12 C.F.R. Part 25 |
Community Reinvestment Act and Interstate Deposit Production
Regulations The Interstate Deposit Production Regulations were amended effective October 1, 2002 |
[Editor's Note: The OCC published a final rule for technical amendments to § 25.12 of Subpart A – General, § 25.27 of Subpart B- Standards for Assessing Performance, § 25.41 and 25.42 of Subpart C – Records, Reporting, and Disclosure Requirements on March 28, 2005, 70 FR 15570, effective March 28, 2005.]
[Editor's Note: The OCC published a final rule amending § 25.12 of Subpart A – General, §§ 25.26 and 25.28 of Subpart B – Standards for Assessing Performance, and Appendix A to Part 25 – Ratings on August 2, 2005, 70 FR 44256, effective September 1, 2005.]
Subpart A--General
Sec.
25.11 Authority, purposes, and scope.
25.12 Definitions.
Subpart B--Standards for Assessing Performance
25.21 Performance tests, standards, and ratings, in general.
25.22 Lending test.
25.23 Investment test.
25.24 Service test.
25.25 Community development test for wholesale or limited purpose banks.
25.26
Small bank performance standards.
25.27 Strategic plan.
25.28 Assigned ratings.
25.29
Effect of CRA performance on applications.
Subpart C--Records, Reporting, and Disclosure Requirements
25.41
Assessment area delineation.
25.42
Data collection, reporting, and disclosure.
25.43
Content and availability of public file.
25.44 Public notice
by banks.
25.45
Publication of planned examination schedule.
Subpart D--Reserved
Subpart E--Prohibition Against Use of Interstate Branches Primarily for Deposit Production
25.61 Purpose
and scope.
25.62 Definitions.
25.63
Loan-to-deposit ratio screen.
25.64 Credit
needs determination.
25.65 Sanctions.
APPENDIX A TO PART 25--RATINGS
APPENDIX B TO PART 25--CRA NOTICE
AUTHORITY: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215,
215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2907, and 3101 through 3111.
SOURCE: 43 FR 47146, Oct. 12, 1978 [and 60 FR 22178, May
4, 1995], unless otherwise noted.
Subpart A--General
§ 25.11 Authority, purposes, and scope.
(a) Authority
and OMB control number--(1) Authority. The authority for subparts A, B, C,
D, and E is 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215, 215a, 481, 1814, 1816,
1828(c), 1835a, 2901 through 2907, and 3101 through 3111.
(2) OMB control
number. The information collection requirements contained in this part were approved
by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq.
and have been assigned OMB control number 1557-0160.
(b) Purposes.
In enacting the Community Reinvestment Act (CRA), the Congress required each appropriate
Federal financial supervisory agency to assess an institution's record of helping to meet
the credit needs of the local communities in which the institution is chartered,
consistent with the safe and sound operation of the institution, and to take this record
into account in the agency's evaluation of an application for a deposit facility by the
institution. This part is intended to carry out the purposes of the CRA by:
(1) Establishing
the framework and criteria by which the Office of the Comptroller of the Currency (OCC)
assesses a 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; and
(2) Providing that
the OCC takes that record into account in considering certain applications.
(c) Scope--(1)
General. This part applies to all banks except as provided in paragraphs (c)(2)
and (c)(3) of this section.
(2) Federal
branches and agencies. (i) This part applies to all insured Federal branches and to
any Federal branch that is uninsured 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)).
(ii) Except as
provided in paragraph (c)(2)(i) of this section, this part does not apply to Federal
branches that are uninsured, limited Federal branches, or Federal agencies, as those terms
are defined in part 28 of this chapter.
(3) Certain
special purpose banks. This part does not apply to special purpose 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. These
banks include banker's 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.
[60 FR 22178, May 4, 1995, as amended at 62 FR 47734, Sept. 10, 1997]
For purposes of
this part, the following definitions apply:
(a) Affiliate
means any company that controls, is controlled by, or is under common control with another
company. The term "control" has the meaning given to that term in 12 U.S.C.
1841(a)(2), and a company is under common control with another company if both companies
are directly or indirectly controlled by the same company.
