(a) Community Development Financing Test.
(1) In general. Pursuant to section 228.21, the Community Development Financing
Test evaluates the bank’s record of helping to meet the credit
needs of its entire community through community development loans
and community development investments (i.e., the bank’s community
development financing performance).
(2) Allocation. The Board considers community development loans and community development
investments allocated pursuant to paragraph I.b of appendix B to this
part.
(b) Facility-based assessment area evaluation. The Board evaluates
a bank’s community development financing performance in a facility-based
assessment area using the metric in paragraph (b)(1) of this section,
benchmarks in paragraph (b)(2) of this section, and a review of the
impact and responsiveness of the bank’s community development
loans and community development investments in paragraph (b)(3) of
this section, and assigns a conclusion for a facility-based assessment
area pursuant to paragraph d.1 of appendix C to this part.
(1) Bank Assessment Area Community Development Financing
Metric. The Bank Assessment Area Community Development Financing
Metric measures the dollar volume of a bank’s community development
loans and community development investments that benefit or serve
a facility-based assessment area compared to deposits in the bank
that are located in the facility-based assessment area, calculated
pursuant to paragraph II.a of appendix B to this part.
(2) Benchmarks. The Board compares the Bank Assessment Area Community
Development Financing Metric to the following benchmarks:
(i) Assessment
Area Community Development Financing Benchmark. For each of a
bank’s facility-based assessment areas, the Assessment Area
Community Development Financing Benchmark measures the dollar volume
of community development loans and community development investments
that benefit or serve the facility-based assessment area for all large
depository institutions compared to deposits located in the facility-based
assessment area for all large depository institutions, calculated
pursuant to paragraph II.b of appendix B to this part.
(ii) MSA and Nonmetropolitan Nationwide
Community Development Financing Benchmarks.
(A) For each of
a bank’s facility-based assessment areas within an MSA, the
MSA Nationwide Community Development Financing Benchmark measures
the dollar volume of community development loans and community development
investments that benefit or serve MSAs in the nationwide area for
all large depository institutions compared to deposits located in
the MSAs in the nationwide area for all large depository institutions.
(B) For each of a bank’s
facility-based assessment areas within a nonmetropolitan area, the
Nonmetropolitan Nationwide Community Development Financing Benchmark
measures the dollar volume of community development loans and community
development investments that benefit or serve nonmetropolitan areas
in the nationwide area for all large depository institutions compared
to deposits located in nonmetropolitan areas in the nationwide area
for all large depository institutions.
(C) The Board calculates the MSA and Nonmetropolitan
Nationwide Community Development Financing Benchmarks pursuant to
paragraph II.c of appendix B to this part.
(3) Impact and responsiveness review. The Board
reviews the impact and responsiveness of a bank’s community
development loans and community development investments that benefit
or serve a facility-based assessment area, as provided in section
228.15.
(c) State evaluation. The Board evaluates a bank’s community
development financing performance in a state, pursuant to sections
228.19 and 228.28(c), using the two components in paragraphs (c)(1)
and (2) of this section and assigns a conclusion for each state based
on a weighted combination of those components pursuant to paragraph
II.p of appendix B to this part.
(1) Component
one—Weighted average of facility-based assessment area performance
conclusions in a state. The Board considers the weighted average
of the performance scores corresponding to the bank’s Community
Development Financing Test conclusions for its facility-based assessment
areas within the state, pursuant to section IV of appendix B to this
part.
(2) Component two—State performance. The
Board considers a bank’s community development financing performance
in a state using the metric and benchmarks in paragraphs (c)(2)(i)
and (ii) of this section and a review of the impact and responsiveness
of the bank’s community development loans and community development
investments in paragraph (c)(2)(iii) of this section.
(i) Bank
State Community Development Financing Metric. The Bank State Community
Development Financing Metric measures the dollar volume of a bank’s
community development loans and community development investments
that benefit or serve all or part of a state compared to deposits
in the bank that are located in the state, calculated pursuant to
paragraph II.d of appendix B to this part.
(ii) Benchmarks. The Board compares
the Bank State Community Development Financing Metric to the following
benchmarks:
(A) State Community Development Financing
Benchmark. The State Community Development Financing Benchmark
measures the dollar volume of community development loans and community
development investments that benefit or serve all or part of a state
for all large depository institutions compared to deposits located
in the state for all large depository institutions, calculated pursuant
to paragraph II.e of appendix B to this part.
(B) State Weighted Assessment Area Community
Development Financing Benchmark. The State Weighted Assessment
Area Community Development Financing Benchmark is the weighted average
of the bank’s Assessment Area Community Development Financing
Benchmarks for each facility-based assessment area within the state,
calculated pursuant to paragraph II.f of appendix B to this part.
(iii) Impact and responsiveness review. The Board reviews the impact
and responsiveness of the bank’s community development loans
and community development investments that benefit or serve a state,
as provided in section 228.15.
(d) Multistate MSA evaluation. The Board evaluates a bank’s community development financing
performance in a multistate MSA, pursuant to sections 228.19 and 228.28(c),
using the two components in paragraphs (d)(1) and (2) of this section
and assigns a conclusion in each multistate MSA based on a weighted
combination of those components pursuant to paragraph II.p of appendix
B to this part.
(1) Component one—Weighted average
of facility-based assessment area performance in a multistate MSA. The Board considers the weighted average of the performance scores
corresponding to the bank’s Community Development Financing
Test conclusions for its facility-based assessment areas within the
multistate MSA, calculated pursuant to section IV of appendix B to
this part.
