# FDIC FIL-21-2005: Community Reinvestment Act Joint Notice of Proposed Rulemaking

> Federal · Agency guidance · Superseded

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL05021

## Section

- **Citation:** FDIC FIL-21-2005
- **Heading:** Community Reinvestment Act Joint Notice of Proposed Rulemaking
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** Superseded
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Community Reinvestment Act Joint Notice of Proposed Rulemaking

## Text

This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules
Federal Register
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Vol. 70, No. 47
Friday, March 11, 2005
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 25
[Docket No. 05–04]
RIN 1557–AB98
FEDERAL RESERVE SYSTEM
12 CFR Part 228
[Regulation BB; Docket No. R–1225]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 345
RIN 3064–AC89
Community Reinvestment Act
Regulations
AGENCIES: Office of the Comptroller of
the Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); and Federal Deposit
Insurance Corporation (FDIC).
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The OCC, Board, and FDIC
(collectively, ‘‘federal banking agencies’’
or ‘‘the Agencies’’) are issuing this
notice of proposed rulemaking that
would revise certain provisions of our
rules implementing the Community
Reinvestment Act (CRA). We plan to
take this action in response to public
comments received by the federal
banking agencies and the Office of
Thrift Supervision (OTS) on a February
2004 inter-agency CRA proposal and by
the FDIC on its August 2004 CRA
proposal. The current proposal would
address regulatory burden imposed on
some smaller banks by revising the
eligibility requirements for CRA
evaluation under the lending,
investment, and service tests.
Specifically, the proposal would
provide a simplified lending test and a
flexible new community development
test for small banks with an asset size
between $250 million and $1 billion.
Holding company affiliation would not
be a factor in determining which CRA
evaluation standards applied to a bank
igibility requirements for CRA
evaluation under the lending,
investment, and service tests.
Specifically, the proposal would
provide a simplified lending test and a
flexible new community development
test for small banks with an asset size
between $250 million and $1 billion.
Holding company affiliation would not
be a factor in determining which CRA
evaluation standards applied to a bank.
In addition, the proposal would revise
the term ‘‘community development’’ to
include certain community
development activities, including
affordable housing, in underserved rural
areas and designated disaster areas.
DATES: Comments must be received by
May 10, 2005.
ADDRESSES: Comments should be
directed to:
OCC: You should include OCC and
Docket Number 05–04 in your comment.
You may submit comments by any of
the following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• OCC Web Site: http://
www.occ.treas.gov. Click on ‘‘Contact
the OCC,’’ scroll down and click on
‘‘Comments on Proposed Regulations.’’
• E-mail Address:
regs.comments@occ.treas.gov.
• Fax: (202) 874–4448.
• Mail: Office of the Comptroller of
the Currency, 250 E Street, SW., Mail
Stop 1–5, Washington, DC 20219.
• Hand Delivery/Courier: 250 E
Street, SW., Attn: Public Information
Room, Mail Stop 1–5, Washington, DC
20219.
Instructions: All submissions received
must include the agency name (OCC)
and docket number or Regulatory
Information Number (RIN) for this
notice of proposed rulemaking. In
general, the OCC will enter all
comments received into the docket
without change, including any business
or personal information that you
provide. You may review comments and
other related materials by any of the
following methods:
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC’s Public
Information Room, 250 E Street, SW.,
Washington, DC. You can make an
appointment to inspect comments by
calling (202) 874–5043
out change, including any business
or personal information that you
provide. You may review comments and
other related materials by any of the
following methods:
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC’s Public
Information Room, 250 E Street, SW.,
Washington, DC. You can make an
appointment to inspect comments by
calling (202) 874–5043.
• Viewing Comments Electronically:
You may request e-mail or CD–ROM
copies of comments that the OCC has
received by contacting the OCC’s Public
Information Room at
regs.comments@occ.treas.gov.
• Docket: You may also request
available background documents and
project summaries using the methods
described above.
Board: You may submit comments,
identified by Docket No. R–1225, by any
of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• Fax: 202/452–3819 or 202/452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
except as necessary for technical
reasons. Accordingly, your comments
will not be edited to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper in Room MP–
500 of the Board’s Martin Building (20th
and C Streets, NW.) between 9 a.m. and
5 p.m. on weekdays.
FDIC: You may submit comments,
identified by RIN number by any of the
following methods:
• Agency Web site: http://
www.fdic.gov/regulations/laws/federal/
propose.html
to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper in Room MP–
500 of the Board’s Martin Building (20th
and C Streets, NW.) between 9 a.m. and
5 p.m. on weekdays.
FDIC: You may submit comments,
identified by RIN number by any of the
following methods:
• Agency Web site: http://
www.fdic.gov/regulations/laws/federal/
propose.html. Follow instructions for
submitting comments on the Agency
Web Site.
• E-mail: Comments@FDIC.gov.
Include the RIN number in the subject
line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
• Instructions: All submissions
received must include the agency name
and RIN for this rulemaking. All
comments received will be posted
without change to http://www.fdic.gov/
regulations/laws/federal/propose.html
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Federal Register / Vol. 70, No. 47 / Friday, March 11, 2005 / Proposed Rules
including any personal information
provided.
FOR FURTHER INFORMATION CONTACT:
OCC: Michael Bylsma, Director, or
Margaret Hesse, Special Counsel,
Community and Consumer Law
Division, (202) 874–5750; Karen Tucker,
National Bank Examiner, Compliance
Division, (202) 874–4428; or Patrick T.
Tierney, Attorney, Legislative and
Regulatory Activities (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW.,
Washington, DC 20219.
Board: William T. Coffey, Senior
Review Examiner, (202) 452–3946;
Catherine M.J. Gates, Oversight Team
Leader, (202) 452–3946; Kathleen C.
Ryan, Counsel, (202) 452–3667; or Dan
S
, Compliance
Division, (202) 874–4428; or Patrick T.
Tierney, Attorney, Legislative and
Regulatory Activities (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW.,
Washington, DC 20219.
Board: William T. Coffey, Senior
Review Examiner, (202) 452–3946;
Catherine M.J. Gates, Oversight Team
Leader, (202) 452–3946; Kathleen C.
Ryan, Counsel, (202) 452–3667; or Dan
S. Sokolov, Senior Attorney, (202) 452–
2412, Division of Consumer and
Community Affairs, Board of Governors
of the Federal Reserve System, 20th
Street and Constitution Avenue, NW.,
Washington, DC 20551.
FDIC: Richard M. Schwartz, Counsel,
Legal Division, (202) 898–7424; Susan
van den Toorn, Counsel, Legal Division,
(202) 898–8707; or Robert W. Mooney,
Chief, CRA and Fair Lending Policy
Section, Division of Supervision and
Consumer Protection, (202) 898–3911;
Federal Deposit Insurance Corporation,
550 17th Street, NW., Washington, DC
20429.
SUPPLEMENTARY INFORMATION:
Background
Advance Notice of Proposed
Rulemaking. In 1995, when the OCC,
the Board, the OTS, and the FDIC
(collectively, ‘‘federal banking and thrift
agencies’’ or ‘‘four agencies’’) adopted
major amendments to regulations
implementing the Community
Reinvestment Act, they committed to
reviewing the amended regulations in
2002 for their effectiveness in placing
performance over process, promoting
consistency in evaluations, and
eliminating unnecessary burden. (60 FR
22156, 22177, May 4, 1995). The review
was initiated in July 2001 with the
publication in the Federal Register of an
advance notice of proposed rulemaking
(66 FR 37602, July 19, 2001). The
federal banking and thrift agencies
indicated that they would determine
whether and, if so, how the regulations
should be amended to better evaluate
financial institutions’ performance
under CRA, consistent with the Act’s
authority, mandate, and intent
d in July 2001 with the
publication in the Federal Register of an
advance notice of proposed rulemaking
(66 FR 37602, July 19, 2001). The
federal banking and thrift agencies
indicated that they would determine
whether and, if so, how the regulations
should be amended to better evaluate
financial institutions’ performance
under CRA, consistent with the Act’s
authority, mandate, and intent. The four
agencies solicited comment on the
fundamental issue of whether any
change to the regulations would be
beneficial or warranted, and on eight
discrete aspects of the regulations.
About 400 comment letters were
received, most from banks and thrifts of
varying sizes and their trade
associations (‘‘financial institutions’’)
and local and national nonprofit
community advocacy and community
development organizations
(‘‘community organizations’’).
The comments reflected a consensus
that certain fundamental elements of the
regulations are sound, but demonstrated
a disagreement over the need and
reasons for change. Community
organizations advocated that the
regulations needed to be changed to
reflect developments in the industry
and marketplace; financial institutions
were concerned principally with
reducing burden consistent with
maintaining or improving the
regulations’ effectiveness. In reviewing
these comments, the federal banking
and thrift agencies were particularly
mindful of the need to balance the
desire to make changes that might ‘‘fine
tune’’ the regulations, with the need to
avoid unnecessary and costly disruption
to reasonable CRA policies and
procedures that the industry has put
into place under the current rules.
Joint Agency Regulatory Proposal to
Address Small Institution Regulatory
Burden and Illegal or Predatory Lending
Practices
ularly
mindful of the need to balance the
desire to make changes that might ‘‘fine
tune’’ the regulations, with the need to
avoid unnecessary and costly disruption
to reasonable CRA policies and
procedures that the industry has put
into place under the current rules.
Joint Agency Regulatory Proposal to
Address Small Institution Regulatory
Burden and Illegal or Predatory Lending
Practices. In February 2004, the federal
banking and thrift agencies issued
identical proposals to amend their
respective CRA regulations to increase
the limit on the asset size of institutions
classified as ‘‘small institutions’’ that
are eligible for streamlined CRA
evaluations and exempt from CRA data
reporting obligations. (69 FR 5729, Feb.
6, 2004). Under the current rule, a
‘‘small institution’’ is an institution that
has less than $250 million in assets and
is either independent or a member of a
holding company with less than $1
billion in assets. The four agencies
proposed to re-define a ‘‘small
institution’’ as one with fewer than $500
million in assets. The holding company
criterion would have been eliminated
under the proposal.
The commenters were deeply split on
the proposal. A majority of over 250
community bank commenters, and all of
the trade associations commenting on
behalf of community banks, urged the
federal banking and thrift federal
banking agencies to extend the proposed
burden relief to all institutions with
assets under $2 billion, or at least to all
institutions with assets under $1 billion;
a few favored the proposed $500 million
threshold. Virtually every one of over
250 community group commenters
strongly opposed changing the
definition of ‘‘small institution’’ or
exempting any more institutions from
the three-part test (lending, services,
and investments). These commenters
urged that the threshold not be changed
so that community development
activities continue to be evaluated, as
they are today, in banks with $250
million or more in assets
f over
250 community group commenters
strongly opposed changing the
definition of ‘‘small institution’’ or
exempting any more institutions from
the three-part test (lending, services,
and investments). These commenters
urged that the threshold not be changed
so that community development
activities continue to be evaluated, as
they are today, in banks with $250
million or more in assets.
The federal banking and thrift
agencies also proposed to revise and
clarify the regulations to provide that
evidence of certain abusive and illegal
credit practices will adversely affect an
agency’s evaluation of a bank’s CRA
performance, including evidence of a
pattern or practice of extending home
mortgage or consumer loans based
predominantly on the foreclosure or
liquidation value of the collateral by the
institution, where the borrower cannot
be expected to be able to make the
payments required under the terms of
the loan. The proposal clarified that a
bank’s evaluation will be adversely
affected by such abusive or illegal credit
practices regardless of whether the
practices involve loans in the bank’s
assessment area(s) or in any other
location or geography. It also provided
that a bank’s CRA evaluation can be
adversely affected by evidence of such
practices by any affiliate, if any loans of
that affiliate have been considered in
the institution’s CRA evaluation.
