[Code of Federal Regulations]
[Title 12, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR25.21]

[Page 309-310]
 
                       TITLE 12--BANKS AND BANKING
 
   CHAPTER I--COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY
 
PART 25_COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT PRODUCTION REGULATIONS--Table of Contents
 
              Subpart B_Standards for Assessing Performance
 
Sec. 25.21  Performance tests, standards, and ratings, in general.

    Source: 60 FR 22180, May 4, 1995, unless otherwise noted.


    (a) Performance tests and standards. The OCC assesses the CRA 
performance of a bank in an examination as follows:
    (1) Lending, investment, and service tests. The OCC applies the 
lending, investment, and service tests, as provided in Sec. Sec. 25.22 
through 25.24, 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 OCC applies the community development test for a wholesale or 
limited purpose bank, as provided in Sec. 25.25, except as provided in 
paragraph (a)(4) of this section.
    (3) Small bank performance standards. The OCC applies the small bank 
performance standards as provided in Sec. 25.26 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 
Sec. 25.42.
    (4) Strategic plan. The OCC evaluates the performance of a bank 
under a strategic plan if the bank submits, and the OCC approves, a 
strategic plan as provided in Sec. 25.27.
    (b) Performance context. The OCC 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 Sec. 25.43, and any 
written comments about the bank's CRA performance submitted to the bank 
or the OCC; and
    (7) Any other information deemed relevant by the OCC.

[[Page 310]]

    (c) Assigned ratings. The OCC assigns to a bank one of the following 
four ratings pursuant to Sec. 25.28 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 OCC 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 OCC 
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.