OCC 2007-3
OCC Bulletin

    Subject:  Community Reinvestment Act
Description:  Small Bank Asset Threshold and Other 
              Regulatory Revisions

       Date:  January 22, 2007

TO:  Chief Executive Officers and Compliance Officers of
     All National Banks, Department and Division Heads, 
     and All Examining Personnel

On December 29, 2006, the Office of the Comptroller of 
the Currency (OCC) published in the Federal Register 
revisions to its Community Reinvestment Act (CRA) 
regulation that are effective January 1, 2007.  Two 
separate revisions are made to the CRA regulation in 
this rulemaking: 

*  Adjustment of the asset-size threshold to be used to
   define "small bank" and "intermediate small bank" 
   based on the annual percentage change in the Consumer
   Price Index.
*  Reference in the small bank performance standards to 
   appendix A: Ratings.

Asset-Size Threshold Adjustment

The OCC's CRA regulation, as revised on September 1, 
2005, provides that national banks that, as of December
31 of either of the prior two calendar years, had assets
of less than $1 billion are "small banks."  Small banks 
with assets of at least $250 million as of December 31 
of both of the prior two calendar years and less than 
$1 billion as of December 31 of either of the prior two 
calendar years are "intermediate small banks."  12 CFR 
25.12(u)(1).  The regulation provides that the OCC will
publish annual adjustments to these dollar figures based
on the year-to-year change in the average of the 
Consumer Price Index for Urban Wage Earners and Clerical 
Workers (CPIW), not seasonally adjusted, for each 
12-month period ending in November, with rounding to the
nearest million.  12 CFR 25.12(u)(2).

During the period ending November 2006, the CPIW 
increased by 3.32 percent.  As a result, the OCC is 
revising section 25.12(u)(1) to make this annual 
adjustment.  Beginning January 1, 2007, banks that, as 
of December 31 of either of the prior two calendar 
years, had assets of less than $1.033 billion are "small
banks."  Small banks with assets of at least $258 
million as of December 31 of both of the prior two 
calendar years and less than $1.033 billion as of 
December 31 of either of the prior two calendar years 
are "intermediate small banks."  For further information
about how these revised asset-size thresholds are 
applied, see the CRA page on the Federal Financial 
Institutions Examination Council's Web site at 
www.ffiec.gov/cra. 

Reference to Appendix A: Ratings

The joint final rule adds as paragraph (d) to section 
25.26 a provision stating, "The [agency] rates the 
performance of a bank evaluated under this section as 
provided in appendix A of this part."  Appendix A to the
regulation describes the CRA ratings system for each 
performance test under the regulations and provides 
specific information on what institutions must 
demonstrate in order to achieve a particular rating.  
Adding this provision to section 25.26 provides 
clarification and consistency with other similar 
provisions in part 25.  No change in the evaluation or 
rating of small banks will result from reinserting the 
provision.

If you have any questions about the regulatory revisions
or about how to determine whether a national bank is 
classified as a small or intermediate small bank, please
contact your supervisory office, the Compliance Policy 
Department at (202) 874-4428, or the Community and 
Consumer Law Division at (202) 874-5750.



        /signed/
Ann F. Jaedicke
Deputy Comptroller for Compliance Policy

Attachment:  71 FR 78335
 [http://www.occ.treas.gov/fr/fedregister/71fr78335.pdf]