While commenters differed in their
reaction to many aspects of the
proposal, many commenters, including
community organizations and financial
institutions, opposed—as either
inadequate or inappropriate—the
provision that evidence of collateral-
based mortgage lending would
adversely affect a bank’s CRA
evaluation.
Recent OTS Rulemaking. On August
18, 2004, the OTS published a final rule
that expanded the category of ‘‘small
savings associations’’ subject to OTS
CRA regulations to those under $1
billion, regardless of holding-company
affiliation
ed—as either
inadequate or inappropriate—the
provision that evidence of collateral-
based mortgage lending would
adversely affect a bank’s CRA
evaluation.
Recent OTS Rulemaking. On August
18, 2004, the OTS published a final rule
that expanded the category of ‘‘small
savings associations’’ subject to OTS
CRA regulations to those under $1
billion, regardless of holding-company
affiliation. The OTS announced that it
was taking this action on July 16, 2004,
and that same day, the OCC and the
Board announced separately that they
would not proceed with their respective
proposals. The Board formally withdrew
its proposal. The OCC did not formally
withdraw its proposal, but did not adopt
it.
On November 24, 2004, the OTS
issued another proposed rulemaking to
revise the definition of ‘‘community
development’’ to permit consideration
of such activities in underserved non-
metropolitan areas, and to solicit
comment on the appropriate
consideration of such community
development activities in any areas
affected by natural disasters or major
community disruptions. The OTS
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1 Some commenters also noted that, under
existing regulations, small banks can elect to be
evaluated under the large bank lending, investment,
and service tests.
2 12 U.S.C. 2903.
further solicited comment on providing
substantial flexibility in the way that
CRA ratings are assigned for institutions
subject to the lending, investment, and
service tests (savings associations with
assets of $1 billion or more). Under the
OTS proposal, 50% or more of a large
savings association’s CRA rating would
be based on lending, and the remaining
percentage would be based on any other
type or types of CRA activity (services
or investments) that the association
elects to have evaluated
institutions
subject to the lending, investment, and
service tests (savings associations with
assets of $1 billion or more). Under the
OTS proposal, 50% or more of a large
savings association’s CRA rating would
be based on lending, and the remaining
percentage would be based on any other
type or types of CRA activity (services
or investments) that the association
elects to have evaluated. The OTS also
asked for comment on whether it should
eliminate the Investment Test entirely.
FDIC Proposal. On August 20, 2004,
the FDIC issued a new proposal on the
CRA evaluation of banks defined as
‘‘small.’’ (69 FR 51611, Aug. 20, 2004)
The FDIC’s new proposal would expand
the category of ‘‘small banks’’ to those
under $1 billion, regardless of any
holding-company size or affiliation. For
small banks with assets between $250
million and $1 billion, the FDIC
proposal would add to the five
performance criteria of the current
streamlined small bank test a new sixth
criterion taking into account a bank’s
record of community development
lending, investments, or services ‘‘based
on the opportunities in the market and
the bank’s own strategic strengths.’’
While these community development
activities would not be a separately
rated test, the FDIC requested comment
on whether it should apply a separate
community development test in
addition to the existing streamlined
performance criteria and on what
weighting the community development
test would have in assigning an overall
performance rating. The FDIC also
proposed to expand the definition of
‘‘community development’’ to include
activities that benefit rural areas and
individuals in rural areas.
The FDIC’s proposal generated
approximately 11,500 comment letters.
These comments were sent by a wide
spectrum of commenters, including over
4,000 from community bankers, over
1,500 from various community
organizations, and over 5,000 from
individuals
sed to expand the definition of
‘‘community development’’ to include
activities that benefit rural areas and
individuals in rural areas.
The FDIC’s proposal generated
approximately 11,500 comment letters.
These comments were sent by a wide
spectrum of commenters, including over
4,000 from community bankers, over
1,500 from various community
organizations, and over 5,000 from
individuals. As with the February 2004
interagency proposal, the commenters
were deeply divided on the issues
presented in the August proposal.
Nearly all of the comments received
from bankers and banking organizations
supported a change in the small bank
dollar threshold, primarily as a way to
reduce administrative burden. Bankers
were mixed on the community
development performance criterion.
Some supported a community
development criterion as an effective
compromise, while others opposed the
criterion altogether on one of two
grounds: (1) Community development
lending and investments are already
part of the loan-to-deposit performance
criterion assessing the level of lending
activity 1 or (2) community development
activities should be based on an overall
subjective assessment, not an artificial
test. Most of the banking commenters
opposed making the community
development test a separate test.
Community groups almost universally
opposed any increase in the small bank
threshold. These commenters asserted
that the burden argument made by
banks did not justify a change. This
group also uniformly opposed the
community development performance
criterion on the ground that permitting
banks to choose one or more lending,
investment, and service activities would
lead to cut backs in investments and
services currently required under the
large bank test. The community group
commenters generally supported a
separate community development test
t justify a change. This
group also uniformly opposed the
community development performance
criterion on the ground that permitting
banks to choose one or more lending,
investment, and service activities would
lead to cut backs in investments and
services currently required under the
large bank test. The community group
commenters generally supported a
separate community development test.
Commenters were mixed on the
addition of ‘‘rural’’ to the definition of
‘‘community development.’’ Some
supported the proposal because it
would permit CRA credit for such rural-
based activities as funding local water
projects, school construction, or
rehabilitation of a Main Street retail
district in rural areas lacking sufficient
financial resources. Many commenters
were concerned that the mere inclusion
of the phrase ‘‘individuals who reside in
rural areas’’ would permit banks to get
CRA credit for loans, investments, or
services to middle-class or wealthy
individuals.
Discussion
The CRA requires the federal banking
and thrift agencies to assess the record
of each insured depository institution in
meeting the credit needs of its entire
community, including low- and
moderate-income neighborhoods,
consistent with safe and sound
operation of the institution and to take
that record into account when the
agency evaluates an application by the
institution for a deposit facility.2
The federal banking agencies continue
to believe that it is both worthwhile and
possible to improve the CRA rules in
ways that reduce unnecessary burden
while at the same time maintaining and
improving the effective implementation
of the CRA. Moreover, we believe that
it is important to take steps at this time
to develop and propose rules to achieve
these goals, and to work toward
achieving standards that ultimately can
apply on a uniform basis to all banks
subject to the CRA
o improve the CRA rules in
ways that reduce unnecessary burden
while at the same time maintaining and
improving the effective implementation
of the CRA. Moreover, we believe that
it is important to take steps at this time
to develop and propose rules to achieve
these goals, and to work toward
achieving standards that ultimately can
apply on a uniform basis to all banks
subject to the CRA. Therefore, the
federal banking agencies request
comment on proposed regulatory
revisions that balance the objective of
providing meaningful regulatory relief
for additional community banks with
the objectives of preserving and
encouraging meaningful CRA activities
by those same banks.
As noted above, commenters were
divided on the merits of that portion of
the February 2004 and August 2004
proposals that would have increased the
limit on the size of banks that would be
eligible for treatment as a ‘‘small bank.’’
The comments in favor of the proposal
focused on the potential regulatory
relief for insured institutions, while
those opposed expressed concern that
the proposal would result in decreased
community development activities in
areas that are particularly in need of
credit and investment, notably rural
areas.
In light of these comments, the federal
banking agencies request comment on
this revised proposal. The new proposal
addresses both the comments from
community banks and comments from
community organizations. It responds to
community banks concerned about the
reduction of undue regulatory burden
by extending eligibility for streamlined
lending evaluations and the exemption
from data reporting to banks under $1
billion without regard to holding
company assets
on
this revised proposal. The new proposal
addresses both the comments from
community banks and comments from
community organizations. It responds to
community banks concerned about the
reduction of undue regulatory burden
by extending eligibility for streamlined
lending evaluations and the exemption
from data reporting to banks under $1
billion without regard to holding
company assets. It addresses the
concerns of community organizations
that urged the federal banking and thrift
agencies to continue to evaluate
community development participation,
by providing that the community
development records of banks between
$250 million and $1 billion would be
separately evaluated and rated, but
provides a more streamlined basis than
the current rule for doing so. It responds
to suggestions from both community
banks and community organizations
that the definition of ‘‘community
development’’ is too confined by
proposing a more flexible approach to
the types of community development
activities that would be considered, and
by expanding the definition of
community development activities in
underserved rural areas and designated
disaster areas. In short, the new
proposal tries to strike a balance
between burden reduction for
community banks and effective
evaluation of community development
by those banks.
The key differences between this
proposal and the February 2004
interagency proposal are three-fold.
First, as with the FDIC’s August 2004
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tries to strike a balance
between burden reduction for
community banks and effective
evaluation of community development
by those banks.
The key differences between this
proposal and the February 2004
interagency proposal are three-fold.
First, as with the FDIC’s August 2004
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3 This represents a change from the FDIC’s August
2004 proposal. In that proposal, FDIC proposed
amending the prong of the definition of community
development relating to community services. See 12
CFR 345.12(g)(2).
proposal, the new proposal would raise
the threshold for a ‘‘small bank’’ to
banks with assets of less than $1 billion,
not $500 million, regardless of any
holding company size or affiliation.
Unlike the prior proposals, the new
proposal would provide an adjustment
of the threshold for inflation, based on
changes to the Consumer Price Index.
Second, the new proposal would add
a flexible new community development
test that would be separately rated in
CRA examinations for banks with at
least $250 million and less than $1
billion in assets (these banks will be
referred to as ‘‘intermediate small
banks’’). Ratings for intermediate small
banks would be based on a rating on
this community development test and
on a separate rating for the streamlined
small bank lending test. An
intermediate small bank would not be
eligible for an overall rating of
‘‘satisfactory’’ unless it received ratings
of ‘‘satisfactory’’ on both the lending
and community development tests
‘‘intermediate small
banks’’). Ratings for intermediate small
banks would be based on a rating on
this community development test and
on a separate rating for the streamlined
small bank lending test. An
intermediate small bank would not be
eligible for an overall rating of
‘‘satisfactory’’ unless it received ratings
of ‘‘satisfactory’’ on both the lending
and community development tests.
Third, the definition of ‘‘community
development’’ would be expanded to
encompass: (1) Affordable housing for
individuals in underserved rural areas
and designated disaster areas (in
addition to low- or moderate-income
individuals) and (2) community
development activities that revitalize or
stabilize underserved rural areas and
designated disaster areas (in addition to
low- or moderate-income areas).3 The
current definition of ‘‘community
development,’’ which hinges on
targeting low- or moderate-income
people or census tracts, has been
criticized by community banks and
community organizations alike for
needlessly excluding rural areas that
often do not have census tracts that
meet the definition of ‘‘low- or
moderate-income.’’ Indeed, about 60%
of non-metropolitan counties lack such
low- and moderate-income tracts. As a
result, many rural areas in need of
community development activities are
not in low- or moderate-income tracts.
The current definition of ‘‘community
development’’ also does not explicitly
provide that it encompasses activities in
areas affected by disasters. For example,
there has been unnecessary uncertainty
about the CRA treatment of bank
revitalization activities in areas affected
by natural disasters such as hurricanes
or in, for example, the commercial and
residential areas surrounding the site of
the World Trade Center
ommunity
development’’ also does not explicitly
provide that it encompasses activities in
areas affected by disasters. For example,
there has been unnecessary uncertainty
about the CRA treatment of bank
revitalization activities in areas affected
by natural disasters such as hurricanes
or in, for example, the commercial and
residential areas surrounding the site of
the World Trade Center. Affordable
housing for individuals in underserved
rural areas and in designated disaster
areas, and activities that promote the
revitalization and stabilization of such
areas, such as for infrastructure
improvements, community services, and
small business development, are fully
consistent with the goals and objectives
of the CRA because these projects can
benefit the entire community, including,
but not limited to, low- or moderate-
income individuals or neighborhoods.
Size Threshold
Under the proposal, intermediate
small banks would no longer have to
report originations and purchases of
small business, small farm, and
community development loans. This
change would account for most of the
cost savings and paperwork burden
reduction for intermediate small banks.
