SUBPART A—GENERAL SECTION 228.11—Authority, Purposes,
and Scope (a) Authority. The Board of Governors of the Federal Reserve System
(the Board) issues this part to implement the Community Reinvestment
Act (12 U.S.C. 2901 et seq.) (CRA). The regulations comprising
this part are issued under the authority of the CRA and under the
provisions of the United States Code authorizing the Board:
(1) To conduct examinations of state-chartered
banks that are members of the Federal Reserve System (12 U.S.C. 325);
(2) To conduct examinations
of bank holding companies and their subsidiaries (12 U.S.C. 1844)
and savings and loan holding companies and their subsidiaries (12
U.S.C. 1467a); and
(3)
To consider applications for:
(i) Domestic branches by
state member banks (12 U.S.C. 321);
(ii) Mergers in which the resulting
bank would be a state member bank (12 U.S.C. 1828(c));
(iii) Formations of, acquisitions
of banks by, and mergers of, bank holding companies (12 U.S.C. 1842);
(iv) The acquisition
of savings associations by bank holding companies (12 U.S.C. 1843);
and
(v) Formations
of, acquisitions of savings associations by, conversions of, and mergers
of, savings and loan holding companies (12 U.S.C. 1467a).
(b) Purposes. In enacting the CRA, the Congress required each appropriate federal
financial supervisory agency to assess an institution’s record
of helping to meet the credit needs of the local communities in which
the institution is chartered, consistent with the safe and sound operation
of the institution, and to take this record into account in the agency’s
evaluation of an application for a deposit facility by the institution.
This part is intended to carry out the purposes of the CRA by:
(1) Establishing the framework and criteria
by which the Board assesses a bank’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
bank; and
(2) Providing
that the Board takes that record into account in considering certain
applications.
(c) Scope.
(1) General. This part applies to all banks except as provided in paragraph (c)(3)
of this section.
(2) Foreign bank acquisitions. This part also
applies to an uninsured state branch (other than a limited branch)
of a foreign bank that results from an acquisition described in section
5(a)(8) of the International Banking Act of 1978 (12 U.S.C. 3103(a)(8)).
The terms “state branch” and “foreign bank”
have the same meanings as in section 1(b) of the International Banking
Act of 1978 (12 U.S.C. 3101 et seq.); the term “uninsured
state branch” means a state branch the deposits of which are
not insured by the Federal Deposit Insurance Corporation; the term
“limited branch” means a state branch that accepts only
deposits that are permissible for a corporation organized under section
25A of the Federal Reserve Act (12 U.S.C. 611 et seq.).
(3) Certain special purpose banks. This part
does not apply to special purpose banks that do not perform commercial
or retail banking services by granting credit to the public in the
ordinary course of business, other than as incident to their specialized
operations. These banks include banker’s banks, as defined in
12 U.S.C. 24 (Seventh), and banks that engage only in one or more
of the following activities: providing cash management controlled
disbursement services or serving as correspondent banks, trust companies,
or clearing agents.
For purposes of
this part, the following definitions apply:
(a) Affiliate means any company that controls, is controlled by,
or is under common control with another company. The term “control”
has the meaning given to that term in 12 U.S.C. 1841(a)(2), and a
company is under common control with another company if both companies
are directly or indirectly controlled by the same company.
(b) Area median income means:
(1) The median family income for the MSA,
if a person or geography is located in an MSA, or for the metropolitan
division, if a person or geography is located in an MSA that has been
subdivided into metropolitan divisions; or
(2) The statewide nonmetropolitan median
family income, if a person or geography is located outside an MSA.
(c) Assessment area means a geographic
area delineated in accordance with section 228.41.
(d) Automated teller machine (ATM) means an automated, unstaffed
banking facility owned or operated by, or operated exclusively for,
the bank at which deposits are received, cash dispersed, or money
lent.
(e) Bank means a state member bank
as that term is defined in section 3(d)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(d)(2)), except as provided in section
228.11(c)(3), and includes an uninsured state branch (other than a
limited branch) of a foreign bank described in section 228.11(c)(2).
(f) Branch means a staffed banking facility
approved as a branch, whether shared or unshared, including, for example,
a mini-branch in a grocery store or a branch operated in conjunction
with any other local business or nonprofit organization.
(g) Community development means:
(1) Affordable housing (including multifamily
rental housing) for low- or moderate-income individuals;
(2) Community services targeted
to low- or moderate-income individuals;
(3) Activities that promote economic development
by financing businesses or farms that meet the size eligibility standards
of the Small Business Administration’s Development Company or
Small Business Investment Company programs (13 CFR 121.301) or have
gross annual revenues of $1 million or less; or
(4) Activities that revitalize or stabilize—
(i) Low- or moderate-income geographies;
(ii) Designated disaster areas; or
(iii) Distressed or
underserved nonmetropolitan middle-income geographies designated by
the Board, Federal Deposit Insurance Corporation, and Office of the
Comptroller of the Currency, based on—
(A) Rates of poverty,
unemployment, and population loss; or
(B) Population size, density, and dispersion.
Activities revitalize and stabilize geographies designated based on
population size, density, and dispersion if they help to meet essential
community needs, including needs of low- and moderate-income individuals.
(h) Community
development loan means a loan that:
(1) Has as its primary purpose community
development; and
(2)
Except in the case of a wholesale or limited purpose bank:
(i) Has
not been reported or collected by the bank or an affiliate for consideration
in the bank’s assessment as a home mortgage, small business,
small farm, or consumer loan, unless the loan is for a multifamily
dwelling (as defined in section 1003.2(n) of this title); and
(ii) Benefits the bank’s
assessment area(s) or a broader statewide or regional area that includes
the bank’s assessment area(s).
(i) Community development service means a service
that:
(1) Has as its primary
purpose community development;
(2) Is related to the provision of financial
services; and
(3) Has
not been considered in the evaluation of the bank’s retail banking
services under section 228.24(d).
(j) Consumer loan means a loan to one or more individuals for household,
family, or other personal expenditures. A consumer loan does not include
a home mortgage, small business, or small farm loan. Consumer loans
include the following categories of loans:
(1) Motor vehicle loan, which is
a consumer loan extended for the purchase of and secured by a motor
vehicle;
(2) Credit
card loan, which is a line of credit for household, family, or
other personal expenditures that is accessed by a borrower’s
use of a “credit card,” as this term is defined in section
1026.2 of this chapter;
(3) Other secured consumer loan, which is a secured consumer
loan that is not included in one of the other categories of consumer
loans; and
(4) Other
unsecured consumer loan, which is an unsecured consumer loan that
is not included in one of the other categories of consumer loans.
(k) Geography means a census tract
delineated by the United States Bureau of the Census in the most recent
decennial census.
(l) Home mortgage loan means a closed-end mortgage loan or an open-end line of credit as
these terms are defined under section 1003.2 of this title and that
is not an excluded transaction under section 1003.3(c)(1) through
(10) and (13) of this title.
(m) Income level includes:
(1) Low-income, which
means an individual income that is less than 50 percent of the area
median income, or a median family income that is less than 50 percent,
in the case of a geography.
(2) Moderate-income, which means
an individual income that is at least 50 percent and less than 80
percent of the area median income, or a median family income that
is at least 50 and less than 80 percent, in the case of a geography.
(3) Middle-income, which means an individual income that is at least 80 percent and
less than 120 percent of the area median income, or a median family
income that is at least 80 and less than 120 percent, in the case
of a geography.
(4) Upper-income, which means an individual income that is 120 percent
or more of the area median income, or a median family income that
is 120 percent or more, in the case of a geography.
(n) Limited purpose bank means a bank that offers
only a narrow product line (such as credit card or motor vehicle loans)
to a regional or broader market and for which a designation as a limited
purpose bank is in effect, in accordance with section 228.25(b).
(o) Loan location. A loan is located as follows:
(1) A consumer loan is located in the geography
where the borrower resides;
(2) A home mortgage loan is located in
the geography where the property to which the loan relates is located;
and
(3) A small business
or small farm loan is located in the geography where the main business
facility or farm is located or where the loan proceeds otherwise will
be applied, as indicated by the borrower.
