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close of business November 10, 1990, and December 11, 1992; IDFI
conducted an examination as of March 14, 1992. In all three
cases, Peoples received a uniform composite rating of one (1),
the highest possible rating. Institutions earning a uniform
composite rating of one (1) are basically sound in every respect
and are considered to be resistant to external economic and
financial disturbances and more capable of withstanding the
vagaries of business conditions than institutions with lower
ratings. Nevertheless, in their reports with respect to the 1992
examinations, both FDIC and IDFI expressed concern over Peoples'
liability sensitive position and cautioned that earnings could be
negatively impacted during a period of rising interest rates.
The FDIC also expressed concern over shortcomings in various
policies and procedures of Peoples, including financial
reporting, underwriting, and budgeting, although apparently not
of sufficient magnitude to affect Peoples' top rating.
3. Community Reinvestment Act
The Community Reinvestment Act (CRA), title VII of the
Housing and Community Development Act of 1977, Pub. L. 95-123,
sec. 802, 91 Stat. 1147, currently codified at 12 U.S.C. sec.
2901 (1994), was enacted by Congress to encourage depository
institutions to help meet the credit needs of the communities in
which they operate, including low- and moderate-income
neighborhoods, consistent with safe and sound banking operations.
CRA requires that each insured depository institution’s record in
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