The proposal also would annually
adjust the asset size for small and
intermediate small banks based on
changes to the Consumer Price Index.
Using an index to adjust dollar figures
for the effects of inflation is
commonplace, and is used in other
federal lending regulations, such as the
Home Mortgage Disclosure Act. 12
U.S.C. 2801 et seq.
Community Development Test for
Intermediate Small Banks
As stated above, comments were
mixed on the FDIC’s inquiry as to
whether the community development
test should be separated from the
current small bank test. Many industry
commenters preferred to have a
community development criterion,
which would permit a bank to engage in
one or more community development
activities, and opposed a separate
community development test
ediate Small Banks
As stated above, comments were
mixed on the FDIC’s inquiry as to
whether the community development
test should be separated from the
current small bank test. Many industry
commenters preferred to have a
community development criterion,
which would permit a bank to engage in
one or more community development
activities, and opposed a separate
community development test. On the
other hand, many community
organizations and others expressed
concern that the criterion was overly
flexible and would result in a narrow
focus that would ignore a broad range of
community needs, including
investments.
The OCC, FDIC, and Board believe
that the proposal for a separate
community development rating presents
an appropriate focus on community
development activities for intermediate
small banks and makes transparent the
weight that community development
performance receives in the overall
rating. Under the proposed community
development test for these
‘‘intermediate’’ small banks, community
development loans, qualified
investments, and community
development services would be
evaluated together, resulting in a single
rating for community development
performance. While the lending test for
small banks permits consideration of
community development lending and
qualified investments ‘‘as appropriate,’’
such activities by an intermediate small
bank generally would be considered
under the community development test.
An intermediate small bank’s rating for
community development would play a
significant role in the bank’s overall
rating, as would its rating on the
separate test of the bank’s lending
onsideration of
community development lending and
qualified investments ‘‘as appropriate,’’
such activities by an intermediate small
bank generally would be considered
under the community development test.
An intermediate small bank’s rating for
community development would play a
significant role in the bank’s overall
rating, as would its rating on the
separate test of the bank’s lending. To
ensure that community development
performance and retail lending are
appropriately weighted under the
proposal, and given the flexibility that
would be available to satisfy the
community development test through a
variety of activities, an intermediate
small bank would have to achieve a
rating of at least satisfactory on both
tests to be assigned an overall rating of
satisfactory.
The number and amount of
community development loans, the
number and amount of qualified
investments, and the provision of
community development services, by an
intermediate small bank, and the bank’s
responsiveness through such activities
to community development lending,
investment, and services needs, would
be evaluated in the context of the bank’s
capacities, business strategy, the needs
of the relevant community, and the
number and types of opportunities for
community development activities. The
federal banking agencies intend that the
proposed community development test
would be applied flexibly to permit a
bank to apply its resources strategically
to the types of community development
activities (loans, investments, and
services) that are most responsive to
helping to meet community needs, even
when those activities are not necessarily
innovative, complex, or new.
As noted in the February 2004
proposal, some community banks face
intense competition for a limited supply
of qualified investments that are safe
and sound and yield an acceptable
return. Competition for scarce
investments also may result in
‘‘churning,’’ or the repeated purchase
and sale, of the same pool of
investments
those activities are not necessarily
innovative, complex, or new.
As noted in the February 2004
proposal, some community banks face
intense competition for a limited supply
of qualified investments that are safe
and sound and yield an acceptable
return. Competition for scarce
investments also may result in
‘‘churning,’’ or the repeated purchase
and sale, of the same pool of
investments. To ‘‘fill the silo’’ of
investments for purposes of the CRA
investment test, these banks may have
made or purchased investments that
may not be meaningful or responsive to
the needs of their community, whereas
additional lending or provision of
services by the bank could have been
more responsive to local community
development needs. The OCC, FDIC,
and Board recognize that these
constraints may affect the investment
performance of particular banks, and
believe that a more flexible community
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4 Staff interpretations of ‘‘affordable housing’’ and
‘‘revitalization and stabilization’’ can be found in
Interagency Questions and Answers Regarding
Community Reinvestment, (66 FR 36620, 36625–
36626, July 12, 2001) (Q&A _.12(h)(1)–1, _.12(h)(4)–
1).
5 Under the definition of ‘‘low- or moderate-
income’’ census tract in the CRA regulations, 57
percent of non-metropolitan counties have no low-
or moderate-income tracts, compared to 13 percent
of metropolitan counties. The reason for this
disparity is that rural census tracts are drawn over
relatively large geographic areas, often having
relatively heterogeneous populations that, when
averaged, tend toward the middle. This leads to a
concentration of 72 percent of rural census tracts in
the middle-income category, which leaves a small
share (15 percent) in the low- and moderate-income
categories
ounties. The reason for this
disparity is that rural census tracts are drawn over
relatively large geographic areas, often having
relatively heterogeneous populations that, when
averaged, tend toward the middle. This leads to a
concentration of 72 percent of rural census tracts in
the middle-income category, which leaves a small
share (15 percent) in the low- and moderate-income
categories. Moreover, because most rural counties
have relatively few census tracts, the relatively few
low- or moderate-income rural census tracts are
distributed unevenly among rural counties. As
would be expected, they also appear to be
distributed unevenly among bank CRA assessment
areas. About 42 percent of non-metropolitan
assessment areas reported by large banks in 2003,
compared to 14 percent of the metropolitan
assessment areas they reported, lacked such tracts.
(The regulation requires large banks to report their
assessment areas; the assessment areas of small
banks are not required to be reported.)
development test for intermediate small
banks provides a better framework to
evaluate a bank’s capacity, the types of
investments that are reasonably
available in a bank’s community, and
how a bank fosters community
development goals in its assessment
areas.
As part of the proposed community
development test for intermediate small
banks, the OCC, FDIC, and Board also
anticipate that examiners would use
their discretion, using performance
context, to assign appropriate weight in
a bank’s current period rating to prior-
period outstanding investments that
reflect a substantial financial
commitment or outlay by the bank
designed to have a multi-year impact, in
addition to investments made during
the current examination cycle.
In providing this flexibility for
intermediate small banks, it is not the
intention of the federal banking agencies
to permit a bank to simply ignore one
or more categories of community
development
g investments that
reflect a substantial financial
commitment or outlay by the bank
designed to have a multi-year impact, in
addition to investments made during
the current examination cycle.
In providing this flexibility for
intermediate small banks, it is not the
intention of the federal banking agencies
to permit a bank to simply ignore one
or more categories of community
development. Nor would the proposal
prescribe any required threshold
proportion of community development
loans, qualified investments, and
community development services for
these banks. Instead, the OCC, FDIC,
and Board would expect that a bank will
appropriately assess the needs in its
community, engage in different types of
community development activities
based on those needs and the bank’s
capacities, and that it will take
reasonable steps to apply its community
development resources strategically to
meet those needs.
Under the proposal, retail banking
services provided by intermediate small
banks would no longer be evaluated in
a separate service test. Instead, services
for low- and moderate-income people
would be taken into account in the
community development test. Under
that test, the federal banking agencies
would consider bank services intended
primarily to benefit low- and moderate-
income people, such as low-cost bank
accounts and banking services such as
low-cost remittance services.
Giving banks more flexibility on how
to apply their community development
resources to respond to community
needs through a more strategic use of
loans, investments, and services is
intended to reduce burden and make the
evaluation of community banks’
community development records more
effective.
Community Development Definition
The regulations’ present definition of
‘‘community development’’ has been
criticized by community banks and
community organizations alike for
failing to recognize the unique
community development needs of
certain rural areas
nd services is
intended to reduce burden and make the
evaluation of community banks’
community development records more
effective.
Community Development Definition
The regulations’ present definition of
‘‘community development’’ has been
criticized by community banks and
community organizations alike for
failing to recognize the unique
community development needs of
certain rural areas. The definition covers
four categories of activities, three of
which (affordable housing, community
services, and economic development)
are defined in terms of the activity’s
targeting of low- or moderate-income
people or small businesses or farms, and
one of which (revitalization and
stabilization activities) is defined in
terms of its targeting of low- or
moderate-income census tracts. The
OCC, FDIC, and Board propose to
amend two of the categories—affordable
housing and revitalization and
stabilization activities—by adding
references to individuals in
‘‘underserved rural areas’’ and in
‘‘designated disaster areas.’’ 4
In response to the FDIC’s August 2004
proposal to revise the definition of
‘‘community development’’ to include
the provision of affordable housing to
individuals in rural areas (in addition to
low- or moderate-income individuals
under the current rule), several
commenters noted that the provision of
affordable housing was critical in
certain rural areas. Some community
organizations serving rural areas
commented that the CRA process
should promote affordable housing in
rural areas across the country.
As described in the ‘‘Request for
Comments’’ discussion below, the OCC,
FDIC, and Board seek comment on a
variety of approaches to identify the
community development needs of rural
areas
fordable housing was critical in
certain rural areas. Some community
organizations serving rural areas
commented that the CRA process
should promote affordable housing in
rural areas across the country.
As described in the ‘‘Request for
Comments’’ discussion below, the OCC,
FDIC, and Board seek comment on a
variety of approaches to identify the
community development needs of rural
areas. The approach reflected in the
proposed amendments is based on the
premise that the provision of affordable
housing—in addition to activities that
revitalize and stabilize underserved
rural areas—may meet a critical need of
individuals in certain underserved rural
areas, even if those individuals may not
meet the technical requirements of the
definition of ‘‘low- or moderate-income’’
in the current regulation. The proposed
amendment would clarify that bank
support of affordable housing that
benefits individuals in need of
affordable housing in underserved rural
areas will qualify as a community
development activity.
With respect to the current definition
covering revitalization and stabilization
activities, this category does not address
revitalization and stabilization activities
in most rural counties, since most rural
counties do not have any low- or
moderate-income census tracts.5 Under
the CRA regulation, a tract’s income
classification derives from its
relationship to the median family
income of the state’s rural, or non-
metropolitan areas as a whole, which
could be relatively low and declining.
Community banks and community
organizations have said that the tract-
income limitation has made the
definition of ‘‘community development’’
ineffective for addressing the needs of
rural areas that do not have low- or
moderate-income tracts, but are in
decline, have been designated for
redevelopment, or need revitalizing or
stabilizing
whole, which
could be relatively low and declining.
Community banks and community
organizations have said that the tract-
income limitation has made the
definition of ‘‘community development’’
ineffective for addressing the needs of
rural areas that do not have low- or
moderate-income tracts, but are in
decline, have been designated for
redevelopment, or need revitalizing or
stabilizing. This aspect of the proposed
amendment to the definition of
‘‘community development’’ is designed
to recognize the benefits of activities
that revitalize and stabilize underserved
rural areas that do not meet the
technical definition of ‘‘low- or
moderate-income’’ census tracts. Such
activities might include, depending
upon the circumstances, state or local
infrastructure bonds and loans to
construct healthcare facilities. They
would not include, however, activities
that benefit primarily higher-income
individuals in underserved rural areas
or rural areas that are not underserved.
In evaluating the responsiveness of
community development activities in
underserved rural areas, examiners
would give significant weight to factors
such as the extent to which low- or
moderate-income individuals benefited
from the activities.
Under the revised community
development definition, a ‘‘designated
disaster area’’ is an area that has
received an official designation as a
disaster area.
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nificant weight to factors
such as the extent to which low- or
moderate-income individuals benefited
from the activities.
Under the revised community
development definition, a ‘‘designated
disaster area’’ is an area that has
received an official designation as a
disaster area.
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6 Evidence of credit practices that violate other
laws, rules or regulations, including a federal
banking agency regulation or a state law, if
applicable, also may adversely affect a bank’s CRA
evaluation.