(p) Loan production office means a staffed facility, other
than a branch, that is open to the public and that provides lending-related
services, such as loan information and applications.
(q) Metropolitan division means a metropolitan division as
defined by the director of the Office of Management and Budget.
(r) MSA means a metropolitan statistical area
as defined by the director of the Office of Management and Budget.
(s) Nonmetropolitan area means any area that
is not located in an MSA.
(t) Qualified investment means a lawful investment, deposit, membership share, or grant that
has as its primary purpose community development.
(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 $1.564 billion. Intermediate small bank means a small bank with assets of at
least $391 million as of December 31 of both of the prior two calendar
years and less than $1.564 billion as of December 31 of either 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.
(v) Small business loan means a loan included in “loans
to small businesses” as defined in the instructions for preparation
of the Consolidated Report of Condition and Income.
(w) Small farm loan means a loan included in “loans
to small farms” as defined in the instructions for preparation
of the Consolidated Report of Condition and Income.
(x) Wholesale bank means a bank that is not in the business
of extending home mortgage, small business, small farm, or consumer
loans to retail customers, and for which a designation as a wholesale
bank is in effect, in accordance with section 228.25(b).
SUBPART B—STANDARDS FOR ASSESSING PERFORMANCE SECTION 228.21—Performance Tests,
Standards, and Ratings, in General(a) Performance tests and standards. The Board
assesses the CRA performance of a bank in an examination as follows:
(1) Lending, investment, and service tests. The Board applies the
lending, investment, and service tests, as provided in sections 228.22
through 228.24, in evaluating the performance of a bank, except as
provided in paragraphs (a)(2), (a)(3), and (a)(4) of this section.
(2) Community development test for wholesale or
limited purpose banks. The Board applies the community development
test for a wholesale or limited purpose bank, as provided in section
228.25, except as provided in paragraph (a)(4) of this section.
(3) Small bank performance standards. The Board
applies the small bank performance standards as provided in section
228.26 in evaluating the performance of a small bank or a bank that
was a small bank during the prior calendar year, unless the bank elects
to be assessed as provided in paragraphs (a)(1), (a)(2), or (a)(4)
of this section. The bank may elect to be assessed as provided in
paragraph (a)(1) of this section only if it collects and reports the
data required for other banks under section 228.42.
(4) Strategic
plan. The Board evaluates the performance of a bank under a strategic
plan if the bank submits, and the Board approves, a strategic plan
as provided in section 228.27.
(b) Performance context. The Board applies
the tests and standards in paragraph (a) of this section 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 bank’s
assessment area(s);
(2) Any information about lending, investment, and service opportunities
in the bank’s assessment area(s) maintained by the bank or obtained
from community organizations, state, local, and tribal governments,
economic development agencies, or other sources;
(3) The bank’s product offerings
and business strategy as determined from data provided by the bank;
(4) Institutional capacity
and constraints, including the size and financial condition of the
bank, the economic climate (national, regional, and local), safety
and soundness limitations, and any other factors that significantly
affect the bank’s ability to provide lending, investments, or
services in its assessment area(s);
(5) The bank’s past performance and
the performance of similarly situated lenders;
(6) The bank’s public file, as described
in section 228.43, and any written comments about the bank’s
CRA performance submitted to the bank or the Board; and
(7) Any other information
deemed relevant by the Board.
(c) Assigned ratings. The Board assigns to
a bank one of the following four ratings pursuant to section 228.28
and appendix A of this part: “outstanding”; “satisfactory”;
“needs to improve”; or “substantial noncompliance”
as provided in 12 U.S.C. 2906(b)(2). The rating assigned by the Board
reflects the bank’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 bank.
(d) Safe and sound operations. This part and the CRA do not require a bank to make loans or investments
or to provide services that are inconsistent with safe and sound operations.
To the contrary, the Board anticipates banks can meet the standards
of this part with safe and sound loans, investments, and services
on which the banks expect to make a profit. Banks are permitted and
encouraged to develop and apply flexible underwriting standards for
loans that benefit low- or moderate-income geographies or individuals,
only if consistent with safe and sound operations.
(e) Low-cost education loans provided to
low-income borrowers. In assessing and taking into account the
record of a bank under this part, the Board considers, as a factor,
low-cost education loans originated by the bank to borrowers, particularly
in its assessment area(s), 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 bank 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).
(f) Activities in cooperation with minority-
or women-owned financial institutions and low-income credit unions. In assessing and taking into account the record of a nonminority-owned
and nonwomen-owned bank under this part, the Board considers as a
factor capital investment, loan participation, and other ventures
undertaken by the bank in cooperation with minority- and women-owned
financial institutions and low-income credit unions. Such activities
must help meet the credit needs of local communities in which the
minority- and women-owned financial institutions and low-income credit
unions are chartered. To be considered, such activities need not also
benefit the bank’s assessment area(s) or the broader statewide
or regional area that includes the bank’s assessment area(s).
SECTION 228.22—Lending Test(a) Scope of test.
(1) The lending test evaluates
a bank’s record of helping to meet the credit needs of its assessment
area(s) through its lending activities by considering a bank’s
home mortgage, small business, small farm, and community development
lending. If consumer lending constitutes a substantial majority of
a bank’s business, the Board will evaluate the bank’s
consumer lending in one or more of the following categories: motor
vehicle, credit card, other secured, and other unsecured loans. In
addition, at a bank’s option, the Board will evaluate one or
more categories of consumer lending, if the bank has collected and
maintained, as required in section 228.42(c)(1), the data for each
category that the bank elects to have the Board evaluate.
(2) The Board considers originations
and purchases of loans. The Board will also consider any other loan
data the bank may choose to provide, including data on loans outstanding,
commitments, and letters of credit.
(3) A bank may ask the Board to consider
loans originated or purchased by consortia in which the bank participates
or by third parties in which the bank has invested only if the loans
meet the definition of community development loans and only in accordance
with paragraph (d) of this section. The Board will not consider these
loans under any criterion of the lending test except the community
development lending criterion.
(b) Performance criteria. The Board evaluates
a bank’s lending performance pursuant to the following criteria:
(1) Lending activity. The number and amount of the bank’s
home mortgage, small-business, small-farm, and consumer loans, if
applicable, in the bank’s assessment area(s);
(2) Geographic
distribution. The geographic distribution of the bank’s
home mortgage, small business, small farm, and consumer loans, if
applicable, based on the loan location, including:
(i) The
proportion of the bank’s lending in the bank’s assessment
area(s);
(ii) The
dispersion of lending in the bank’s assessment area(s); and
(iii) The number and
amount of loans in low-, moderate-, middle-, and upper-income geographies
in the bank’s assessment area(s);
(3) Borrower
characteristics. The distribution, particularly in the bank’s
assessment area(s), of the bank’s home mortgage, small business,
small farm, and consumer loans, if applicable, based on borrower characteristics,
including the number and amount of:
(i) Home mortgage loans
to low-, moderate-, middle-, and upper-income individuals;
(ii) Small business and
small farm loans to businesses and farms with gross annual revenues
of $1 million or less;
(iii) Small business and small farm loans by loan amount at origination;
and
(iv) Consumer
loans, if applicable, to low-, moderate-, middle-, and upper-income
individuals;
(4) Community development lending. The bank’s community development lending, including the number
and amount of community development loans, and their complexity and
innovativeness; and
(5) Innovative or flexible lending practices. The bank’s use of innovative or flexible lending practices
in a safe and sound manner to address the credit needs of low or moderate-income
individuals or geographies.
(c) Affiliate lending.
(1) At a bank’s option, the Board
will consider loans by an affiliate of the bank, if the bank provides
data on the affiliate’s loans pursuant to section 228.42.