(2) Component two—Multistate MSA performance. The Board considers a bank’s community development financing
performance in a multistate MSA using the metric and benchmarks in
paragraphs (d)(2)(i) and (ii) of this section and a review of the
impact and responsiveness of the bank’s community development
loans and community development investments in paragraph (d)(2)(iii)
of this section.
(i) Bank Multistate MSA Community
Development Financing Metric. The Bank Multistate MSA Community
Development Financing Metric measures the dollar volume of a bank’s
community development loans and community development investments
that benefit or serve a multistate MSA compared to deposits in the
bank located in the multistate MSA, calculated pursuant to paragraph
II.g of appendix B to this part.
(ii) Benchmarks. The Board compares
the Bank Multistate MSA Community Development Financing Metric to
the following benchmarks:
(A) Multistate MSA Community Development
Financing Benchmark. The Multistate MSA Community Development
Financing Benchmark measures the dollar volume of community development
loans and community development investments that benefit or serve
a multistate MSA for all large depository institutions compared to
deposits located in the multistate MSA for all large depository institutions,
calculated pursuant to paragraph II.h of appendix B to this part.
(B) Multistate MSA Weighted
Assessment Area Community Development Financing Benchmark. The
Multistate MSA Weighted Assessment Area Community Development Financing
Benchmark is the weighted average of the bank’s Assessment Area
Community Development Financing Benchmarks for each facility-based
assessment area within the multistate MSA, calculated pursuant to
paragraph II.i of appendix B to this part.
(iii) Impact and responsiveness
review. The Board reviews the impact and responsiveness of the
bank’s community development loans and community development
investments that benefit or serve a multistate MSA, as provided in
section 228.15.
(e) Nationwide area evaluation. The Board evaluates
a bank’s community development financing performance in the
nationwide area, pursuant to section 228.19, using the two components
in paragraphs (e)(1) and (2) of this section and assigns a conclusion
for the institution based on a weighted combination of those components
pursuant to paragraph II.p of appendix B to this part.
(1) Component one—Weighted average of facility-based
assessment area performance in the nationwide area. The Board
considers the weighted average of the performance scores corresponding
to the bank’s conclusions for the Community Development Financing
Test for its facility-based assessment areas within the nationwide
area, calculated pursuant to section IV of appendix B to this part.
(2) Component two—Nationwide area performance. The Board considers a bank’s community development financing
performance in the nationwide area using the metrics and benchmarks
in paragraphs (e)(2)(i) through (iv) of this section and a review
of the impact and responsiveness of the bank’s community development
loans and community development investments in paragraph (e)(2)(v)
of this section.
(i) Bank Nationwide Community Development
Financing Metric. The Bank Nationwide Community Development Financing
Metric measures the dollar volume of the bank’s community development
loans and community development investments that benefit or serve
all or part of the nationwide area compared to deposits in the bank
located in the nationwide area, calculated pursuant to paragraph II.j
of appendix B to this part.
(ii) Community Development Financing
Benchmarks. The Board compares the Bank Nationwide Community Development
Financing Metric to the following benchmarks:
(A) Nationwide
Community Development Financing Benchmark. The Nationwide Community
Development Financing Benchmark measures the dollar volume of community
development loans and community development investments that benefit
or serve all or part of the nationwide area for all large depository
institutions compared to the deposits located in the nationwide area
for all large depository institutions, calculated pursuant to paragraph
II.k of appendix B to this part.
(B) Nationwide Weighted Assessment Area
Community Development Financing Benchmark. The Nationwide Weighted
Assessment Area Community Development Financing Benchmark is the weighted
average of the bank’s Assessment Area Community Development
Financing Benchmarks for each facility-based assessment area within
the nationwide area, calculated pursuant to paragraph II.l of appendix
B to this part.
(iii) Bank Nationwide Community Development
Investment Metric. For a large bank that had assets greater than
$10 billion as of December 31 in both of the prior two calendar years,
the Bank Nationwide Community Development Investment Metric measures
the dollar volume of the bank’s community development investments
that benefit or serve all or part of the nationwide area, excluding
mortgage-backed securities, compared to the deposits in the bank located
in the nationwide area, calculated pursuant to paragraph II.m of appendix
B to this part.
(iv) Nationwide Community Development Investment Benchmark.
(A) For a large
bank that had assets greater than $10 billion as of December 31 in
both of the prior two calendar years, the Board compares the Bank
Nationwide Community Development Investment Metric to the Nationwide
Community Development Investment Benchmark. This comparison may only
contribute positively to the bank’s Community Development Financing
Test conclusion for the institution.
(B) The Nationwide Community Development Investment
Benchmark measures the dollar volume of community development investments
that benefit or serve all or part of the nationwide area, excluding
mortgage-backed securities, of all large depository institutions that
had assets greater than $10 billion as of December 31 in both of the
prior two calendar years compared to deposits located in the nationwide
area for those depository institutions, calculated pursuant to paragraph
II.n of appendix B to this part.
(v) Impact and responsiveness review. The Board reviews the impact and responsiveness of the bank’s
community development loans and community development investments
that benefit or serve the nationwide area, as provided in section
228.15.
(f) Community Development Financing Test performance
conclusions and ratings.
(1) Conclusions. Pursuant to section 228.28 and appendix C to this part, the Board
assigns conclusions for a bank’s Community Development Financing
Test performance in each facility-based assessment area, each state
or multistate MSA, as applicable, and for the institution. In assigning
conclusions under this performance test, the Board may consider performance
context information as provided in section 228.21(d).
(2) Ratings. Pursuant to section 228.28 and appendix D to this part, the Board
incorporates a bank’s Community Development Financing Test conclusions
into its state or multistate MSA ratings, as applicable, and its institution
rating.