7 The FDIC’s August NPRM added individuals in
rural communities to the community services
category. Comments were mixed in response to this
part of that proposal. Some commenters expressed
the concern that a broader definition would permit
consideration of activities that benefit middle- and
upper-income individuals. On the other hand,
others stated that the regulations should recognize
that some rural communities lack financial
resources for economic and infrastructure
improvement such as school construction,
revitalizing Main Street, and maintaining or
improving water and sewer systems. Banks are
frequently called upon to help meet these needs. In
light of these comments, this proposal would not
change the definition of community development
regarding community services provided to low- or
moderate-income individuals. Rather, the proposal
recognizes that activities that revitalize and
stabilize underserved areas may also include many
activities that benefit rural residents. We also seek
comment on whether the definition of ‘‘community
development’’ should be amended to explicitly
include community services targeted to individuals
in undeserved rural and designated disaster areas
erate-income individuals. Rather, the proposal
recognizes that activities that revitalize and
stabilize underserved areas may also include many
activities that benefit rural residents. We also seek
comment on whether the definition of ‘‘community
development’’ should be amended to explicitly
include community services targeted to individuals
in undeserved rural and designated disaster areas.
Effect of Certain Credit Practices on
CRA Evaluations
The OCC, FDIC, and Board again
propose to revise the regulations to
address the impact on a bank’s CRA
rating of evidence of discrimination or
other illegal credit practices. The
regulations would provide that evidence
of discrimination, or evidence of credit
practices that violate an applicable law,
rule, or regulation, will adversely affect
an agency’s evaluation of a bank’s CRA
performance. The regulations also
would be revised to include an
illustrative list of such practices,
including evidence of discrimination
against applicants on a prohibited basis
in violation of, for example, the Equal
Credit Opportunity (15 U.S.C. 1691 et
seq.) or Fair Housing Acts (42 U.S.C.
3601 et seq.); evidence of illegal referral
practices in violation of section 8 of the
Real Estate Settlement Procedures Act
(12 U.S.C. 2607); evidence of violations
of the Truth in Lending Act (12 U.S.C.
1601 et seq.) concerning a consumer’s
right to rescind a credit transaction
secured by a principal residence;
evidence of violations of the Home
Ownership and Equity Protection Act
(15 U.S.C. 1639); and evidence of unfair
or deceptive credit practices in violation
of section 5 of the Federal Trade
Commission Act (15 U.S.C. 45(a)(1)).6
We believe that specifying examples of
violations that give rise to adverse CRA
consequences in the CRA regulations,
rather than solely in interagency
guidance on the regulations, will
improve the usefulness of the
regulations and provide critical
information in primary compliance
source material
ctices in violation
of section 5 of the Federal Trade
Commission Act (15 U.S.C. 45(a)(1)).6
We believe that specifying examples of
violations that give rise to adverse CRA
consequences in the CRA regulations,
rather than solely in interagency
guidance on the regulations, will
improve the usefulness of the
regulations and provide critical
information in primary compliance
source material.
Under the proposal, a bank’s
evaluation will be adversely affected by
such practices regardless of whether the
practices involve loans in the bank’s
assessment area(s) or in any other
location or geography. In addition, a
bank’s CRA evaluation also can be
adversely affected by evidence of such
practices by any affiliate, if any loans of
that affiliate have been considered in
the bank’s CRA evaluation.
In response to comments on the
February 2004 proposal, the federal
banking agencies do not propose to
include in the CRA regulations a
provision that evidence of collateral-
based lending also can adversely affect
an agency’s evaluation of a bank’s CRA
performance.
Request for Comments
The OCC, FDIC, and Board welcome
comments on any aspect of this
proposal, particularly, those issues
noted below.
• The federal banking agencies invite
comment on whether other approaches
would be more appropriate to
addressing the CRA burdens and
obligations of banks with less than $1
billion in assets. Is there another
appropriate asset threshold to use when
defining intermediate small banks, and,
if so, why?
• We seek comment on the proposal
to adjust the asset size for small and
intermediate small banks on an ongoing
basis, based on changes to the Consumer
Price Index.
• Under the proposal, banks with
assets between $250 million and $1
billion will no longer be required to
report data on small business, small
farm, and community development
lending
termediate small banks, and,
if so, why?
• We seek comment on the proposal
to adjust the asset size for small and
intermediate small banks on an ongoing
basis, based on changes to the Consumer
Price Index.
• Under the proposal, banks with
assets between $250 million and $1
billion will no longer be required to
report data on small business, small
farm, and community development
lending. The federal banking agencies
seek comment specifically addressing
whether and how the public has used
the loan information that has been
reported to date by such intermediate
small banks (for example, by reference
to specific studies on bank lending
patterns that used the data), and
whether other sources of data about this
lending can be used for such purposes
going forward.
• Does the proposal provide more
flexibility in how an intermediate small
bank may apply its community
development resources through a more
strategic use of loans, investments and
services? Does the proposal to permit
examiners to use performance context to
give consideration in a current-period
rating, to prior-period outstanding
investments that reflect a substantial
financial commitment by the bank, also
provide more flexibility for intermediate
small banks?
• Does the proposal to evaluate all
community development activities of
intermediate small banks under one test
have the potential to make the
evaluations of those banks’ community
development performance more
effective than under the current
regulation?
• Should the community
development test for intermediate small
banks be separately rated as proposed?
If so, should an intermediate small bank
be required to achieve a rating of at least
‘‘satisfactory’’ under both the small bank
lending and community development
tests to achieve an overall ‘‘satisfactory’’
CRA rating? Should the bank’s
community development test
performance be weighted equally with
its lending test performance in assigning
an overall CRA rating? Would other
ratings floors or weig
uld an intermediate small bank
be required to achieve a rating of at least
‘‘satisfactory’’ under both the small bank
lending and community development
tests to achieve an overall ‘‘satisfactory’’
CRA rating? Should the bank’s
community development test
performance be weighted equally with
its lending test performance in assigning
an overall CRA rating? Would other
ratings floors or weights be appropriate
to provide greater flexibility in certain
circumstances? If so, under what
circumstances?
• The federal banking agencies seek
comment on whether the existing
definition of ‘‘community development’’
provides sufficient recognition for
community services to individuals
residing in underserved rural areas and
designated disaster areas and, if not,
how to encourage the provision of such
services to persons in underserved rural
areas and designated disaster areas that
have the greatest need.7
• We also seek comment on the
merits of the proposed treatment of the
definition of ‘‘community development’’
in underserved rural and designated
disaster areas and invite suggestions for
alternatives.
• We seek comment on the proper
way to define ‘‘rural.’’ Should we adopt
a definition and, if so, which one? For
example, should all areas outside a
metropolitan area be considered
‘‘rural’’? Alternatively, should the
federal banking agencies define rural
consistent with the definition employed
by the Census Bureau? The Census
Bureau defines any territory or
population not meeting its criteria for
‘‘urban’’ to be ‘‘rural.’’ Are there other
definitions the federal banking agencies
should consider?
• We also seek comment on the
proper way to define ‘‘underserved’’
when used in connection with rural
areas
deral banking agencies define rural
consistent with the definition employed
by the Census Bureau? The Census
Bureau defines any territory or
population not meeting its criteria for
‘‘urban’’ to be ‘‘rural.’’ Are there other
definitions the federal banking agencies
should consider?
• We also seek comment on the
proper way to define ‘‘underserved’’
when used in connection with rural
areas. Should we adopt a definition and,
if so, which one? For example, should
the term refer solely to those rural areas
showing signs of economic distress or
lack of investment? If so, what indicia
should the federal banking agencies use
to identify such rural areas? Should we
use criteria from other federal programs,
such as the Community Development
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Federal Register / Vol. 70, No. 47 / Friday, March 11, 2005 / Proposed Rules
Financial Institutions Fund (CDFI)
rules? Indicators used by the CDFI Fund
to define ‘‘investment areas’’ include
counties with (a) unemployment rates
one-and-a-half times the national
average, (b) poverty rates of 20% or
more, or (c) population loss of 10
percent or more between the previous
and most recent census, or a net
migration loss of 5 percent or more over
the five-year period preceding the most
recent census.
• Should ‘‘underserved rural area’’ be
defined in the regulation to also
encompass those rural areas that have
been targeted by a governmental agency
for redevelopment, without regard to
median income characteristics of the
area?
• Should ‘‘underserved rural area’’ be
limited to low- and moderate-income
areas, without regard to whether those
areas show signs of economic distress,
lack of investment, or are targeted for
redevelopment by a governmental
agency? If so, should the OCC, FDIC,
and Board adopt a different method
than currently exists in the regulation
for determining when a rural area is
low- or moderate-income? For exa
served rural area’’ be
limited to low- and moderate-income
areas, without regard to whether those
areas show signs of economic distress,
lack of investment, or are targeted for
redevelopment by a governmental
agency? If so, should the OCC, FDIC,
and Board adopt a different method
than currently exists in the regulation
for determining when a rural area is
low- or moderate-income? For example,
under the current regulations, the area
must be a low- or moderate-income
census tract, which the regulations
define as a tract with median family
income that does not exceed 80% of the
statewide non-metropolitan median
family income. Would raising the low-
and moderate-income threshold in non-
metropolitan communities from 80% of
non-metropolitan median family income
to some higher figure, such as 85%,
90%, or 100%, more appropriately
identify underserved rural areas?
Alternatively, would identifying another
measure of median income instead of
the non-metropolitan median income,
such as the statewide median income,
more appropriately define low- and
moderate-income for purposes of
defining underserved rural areas by
reference to low- and moderate-income
characteristics?
• As proposed, the definition of
‘‘community development’’ would
encompass affordable housing for
people who do not meet the regulatory
definition of ‘‘low- or moderate-income’’
if, and only if, they reside in
underserved rural areas. The federal
banking agencies seek comment on
whether the current regulatory
definition of ‘‘low- or moderate-income
individual’’ is unduly restrictive for
purposes of identifying individuals in
rural areas who need affordable
housing. If so, in what ways?
Solicitation of Comments on Use of
Plain Language
Section 722 of the Gramm-Leach-
Bliley Act, Pub. L. 106–102, sec. 722,
113 Stat. 1338, 1471 (Nov. 12, 1999),
requires the federal banking agencies to
use plain language in all proposed and
final rules published after January 1,
2000
e for
purposes of identifying individuals in
rural areas who need affordable
housing. If so, in what ways?
Solicitation of Comments on Use of
Plain Language
Section 722 of the Gramm-Leach-
Bliley Act, Pub. L. 106–102, sec. 722,
113 Stat. 1338, 1471 (Nov. 12, 1999),
requires the federal banking agencies to
use plain language in all proposed and
final rules published after January 1,
2000. We invite your comments on how
to make the proposal easier to
understand. For example:
• Have we organized the material to
suit your needs? If not, how could this
material be better organized?
• Are the requirements in the
proposal clearly stated? If not, how
could the regulation be more clearly
stated?
• Does the proposal contain language
or jargon that is not clear? If so, which
language requires clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulation
easier to understand? If so, what
changes to the format would make the
regulation easier to understand?
• What else could we do to make the
regulation easier to understand?
Community Bank Comment Request
In addition, we invite your comments
on the impact of this proposal on
community banks. The federal banking
agencies recognize that community
banks operate with more limited
resources than larger institutions and
may present a different risk profile.
Thus, the federal banking agencies
specifically request comments on the
impact of the proposal on community
banks’ current resources and available
personnel with the requisite expertise,
and whether the goals of the proposal
could be achieved, for community
banks, through an alternative approach.
Regulatory Flexibility Act
OCC and FDIC: Under section 605(b)
of the Regulatory Flexibility Act (RFA),
5 U.S.C
banking agencies
specifically request comments on the
impact of the proposal on community
banks’ current resources and available
personnel with the requisite expertise,
and whether the goals of the proposal
could be achieved, for community
banks, through an alternative approach.