(2) The Board considers
affiliate lending subject to the following constraints:
(i) No affiliate
may claim a loan origination or loan purchase if another institution
claims the same loan origination or purchase; and
(ii) If a bank elects to have the Board
consider loans within a particular lending category made by one or
more of the bank’s affiliates in a particular assessment area,
the bank shall elect to have the Board consider, in accordance with
paragraph (c)(1) of this section, all the loans within that lending
category in that particular assessment area made by all of the bank’s
affiliates.
(3) The Board does not consider affiliate lending in assessing a
bank’s performance under paragraph (b)(2)(i) of this section.
(d) Lending
by a consortium or a third party. Community development loans
originated or purchased by a consortium in which the bank participates
or by a third party in which the bank has invested:
(1) Will be considered, at the bank’s
option, if the bank reports the data pertaining to these loans under
section 228.42(b)(2); and
(2) May be allocated among participants or investors, as they choose,
for purposes of the lending test, except that no participant or investor:
(i) May claim a loan origination or loan purchase if another participant
or investor claims the same loan origination or purchase; or
(ii) May claim loans accounting
for more than its percentage share (based on the level of its participation
or investment) of the total loans originated by the consortium or
third party.
(e) Lending performance rating. The Board rates
a bank’s lending performance as provided in appendix A of this
part.
SECTION 228.23—Investment
Test(a) Scope
of test. The investment test evaluates a bank’s record
of helping to meet the credit needs of its assessment area(s) through
qualified investments that benefit its assessment area(s) or a broader
statewide or regional area that includes the bank’s assessment
area(s).
(b) Exclusion. Activities considered under the lending or service tests may not
be considered under the investment test.
(c) Affiliate investment. At a bank’s
option, the Board will consider, in its assessment of a bank’s
investment performance, a qualified investment made by an affiliate
of the bank, if the qualified investment is not claimed by any other
institution.
(d) Disposition
of branch premises. Donating, selling on favorable terms, or
making available on a rent-free basis a branch of the bank that is
located in a predominantly minority neighborhood to a minority depository
institution or women’s depository institution (as these terms
are defined in 12 U.S.C. 2907(b)) will be considered as a qualified
investment.
(e) Performance
criteria. The Board evaluates the investment performance of a
bank pursuant to the following criteria:
(1) The dollar amount of qualified investments;
(2) The innovativeness
or complexity of qualified investments;
(3) The responsiveness of qualified investments
to credit and community development needs; and
(4) The degree to which the qualified investments
are not routinely provided by private investors.
(f) Investment performance
rating. The Board rates a bank’s investment performance
as provided in appendix A of this part.
SECTION 228.24—Service Test(a) Scope of test. The service test evaluates
a bank’s record of helping to meet the credit needs of its assessment
area(s) by analyzing both the availability and effectiveness of a
bank’s systems for delivering retail banking services and the
extent and innovativeness of its community development services.
(b) Area(s) benefitted. Community development services must benefit a bank’s assessment
area(s) or a broader statewide or regional area that includes the
bank’s assessment area(s).
(c) Affiliate service. At a bank’s option,
the Board will consider, in its assessment of a bank’s service
performance, a community development service provided by an affiliate
of the bank, if the community development service is not claimed by
any other institution.
(d) Performance criteria—Retail banking services. The Board
evaluates the availability and effectiveness of a bank’s systems
for delivering retail banking services, pursuant to the following
criteria:
(1) The current distribution
of the bank’s branches among low-, moderate-, middle-, and upper-income
geographies;
(2) In
the context of its current distribution of the bank’s branches,
the bank’s record of opening and closing branches, particularly
branches located in low- or moderate-income geographies or primarily
serving low- or moderate-income individuals;
(3) The availability and effectiveness
of alternate systems for delivering retail banking services (e.g.,
ATMs, ATMs not owned or operated by or exclusively for the bank, banking
by telephone or computer, loan production offices, and bank-at-work
or bank-by-mail programs) in low- and moderate-income geographies
and to low- and moderate-income individuals; and
(4) The range of services provided in low-,
moderate-, middle-, and upper-income geographies and the degree to
which the services are tailored to meet the needs of those geographies.
(e) Performance
criteria—Community development services. The Board evaluates
community development services pursuant to the following criteria:
(1) The extent to which the
bank provides community development services; and
(2) The innovativeness and responsiveness
of community development services.
(f) Service performance rating. The Board rates
a bank’s service performance as provided in appendix A of this
part.
SECTION 228.25—Community
Development Test for Wholesale or Limited Purpose Banks(a) Scope of test. The
Board assesses a wholesale or limited purpose bank’s record
of helping to meet the credit needs of its assessment area(s) under
the community development test through its community development lending,
qualified investments, or community development services.
(b) Designation as a wholesale
or limited purpose bank. In order to receive a designation as
a wholesale or limited purpose bank, a bank shall file a request,
in writing, with the Board, at least three months prior to the proposed
effective date of the designation. If the Board approves the designation,
it remains in effect until the bank requests revocation of the designation
or until one year after the Board notifies the bank that the Board
has revoked the designation on its own initiative.
(c) Performance criteria. The Board
evaluates the community development performance of a wholesale or
limited purpose bank pursuant to the following criteria:
(1) The number and amount of community
development loans (including originations and purchases of loans and
other community development loan data provided by the bank, such as
data on loans outstanding, commitments, and letters of credit), qualified
investments, or community development services;
(2) The use of innovative or complex qualified
investments, community development loans, or community development
services and the extent to which the investments are not routinely
provided by private investors; and
(3) The bank’s responsiveness to
credit and community development needs.
(d) Indirect activities. At a bank’s
option, the Board will consider in its community development performance
assessment:
(1) Qualified investments
or community development services provided by an affiliate of the
bank, if the investments or services are not claimed by any other
institution; and
(2)
Community development lending by affiliates, consortia and third parties,
subject to the requirements and limitations in section 228.22(c) and
(d).
(e) Benefit
to assessment area(s).
(1) Benefit inside
assessment area(s). The Board considers all qualified investments,
community development loans, and community development services that
benefit areas within the bank’s assessment area(s) or a broader
statewide or regional area that includes the bank’s assessment
area(s).
(2) Benefit outside assessment area(s). The
Board considers the qualified investments, community development loans,
and community development services that benefit areas outside the
bank’s assessment area(s), if the bank has adequately addressed
the needs of its assessment area(s).
(f) Community development performance rating. The Board rates a bank’s community development performance
as provided in appendix A of this part.
SECTION 228.26—Small Bank Performance Standards(a) Performance criteria.
(1) Small banks that are
not intermediate small banks. 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.
(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.
(d) Small bank performance rating. The Board
rates the performance of a bank evaluated under this section as provided
in appendix A of this part.
SECTION
228.27—Strategic Plan(a) Alternative election. The Board will assess
a bank’s record of helping to meet the credit needs of its assessment
area(s) under a strategic plan if:
(1) The bank has submitted the plan to
the Board as provided for in this section;
(2) The Board has approved the plan;
(3) The plan is in effect;
and
(4) The bank has
been operating under an approved plan for at least one year.
(b) Data reporting. The Board’s approval of a plan does not affect the bank’s
obligation, if any, to report data as required by section 228.42.
(c) Plans in general.
(1) Term. A plan may have a term of no more than five years, and
any multiyear plan must include annual interim measurable goals under
which the Board will evaluate the bank’s performance.
(2) Multiple assessment areas. A bank with more than one assessment
area may prepare a single plan for all of its assessment areas or
one or more plans for one or more of its assessment areas.
(3) Treatment of affiliates. Affiliated institutions may prepare
a joint plan if the plan provides measurable goals for each institution.
Activities may be allocated among institutions at the institutions’
option, provided that the same activities are not considered for more
than one institution.
(d) Public participation in plan development. Before submitting a plan to the Board for approval, a bank shall:
(1) Informally seek suggestions
from members of the public in its assessment area(s) covered by the
plan while developing the plan;
(2) Once the bank has developed a plan,
formally solicit public comment on the plan for at least 30 days by
publishing notice in at least one newspaper of general circulation
in each assessment area covered by the plan; and
(3) During the period of formal public
comment, make copies of the plan available for review by the public
at no cost at all offices of the bank in any assessment area covered
by the plan and provide copies of the plan upon request for a reasonable
fee to cover copying and mailing, if applicable.
