Azure GPT-4 Analysis of the New CRA: Part 2 / Blogs / Perficient

The following information was generated by utilizing the Azure GPT-4-32k variant, which is part of the Azure OpenAI Service. Comparable to the publicly accessible ChatGPT, Azure GPT-4 offers equivalent accuracy in solving problems.  

The advantages of using Azure GPT-4-32k includes: 

• Context Size: Available in 128K context and 32K context variants. 

• • Larger context size, better suited for detailed discussions. 

• Cost: More cost-effective in terms of input and output pricing. 

• • Ideal for complex conversations, long-form content, and tasks requiring extensive context. 

 The AI tool was created by Perficient’s Generative AI Innovation Group which aims to drive innovation, connection and community to Perficient’s clients, colleagues, partners and investors while having a strong focus toward the emergence of generative AI tools and capabilities, and the impact these technologies have in businesses today.  

 The AI Innovation Group is developing proofs of content (POCs) to help clients explore use cases for generative AI and to operationalize it through policies, advocacy, controls and enablement. The team set up a sandbox for Perficient’s Finance Services Center of Excellence (FS CoE), allowing them to analyze the newly revised, 1,300-page Community Reinvestment Act in mere seconds.  

 In our last blog, Azure GPT-4 Analysis of the New CRA: Part 1, we asked the Azure GPT software to generate a 1,000-word blog on the CRA. To provide us with a comparison and more depth, we asked:  

• “Generate a 1,500 word blog on the CRA” 

Title: Understanding the Community Reinvestment Act (CRA) and Its Implications 

The Community Reinvestment Act (CRA) is a landmark piece of legislation passed in 1977 to combat discriminatory lending practices and to ensure that banks serve the needs of their entire community, including low-and moderate-income neighborhoods. The OCC, Federal Reserve Board, and FDIC jointly oversee the CRA to ensure banks are meeting these obligations. 

A crucial aspect of the CRA involves the assessment of a bank’s record in meeting the credit needs of its community. Upon completing this examination, the agencies prepare a written evaluation of the bank’s performance. This evaluation includes information about the bank’s branches, their location, services provided at them, and the bank’s CRA Performance Evaluation. It’s important to note that the CRA evaluations are not just a regulatory requirement but also serve as a reflection of a bank’s commitment to its community. 

Public involvement is a significant component of the CRA process. The agencies publish a list of banks scheduled for CRA examinations in the upcoming two calendar quarters, 30 days in advance of each calendar quarter. This advance notice allows the public to review and provide meaningful comments on a bank’s performance before a CRA examination. 

Written comments are a valuable tool in the CRA process. They are submitted directly to a bank or to an agency and are available both for consideration and response by a bank and for public review. This engagement allows the public to voice concerns or provide feedback on a bank’s efforts to meet community credit needs. Some of these comments may address concerns about a bank’s performance in distressed and underserved areas. Such feedback can be instrumental in shaping a bank’s future community engagement efforts. 

However, it’s worth noting that comments are not without challenges. For instance, it may not be feasible or appropriate to consider social media posts as part of a bank’s performance context. The agencies believe it could be challenging to determine whether remarks made by members of the public on social media were intended or appropriate for them to consider in the bank’s CRA evaluation. Therefore, written comments, particularly those submitted through the proper channels, are given more weight in CRA evaluations. 

The agencies also publish a nationwide list of the banks and savings associations scheduled for CRA examination in each quarter. This transparency empowers the public to engage with the banks and make written comments about their performance in helping to meet community credit needs. These comments are considered by the OCC or FDIC, as appropriate, in their evaluation of the bank’s CRA performance and may be made public. 

As the digital age continues to evolve, so does the way we engage with our banks. Hence, for CRA evaluations to be truly reflective of a bank’s performance, they must adapt and change with the times. Therefore, the agencies have made provisions for the public to submit comments electronically. 

The CRA continues to evolve to meet the changing needs and realities of the banking sector. In September 2020, the Board issued a CRA Advance Notice of Proposed Rulemaking (ANPR) requesting public comment on an approach to modernize the CRA regulations. The proposed changes aim to strengthen, clarify, and tailor the regulations to reflect the current banking landscape and better meet the core purpose of the CRA. 

In conclusion, the CRA is an essential piece of legislation that promotes fairness and equality in banking. It ensures that banks meet the credit needs of their entire community, including low-and moderate-income neighborhoods. The public’s involvement in the CRA process is crucial in holding banks accountable and ensuring they meet their obligations. As the CRA continues to evolve and modernize, it remains a critical tool in ensuring equitable access to credit and banking services for all communities. 

Read More: Regulatory Risk and Compliance in Financial Services

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This blog was co-authored by: Andrea Milano, Noelle Reinhold, AbdulKadir Sheikh, Lalit Diwate, Akshay Suryawanshi, Akshay Admane, Raj Merchant, and Ashish Chakole