in the bank's assessment area. The bank could no longer just take positive credit for affiliate lending activities, according to Comptroller John Hawke, Jr. "You have to take the bad as well as the good," he told reporters. The CRA proposed rule, which the Federal Deposit Insurance Corp. agreed to issue for a 60-day comment period, also seeks comment on whether discriminatory, illegal, or abusive lending practices by an affiliate outside the bank's assessment should be counted against the institution's CRA score. But the proposal does not currently recommend such a change. The CRA proposal also provides relief for small banks and thrifts with up to $500 million in assets from full-scale CRA examinations and exempts them from the CRA investment test. The current small-bank exemption is $250 million in assets. Large institutions were disappointed to find that no changes are proposed to their CRA investment test.