(e) Submission of plan. The bank shall submit its plan to the Board at least three months
prior to the proposed effective date of the plan. The bank shall also
submit with its plan a description of its informal efforts to seek
suggestions from members of the public, any written public comment
received, and, if the plan was revised in light of the comment received,
the initial plan as released for public comment.
(f) Plan content.
(1) Measurable
goals.
(i) A bank shall specify in its plan
measurable goals for helping to meet the credit needs of each assessment
area covered by the plan, particularly the needs of low- and moderate-income
geographies and low- and moderate-income individuals, through lending,
investment, and services, as appropriate.
(ii) A bank shall address in its plan
all three performance categories and, unless the bank has been designated
as a wholesale or limited purpose bank, shall emphasize lending and
lending-related activities. Nevertheless, a different emphasis, including
a focus on one or more performance categories, may be appropriate
if responsive to the characteristics and credit needs of its assessment
area(s), considering public comment and the bank’s capacity
and constraints, product offerings, and business strategy.
(2) Confidential information. A bank may submit
additional information to the Board on a confidential basis, but the
goals stated in the plan must be sufficiently specific to enable the
public and the Board to judge the merits of the plan.
(3) Satisfactory and outstanding goals. A bank shall specify in
its plan measurable goals that constitute “satisfactory”
performance. A plan may specify measurable goals that constitute “outstanding”
performance. If a bank submits, and the Board approves, both “satisfactory”
and “outstanding” performance goals, the Board will consider
the bank eligible for an “outstanding” performance rating.
(4) Election if satisfactory goals not substantially
met. A bank may elect in its plan that, if the bank fails to
meet substantially its plan goals for a satisfactory rating, the Board
will evaluate the bank’s performance under the lending, investment,
and service tests, the community development test, or the small-bank
performance standards, as appropriate.
(g) Plan approval.
(1) Timing. The Board will act upon a plan within 60 calendar days after the
Board receives the complete plan and other material required under
paragraph (e) of this section. If the Board fails to act within this
time period, the plan shall be deemed approved unless the Board extends
the review period for good cause.
(2) Public participation. In evaluating the plan’s goals, the Board considers the public’s
involvement in formulating the plan, written public comment on the
plan, and any response by the bank to public comment on the plan.
(3) Criteria for evaluating plan. The Board
evaluates a plan’s measurable goals using the following criteria,
as appropriate:
(i) The extent and breadth of lending
or lending-related activities, including, as appropriate, the distribution
of loans among different geographies, businesses and farms of different
sizes, and individuals of different income levels, the extent of community
development lending, and the use of innovative or flexible lending
practices to address credit needs;
(ii) The amount and innovativeness,
complexity, and responsiveness of the bank’s qualified investments;
and
(iii) The availability
and effectiveness of the bank’s systems for delivering retail
banking services and the extent and innovativeness of the bank’s
community development services.
(h) Plan amendment. During
the term of a plan, a bank may request the Board to approve an amendment
to the plan on grounds that there has been a material change in circumstances.
The bank shall develop an amendment to a previously approved plan
in accordance with the public participation requirements of paragraph
(d) of this section.
(i) Plan assessment. The Board approves the goals and assesses performance
under a plan as provided for in appendix A of this part.
SECTION 228.28—Assigned Ratings(a) Ratings in general. Subject to paragraphs (b) and (c) of this section, the Board assigns
to a bank a rating of “outstanding,” “satisfactory,”
“needs to improve,” or “substantial noncompliance”
based on the bank’s performance under the lending, investment,
and service tests, the community development test, the small-bank
performance standards, or an approved strategic plan, as applicable.
(b) Lending, investment,
and service tests. The Board assigns a rating for a bank assessed
under the lending, investment, and service tests in accordance with
the following principles:
(1) A bank that receives an “outstanding”
rating on the lending test receives an assigned rating of at least
“satisfactory”;
(2) A bank that receives an “outstanding” rating on both
the service test and the investment test and a rating of at least
“high satisfactory” on the lending test receives an assigned
rating of “outstanding”; and
(3) No bank may receive an assigned rating
of “satisfactory” or higher unless it receives a rating
of at least “low satisfactory” on the lending test.
(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 loans
have been considered as part of the bank’s lending performance.
In connection with any type of lending activity described in section
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
(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.
(a) CRA performance. Among other factors, the Board takes into account
the record of performance under the CRA of:
(1) Each applicant bank for the:
(i) Establishment
of a domestic branch by a state member bank; and
(ii) Merger, consolidation, acquisition
of assets, or assumption of liabilities requiring approval under the
Bank Merger Act (12 U.S.C. 1828(c)) if the acquiring, assuming, or
resulting bank is to be a state member bank; and
(2) Each insured depository
institution (as defined in 12 U.S.C. 1813) controlled by an applicant
and subsidiary bank or savings association proposed to be controlled
by an applicant:
(i) To become a bank holding company
in a transaction that requires approval under section 3 of the Bank
Holding Company Act (12 U.S.C. 1842);
(ii) To acquire ownership or control
of shares or all or substantially all of the assets of a bank, to
cause a bank to become a subsidiary of a bank holding company, or
to merge or consolidate a bank holding company with any other bank
holding company in a transaction that requires approval under section
3 of the Bank Holding Company Act (12 U.S.C. 1842);
(iii) To own, control or operate a savings
association in a transaction that requires approval under section
4 of the Bank Holding Company Act (12 U.S.C. 1843);
(iv) To become a savings and loan holding
company in a transaction that requires approval under section 10 of
the Home Owners’ Loan Act (12 U.S.C. 1467a); and
(v) To acquire ownership
or control of shares or all or substantially all of the assets of
a savings association, to cause a savings association to become a
subsidiary of a savings and loan holding company, or to merge or consolidate
a savings and loan holding company with any other savings and loan
holding company in a transaction that requires approval under section
10 of the Home Owners’ Loan Act (12 U.S.C. 1467a).
(b) Interested
parties. In considering CRA performance in an application described
in paragraph (a) of this section, the Board takes into account any
views expressed by interested parties that are submitted in accordance
with the Board’s Rules of Procedure set forth in part 262 of
this chapter.
(c) Denial
or conditional approval of application. A bank or savings association’s
record of performance may be the basis for denying or conditioning
approval of an application listed in paragraph (a) of this section.
(d) Definitions. For
purposes of paragraphs (a)(2)(i), (ii), and (iii) of this section,
“bank,” “bank holding company,” “subsidiary,”
and “savings association” have the meanings given to those
terms in section 2 of the Bank Holding Company Act (12 U.S.C. 1841).
For purposes of paragraphs (a)(2)(iv) and (v) of this section, “savings
and loan holding company” and “subsidiary” has the
meaning given to that term in section 10 of the Home Owners’
Loan Act (12 U.S.C. 1467a).
SUBPART
C—RECORDS, REPORTING, AND DISCLOSURE REQUIREMENTSSECTION 228.41—Assessment Area
Delineation(a) In general. A bank shall delineate one or more assessment areas
within which the Board evaluates the bank’s record of helping
to meet the credit needs of its community. The Board does not evaluate
the bank’s delineation of its assessment area(s) as a separate
performance criterion, but the Board reviews the delineation for compliance
with the requirements of this section.
(b) Geographic area(s) for wholesale or limited
purpose banks. The assessment area(s) for a wholesale or limited
purpose bank must consist generally of one or more MSAs or metropolitan
divisions (using the MSA or metropolitan division boundaries that
were in effect as of January 1 of the calendar year in which the delineation
is made) or one or more contiguous political subdivisions, such as
counties, cities, or towns, in which the bank has its main office,
branches, and deposit-taking ATMs.
