Section 185.210 Performance Tests, Standards, and Ratings, In General

TITLE 38: FINANCIAL INSTITUTIONS

CHAPTER II: DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

PART 185 CREDIT UNION COMMUNITY REINVESTMENT

SECTION 185.210 PERFORMANCE TESTS, STANDARDS, AND RATINGS, IN GENERAL

Section 185.210  Performance Tests, Standards, and

Ratings, In General

a)         Performance

tests and standards.  The Secretary assesses the ILCRA performance of a credit

union in an examination as follows:

1)         The

Secretary shall apply the assessment factors, as provided in Section 185.200,

and the lending and service tests, as provided in Section 185.220 and Section

185.240 in evaluating the performance of a credit union, except as provided in

Section 185.210(a)(2), (a)(3) and (a)(4). The investment test, as provided in

Section 185.230, does not apply to credit unions unless the credit union elects

to be evaluated pursuant to the investment test at the start of an examination.

2)         Community

development test for wholesale or limited purpose credit unions.  The Secretary

applies the community development test for a wholesale or limited purpose

credit union, as provided in Section 185.250, except as provided in Section

185.210(a)(4).

3)         Small

credit union and intermediate small credit union performance standards.  The

Secretary applies the small credit union and intermediate small credit union performance

standards as provided in Section 185.260 in evaluating the performance of a

small credit union or intermediate small credit union or a credit union that

was a small credit union during the prior calendar year, unless the credit

union elects to be assessed as provided in subsections (a)(1), (a)(2), or

The

Secretary applies the small credit union and intermediate small credit union performance

standards as provided in Section 185.260 in evaluating the performance of a

small credit union or intermediate small credit union or a credit union that

was a small credit union during the prior calendar year, unless the credit

union elects to be assessed as provided in subsections (a)(1), (a)(2), or

(a)(4) of this Section.  A small credit union or intermediate small credit

union may elect to be assessed as provided in subsection (a)(1) of this Section

only if it collects and reports the data required for other credit unions under

Section 185.410.

4)         Strategic

plan.  The Secretary evaluates the performance of a credit union under a

strategic plan if the credit union submits, and the Secretary approves, a

strategic plan as provided in Section 185.270.

b)         Performance

context.  The Secretary applies the tests and standards in subsection (a) and

also considers whether to approve a proposed strategic plan in the context of:

1)         demographic

data on median income levels, distribution of household income, nature of

housing stock, housing costs, and other relevant data pertaining to a credit

union's assessment field;

2)         any

information about lending, investment, and service opportunities in the credit

union's assessment field maintained by the credit union or obtained from

community organizations, state, local, and tribal governments, economic

development agencies, or other sources;

3)         the

credit union's product offerings and business strategy as determined from data

provided by the credit union;

4)         credit

union capacity and constraints, including the size and financial condition of

the credit union, the economic climate (national, regional, and local), safety

and soundness limitations, and any other factors that significantly affect the

credit union's ability to provide lending, investments, or services in its assessment

field;

5)         the

credit union

y the credit union;

4)         credit

union capacity and constraints, including the size and financial condition of

the credit union, the economic climate (national, regional, and local), safety

and soundness limitations, and any other factors that significantly affect the

credit union's ability to provide lending, investments, or services in its assessment

field;

5)         the

credit union's past performance and the performance of similarly situated credit

unions;

6)         the

credit union's ILCRA file, as described in Section 185.420, and any written

comments about the credit union's ILCRA performance submitted to the credit

union or the Secretary;

7)         the credit

union's field of membership and any lending, investment, and other limitation

or prohibition applicable to the credit union pursuant to law

;

and

8)         any

other information deemed relevant by the Secretary.

c)         Assigned

ratings.  The Secretary assigns to a credit union one of the following four

ratings pursuant to Section 185.280 and 185.APPENDIX A (Ratings):  "outstanding";

"satisfactory"; "needs to improve"; or "substantial

noncompliance" as provided in 205 ILCS 735/35-15(c). The rating assigned

by the Secretary reflects the credit union's record of helping to meet the

credit needs of its entire community, including low- and moderate-income

neighborhoods, consistent with the safe and sound operation of the credit

union, and consistent with its common bond.