(b) Area median
income means:
(1) The median
family income for the MSA, if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions; or
(2) The statewide
nonmetropolitan median family income, if a person or geography is located outside an MSA.
(c) Assessment
area means a geographic area delineated in accordance with § 25.41.
(d) Automated
teller machine (ATM) means an automated, unstaffed banking facility owned or operated
by, or operated exclusively for, the bank at which deposits are received, cash dispersed,
or money lent.
(e) Bank
means a national bank (including a Federal branch as defined in part 28 of this chapter)
with Federally insured deposits, except as provided in § 25.11(c).
(f) Branch
means a staffed banking facility authorized as a branch, whether shared or unshared,
including, for example, a mini-branch in a grocery store or a branch operated in
conjunction with any other local business or nonprofit organization.
(g) Community
development means:
(1) Affordable
housing (including multifamily rental housing) for low- or moderate-income individuals;
(2) Community
services targeted to low- or moderate-income individuals;
(3) Activities that
promote economic development by financing businesses or farms that meet the size
eligibility standards of the Small Business Administration's Development Company or Small
Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1
million or less; or
(4) (4) Activities that revitalize or stabilize
(i) Low-or moderate-income geographies;
(ii) Designated disaster areas; or
(iii) Distressed or underserved nonmetropolitan middle-income geographies designated by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, and OCC, based on
(A) Rates of poverty, unemployment, and population loss; or
(B) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals.
(h) Community
development loan means a loan that:
(1) Has as its
primary purpose community development; and
(2) Except in the
case of a wholesale or limited purpose bank:
(i) Has not been
reported or collected by the bank or an affiliate for consideration in the bank's
assessment as a home mortgage, small business, small farm, or consumer loan, unless it is
a multifamily dwelling loan (as described in appendix A to part 203 of this title); and
(ii) Benefits the
bank's assessment area(s) or a broader statewide or regional area that includes the bank's
assessment area(s).
(i) Community
development service means a service that:
(1) Has as its
primary purpose community development;
(2) Is related to
the provision of financial services; and
(3) Has not been
considered in the evaluation of the bank's retail banking services under § 25.24(d).
(j) Consumer
loan means a loan to one or more individuals for household, family, or other personal
expenditures. A consumer loan does not include a home mortgage, small business, or small
farm loan. Consumer loans include the following categories of loans:
(1) Motor
vehicle loan, which is a consumer loan extended for the purchase of and secured by a
motor vehicle;
(2) Credit card
loan, which is a line of credit for household, family, or other personal expenditures
that is accessed by a borrower's use of a "credit card," as this term is defined
in § 226.2 of this title;
(3) Home equity
loan, which is a consumer loan secured by a residence of the borrower;
(4) Other
secured consumer loan, which is a secured consumer loan that is not included in one
of the other categories of consumer loans; and
(5) Other
unsecured consumer loan, which is an unsecured consumer loan that is not included in
one of the other categories of consumer loans.
(k) Geography
means a census tract delineated by the United States Bureau of
the Census in the most recent decennial census.
(l) Home
mortgage loan means a "home improvement loan," "home purchase
loan," or "refinancing" as defined in § 203.2 of this title.
(m) Income
level includes:
(1) Low-income,
which means an individual income that is less than 50 percent of the area median income,
or a median family income that is less than 50 percent, in the case of a geography.
(2) Moderate-income,
which means an individual income that is at least 50 percent and less than 80 percent of
the area median income, or a median family income that is at least 50 and less than 80
percent, in the case of a geography.
(3) Middle-income,
which means an individual income that is at least 80 percent and less than 120 percent of
the area median income, or a median family income that is at least 80 and less than 120
percent, in the case of a geography.
(4) Upper-income,
which means an individual income that is 120 percent or more of the area median income, or
a median family income that is 120 percent or more, in the case of a geography.
(n) Limited
purpose bank means a bank that offers only a narrow product line (such as credit card
or motor vehicle loans) to a regional or broader market and for which a designation as a
limited purpose bank is in effect, in accordance with § 25.25(b).
(o) Loan
location. A loan is located as follows:
(1) A consumer loan
is located in the geography where the borrower resides;
(2) A home mortgage
loan is located in the geography where the property to which the loan relates is located;
and
(3) A small
business or small farm loan is located in the geography where the main business facility
or farm is located or where the loan proceeds otherwise will be applied, as indicated by
the borrower.