(c) Geographic area(s) for other banks. The
assessment area(s) for a bank other than a wholesale or limited purpose
bank must:
(1) Consist generally of
one or more MSAs or metropolitan divisions (using the MSA or metropolitan
division boundaries that were in effect as of January 1 of the calendar
year in which the delineation is made) or one or more contiguous political
subdivisions, such as counties, cities, or towns; and
(2) Include the geographies in which the
bank has its main office, its branches, and its deposit-taking ATMs,
as well as the surrounding geographies in which the bank has originated
or purchased a substantial portion of its loans (including home mortgage
loans, small-business and small-farm loans, and any other loans the
bank chooses, such as those consumer loans on which the bank elects
to have its performance assessed).
(d) Adjustments to geographic area(s). A bank
may adjust the boundaries of its assessment area(s) to include only
the portion of a political subdivision that it reasonably can be expected
to serve. An adjustment is particularly appropriate in the case of
an assessment area that otherwise would be extremely large, of unusual
configuration, or divided by significant geographic barriers.
(e) Limitations on the delineation
of an assessment area. Each bank’s assessment area(s):
(1) Must consist only of whole
geographies;
(2) May
not reflect illegal discrimination;
(3) May not arbitrarily exclude low- or
moderate-income geographies, taking into account the bank’s
size and financial condition; and
(4) May not extend substantially beyond
an MSA boundary or beyond a state boundary unless the assessment area
is located in a multistate MSA. If a bank serves a geographic area
that extends substantially beyond a state boundary, the bank shall
delineate separate assessment areas for the areas in each state. If
a bank serves a geographic area that extends substantially beyond
an MSA boundary, the bank shall delineate separate assessment areas
for the areas inside and outside the MSA.
(f) Banks serving military personnel. Notwithstanding the requirements of this section, a bank whose business
predominantly consists of serving the needs of military personnel
or their dependents who are not located within a defined geographic
area may delineate its entire deposit customer base as its assessment
area.
(g) Use of assessment
area(s). The Board uses the assessment area(s) delineated by
a bank in its evaluation of the bank’s CRA performance unless
the Board determines that the assessment area(s) do not comply with
the requirements of this section.
SECTION 228.42—Data Collection, Reporting, and Disclosure(a) Loan information required
to be collected and maintained. A bank, except a small bank,
shall collect, and maintain in machine readable form (as prescribed
by the Board) until the completion of its next CRA examination, the
following data for each small business or small farm loan originated
or purchased by the bank:
(1) A unique number or alpha-numeric symbol
that can be used to identify the relevant loan file;
(2) The loan amount at origination;
(3) The loan location;
and
(4) An indicator
whether the loan was to a business or farm with gross annual revenues
of $1 million or less.
(b) Loan information required to be reported. A bank, except a small bank or a bank that was a small bank during
the prior calendar year, shall report annually by March 1 to the Board
in machine-readable form (as prescribed by the Board) the following
data for the prior calendar year:
(1) Small business
and small farm loan data. For each geography in which the bank
originated or purchased a small business or small farm loan, the aggregate
number and amount of loans:
(i) With an amount at origination of
$100,000 or less;
(ii) With amount at origination of more than $100,000 but less than
or equal to $250,000;
(iii) With an amount at origination of more than $250,000; and
(iv) To businesses
and farms with gross annual revenues of $1 million or less (using
the revenues that the bank considered in making its credit decision);
(2) Community development loan data. The aggregate
number and aggregate amount of community development loans originated
or purchased; and
(3) Home mortgage loans. If the bank is subject
to reporting under part 1003 of this chapter, the location of each
home mortgage loan application, origination, or purchase outside the
MSAs in which the bank has a home or branch office (or outside any
MSA) in accordance with the requirements of part 1003 of this chapter.
(c) Optional
data collection and maintenance.
(1) Consumer
loans. A bank may collect and maintain in machine readable form
(as prescribed by the Board) data for consumer loans originated or
purchased by the bank for consideration under the lending test. A
bank may maintain data for one or more of the following categories
of consumer loans: motor vehicle, credit card, other secured, and
other unsecured. If the bank maintains data for loans in a certain
category, it shall maintain data for all loans originated or purchased
within that category. The bank shall maintain data separately for
each category, including for each loan:
(i) Aunique number
or alpha-numeric symbol that can be used to identify the relevant
loan file;
(ii)
The loan amount at origination or purchase;
(iii) The loan location; and
(iv) The gross annual income
of the borrower that the bank considered in making its credit decision.
(2) Other loan data. At its option, a bank
may provide other information concerning its lending performance,
including additional loan distribution data.
(d) Data on affiliate lending. A bank that elects to have the Board consider loans by an affiliate,
for purposes of the lending or community development test or an approved
strategic plan, shall collect, maintain, and report for those loans
the data that the bank would have collected, maintained, and reported
pursuant to paragraphs (a), (b), and (c) of this section had the loans
been originated or purchased by the bank. For home mortgage loans,
the bank shall also be prepared to identify the home mortgage loans
reported under part 1003 of this chapter by the affiliate.
(e) Data on lending by a consortium
or a third party. A bank that elects to have the Board consider
community development loans by a consortium or third party, for purposes
of the lending or community development tests or an approved strategic
plan, shall report for those loans the data that the bank would have
reported under paragraph (b)(2) of this section had the loans been
originated or purchased by the bank.
(f) Small banks electing evaluation under the lending,
investment, and service tests. A bank that qualifies for evaluation
under the small bank performance standards but elects evaluation under
the lending, investment, and service tests shall collect, maintain,
and report the data required for other banks pursuant to paragraphs
(a) and (b) of this section.
(g) Assessment area data. A bank, except a
small bank or a bank that was a small bank during the prior calendar
year, shall collect and report to the Board by March 1 of each year
a list for each assessment area showing the geographies within the
area.
(h) CRA disclosure
statement. The Board prepares annually for each bank that reports
data pursuant to this section a CRA disclosure statement that contains,
on a state-by-state basis:
(1) For each county (and for each assessment
area smaller than a county) with a population of 500,000 persons or
fewer in which the bank reported a small business or small farm loan:
(i) The number and amount of small business and small farm loans
reported as originated or purchased located in low-, moderate-, middle-,
and upper-income geographies;
(ii) A list grouping each geography
according to whether the geography is low-, moderate-, middle-, or
upper-income;
(iii)
A list showing each geography in which the bank reported a small business
or small farm loan; and
(iv) The number and amount of small
business and small farm loans to businesses and farms with gross annual
revenues of $1 million or less;
(2) For each county (and for each assessment
area smaller than a county) with a population in excess of 500,000
persons in which the bank reported a small business or small farm
loan:
(i) The number and amount of small business
and small farm loans reported as originated or purchased located in
geographies with median income relative to the area median income
of less than 10 percent, 10 or more but less than 20 percent, 20 or
more but less than 30 percent, 30 or more but less than 40 percent,
40 or more but less than 50 percent, 50 or more but less than 60 percent,
60 or more but less than 70 percent, 70 or more but less than 80 percent,
80 or more but less than 90 percent, 90 or more but less than 100
percent, 100 or more but less than 110 percent, 110 or more but less
than 120 percent, and 120 percent or more;
(ii) A list grouping each geography
in the county or assessment area according to whether the median income
in the geography relative to the area median income is less than 10
percent, 10 or more but less than 20 percent, 20 or more but less
than 30 percent, 30 or more but less than 40 percent, 40 or more but
less than 50 percent, 50 or more but less than 60 percent, 60 or more
but less than 70 percent, 70 or more but less than 80 percent, 80
or more but less than 90 percent, 90 or more but less than 100 percent,
100 or more but less than 110 percent, 110 or more but less than 120
percent, 120 percent or more;
(iii) A list showing each geography
in which the bank reported a small business or small farm loan; and
(iv) The number and
amount of small business and small farm loans to businesses and farms
with gross annual revenues of $1 million or less;
(3) The number and amount
of small business and small farm loans located inside each assessment
area reported by the bank and the number and amount of small business
and small farm loans located outside the assessment area(s) reported
by the bank; and
(4)
The number and amount of community development loans reported as originated
or purchased.
