(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. This part implements the requirement in the CRA that the Board assess
a bank’s record of helping to meet the credit needs of the local
communities in which the bank is chartered, consistent with the safe
and sound operation of the bank, and to take this record into account
in the agency’s evaluation of an application for a deposit facility
by the bank. Accordingly, this part:
(1) Establishes the framework and criteria
by which the Board assesses a bank’s record of responding to
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) Provides
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 given to those terms 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 exempt banks. This part
does not apply to 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 and
done on an accommodation basis. These banks include bankers’
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.