(p) Loan
production office means a staffed facility, other than a branch, that is open to the
public and that provides lending-related services, such as loan information and
applications.
(q) Metropolitan division means a metropolitan division as defined by the Director of the Office of Management and Budget.
(r) MSA
means a metropolitan statistical area as defined by the Director of the Office of Management and Budget.
(s) Nonmetropolitan area
means any area that is not located in an MSA.
(t) Qualified
investment means a lawful investment, deposit, membership share, or grant that has as
its primary purpose community development.
(u) Small bank(1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1 billion. Intermediate small bank means a small bank 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.
(2) Adjustment. The dollar figures in paragraph (u)(1) of this section shall be adjusted annually and published by the OCC, based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each twelve-month period ending in November, with rounding to the nearest million.
(v) Small
business loan means a loan included in "loans to small businesses" as
defined in the instructions for preparation of the Consolidated Report of Condition and
Income.
(w) Small farm
loan means a loan included in "loans to small farms" as defined in the
instructions for preparation of the Consolidated Report of Condition and Income.
(x) Wholesale
bank means a bank that is not in the business of extending home mortgage, small
business, small farm, or consumer loans to retail customers, and for which a designation
as a wholesale bank is in effect, in accordance with § 25.25(b).
[60 FR 22178, May 4, 1995, as amended at 60 FR 66050, Dec. 20, 1995; 61 FR 21363, May 10, 1996; 70 FR March 28, 2005; 70 FR 44256 August 2, 2005]
Subpart B--Standards for Assessing Performance
[Source for Subpart B: 60 FR 22180, May 4, 1995, unless otherwise noted.]
§ 25.21 Performance tests, standards, and ratings, in general.
(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 §§ 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 §
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 § 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 § 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 § 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 § 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.
(c) Assigned
ratings. The OCC assigns to a bank one of the following four ratings pursuant to §
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.
(a) Scope of
test. (1) The lending test evaluates a bank's record of helping to meet the credit
needs of its assessment area(s) through its lending activities by considering a bank's
home mortgage, small business, small farm, and community development lending. If consumer
lending constitutes a substantial majority of a bank's business, the OCC will evaluate the
bank's consumer lending in one or more of the following categories: motor vehicle, credit
card, home equity, other secured, and other unsecured loans. In addition, at a bank's
option, the OCC will evaluate one or more categories of consumer lending, if the bank has
collected and maintained, as required in § 25.42(c)(1), the data for each category that
the bank elects to have the OCC evaluate.
(2) The OCC
considers originations and purchases of loans. The OCC will also consider any other loan
data the bank may choose to provide, including data on loans outstanding, commitments and
letters of credit.
(3) A bank may ask
the OCC to consider loans originated or purchased by consortia in which the bank
participates or by third parties in which the bank has invested only if the loans meet the
definition of community development loans and only in accordance with paragraph (d) of
this section. The OCC will not consider these loans under any criterion of the lending
test except the community development lending criterion.
(b) Performance
criteria. The OCC evaluates a bank's lending performance pursuant to the following
criteria:
(1) Lending
activity. The number and amount of the bank's home mortgage, small business, small
farm, and consumer loans, if applicable, in the bank's assessment area(s);
(2) Geographic
distribution. The geographic distribution of the bank's home mortgage, small
business, small farm, and consumer loans, if applicable, based on the loan location,
including:
(i) The proportion
of the bank's lending in the bank's assessment area(s);
(ii) The dispersion
of lending in the bank's assessment area(s); and
(iii) The number
and amount of loans in low-, moderate-, middle-, and upper-income geographies in the
bank's assessment area(s);
(3) Borrower
characteristics. The distribution, particularly in the bank's assessment area(s), of
the bank's home mortgage, small business, small farm, and consumer loans, if applicable,
based on borrower characteristics, including the number and amount of:
(i) Home mortgage
loans to low-, moderate-, middle-, and upper-income individuals;
(ii) Small business
and small farm loans to businesses and farms with gross annual revenues of $1 million or
less;
(iii) Small
business and small farm loans by loan amount at origination; and
(iv) Consumer
loans, if applicable, to low-, moderate-, middle-, and upper-income individuals;
(4) Community
development lending. The bank's community development lending, including the number
and amount of community development loans, and their complexity and innovativeness; and
(5) Innovative
or flexible lending practices. The bank's use of innovative or flexible lending
practices in a safe and sound manner to address the credit needs of low- or
moderate-income individuals or geographies.