(i) Aggregate disclosure statements. The Board,
in conjunction with the Office of the Comptroller of the Currency,
and the Federal Deposit Insurance Corporation, prepares annually,
for each MSA or metropolitan division (including an MSA or metropolitan
division that crosses a state boundary) and the nonmetropolitan portion
of each state, an aggregate disclosure statement of small-business
and small-farm lending by all institutions subject to reporting under
this part or parts 25, 195, or 345 of this title. These disclosure
statements indicate, for each geography, the number and amount of
all small-business and small-farm loans originated or purchased by
reporting institutions, except that the Board may adjust the form
of the disclosure if necessary, because of special circumstances,
to protect the privacy of a borrower or the competitive position of
an institution.
(j) Central data depositories. The Board makes the aggregate disclosure
statements, described in paragraph (i) of this section, and the individual
bank CRA disclosure statements, described in paragraph (h) of this
section, available to the public at central data depositories. The
Board publishes a list of the depositories at which the statements
are available.
SECTION 228.43—Content
and Availability of Public File(a) Information available to the public. A
bank shall maintain a public file that includes the following information:
(1) All written comments received from
the public for the current year and each of the prior two calendar
years that specifically relate to the bank’s performance in
helping to meet community credit needs, and any response to the comments
by the bank, if neither the comments nor the responses contain statements
that reflect adversely on the good name or reputation of any persons
other than the bank or publication of which would violate specific
provisions of law;
(2)
A copy of the public section of the bank’s most recent CRA performance
evaluation prepared by the Board. The bank shall place this copy in
the public file within 30 business days after its receipt from the
Board;
(3) A list of
the bank’s branches, their street addresses, and geographies;
(4) A list of branches
opened or closed by the bank during the current year and each of the
prior two calendar years, their street addresses, and geographies;
(5) A list of services
(including hours of operation, available loan and deposit products,
and transaction fees) generally offered at the bank’s branches
and descriptions of material differences in the availability or cost
of services at particular branches, if any. At its option, a bank
may include information regarding the availability of alternative
systems for delivering retail banking services (e.g., ATMs, ATMs not
owned or operated by or exclusively for the bank, banking by telephone
or computer, loan-production offices, and bank-at-work or bank-by-mail
programs);
(6) A map
of each assessment area showing the boundaries of the area and identifying
the geographies contained within the area, either on the map or in
a separate list; and
(7) Any other information the bank chooses.
(b) Additional information available
to the public.
(1) Banks other
than small banks. A bank, except a small bank or a bank that
was a small bank during the prior calendar year, shall include in
its public file the following information pertaining to the bank and
its affiliates, if applicable, for each of the prior two calendar
years:
(i) If the bank has elected to have
one or more categories of its consumer loans considered under the
lending test, for each of these categories, the number and amount
of loans:
(A) To low-, moderate-, middle-, and upper-income
individuals;
(B) Located
in low-, moderate-, middle-, and upper-income census tracts; and
(C) Located inside the bank’s
assessment area(s) and outside the bank’s assessment area(s);
and
(ii) The bank’s CRA disclosure statement. The bank shall place
the statement in the public file within three business days of its
receipt from the Board.
(2)
Banks required
to report Home Mortgage Disclosure Act (HMDA) data. A bank required
to report home mortgage loan data pursuant part 1003 of this title
shall include in its public file a written notice that the institution’s
HMDA Disclosure Statement may be obtained on the Consumer Financial
Protection Bureau’s (Bureau’s) Web site at
https://www.consumerfinance.gov/hmda. In addition,
a bank that elected to have the Board consider the mortgage lending
of an affiliate shall include in its public file the name of the affiliate
and a written notice that the affiliate’s HMDA Disclosure Statement
may be obtained at the Bureau’s Web site. The bank shall place
the written notice(s) in the public file within three business days
after receiving notification from the Federal Financial Institutions
Examination Council of the availability of the disclosure statement(s).
(3) Small banks. A small bank or a bank that was a small bank during
the prior calendar year shall include in its public file:
(i) The bank’s
loan-to-deposit ratio for each quarter of the prior calendar year
and, at its option, additional data on its loan-to-deposit ratio;
and
(ii) The information
required for other banks by paragraph (b)(1) of this section, if the
bank has elected to be evaluated under the lending, investment, and
service tests.
(4) Banks with
strategic plans. A bank that has been approved to be assessed
under a strategic plan shall include in its public file a copy of
that plan. A bank need not include information submitted to the Board
on a confidential basis in conjunction with the plan.
(5) Banks with less than satisfactory ratings. A bank that received
a less than satisfactory rating during its most recent examination
shall include in its public file a description of its current efforts
to improve its performance in helping to meet the credit needs of
its entire community. The bank shall update the description quarterly.
(c) Location
of public information. A bank shall make available to the public
for inspection upon request and at no cost the information required
in this section as follows:
(1) At the main office and, if an interstate
bank, at one branch office in each state, all information in the public
file; and
(2) At each
branch:
(i) A copy of the public section of
the bank’s most recent CRA performance evaluation and a list
of services provided by the branch; and
(ii) Within five calendar days of the
request, all the information in the public file relating to the assessment
area in which the branch is located.
(d) Copies. Upon request,
a bank shall provide copies, either on paper or in another form acceptable
to the person making the request, of the information in its public
file. The bank may charge a reasonable fee not to exceed the cost
of copying and mailing (if applicable).
(e) Updating. Except as otherwise provided
in this section, a bank shall ensure that the information required
by this section is current as of April 1 of each year.
SECTION 228.44—Public Notice by BanksA bank shall provide in the public lobby of its main
office and each of its branches the appropriate public notice set
forth in appendix B of this part. Only a branch of a bank having more
than one assessment area shall include the bracketed material in the
notice for branch offices. Only a bank that is an affiliate of a holding
company shall include the next to the last sentence of the notices.
A bank shall include the last sentence of the notices only if it is
an affiliate of a holding company that is not prevented by statute
from acquiring additional banks.
SECTION 228.45—Publication of Planned Examination ScheduleThe Board publishes at least 30 days in advance of
the beginning of each calendar quarter a list of banks scheduled for
CRA examinations in that quarter.
APPENDIX A—Ratings(a) Ratings in general.
(1) In assigning a rating, the Board evaluates
a bank’s performance under the applicable performance criteria
in this part, in accordance with sections 228.21 and 228.28. This
includes consideration of low-cost education loans provided to low-income
borrowers and activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions, as well as adjustments
on the basis of evidence of discriminatory or other illegal credit
practices.
(2) A bank’s
performance need not fit each aspect of a particular rating profile
in order to receive that rating, and exceptionally strong performance
with respect to some aspects may compensate for weak performance in
others. The bank’s overall performance, however, must be consistent
with safe and sound banking practices and generally with the appropriate
rating profile as follows.
(b) Banks evaluated under the lending, investment,
and service tests.
(1) Lending performance
rating. The Board assigns each bank’s lending performance
one of the five following ratings.
(i) Outstanding. The Board rates a bank’s lending performance
“outstanding” if, in general, it demonstrates:
(A) Excellent
responsiveness to credit needs in its assessment area(s), taking into
account the number and amount of home mortgage, small business, small
farm, and consumer loans, if applicable, in its assessment area(s);
(B) A substantial majority
of its loans are made in its assessment area(s);
(C) An excellent geographic distribution of
loans in its assessment area(s);
(D) An excellent distribution, particularly
in its assessment area(s), of loans among individuals of different
income levels and businesses (including farms) of different sizes,
given the product lines offered by the bank;
(E) An excellent record of serving the credit
needs of highly economically disadvantaged areas in its assessment
area(s), low-income individuals, or businesses (including farms) with
gross annual revenues of $1 million or less, consistent with safe
and sound operations;
(F)
Extensive use of innovative or flexible lending practices in a safe
and sound manner to address the credit needs of low- or moderate-income
individuals or geographies; and
(G) It is a leader in making community development
loans.
