Why are Banks Always Sponsoring Community Events?
A few months ago, as I was starting to compile Impactful Local Businesses for our Business Directory (check it out here if you haven’t seen it yet!), I went through the sponsors of local events in my community to see what business owners were donating money for community events. However, one type of business that I constantly saw sponsoring community events was BANKS. I didn’t fully understand at first why that was. However, after looking into it further, I learned about the Community Reinvestment Act (CRA), which requires banks to do a certain amount of banking services to low & moderate-income areas, volunteer their time training low and moderate-income members of the community about financial literacy and donate a certain amount of money to causes in their community. Although there is no exact amount of money or time that banks are required to donate, the more they prioritize this work, the higher their CRA rating.
Want to see what banks in your area are doing most for the community? Generally, many of these banks have information about their donations and volunteering on their website and social media pages. However, if you really want to dig into their exact numbers and see their latest CRA rating, it is public information that is available on your state’s .gov website. For example, here is the link for Massachusetts banks and credit unions. To see their work in the community, open up the CRA rating for a certain bank and scroll down to the “Community Development Test” portion of the rating towards the bottom. That will tell you information about how many loans they’ve given regarding public housing, total dollars donated, whether their employees are involved in nonprofit boards, and much more. It’s important to note that although the CRA applies to all banks federally, only some states impose CRA laws on credit unions. Massachusetts is one of those states so that’s why you will see credit unions on their CRA rating list.
A last quick note about banks versus credit unions. Generally, credit unions are a more community-focused choice because they are nonprofits and they are member-owned meaning you have more say in how they do things. However, credit unions may not always have all the services that you are looking for in a financial solution. If that is the case and you plan to work with a bank, but want to work with a community-focused bank that gives back to your local community, check out their CRA rating!