(c) Affiliate
lending. (1) At a bank's option, the OCC will consider loans by an affiliate of the
bank, if the bank provides data on the affiliate's loans pursuant to § 25.42.
(2) The OCC
considers affiliate lending subject to the following constraints:
(i) No affiliate
may claim a loan origination or loan purchase if another institution claims the same loan
origination or purchase; and
(ii) If a bank
elects to have the OCC consider loans within a particular lending category made by one or
more of the bank's affiliates in a particular assessment area, the bank shall elect to
have the OCC consider, in accordance with paragraph (c)(1) of this section, all the loans
within that lending category in that particular assessment area made by all of the bank's
affiliates.
(3) The OCC does
not consider affiliate lending in assessing a bank's performance under paragraph (b)(2)(i)
of this section.
(d) Lending by
a consortium or a third party. Community development loans originated or purchased by
a consortium in which the bank participates or by a third party in which the bank has
invested:
(1) Will be
considered, at the bank's option, if the bank reports the data pertaining to these loans
under § 25.42(b)(2); and
(2) May be
allocated among participants or investors, as they choose, for purposes of the lending
test, except that no participant or investor:
(i) May claim a
loan origination or loan purchase if another participant or investor claims the same loan
origination or purchase; or
(ii) May claim
loans accounting for more than its percentage share (based on the level of its
participation or investment) of the total loans originated by the consortium or third
party.
(e) Lending
performance rating. The OCC rates a bank's lending performance as provided in
appendix A of this part.
(a) Scope of
test. The investment test evaluates a bank's record of helping to meet the credit
needs of its assessment area(s) through qualified investments that benefit its assessment
area(s) or a broader statewide or regional area that includes the bank's assessment
area(s).
(b) Exclusion.
Activities considered under the lending or service tests may not be considered under the
investment test.
(c) Affiliate
investment. At a bank's option, the OCC will consider, in its assessment of a bank's
investment performance, a qualified investment made by an affiliate of the bank, if the
qualified investment is not claimed by any other institution.
(d) Disposition
of branch premises. Donating, selling on favorable terms, or making available on a
rent-free basis a branch of the bank that is located in a predominantly minority
neighborhood to a minority depository institution or women's depository institution (as
these terms are defined in 12 U.S.C. 2907(b)) will be considered as a qualified
investment.
(e) Performance
criteria. The OCC evaluates the investment performance of a bank pursuant to the
following criteria:
(1) The dollar
amount of qualified investments;
(2) The
innovativeness or complexity of qualified investments;
(3) The
responsiveness of qualified investments to credit and community development needs; and
(4) The degree to
which the qualified investments are not routinely provided by private investors.
(f) Investment
performance rating. The OCC rates a bank's investment performance as provided in
appendix A of this part.
(a) Scope of
test. The service test evaluates a bank's record of helping to meet the credit needs
of its assessment area(s) by analyzing both the availability and effectiveness of a bank's
systems for delivering retail banking services and the extent and innovativeness of its
community development services.
(b) Area(s)
benefitted. Community development services must benefit a bank's assessment area(s)
or a broader statewide or regional area that includes the bank's assessment area(s).
(c) Affiliate
service. At a bank's option, the OCC will consider, in its assessment of a bank's
service performance, a community development service provided by an affiliate of the bank,
if the community development service is not claimed by any other institution.
(d) Performance
criteria--retail banking services. The OCC evaluates the availability and
effectiveness of a bank's systems for delivering retail banking services, pursuant to the
following criteria:
(1) The current
distribution of the bank's branches among low-, moderate-, middle-, and upper-income
geographies;
(2) In the context
of its current distribution of the bank's branches, the bank's record of opening and
closing branches, particularly branches located in low- or moderate-income geographies or
primarily serving low- or moderate-income individuals;
(3) The
availability and effectiveness of alternative systems for delivering retail banking
services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank,
banking by telephone or computer, loan production offices, and bank-at-work or
bank-by-mail programs) in low- and moderate-income geographies and to low- and
moderate-income individuals; and
(4) The range of
services provided in low-, moderate-, middle-, and upper-income geographies and the degree
to which the services are tailored to meet the needs of those geographies.