(ii) High satisfactory. The Board
rates a bank’s lending performance “high satisfactory”
if, in general, it demonstrates:
(A) Good responsiveness to credit
needs in its assessment area(s), taking into account the number and
amount of home mortgage, small business, small farm, and consumer
loans, if applicable, in its assessment area(s);
(B) A high percentage of its loans are made
in its assessment area(s);
(C) A good geographic distribution of loans in its assessment area(s);
(D) A good distribution,
particularly in its assessment area(s), of loans among individuals
of different income levels and businesses (including farms) of different
sizes, given the product lines offered by the bank;
(E) A good record of serving the credit needs
of highly economically disadvantaged areas in its assessment area(s),
low-income individuals, or businesses (including farms) with gross
annual revenues of $1 million or less, consistent with safe and sound
operations;
(F) Use of
innovative or flexible lending practices in a safe and sound manner
to address the credit needs of low- or moderate-income individuals
or geographies; and
(G)
It has made a relatively high level of community development loans.
(iii) Low satisfactory. The Board rates a bank’s
lending performance “low satisfactory” if, in general,
it demonstrates:
(A) Adequate responsiveness to credit needs
in its assessment area(s), taking into account the number and amount
of home mortgage, small business, small farm, and consumer loans,
if applicable, in its assessment area(s);
(B) An adequate percentage of its loans are
made in its assessment area(s);
(C) An adequate geographic distribution of
loans in its assessment area(s);
(D) An adequate distribution, particularly
in its assessment area(s), of loans among individuals of different
income levels and businesses (including farms) of different sizes,
given the product lines offered by the bank;
(E) An adequate record of serving the credit
needs of highly economically disadvantaged areas in its assessment
area(s), low-income individuals, or businesses (including farms) with
gross annual revenues of $1 million or less, consistent with safe
and sound operations;
(F) Limited use of innovative or flexible lending practices in a
safe and sound manner to address the credit needs of low- or moderate-income
individuals or geographies; and
(G) It has made an adequate level of community
development loans.
(iv) Needs
to improve. The Board rates a bank’s lending performance
“needs to improve” if, in general, it demonstrates:
(A) Poor responsiveness to credit needs in its assessment area(s),
taking into account the number and amount of home mortgage, small
business, small farm, and consumer loans, if applicable, in its assessment
area(s);
(B) A small percentage
of its loans are made in its assessment area(s);
(C) A poor geographic distribution of loans,
particularly to low- or moderate-income geographies, in its assessment
area(s);
(D) a poor distribution,
particularly in its assessment area(s), of loans among individuals
of different income levels and businesses (including farms) of different
sizes, given the product lines offered by the bank;
(E) A poor record of serving the credit needs
of highly economically disadvantaged areas in its assessment area(s),
low-income individuals, or businesses (including farms) with gross
annual revenues of $1 million or less, consistent with safe and sound
operations;
(F) Little
use of innovative or flexible lending practices in a safe and sound
manner to address the credit needs of low- or moderate-income individuals
or geographies; and
(G)
It has made a low level of community development loans.
(v) Substantial noncompliance. The Board rates
a bank’s lending performance as being in “substantial
noncompliance” if, in general, it demonstrates:
(A) A very poor
responsiveness to credit needs in its assessment area(s), taking into
account the number and amount of home mortgage, small business, small
farm, and consumer loans, if applicable, in its assessment area(s);
(B) A very small percentage
of its loans are made in its assessment area(s);
(C) A very poor geographic distribution of
loans, particularly to low- or moderate-income geographies, in its
assessment area(s);
(D)
A very poor distribution, particularly in its assessment area(s),
of loans among individuals of different income levels and businesses
(including farms) of different sizes, given the product lines offered
by the bank;
(E) A very
poor record of serving the credit needs of highly economically disadvantaged
areas in its assessment area(s), low-income individuals, or businesses
(including farms) with gross annual revenues of $1 million or less,
consistent with safe and sound operations;
(F) No use of innovative or flexible lending
practices in a safe and sound manner to address the credit needs of
low- or moderate-income individuals or geographies; and
(G) It has made few, if any, community
development loans.
(2) Investment
performance rating. The Board assigns each bank’s investment
performance one of the five following ratings.
(i) Outstanding. The Board rates a bank’s
investment performance “outstanding” if, in general, it
demonstrates:
(A) An excellent level of qualified investments,
particularly those that are not routinely provided by private investors,
often in a leadership position;
(B) Extensive use of innovative or complex
qualified investments; and
(C) Excellent responsiveness to credit and community development
needs.
(ii) High satisfactory. The Board
rates a bank’s investment performance “high satisfactory”
if, in general, it demonstrates:
(A) A significant level of qualified
investments, particularly those that are not routinely provided by
private investors, occasionally in a leadership position;
(B) Significant use of innovative
or complex qualified investments; and
(C) Good responsiveness to credit and community
development needs.
(iii) Low
satisfactory. The Board rates a bank’s investment performance
“low satisfactory” if, in general, it demonstrates:
(A) An adequate level of qualified investments, particularly those
that are not routinely provided by private investors, although rarely
in a leadership position;
(B) Occasional use of innovative or complex qualified investments;
and
(C) Adequate responsiveness
to credit and community development needs.
(iv) Needs to improve. The Board rates a bank’s investment
performance “needs to improve” if, in general, it demonstrates:
(A) A poor level of qualified investments, particularly those that
are not routinely provided by private investors;
(B) Rare use of innovative or complex qualified
investments; and
(C) Poor
responsiveness to credit and community development needs.
(v) Substantial noncompliance. The Board rates
a bank’s investment performance as being in “substantial
noncompliance” if, in general, it demonstrates:
(A) Few, if any,
qualified investments, particularly those that are not routinely provided
by private investors;
(B) No use of innovative or complex qualified investments; and
(C) Very poor responsiveness
to credit and community development needs.
(3) Service performance rating. The Board assigns
each bank’s service performance one of the five following ratings.
(i) Outstanding. The Board rates a
bank’s service performance “outstanding” if, in
general, the bank demonstrates:
(A) Its service delivery systems
are readily accessible to geographies and individuals of different
income levels in its assessment area(s);
(B) To the extent changes have been made,
its record of opening and closing branches has improved the accessibility
of its delivery systems, particularly in low- or moderate-income geographies
or to low- or moderate- income individuals;
(C) Its services (including, where appropriate,
business hours) are tailored to the convenience and needs of its assessment
area(s), particularly low- or moderate-income geographies or low-
or moderate-income individuals; and
(D) It is a leader in providing community
development services.
(ii) High
satisfactory. The Board rates a bank’s service performance
“high satisfactory” if, in general, the bank demonstrates:
(A) Its service-delivery systems are accessible to geographies and
individuals of different income levels in its assessment area(s);
(B) To the extent changes
have been made, its record of opening and closing branches has not
adversely affected the accessibility of its delivery systems, particularly
in low- and moderate-income geographies and to low- and moderate-income
individuals;
(C) Its services
(including, where appropriate, business hours) do not vary in a way
that inconveniences its assessment area(s), particularly low- and
moderate-income geographies and low- and moderate-income individuals;
and
(D) It provides a
relatively high level of community development services.
(iii) Low satisfactory. The Board rates a bank’s
service performance “low satisfactory” if, in general,
the bank demonstrates:
(A) Its service delivery systems are reasonably
accessible to geographies and individuals of different income levels
in its assessment area(s);
(B) To the extent changes have been made, its record of opening and
closing branches has generally not adversely affected the accessibility
of its delivery systems, particularly in low- and moderate-income
geographies and to low- and moderate-income individuals;
(C) Its services (including,
where appropriate, business hours) do not vary in a way that inconveniences
its assessment area(s), particularly low- and moderate-income geographies
and low- and moderate-income individuals; and
(D) It provides an adequate level of community
development services.
