Is responding in a bank's best interest?

Action Item

Carefully weigh the pros and cons of responding when evaluating community group questionnaires:

  • Is it in the bank's best interest?
  • How will the response be used?
  • Will it further the bank's outreach and advocacy efforts?
  • Are there possible negative consequences?

Community Group Questionnaires

Recently, a number of our clients have received questionnaires from community groups asking about bank initiatives targeting low- and moderate-income and minority communities. These questionnaires frequently request detailed information about lending, investments and services, as well as operational issues such as hiring practices and Board composition.

As a threshold matter, each bank should carefully evaluate whether responding to such a questionnaire is in its best interest. That decision will be dictated by a number of factors, including whether the bank intends to engage in expansionary activities requiring regulatory approval in the near future.

How Will The Response Be Used?

If a bank decides to respond to a community group questionnaire, it should recognize any responses it provides eventually may be disclosed to the public or may be used in ways that could be detrimental to the institution. Moreover, banks responding to such questionnaires should ensure their responses do not contradict other information that may previously have been disclosed to the public or its regulators.