Regulatory Flexibility Act
OCC and FDIC: Under section 605(b)
of the Regulatory Flexibility Act (RFA),
5 U.S.C. 605(b), the regulatory flexibility
analysis otherwise required under
section 604 of the RFA is not required
if an agency certifies, along with a
statement providing the factual basis for
such certification, that the rule will not
have a significant economic impact on
a substantial number of small entities.
The OCC and FDIC have reviewed the
impact of this proposed rule on small
banks and certify that the proposed rule
will not have a significant economic
impact on a substantial number of small
entities.
The Small Business Administration
(SBA) has defined ‘‘small entities’’ for
banking purposes as a bank or savings
institution with less than $150 million
in assets. See 13 CFR 212.01. This
proposed rule primarily affects banks
with assets of at least $250 million and
under $1 billion. The proposed
amendments decrease the regulatory
burden for banks within that asset range
by relieving them of certain reporting
and recordkeeping requirements
applicable to larger institutions.
The proposal to eliminate the $1
billion holding company threshold as a
factor in determining whether banks
will be subject to the streamlined CRA
examination or the more in-depth CRA
examination applicable to larger
institutions will impact a limited
number of small banks, which are
affiliated with holding companies with
assets over $1 billion. The FDIC
estimates that only 110 of
approximately 5,300 FDIC-regulated
banks had assets of under $150 million
and were affiliated with a holding
company with over $1 billion in assets
CRA
examination or the more in-depth CRA
examination applicable to larger
institutions will impact a limited
number of small banks, which are
affiliated with holding companies with
assets over $1 billion. The FDIC
estimates that only 110 of
approximately 5,300 FDIC-regulated
banks had assets of under $150 million
and were affiliated with a holding
company with over $1 billion in assets.
The OCC estimates that only 36 of
approximately 2,000 OCC-regulated
banks met these criteria. Because so few
small banks will be affected by the
proposed revisions to Parts 25 and 345,
a regulatory flexibility analysis is not
required. Nevertheless, the OCC and
FDIC are willing, in response to any
comments received regarding the
proposal’s economic impact on small
banks with assets of under $150 million,
to reevaluate the RFA certifications and,
if appropriate, publish regulatory
flexibility analyses in conjunction with
the issuance of any final rule.
Board: Subject to certain exceptions,
the Regulatory Flexibility Act (5 U.S.C.
601–612) (RFA) requires an agency to
publish an initial regulatory flexibility
analysis with a proposed rule whenever
the agency is required to publish a
general notice of proposed rulemaking
for a proposed rule. The Supplementary
Information describes the proposed
regulations and the proposal’s
objectives. The Board, in connection
with its initial regulatory flexibility
analysis, requests public comment in
the following areas.
A. Reasons for the Proposed Rule
As described in the SUPPLEMENTARY
INFORMATION section, the Board, together
with the other Agencies, seek to
improve the effectiveness of the CRA
regulations in placing performance over
process, promoting consistency in
evaluations, and eliminating
unnecessary burden. The proposed rule
is intended to reduce unnecessary
burden while maintaining or improving
CRA’s effectiveness in evaluating
performance
n the SUPPLEMENTARY
INFORMATION section, the Board, together
with the other Agencies, seek to
improve the effectiveness of the CRA
regulations in placing performance over
process, promoting consistency in
evaluations, and eliminating
unnecessary burden. The proposed rule
is intended to reduce unnecessary
burden while maintaining or improving
CRA’s effectiveness in evaluating
performance.
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Federal Register / Vol. 70, No. 47 / Friday, March 11, 2005 / Proposed Rules
B. Statement of Objectives and Legal
Basis
The Supplementary Information
describes the proposal’s objectives. The
legal basis for the proposed rule is
section 806 of the CRA.
C. Description of Small Entities To
Which the Rule Applies
The proposed rule would apply to all
state-chartered banks that are members
of the Federal Reserve System; there are
approximately 932 such banks. The RFA
requires the Board to consider the effect
of the proposal on small entities, which
are defined for RFA purposes as all
banks with assets of less than $150
million. There are 473 state member
banks with less than $150 million of
assets. All but about 12 state member
banks with assets of less than $150
million are already subject to a
streamlined CRA process that is
unaffected by this proposal. The rule
would eliminate data reporting
requirements for these 12 state member
banks by eliminating holding-company
affiliation as a disqualification for
treatment as a ‘‘small bank’’ under the
CRA regulations.
D. Projected Reporting, Recordkeeping
and Other Compliance Requirements
The Board does not believe that the
proposed rule imposes any new
reporting or recordkeeping
requirements, as defined in section 603
of the RFA. As noted, the rule would
eliminate holding-company affiliation
as a disqualification for treatment as a
‘‘small bank’’ under the CRA
regulations
under the
CRA regulations.
D. Projected Reporting, Recordkeeping
and Other Compliance Requirements
The Board does not believe that the
proposed rule imposes any new
reporting or recordkeeping
requirements, as defined in section 603
of the RFA. As noted, the rule would
eliminate holding-company affiliation
as a disqualification for treatment as a
‘‘small bank’’ under the CRA
regulations. Accordingly, the rule would
eliminate data reporting requirements
for about 12 state member banks with
assets of less than $150 million. As
noted above, all other state member
banks with assets under $150 million
are already exempt from this reporting
requirement.
The Board believes that the proposed
revisions to the definition of
‘‘community development’’ would not
place additional compliance costs or
burdens on small institutions. Instead,
this proposal would add greater
flexibility to the definition in response
to requests made by many small banks.
The Board believes the same of the
provisions regarding the effect of
evidence of illegal credit practices on
CRA evaluations. State banks of all sizes
are already subject to laws against such
practices, and the proposal would not
affect that.
The Board seeks information and
comment on whether application of the
proposed rule would impose any costs,
compliance requirements, or changes in
operating procedures in addition to or
which may differ from those arising
from the application of the statute.
E. Identification of Duplicative,
Overlapping, or Conflicting Federal
Rules
The Board does not believe there are
any federal statutes or regulations that
would duplicate, overlap, or conflict
with the proposed rule. The Board seeks
comment regarding any statues or
regulations, including state or local
statutes or regulations, that would
duplicate, overlap, or conflict with the
proposed rule.
F
tification of Duplicative,
Overlapping, or Conflicting Federal
Rules
The Board does not believe there are
any federal statutes or regulations that
would duplicate, overlap, or conflict
with the proposed rule. The Board seeks
comment regarding any statues or
regulations, including state or local
statutes or regulations, that would
duplicate, overlap, or conflict with the
proposed rule.
F. Discussion of Significant Alternatives
The proposed rule maintains the
approach of the existing CRA
regulations in exempting small entities
from reporting requirements and
providing for streamlined lending
evaluations for small entities. A
complete exemption of small entities
from all of the CRA’s requirements
would be impermissible under the CRA
statute. The Board welcomes comments
on any significant alternatives that
would minimize the impact of the
proposed rule on small entities.
Executive Order 12866
The OCC has determined that this
proposed rule is not a significant
regulatory action under Executive Order
12866.
Unfunded Mandates Reform Act of
1995
Section 202 of the Unfunded
Mandates Reform Act of 1995, Pub. L.
104–4 (2 U.S.C. 1532) (Unfunded
Mandates Act), requires that an agency
prepare a budgetary impact statement
before promulgating any rule likely to
result in a Federal mandate that may
result in the expenditure by State, local,
and tribal governments, in the aggregate,
or by the private sector of $100 million
or more in any one year. If a budgetary
impact statement is required, section
205 of the Unfunded Mandates Act also
requires an agency to identify and
consider a reasonable number of
regulatory alternatives before
promulgating a rule. The OCC has
determined that the proposal will not
result in expenditures by State, local,
and tribal governments, or by the
private sector, of $100 million or more
in any one year. Accordingly, the
proposal is not subject to section 202 of
the Unfunded Mandates Act
also
requires an agency to identify and
consider a reasonable number of
regulatory alternatives before
promulgating a rule. The OCC has
determined that the proposal will not
result in expenditures by State, local,
and tribal governments, or by the
private sector, of $100 million or more
in any one year. Accordingly, the
proposal is not subject to section 202 of
the Unfunded Mandates Act.
Paperwork Reduction Act
Request for Comment on Proposed
Information Collection
In accordance with the requirements
of the Paperwork Reduction Act of 1995,
the Agencies may not conduct or
sponsor, and the respondent is not
required to respond to, an information
collection (IC) unless it displays a
currently valid Office of Management
and Budget (OMB) control number
(OCC, 1557–0160; Board, 7100–0197;
and FDIC, 3064–0092).
The FDIC has obtained OMB-approval
for the paperwork burden associated
with its CRA regulation at 12 CFR Part
345 under OMB IC 3064–0092. The
change in burden to IC 3064–0092
associated with this proposal to raise
the threshold for small banks from those
with under $250 million in assets to
those with under $1 billion in assets
was submitted to and approved by OMB
in connection with a similar proposal
published by the FDIC in August 2004
(69 FR 51611, Aug. 20, 2004). This
interagency proposal would not, if
adopted as final, result in any added
change in burden to IC 3064–0092.
Therefore, the FDIC is not required to
make a submission to OMB under the
Paperwork Reduction Act at this time.
Nevertheless, the FDIC joins the OCC
and the Board in seeking additional
comment on the paperwork burden
associated with the current proposal.
The Agencies give notice that, at the
end of the comment period, the
proposed collections of information,
along with an analysis of the comments,
and recommendations received, will be
submitted to OMB for review and
approval.
Comments are invited on:
theless, the FDIC joins the OCC
and the Board in seeking additional
comment on the paperwork burden
associated with the current proposal.
The Agencies give notice that, at the
end of the comment period, the
proposed collections of information,
along with an analysis of the comments,
and recommendations received, will be
submitted to OMB for review and
approval.
Comments are invited on:
(a) Whether the collection of
information is necessary for the proper
performance of the Agencies’ functions,
including whether the information has
practical utility;
(b) The accuracy of the estimates of
the burden of the information
collection, including the validity of the
methodology and assumptions used;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected;
(d) Ways to minimize the burden of
the information collection on
respondents, including through the use
of automated collection techniques or
other forms of information technology;
and
(e) Estimates of capital or start up
costs and costs of operation,
maintenance, and purchase of services
to provide information.
At the end of the comment period, the
comments and recommendations
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Federal Register / Vol. 70, No. 47 / Friday, March 11, 2005 / Proposed Rules
received will be analyzed to determine
the extent to which the information
collections should be modified prior to
submission to OMB for review and
approval. The comments will also be
summarized or included in the
Agencies’ requests to OMB for approval
of the collections. All comments will
become a matter of public record.
Comments should be addressed to:
OCC: Mary H. Gottlieb or Camille
Dixon, Office of the Comptroller of the
Currency, Legislative and Regulatory
Activities Division, Attention: Docket
No. 05–04, 250 E Street, SW., Mailstop
8–4, Washington, DC 20219
e
summarized or included in the
Agencies’ requests to OMB for approval
of the collections. All comments will
become a matter of public record.
Comments should be addressed to:
OCC: Mary H. Gottlieb or Camille
Dixon, Office of the Comptroller of the
Currency, Legislative and Regulatory
Activities Division, Attention: Docket
No. 05–04, 250 E Street, SW., Mailstop
8–4, Washington, DC 20219. Due to
delays in paper mail in the Washington
area, commenters are encouraged to
submit their comments by fax to (202)
874–4889 or by e-mail to
camille.dixon@occ.treas.gov.
Board: Comments should refer to
Docket No. R–1225 and may be mailed
to Jennifer J. Johnson, Secretary, Board
of Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, N.W., Washington, DC 20551.
Please consider submitting your
comments through the Board’s Web site
at http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm, by
e-mail to
regs.comments@federalreserve.gov, or
by fax to the Office of the Secretary at
(202) 452–3819 or (202) 452–3102.
Rules proposed by the Board and other
federal agencies may also be viewed and
commented on at http://
www.regulations.gov.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
except as necessary for technical
reasons. Accordingly, your comments
will not be edited to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper in Room MP–
500 of the Board’s Martin Building (C
and 20th Streets, NW.) between 9 a.m.
and 5 p.m. on weekdays.