A credit

union will be evaluated by how it serves its assessment field. A credit union's

rating will not be negatively impacted by the composition of its assessment

field, including without limitation the income and geographic demographic data

of borrowers in the assessment field, so long as the assessment field is

delineated in accordance with Section 185.400.

d)         Safe

and sound operations

it

union will be evaluated by how it serves its assessment field. A credit union's

rating will not be negatively impacted by the composition of its assessment

field, including without limitation the income and geographic demographic data

of borrowers in the assessment field, so long as the assessment field is

delineated in accordance with Section 185.400.

d)         Safe

and sound operations.  This Part and the ILCRA does not require a credit union

to make loans or investments or to provide services that are inconsistent with

safe and sound operations, its size and financial condition, or inconsistent

with its common bond. Credit unions are permitted and encouraged to develop and

apply flexible underwriting standards for loans that benefit low- and moderate-income

geographies or individuals and work with delinquent customers to facilitate a

resolution of the delinquency, only if consistent with safe and sound

operations and consistent with its common bond.

e)         Low-cost

education loans provided to low-income borrowers.  In assessing and taking into

account the record of a credit union under this Part, the Secretary shall consider,

when applicable, low-cost education loans originated by the credit union to

borrowers, particularly in its assessment field, who have an individual income

that is less than 50 percent of the area median income. For purposes of this

paragraph, "low-cost education loans" means any education loan, as

defined in section 140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7))

(including a loan under a state or local education loan program), originated by

the credit union for a student at an "institution of higher education",

as that term is generally defined in sections 101 and 102 of the Higher

Education Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing

regulations published by the U.S. Department of Education, with interest rates

and fees no greater than those of comparable education loans offered directly

by the U.S. Department of Education

union for a student at an "institution of higher education",

as that term is generally defined in sections 101 and 102 of the Higher

Education Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing

regulations published by the U.S. Department of Education, with interest rates

and fees no greater than those of comparable education loans offered directly

by the U.S. Department of Education. Such rates and fees are specified in

section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e). This

subsection only applies to credit unions that offer education loans.

f)         Activities

in cooperation with Community Development Financial Institutions, Minority- or

Women-Owned Financial Institutions and Low-Income Credit Unions.  In assessing

performance to this Part, the Secretary shall consider: capital investment,

loan participation, and other ventures undertaken by the credit union in

cooperation with Community Development Financial Institutions

as defined in regulations issued by the

U.S. Department of the Treasury,

with minority- and women-owned

financial institutions as defined in 12 U.S.C. 2907(b) and credit unions

designated as low-income or minority depository institutions by the National

Credit Union Administration. Activities must help meet the credit needs of

local communities in which Community Development Financial Institution, the

minority- and women-owned financial institutions or low income or minority

credit unions are chartered. To be considered, activities need not also benefit

the credit union's assessment field. This subsection does not apply to credit

unions designated as low-income or minority credit unions.

g)         Community

Development Financial Institutions, Minority Depository Institutions and

Low-Income Designated Credit Unions

financial institutions or low income or minority

credit unions are chartered. To be considered, activities need not also benefit

the credit union's assessment field. This subsection does not apply to credit

unions designated as low-income or minority credit unions.

g)         Community

Development Financial Institutions, Minority Depository Institutions and

Low-Income Designated Credit Unions. In assessing performance pursuant to this

Part, the Secretary shall consider whether a credit union is certified or

designated as a Community Development Financial Institution, Minority

Depository Institution and/or Low-Income Designated Credit Union.  The

Department may require documentation to confirm the credit union still meets

the criteria for the certification or designation.