NR 98-105
October 20, 1998


  OCC Advises National Banks to Strengthen CRA Data Collection
                           Processes 
                                
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency
(OCC) today issued an advisory letter calling on national banks
to establish or verify internal controls and procedures for
collecting and reporting data required under the Community
Reinvestment Act (CRA).

"While performing large bank CRA examinations, OCC examiners have
found numerous errors in the collection and reporting of CRA
small business and community development loans," according to
Julie Williams, acting Comptroller of the Currency.  "Data errors
compromise an examiner's ability to accurately evaluate a bank's
CRA performance, prolong compliance exams and may mislead users
of public CRA data," added Ms. Williams.

Under 12 CFR 25.42, large national banks (generally those with
$250 million or more in assets) are required to collect and
report data annually on small business, small farm and community
development lending.  Some of the common errors that OCC
examiners have found include:

 -        reporting renewals of small business loans as
          originations;

 -        not reporting gross annual revenues, when known, for a
          business receiving a small business loan;

 -        in cases of the increase in a line of credit, reporting
          the total amount of the line of credit rather than the
          amount of the increase;

 -        reporting loans that do not meet the regulatory
          definition of community development loans found in 12
          CFR 25.12(h);
 
 -        reporting of the same loans as both small business
          loans and community development loans.

"National banks that collect and report CRA data are responsible
for maintaining solid internal controls to assure accurate
submissions," the acting Comptroller cautioned.   According to
the advisory letter, OCC examiners will review national banks'
processes for collecting, reporting, and verifying the integrity
of CRA data during future compliance or CRA examinations to
ensure that banks are meeting this responsibility.  The OCC also
encouraged national banks to review how their employees are
trained in the CRA data collection requirements.

According to the OCC, data errors also increase the burden on
bank personnel during exams and increase exam time when data must
be corrected during an exam.  Data with errors that affect an
examiner's ability to evaluate a bank's CRA performance
accurately won't be used and the resubmission of reportable data
may be required.  The advisory also cautioned that other
supervisory actions may be taken.

The full text of OCC Advisory Letter AL-98-16 is available on the
agency's web site at www.occ.treas.gov, or may be obtained by
calling the OCC Information Line (a fax on demand service) at
202- 479-0141.   
 


                              # # #

The OCC charters, regulates and examines approximately 2,600 national banks
and 66 federal branches and agencies of foreign banks in the United States,
accounting for 58 percent of the nation's banking assets.  Its mission is to
ensure a safe, sound and competitive national banking system that supports the
citizens, communities and economy of the United States.