FDIC: Leneta G. Gregorie, Legal
Division, Room MB–3082, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429. All
comments should refer to the title of the
proposed collection. Comments may be
hand-delivered to the guard station at
the rear of the 17th Street Building
(located on F Street), on business days
between 7 a.m
etween 9 a.m.
and 5 p.m. on weekdays.
FDIC: Leneta G. Gregorie, Legal
Division, Room MB–3082, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429. All
comments should refer to the title of the
proposed collection. Comments may be
hand-delivered to the guard station at
the rear of the 17th Street Building
(located on F Street), on business days
between 7 a.m. and 5 p.m., Attention:
Comments/Executive Secretary, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
Comments should also be sent to
Mark D. Menchik, Desk Officer, Office
of Information and Regulatory Affairs,
Office of Management and Budget,
Room 10235, Washington, DC 20503.
Comments may also be sent by e-mail to
Mark_D._Menchik@omb.eop.gov.
Title of Information Collection:
OCC: Community Reinvestment Act
Regulation—12 CFR 25.
Board: Recordkeeping, Reporting, and
Disclosure Requirements in Connection
with Regulation BB (Community
Reinvestment Act).
FDIC: Community Reinvestment—12
CFR 345.
Frequency of Response: Annual.
Affected Public:
OCC: National banks.
Board: State member banks.
FDIC: State nonmember banks.
Abstract: This Paperwork Reduction
Act section estimates the burden that
would be associated with the
regulations were the agencies to change
the definition of ‘‘small institution’’ as
proposed, that is, increase the asset
threshold from $250 million to $1
billion and eliminate any consideration
of holding-company size. The two
proposed changes, if adopted, would
make ‘‘small’’ approximately 1,522
insured depository institutions that do
not now have that status. That estimate
is based on data for all FDIC-insured
institutions that filed Call Reports in
2004. Those data also underlie the
estimated paperwork burden that would
be associated with the regulations if the
proposals were adopted by the agencies
The two
proposed changes, if adopted, would
make ‘‘small’’ approximately 1,522
insured depository institutions that do
not now have that status. That estimate
is based on data for all FDIC-insured
institutions that filed Call Reports in
2004. Those data also underlie the
estimated paperwork burden that would
be associated with the regulations if the
proposals were adopted by the agencies.
The proposed change to amend the
intermediate small bank performance
standards to incorporate a separate
community development test would
have no impact on paperwork burden
because the evaluation is based on
information prepared by examiners.
Estimated Paperwork Burden under
the Proposal:
OCC:
Number of Respondents: 1,877.
Estimated Time per Response: Small
business and small farm loan register,
219 hours; Consumer loan data, 326
hours; Other loan data, 25 hours;
Assessment area delineation, 2 hours;
Small business and small farm loan
data, 8 hours; Community development
loan data, 13 hours; HMDA out-of-MSA
loan data, 253 hours; Data on lending by
a consortium or third party, 17 hours;
Affiliated lending data, 38 hours;
Request for designation as a wholesale
or limited purpose bank, 4 hours;
Strategic Plan, 275 hours; and Public
file, 10 hours.
Total Estimated Annual Burden:
160,782 hours.
Board:
Number of Respondents: 934.
Estimated Time per Response: Small
business and small farm loan register,
219 hours; Consumer loan data, 326
hours; Other loan data, 25 hours;
Assessment area delineation, 2 hours;
Small business and small farm loan
data, 8 hours; Community development
loan data, 13 hours; HMDA out-of-MSA
loan data, 253 hours; Data on lending by
a consortium or third party, 17 hours;
Affiliated lending data, 38 hours;
Request for designation as a wholesale
or limited purpose bank, 4 hours; and
Public file, 10 hours.
Total Estimated Annual Burden:
114,580 hours.
FDIC:
Number of Respondents: 5,296
and small farm loan
data, 8 hours; Community development
loan data, 13 hours; HMDA out-of-MSA
loan data, 253 hours; Data on lending by
a consortium or third party, 17 hours;
Affiliated lending data, 38 hours;
Request for designation as a wholesale
or limited purpose bank, 4 hours; and
Public file, 10 hours.
Total Estimated Annual Burden:
114,580 hours.
FDIC:
Number of Respondents: 5,296.
Estimated Time per Response: Small
business and small farm loan register,
219 hours; Consumer loan data, 326
hours; Other loan data, 25 hours;
Assessment area delineation, 2 hours;
Small business and small farm loan
data, 8 hours; Community development
loan data, 13 hours; HMDA out-of-MSA
loan data, 253 hours; Data on lending by
a consortium or third party, 17 hours;
Affiliated lending data, 38 hours;
Request for designation as a wholesale
or limited purpose bank, 4 hours; and
Public file, 10 hours.
Total Estimated Annual Burden:
193,975 hours.
Executive Order 13132
The OCC has determined that this
proposal does not have any Federalism
implications, as required by Executive
Order 13132.
List of Subjects
12 CFR Part 25
Community development, Credit,
Investments, National banks, Reporting
and recordkeeping requirements.
12 CFR Part 228
Banks, Banking, Community
development, Credit, Investments,
Reporting and recordkeeping
requirements.
12 CFR Part 345
Banks, Banking, Community
development, Credit, Investments,
Reporting and recordkeeping
requirements.
Department of the Treasury
Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons discussed in the joint
preamble, part 25 of chapter I of title 12
of the Code of Federal Regulations is
proposed to be amended as follows:
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equirements.
Department of the Treasury
Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons discussed in the joint
preamble, part 25 of chapter I of title 12
of the Code of Federal Regulations is
proposed to be amended as follows:
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Federal Register / Vol. 70, No. 47 / Friday, March 11, 2005 / Proposed Rules
PART 25—COMMUNITY
REINVESTMENT ACT AND
INTERSTATE DEPOSIT PRODUCTION
REGULATIONS
1. The authority citation for part 25
continues to read as follows:
Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36,
93a, 161, 215, 215a, 481, 1814, 1816, 1828(c),
1835a, 2901 through 2907, and 3101 through
3111.
2. In § 25.12, revise paragraphs (g)(1),
(g)(4), and (u) to read as follows:
§ 25.12
Definitions.
*
*
*
*
*
(g) Community development means:
(1) Affordable housing (including
multifamily rental housing) for low- or
moderate-income individuals,
individuals in underserved rural areas,
or individuals located in designated
disaster areas;
*
*
*
*
*
(4) Activities that revitalize or
stabilize low- or moderate-income
geographies, underserved rural areas, or
designated disaster areas.
*
*
*
*
*
(u) Small bank—(1) Definition. Small
bank means a bank that, as of December
31 of either of the prior two calendar
years, had assets of less than $1 billion.
Intermediate small bank means a small
bank with assets of at least $250 million
and less than $1 billion as of December
31 of both of the prior two calendar
years.
underserved rural areas, or
designated disaster areas.
*
*
*
*
*
(u) Small bank—(1) Definition. Small
bank means a bank that, as of December
31 of either of the prior two calendar
years, had assets of less than $1 billion.
Intermediate small bank means a small
bank with assets of at least $250 million
and less than $1 billion as of December
31 of both of the prior two calendar
years.
(2) Adjustment. The dollar figures in
paragraph (u)(1) of this section shall be
adjusted annually and published by the
OCC, based on the year-to-year change
in the average of the Consumer Price
Index for Urban Wage Earners and
Clerical Workers, not seasonally
adjusted, for each twelve-month period
ending in November, with rounding to
the nearest million.
*
*
*
*
*
3. Revise § 25.26 to read as follows:
§ 25.26
Small bank performance
standards.
(a) Performance criteria—(1) Small
banks with assets of less than $250
million. The OCC evaluates the record
of a small bank that is not, or that was
not during the prior calendar year, an
intermediate small bank, of helping to
meet the credit needs of its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
(2) Intermediate small banks. The
OCC evaluates the record of a small
bank that is, or that was during the prior
calendar year, an intermediate small
bank, of helping to meet the credit
needs of its assessment area(s) pursuant
to the criteria set forth in paragraphs (b)
and (c) of this section.
f its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
(2) Intermediate small banks. The
OCC evaluates the record of a small
bank that is, or that was during the prior
calendar year, an intermediate small
bank, of helping to meet the credit
needs of its assessment area(s) pursuant
to the criteria set forth in paragraphs (b)
and (c) of this section.
(b) Lending test. A small bank’s
lending performance is evaluated
pursuant to the following criteria:
(1) The bank’s loan-to-deposit ratio,
adjusted for seasonal variation, and, as
appropriate, other lending-related
activities, such as loan originations for
sale to the secondary markets,
community development loans, or
qualified investments;
(2) The percentage of loans and, as
appropriate, other lending-related
activities located in the bank’s
assessment area(s);
(3) The bank’s record of lending to
and, as appropriate, engaging in other
lending-related activities for borrowers
of different income levels and
businesses and farms of different sizes;
(4) The geographic distribution of the
bank’s loans; and
(5) The bank’s record of taking action,
if warranted, in response to written
complaints about its performance in
helping to meet credit needs in its
assessment area(s).
(c) Community development test. An
intermediate small bank’s community
development performance also is
evaluated pursuant to the following
criteria:
(1) The number and amount of
community development loans;
(2) The number and amount of
qualified investments;
(3) The extent to which the bank
provides community development
services; and
(4) The bank’s responsiveness through
such activities to community
development lending, investment, and
services needs.
3a. Revise § 25.28, paragraph (c) to
read as follows:
§ 25.28
Assigned ratings.
*
*
*
*
*
r and amount of
community development loans;
(2) The number and amount of
qualified investments;
(3) The extent to which the bank
provides community development
services; and
(4) The bank’s responsiveness through
such activities to community
development lending, investment, and
services needs.
3a. Revise § 25.28, paragraph (c) to
read as follows:
§ 25.28
Assigned ratings.
*
*
*
*
*
(c) Effect of evidence of
discriminatory or other illegal credit
practices.
(1) The OCC’s evaluation of a bank’s
CRA performance is adversely affected
by evidence of discriminatory or other
illegal credit practices in any geography
by the bank or in any assessment area
by any affiliate whose loans have been
considered as part of the bank’s lending
performance. In connection with any
type of lending activity described in
§ 25.22(a), evidence of discriminatory or
other credit practices that violate an
applicable law, rule, or regulation
includes, but is not limited to:
(i) Discrimination against applicants
on a prohibited basis in violation, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending
Act provisions regarding a consumer’s
right of rescission.
ion, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending
Act provisions regarding a consumer’s
right of rescission.
(2) In determining the effect of
evidence of practices described in
paragraph (c)(1) of this section on the
bank’s assigned rating, the OCC
considers the nature, extent, and
strength of the evidence of the practices;
the policies and procedures that the
bank (or affiliate, as applicable) has in
place to prevent the practices; any
corrective action that the bank (or
affiliate, as applicable) has taken or has
committed to take, including voluntary
corrective action resulting from self-
assessment; and any other relevant
information.
4. In Appendix A to part 25, revise
paragraph (d) to read as follows:
Appendix A to Part 25—Ratings
*
*
*
*
*
(d) Banks evaluated under the small bank
performance standards.—(1) Lending test
ratings.—(i) Eligibility for a satisfactory
lending test rating. The OCC rates a small
bank’s lending performance ‘‘satisfactory’’ if,
in general, the bank demonstrates:
(A) A reasonable loan-to-deposit ratio
(considering seasonal variations) given the
bank’s size, financial condition, the credit
needs of its assessment area(s), and taking
into account, as appropriate, other lending-
related activities such as loan originations for
sale to the secondary markets and
community development loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(including low- and moderate-income
individuals) and businesses and farms of
different sizes that is reasonable g
ment loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(including low- and moderate-income
individuals) and businesses and farms of
different sizes that is reasonable given the
demographics of the bank’s assessment
area(s);
(D) A record of taking appropriate action,
when warranted, in response to written
complaints, if any, about the bank’s
performance in helping to meet the credit
needs of its assessment area(s); and
(E) A reasonable geographic distribution of
loans given the bank’s assessment area(s).
