The Community Reinvestment Act (CRA) requires banks regulated by the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve Board (FRB) to make investments that support the lives of low-and moderate-income (LMI) households in the areas they serve. Bank of China NY (BOC-NY) is the largest Chinese bank and one of the leading foreign wholesale banks operating in the U.S. BOC-NY tasked the SIPA Capstone team with providing strategic recommendations to improve their CRA rating in the next examination. Under the CRA framework, BOC-NY’s assessment area is comprised of eleven counties within the New York, New Jersey, and Pennsylvania metropolitan regions. A bank’s performance is judged based on the growth of its support for the LMI community according tothe three main pillarsof the CRA: investment, lending, and community service.

For this project, the SIPA Capstone team conducted comprehensive research on 11 selective wholesale banks, the regulatory requirements, and the COVID-19 impact on the CRA reform. After analyzing peer banks’ CRA performance, the team conducted onsite and online interviews with 9 representatives from Community Development Finance Institutions (CDFIs) and relatable wholesale banks. The research conducted a comparative analysis of four best-practice banks and determined the most suitable recommendations that can both meet the bank’s CRA requirements as well as maximize the benefit to the local LMI communities. Finally, the report provided recommendations that apply not only to Bank of China NY but to foreign wholesale banks in general as well.