(iv) Needs
to improve. The Board rates a bank’s service performance
“needs to improve” if, in general, the bank demonstrates:
(A) Its service delivery systems are unreasonably inaccessible to
portions of its assessment area(s), particularly to low- or moderate-income
geographies or to low- or moderate-income individuals;
(B) To the extent changes have
been made, its record of opening and closing branches has adversely
affected the accessibility of its delivery systems, particularly in
low- or moderate-income geographies or to low- or moderate-income
individuals;
(C) Its services
(including, where appropriate, business hours) vary in a way that
inconveniences its assessment area(s), particularly low- or moderate-income
geographies or low- or moderate-income individuals; and
(D) It provides a limited level
of community development services.
(v) Substantial
noncompliance. The Board rates a bank’s service performance
as being in “substantial noncompliance” if, in general,
the bank demonstrates:
(A) Its service delivery systems are unreasonably
inaccessible to significant portions of its assessment area(s), particularly
to low- or moderate-income geographies or to low- or moderate- income
individuals;
(B) To the
extent changes have been made, its record of opening and closing branches
has significantly adversely affected the accessibility of its delivery
systems, particularly in low- or moderate-income geographies or to
low- or moderate-income individuals;
(C) Its services (including, where appropriate,
business hours) vary in a way that significantly inconveniences its
assessment area(s), particularly low- or moderate-income geographies
or low- or moderate-income individuals; and
(D) It provides few, if any, community development
services.
(c) Wholesale or limited purpose banks. The Board assigns each wholesale or limited purpose bank’s
community development performance one of the four following ratings.
(1) Outstanding. The Board rates a wholesale or limited purpose
bank’s community development performance “outstanding”
if, in general, it demonstrates:
(i) A high level of community
development loans, community development services, or qualified investments,
particularly investments that are not routinely provided by private
investors;
(ii) Extensive
use of innovative or complex qualified investments, community development
loans, or community development services; and
(iii) Excellent responsiveness to credit
and community development needs in its assessment area(s).
(2) Satisfactory. The Board rates a wholesale
or limited purpose bank’s community development performance
“satisfactory” if, in general, it demonstrates:
(i) An adequate
level of community development loans, community development services,
or qualified investments, particularly investments that are not routinely
provided by private investors;
(ii) Occasional use of innovative or
complex qualified investments, community development loans, or community
development services; and
(iii) Adequate responsiveness to credit
and community development needs in its assessment area(s).
(3) Needs to improve. The Board rates a wholesale
or limited purpose bank’s community development performance
as “needs to improve” if, in general, it demonstrates:
(i) A poor level of community development loans, community development
services, or qualified investments, particularly investments that
are not routinely provided by private investors;
(ii) Rare use of innovative or complex
qualified investments, community development loans, or community development
services; and
(iii)
Poor responsiveness to credit and community development needs in its
assessment area(s).
(4) Substantial
noncompliance. The Board rates a wholesale or limited purpose
bank’s community development performance in “substantial
noncompliance” if, in general, it demonstrates:
(i) Few,
if any, community development loans, community development services,
or qualified investments, particularly investments that are not routinely
provided by private investors;
(ii) No use of innovative or complex
qualified investments, community development loans, or community development
services; and
(iii)
Very poor responsiveness to credit and community development needs
in its assessment area(s).
(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 (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) 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.
(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).
(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.
(e) Strategic plan assessment and rating.
(1) Satisfactory
goals. The Board approves as “satisfactory” measurable
goals that adequately help to meet the credit needs of the bank’s
assessment area(s).
(2) Outstanding goals. If the plan
identifies a separate group of measurable goals that substantially
exceed the levels approved as “satisfactory,” the Board
will approve those goals as “outstanding.”
(3) Rating. The Board assesses the performance of a bank operating
under an approved plan to determine if the bank has met its plan goals:
(i) If the bank substantially achieves its plan goals for a satisfactory
rating, the Board will rate the bank’s performance under the
plan as “satisfactory.”
(ii) If the bank exceeds its plan goals
for a satisfactory rating and substantially achieves its plan goals
for an outstanding rating, the Board will rate the bank’s performance
under the plan as “outstanding.”
(iii) If the bank fails to meet substantially
its plan goals for a satisfactory rating, the Board will rate the
bank as either “needs to improve” or “substantial
noncompliance,” depending on the extent to which it falls short
of its plan goals, unless the bank elected in its plan to be rated
otherwise, as provided in section 228.27(f)(4).
(a) Notice for main offices
and, if an interstate bank, one branch office in each state.
COMMUNITY REINVESTMENT ACT NOTICE
Under the Federal Community
Reinvestment Act (CRA), the Federal Reserve Board (Board) evaluates
our record of helping to meet the credit needs of this community consistent
with safe and sound operations. The Board also takes this record into
account when deciding on certain applications submitted by us.
Your involvement is encouraged.
You are entitled to certain information about our operations
and our performance under the CRA, including, for example, information
about our branches, such as their location and services provided at
them; the public section of our most recent CRA performance evaluation,
prepared by the Federal Reserve Bank of
(Reserve
Bank); and comments received from the public relating to our performance
in helping to meet community credit needs, as well as our responses
to those comments. You may review this information today.
At least 30 days before the beginning
of each quarter, the Federal Reserve System publishes a list of the
banks that are scheduled for CRA examination by the Reserve Bank in
that quarter. This list is available from (title of responsible official),
Federal Reserve Bank of
(address). You may send written comments
about our performance in helping to meet community credit needs to
(name and address of official at bank) and (title of responsible official),
Federal Reserve Bank of
(address). Your letter, together with
any response by us, will be considered by the Federal Reserve System
in evaluating our CRA performance and may be made public.
You may ask to look at any comments
received by the Reserve Bank. You may also request from the Reserve
Bank an announcement of our applications covered by the CRA filed
with the Reserve Bank. We are an affiliate of (name of holding company),
a bank holding company. You may request from (title of responsible
official), Federal Reserve Bank of
(address) an announcement
of applications covered by the CRA filed by bank holding companies. (b) Notice for branch offices.
COMMUNITY REINVESTMENT ACT NOTICE
Under the Federal Community
Reinvestment Act (CRA), the Federal Reserve Board (Board) evaluates
our record of helping to meet the credit needs of this community consistent
with safe and sound operations. The Board also takes this record into
account when deciding on certain applications submitted by us.
Your involvement is encouraged.
You are entitled to certain information about our operations
and our performance under the CRA. You may review today the public
section of our most recent CRA evaluation, prepared by the Federal
Reserve Bank of
(address), and a list of services provided
at this branch. You may also have access to the following additional
information, which we will make available to you at this branch within
five calendar days after you make a request to us: (1) a map showing
the assessment area containing this branch, which is the area in which
the Board evaluates our CRA performance in this community; (2) information
about our branches in this assessment area; (3) a list of services
we provide at those locations; (4) data on our lending performance
in this assessment area; and (5) copies of all written comments received
by us that specifically relate to our CRA performance in its assessment
area, and any responses we have made to those comments. If we are
operating under an approved strategic plan, you may also have access
to a copy of the plan.
[If you would like to review information about our CRA
performance in other communities served by us, the public file for
our entire bank is available at (name of office located in state),
located at (address).]
At least 30 days before the beginning of each quarter,
the Federal Reserve System publishes a list of the banks that are
scheduled for CRA examination by the Reserve Bank in that quarter.
This list is available from (title of responsible official), Federal
Reserve Bank of
(address). You may send written comments
about our performance in helping to meet community credit needs to
(name and address of official at bank) and (title of responsible official),
Federal Reserve Bank of
(address). Your letter, together with
any response by us, will be considered by the Federal Reserve System
in evaluating our CRA performance and may be made public.
You may ask to look at any comments
received by the Reserve Bank. You may also request from the Reserve
Bank an announcement of our applications covered by the CRA filed
with the Reserve Bank. We are an affiliate of (name of holding company),
a bank holding company. You may request from (title of responsible
official), Federal Reserve Bank of
(address) an announcement
of applications covered by the CRA filed by bank holding companies.