(ii) Eligibility for an ‘‘outstanding’’ lending
test rating. A small bank that meets each of
the standards for a ‘‘satisfactory’’ rating
under this paragraph and exceeds some or all
of those standards may warrant consideration
for a lending test rating of ‘‘outstanding.’’
(iii) Needs to improve or substantial
noncompliance ratings. A small bank may
also receive a lending test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
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performance has failed to meet the standard
for a ‘‘satisfactory’’ rating.
eive a lending test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
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performance has failed to meet the standard
for a ‘‘satisfactory’’ rating.
(2) Community development test ratings for
intermediate small banks—(i) Eligibility for a
satisfactory community development test
rating. The OCC rates an intermediate small
bank’s community development performance
‘‘satisfactory’’ if the bank demonstrates
adequate responsiveness to the community
development needs of its assessment area(s)
or a broader statewide or regional area that
includes the bank’s assessment area(s)
through community development loans,
qualified investments, and community
development services. The adequacy of the
bank’s response will depend on its capacity
for such community development activities,
its assessment area’s need for such
community development activities, and the
availability of such opportunities for
community development in the bank’s
assessment area(s).
(ii) Eligibility for an outstanding
community development test rating. The
OCC rates an intermediate small bank’s
community development performance
‘‘outstanding’’ if the bank demonstrates
excellent responsiveness to community
development needs in its assessment area(s)
through community development loans,
qualified investments, and community
development services, as appropriate,
considering the bank’s capacity and the need
and availability of such opportunities for
community development in the bank’s
assessment area(s).
erformance
‘‘outstanding’’ if the bank demonstrates
excellent responsiveness to community
development needs in its assessment area(s)
through community development loans,
qualified investments, and community
development services, as appropriate,
considering the bank’s capacity and the need
and availability of such opportunities for
community development in the bank’s
assessment area(s).
(iii) Needs to improve or substantial
noncompliance ratings. An intermediate
small bank may also receive a community
development test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standards
for a ‘‘satisfactory’’ rating.
(3) Overall rating—(i) Eligibility for a
satisfactory overall rating. No intermediate
small bank may receive an assigned overall
rating of ‘‘satisfactory’’ unless it receives a
rating of at least ‘‘satisfactory’’ on both the
lending test and the community development
test.
(ii) Eligibility for an outstanding overall
rating. (A) An intermediate small bank that
receives an ‘‘outstanding’’ rating on one test
and at least ‘‘satisfactory’’ on the other test
may receive an assigned overall rating of
‘‘outstanding.’’
(B) A small bank that is not an
intermediate small bank that meets each of
the standards for a ‘‘satisfactory’’ rating
under the lending test and exceeds some or
all of those standards may warrant
consideration for an overall rating of
‘‘outstanding.’’ In assessing whether a bank’s
performance is ‘‘outstanding,’’ the OCC
considers the extent to which the bank
exceeds each of the performance standards
for a ‘‘satisfactory’’ rating and its
performance in making qualified investments
and its performance in providing branches
and other services and delivery systems that
enhance credit availability in its assessment
area(s).
‘outstanding.’’ In assessing whether a bank’s
performance is ‘‘outstanding,’’ the OCC
considers the extent to which the bank
exceeds each of the performance standards
for a ‘‘satisfactory’’ rating and its
performance in making qualified investments
and its performance in providing branches
and other services and delivery systems that
enhance credit availability in its assessment
area(s).
(iii) Needs to improve or substantial
noncompliance overall ratings. A small bank
may also receive a rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standards
for a ‘‘satisfactory’’ rating.
*
*
*
*
*
Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the joint
preamble, the Board of Governors of the
Federal Reserve System proposes to
amend part 228 of chapter II of title 12
of the Code of Federal Regulations as
follows:
PART 228—COMMUNITY
REINVESTMENT (REGULATION BB)
1. The authority citation for part 228
continues to read as follows:
Authority: 12 U.S.C. 321, 325, 1828(c),
1842, 1843, 1844, and 2901 et seq.
2. In § 228.12, revise paragraphs (g)(1),
(g)(4), and (u) to read as follows:
§ 228.12
Definitions.
*
*
*
*
*
(g) Community development means:
(1) Affordable housing (including
multifamily rental housing) for low-or
moderate-income individuals,
individuals in underserved rural areas,
or individuals located in designated
disaster areas;
*
*
*
*
*
(4) Activities that revitalize or
stabilize low- or moderate-income
geographies, underserved rural areas, or
designated disaster areas.
*
*
*
*
*
(g) Community development means:
(1) Affordable housing (including
multifamily rental housing) for low-or
moderate-income individuals,
individuals in underserved rural areas,
or individuals located in designated
disaster areas;
*
*
*
*
*
(4) Activities that revitalize or
stabilize low- or moderate-income
geographies, underserved rural areas, or
designated disaster areas.
*
*
*
*
*
(u) Small bank—(1) Definition. Small
bank means a bank that, as of December
31 of either of the prior two calendar
years, had assets of less than $1 billion.
Intermediate small bank means a small
bank with assets of at least $250 million
and less than $1 billion as of December
31 of both of the prior two calendar
years.
(2) Adjustment. The dollar figures in
paragraph (u)(1) of this section shall be
adjusted annually and published by the
Board, based on the year-to-year change
in the average of the Consumer Price
Index for Urban Wage Earners and
Clerical Workers, not seasonally
adjusted, for each twelve-month period
ending in November, with rounding to
the nearest million.
*
*
*
*
*
3. Revise § 228.26 to read as follows:
§ 228.26
Small bank performance
standards.
(a) Performance criteria—(1) Small
banks with assets of less than $250
million. The Board evaluates the record
of a small bank that is not, or that was
not during the prior calendar year, an
intermediate small bank, of helping to
meet the credit needs of its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
(2) Intermediate small banks. The
Board evaluates the record of a small
bank that is, or that was during the prior
calendar year, an intermediate small
bank, of helping to meet the credit
needs of its assessment area(s) pursuant
to the criteria set forth in paragraphs (b)
and (c) of this section.
its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
(2) Intermediate small banks. The
Board evaluates the record of a small
bank that is, or that was during the prior
calendar year, an intermediate small
bank, of helping to meet the credit
needs of its assessment area(s) pursuant
to the criteria set forth in paragraphs (b)
and (c) of this section.
(b) Lending test. A small bank’s
lending performance is evaluated
pursuant to the following criteria:
(1) The bank’s loan-to-deposit ratio,
adjusted for seasonal variation, and, as
appropriate, other lending-related
activities, such as loan originations for
sale to the secondary markets,
community development loans, or
qualified investments;
(2) The percentage of loans and, as
appropriate, other lending-related
activities located in the bank’s
assessment area(s);
(3) The bank’s record of lending to
and, as appropriate, engaging in other
lending-related activities for borrowers
of different income levels and
businesses and farms of different sizes;
(4) The geographic distribution of the
bank’s loans; and
(5) The bank’s record of taking action,
if warranted, in response to written
complaints about its performance in
helping to meet credit needs in its
assessment area(s).
(c) Community development test. An
intermediate small bank’s community
development performance also is
evaluated pursuant to the following
criteria:
(1) The number and amount of
community development loans;
(2) The number and amount of
qualified investments;
(3) The extent to which the bank
provides community development
services; and
(4) The bank’s responsiveness through
such activities to community
development lending, investment, and
services needs.
3a. Revise § 228.28(c) to read as
follows:
§ 228.28
Assigned ratings.
*
*
*
*
*
The number and amount of
community development loans;
(2) The number and amount of
qualified investments;
(3) The extent to which the bank
provides community development
services; and
(4) The bank’s responsiveness through
such activities to community
development lending, investment, and
services needs.
3a. Revise § 228.28(c) to read as
follows:
§ 228.28
Assigned ratings.
*
*
*
*
*
(c) Effect of evidence of
discriminatory or other illegal credit
practices. (1) The Board’s evaluation of
a bank’s CRA performance is adversely
affected by evidence of discriminatory
or other illegal credit practices in any
geography by the bank or in any
assessment area by any affiliate whose
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loans have been considered as part of
the bank’s lending performance. In
connection with any type of lending
activity described in § 228.22(a),
evidence of discriminatory or other
credit practices that violate an
applicable law, rule, or regulation
includes, but is not limited to:
(i) Discrimination against applicants
on a prohibited basis in violation, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
ludes, but is not limited to:
(i) Discrimination against applicants
on a prohibited basis in violation, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending
Act provisions regarding a consumer’s
right of rescission.
(2) In determining the effect of
evidence of practices described in
paragraph (c)(1) of this section on the
bank’s assigned rating, the Board
considers the nature, extent, and
strength of the evidence of the practices;
the policies and procedures that the
bank (or affiliate, as applicable) has in
place to prevent the practices; any
corrective action that the bank (or
affiliate, as applicable) has taken or has
committed to take, including voluntary
corrective action resulting from self-
assessment; and any other relevant
information.
4. In Appendix A to part 228, revise
paragraph (d) to read as follows:
Appendix A to Part 228—Ratings
*
*
*
*
*
(d) Banks evaluated under the small bank
performance standards.—(1) Lending test
ratings.—(i) Eligibility for a satisfactory
lending test rating. The Board rates a small
bank’s lending performance ‘‘satisfactory’’ if,
in general, the bank demonstrates:
(A) A reasonable loan-to-deposit ratio
(considering seasonal variations) given the
bank’s size, financial condition, the credit
needs of its assessment area(s), and taking
into account, as appropriate, other lending-
related activities such as loan originations for
sale to the secondary markets and
community development loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(includin
ing-
related activities such as loan originations for
sale to the secondary markets and
community development loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(including low- and moderate-income
individuals) and businesses and farms of
different sizes that is reasonable given the
demographics of the bank’s assessment
area(s);
(D) A record of taking appropriate action,
when warranted, in response to written
complaints, if any, about the bank’s
performance in helping to meet the credit
needs of its assessment area(s); and
(E) A reasonable geographic distribution of
loans given the bank’s assessment area(s).
(ii) Eligibility for an ‘‘outstanding’’ lending
test rating. A small bank that meets each of
the standards for a ‘‘satisfactory’’ rating
under this paragraph and exceeds some or all
of those standards may warrant consideration
for a lending test rating of ‘‘outstanding.’’
(iii) Needs to improve or substantial
noncompliance ratings. A small bank may
also receive a lending test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standard
for a ‘‘satisfactory’’ rating.
(2) Community development test ratings for
intermediate small banks—(i) Eligibility for a
satisfactory community development test
rating. The Board rates an intermediate small
bank’s community development performance
‘‘satisfactory’’ if the bank demonstrates
adequate responsiveness to the community
development needs of its assessment area(s)
or a broader statewide or regional area that
includes the bank’s assessment area(s)
through community development loans,
qualified investments, and community
development services
ating. The Board rates an intermediate small
bank’s community development performance
‘‘satisfactory’’ if the bank demonstrates
adequate responsiveness to the community
development needs of its assessment area(s)
or a broader statewide or regional area that
includes the bank’s assessment area(s)
through community development loans,
qualified investments, and community
development services. The adequacy of the
bank’s response will depend on its capacity
for such community development activities,
its assessment area’s need for such
community development activities, and the
availability of such opportunities for
community development in the bank’s
assessment area(s).
(ii) Eligibility for an outstanding
community development test rating. The
Board rates an intermediate small bank’s
community development performance
‘‘outstanding’’ if the bank demonstrates
excellent responsiveness to community
development needs in its assessment area(s)
through community development loans,
qualified investments, and community
development services, as appropriate,
considering the bank’s capacity and the need
and availability of such opportunities for
community development in the bank’s
assessment area(s).
(iii) Needs to improve or substantial
noncompliance ratings. An intermediate
small bank may also receive a community
development test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standards
for a ‘‘satisfactory’’ rating.
such opportunities for
community development in the bank’s
assessment area(s).
(iii) Needs to improve or substantial
noncompliance ratings. An intermediate
small bank may also receive a community
development test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standards
for a ‘‘satisfactory’’ rating.
(3) Overall rating—(i) Eligibility for a
satisfactory overall rating. No intermediate
small bank may receive an assigned overall
rating of ‘‘satisfactory’’ unless it receives a
rating of at least ‘‘satisfactory’’ on both the
lending test and the community development
test.
(ii) Eligibility for an outstanding overall
rating. (A) An intermediate small bank that
receives an ‘‘outstanding’’ rating on one test
and at least ‘‘satisfactory’’ on the other test
may receive an assigned overall rating of
‘‘outstanding.’’
(B) A small bank that is not an
intermediate small bank that meets each of
the standards for a ‘‘satisfactory’’ rating
under the lending test and exceeds some or
all of those standards may warrant
consideration for an overall rating of
‘‘outstanding.’’ In assessing whether a bank’s
performance is ‘‘outstanding,’’ the Board
considers the extent to which the bank
exceeds each of the performance standards
for a ‘‘satisfactory’’ rating and its
performance in making qualified investments
and its performance in providing branches
and other services and delivery systems that
enhance credit availability in its assessment
area(s).
utstanding.’’ In assessing whether a bank’s
performance is ‘‘outstanding,’’ the Board
considers the extent to which the bank
exceeds each of the performance standards
for a ‘‘satisfactory’’ rating and its
performance in making qualified investments
and its performance in providing branches
and other services and delivery systems that
enhance credit availability in its assessment
area(s).
(iii) Needs to improve or substantial
noncompliance overall ratings. A small bank
may also receive a rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standards
for a ‘‘satisfactory’’ rating.
*
*
*
*
*
Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint
preamble, the Board of Directors of the
Federal Deposit Insurance Corporation
proposes to amend part 345 of chapter
III of title 12 of the Code of Federal
Regulations to read as follows:
PART 345—COMMUNITY
REINVESTMENT
1. The authority citation for part 345
continues to read as follows:
Authority: 12 U.S.C. 1814–1817, 1819–
1820, 1828, 1831u and 2901–2907, 3103–
3104, and 3108(a).
2. In § 345.12, revise paragraphs (g)(1),
(g)(4), and (u) to read as follows:
§ 345.12
Definitions.
*
*
*
*
*
(g) Community development means:
(1) Affordable housing (including
multifamily rental housing) for low- or
moderate-income individuals,
individuals in underserved rural areas,
or individuals located in designated
disaster areas;
*
*
*
*
*
(4) Activities that revitalize or
stabilize low- or moderate-income
geographies, underserved rural areas, or
designated disaster areas.
*
*
*
*
*
g) Community development means:
(1) Affordable housing (including
multifamily rental housing) for low- or
moderate-income individuals,
individuals in underserved rural areas,
or individuals located in designated
disaster areas;
*
*
*
*
*
(4) Activities that revitalize or
stabilize low- or moderate-income
geographies, underserved rural areas, or
designated disaster areas.
*
*
*
*
*
(u) Small bank—(1) Definition. Small
bank means a bank that, as of December
31 of either of the prior two calendar
years, had assets of less than $1 billion.
Intermediate small bank means a small
bank with assets of at least $250 million
and less than $1 billion as of December
31 of both of the prior two calendar
years.
(2) Adjustment. The dollar figures in
paragraph (u)(1) of this section shall be
adjusted annually and published by the
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FDIC, based on the year-to-year change
in the average of the Consumer Price
Index for Urban Wage Earners and
Clerical Workers, not seasonally
adjusted, for each twelve-month period
ending in November, with rounding to
the nearest million.
*
*
*
*
*
3. Revise § 345.26 to read as follows:
§ 345.26
Small bank performance
standards.
(a) Performance criteria—(1) Small
banks with assets of less than $250
million. The FDIC evaluates the record
of a small bank that is not, or that was
not during the prior calendar year, an
intermediate small bank, of helping to
meet the credit needs of its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
§ 345.26
Small bank performance
standards.
(a) Performance criteria—(1) Small
banks with assets of less than $250
million. The FDIC evaluates the record
of a small bank that is not, or that was
not during the prior calendar year, an
intermediate small bank, of helping to
meet the credit needs of its assessment
area(s) pursuant to the criteria set forth
in paragraph (b) of this section.
(2) Intermediate small banks. The
FDIC evaluates the record of a small
bank that is, or that was during the prior
calendar year, an intermediate small
bank, of helping to meet the credit
needs of its assessment area(s) pursuant
to the criteria set forth in paragraphs (b)
and (c) of this section.
(b) Lending test. A small bank’s
lending performance is evaluated
pursuant to the following criteria:
(1) The bank’s loan-to-deposit ratio,
adjusted for seasonal variation, and, as
appropriate, other lending-related
activities, such as loan originations for
sale to the secondary markets,
community development loans, or
qualified investments;
(2) The percentage of loans and, as
appropriate, other lending-related
activities located in the bank’s
assessment area(s);
(3) The bank’s record of lending to
and, as appropriate, engaging in other
lending-related activities for borrowers
of different income levels and
businesses and farms of different sizes;
(4) The geographic distribution of the
bank’s loans; and
(5) The bank’s record of taking action,
if warranted, in response to written
complaints about its performance in
helping to meet credit needs in its
assessment area(s).
lending to
and, as appropriate, engaging in other
lending-related activities for borrowers
of different income levels and
businesses and farms of different sizes;
(4) The geographic distribution of the
bank’s loans; and
(5) The bank’s record of taking action,
if warranted, in response to written
complaints about its performance in
helping to meet credit needs in its
assessment area(s).
(c) Community development test. An
intermediate small bank’s community
development performance also is
evaluated pursuant to the following
criteria:
(1) The number and amount of
community development loans;
(2) The number and amount of
qualified investments;
(3) The extent to which the bank
provides community development
services; and
(4) The bank’s responsiveness through
such activities to community
development lending, investment, and
services needs.
3a. Revise § 345.28(c) to read as
follows:
§ 345.28
Assigned ratings.
*
*
*
*
*
(c) Effect of evidence of
discriminatory or other illegal credit
practices. (1) The FDIC’s evaluation of a
bank’s CRA performance is adversely
affected by evidence of discriminatory
or other illegal credit practices in any
geography by the bank or in any
assessment area by any affiliate whose
loans have been considered as part of
the bank’s lending performance. In
connection with any type of lending
activity described in § 345.22(a),
evidence of discriminatory or other
credit practices that violate an
applicable law, rule, or regulation
includes, but is not limited to:
(i) Discrimination against applicants
on a prohibited basis in violation, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
ludes, but is not limited to:
(i) Discrimination against applicants
on a prohibited basis in violation, for
example, of the Equal Credit
Opportunity Act or the Fair Housing
Act;
(ii) Violations of the Home Ownership
and Equity Protection Act;
(iii) Violations of section 5 of the
Federal Trade Commission Act;
(iv) Violations of section 8 of the Real
Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending
Act provisions regarding a consumer’s
right of rescission.
(2) In determining the effect of
evidence of practices described in
paragraph (c)(1) of this section on the
bank’s assigned rating, the FDIC
considers the nature, extent, and
strength of the evidence of the practices;
the policies and procedures that the
bank (or affiliate, as applicable) has in
place to prevent the practices; any
corrective action that the bank (or
affiliate, as applicable) has taken or has
committed to take, including voluntary
corrective action resulting from self-
assessment; and any other relevant
information.
4. In Appendix A to part 345, revise
paragraph (d) to read as follows:
Appendix A to Part 345—Ratings
*
*
*
*
*
(d) Banks evaluated under the small bank
performance standards—(1) Lending test
ratings.—
(i) Eligibility for a satisfactory lending test
rating. The FDIC rates a small bank’s lending
performance ‘‘satisfactory’’ if, in general, the
bank demonstrates:
(A) A reasonable loan-to-deposit ratio
(considering seasonal variations) given the
bank’s size, financial condition, the credit
needs of its assessment area(s), and taking
into account, as appropriate, other lending-
related activities such as loan originations for
sale to the secondary markets and
community development loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(including
g-
related activities such as loan originations for
sale to the secondary markets and
community development loans and qualified
investments;
(B) A majority of its loans and, as
appropriate, other lending-related activities,
are in its assessment area;
(C) A distribution of loans to and, as
appropriate, other lending-related activities
for individuals of different income levels
(including low- and moderate-income
individuals) and businesses and farms of
different sizes that is reasonable given the
demographics of the bank’s assessment
area(s);
(D) A record of taking appropriate action,
when warranted, in response to written
complaints, if any, about the bank’s
performance in helping to meet the credit
needs of its assessment area(s); and
(E) A reasonable geographic distribution of
loans given the bank’s assessment area(s).
(ii) Eligibility for an ‘‘outstanding’’ lending
test rating. A small bank that meets each of
the standards for a ‘‘satisfactory’’ rating
under this paragraph and exceeds some or all
of those standards may warrant consideration
for a lending test rating of ‘‘outstanding.’’
(iii) Needs to improve or substantial
noncompliance ratings. A small bank may
also receive a lending test rating of ‘‘needs to
improve’’ or ‘‘substantial noncompliance’’
depending on the degree to which its
performance has failed to meet the standard
for a ‘‘satisfactory’’ rating.
(2) Community development test ratings for
intermediate small banks—(i) Eligibility for a
satisfactory community development test
rating. The FDIC rates an intermediate small
bank’s community development performance
‘‘satisfactory’’ if the bank demonstrates
adequate responsiveness to the community
development needs of its assessment area(s)
or a broader statewide or regional area that
includes the bank’s assessment area(s)
through community development loans,
qualified investments, and community
development services
rating. The FDIC rates an intermediate small
bank’s community development performance
‘‘satisfactory’’ if the bank demonstrates
adequate responsiveness to the community
development needs of its assessment area(s)
or a broader statewide

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## Nearby sections

- [FDIC FIL-1-2002 FOREIGN ASSETS CONTROL ACT](https://www.frixlaw.com/law-library/statutes/FDIC_FIL02001.md)
- [FDIC FIL-1-2010 Employee Compensation Advance Notice of Proposed Rulemaking](https://www.frixlaw.com/law-library/statutes/FDIC_FIL10001.md)
- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
- [FDIC FIL-2-2004 Foreign Assets Control Act](https://www.frixlaw.com/law-library/statutes/FDIC_FIL04002.md)
- [FDIC FIL-2-2020 Consolidated Reports of Condition and Income for Fourth Quarter 2019](https://www.frixlaw.com/law-library/statutes/FDIC_FIL20002.md)
- [FDIC FIL-3-2003 FILING PROCEDURES](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03003.md)
- [FDIC FIL-4-2006 Commercial Real Estate Lending Proposed Interagency Guidance](https://www.frixlaw.com/law-library/statutes/FDIC_FIL06004.md)
- [FDIC FIL-4-2021 Revised Guidelines for Appeals of Material Supervisory Determinations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21004.md)
- [FDIC FIL-4-2023 Guidance to Help Financial Institutions and Facilitate Recovery in Areas of California Affected by Severe Winter Storms, Flooding, Landslides and Mudslides](https://www.frixlaw.com/law-library/statutes/FDIC_FIL23004.md)
- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)
- [FDIC FIL-5-2000 Consumer Credit Reporting Practices](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00005.md)
- [FDIC FIL-5-2003 LETTER TO STAKEHOLDERS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03005.md)
- [FDIC FIL-5-2021 Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Considerations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21005.md)
- [FDIC FIL-6-2000 Special Alert](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00006.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL05021. Check the current official text before relying on it. Not legal advice.