(e) Performance
criteria--community development services. The OCC evaluates community development
services pursuant to the following criteria:
(1) The extent to
which the bank provides community development services; and
(2) The
innovativeness and responsiveness of community development services.
(f) Service
performance rating. The OCC rates a bank's service performance as provided in
appendix A of this part.
§ 25.25 Community development test for wholesale or limited purpose banks.
(a) Scope of
test. The OCC assesses a wholesale or limited purpose bank's record of helping to
meet the credit needs of its assessment area(s) under the community development test
through its community development lending, qualified investments, or community development
services.
(b) Designation
as a wholesale or limited purpose bank. In order to receive a designation as a
wholesale or limited purpose bank, a bank shall file a request, in writing, with the OCC,
at least three months prior to the proposed effective date of the designation. If the OCC
approves the designation, it remains in effect until the bank requests revocation of the
designation or until one year after the OCC notifies the bank that the OCC has revoked the
designation on its own initiative.
(c) Performance
criteria. The OCC evaluates the community development performance of a wholesale or
limited purpose bank pursuant to the following criteria:
(1) The number and
amount of community development loans (including originations and purchases of loans and
other community development loan data provided by the bank, such as data on loans
outstanding, commitments, and letters of credit), qualified investments, or community
development services;
(2) The use of
innovative or complex qualified investments, community development loans, or community
development services and the extent to which the investments are not routinely provided by
private investors; and
(3) The bank's
responsiveness to credit and community development needs.
(d) Indirect
activities. At a bank's option, the OCC will consider in its community development
performance assessment:
(1) Qualified
investments or community development services provided by an affiliate of the bank, if the
investments or services are not claimed by any other institution; and
(2) Community
development lending by affiliates, consortia and third parties, subject to the
requirements and limitations in § 25.22(c) and (d).
(e) Benefit to
assessment area(s)--(1) Benefit inside assessment area(s). The OCC considers
all qualified investments, community development loans, and community development services
that benefit areas within the bank's assessment area(s) or a broader statewide or regional
area that includes the bank's assessment area(s).
(2) Benefit
outside assessment area(s). The OCC considers the qualified investments, community
development loans, and community development services that benefit areas outside the
bank's assessment area(s), if the bank has adequately addressed the needs of its
assessment area(s).
(f) Community
development performance rating. The OCC rates a bank's community development
performance as provided in appendix A of this part.
§ 25.26 Small bank performance standards.
(a) Performance
criteria
(1) Small banks with assets of less than $250 million. The OCC evaluates the record of a small bank that is not, or that was not during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraph (b) of this section.
(2) Intermediate small banks. The OCC evaluates the record of a small bank that is, or that was during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraphs (b) and (c) of this section.
(b) Lending test. A small bank’s lending performance is evaluated pursuant to the following criteria:
(1) The bank's
loan-to-deposit ratio, adjusted for seasonal variation and, as appropriate, other
lending-related activities, such as loan originations for sale to the secondary markets,
community development loans, or qualified investments;
(2) The percentage
of loans and, as appropriate, other lending-related activities located in the bank's
assessment area(s);
(3) The bank's
record of lending to and, as appropriate, engaging in other lending-related activities for
borrowers of different income levels and businesses and farms of different sizes;
(4) The geographic
distribution of the bank's loans; and
(5) The bank's
record of taking action, if warranted, in response to written complaints about its
performance in helping to meet credit needs in its assessment area(s).
(c) Community development test. An intermediate small bank’s community development performance also is evaluated pursuant to the following criteria:
(1) The number and amount of community development loans;
(2) The number and amount of qualified investments;
(3) The extent to which the bank provides community development services; and
(4) The bank’s responsiveness through such activities to community development lending, investment, and services needs.
FR 70 44256 August 2, 2005
(a) Alternative
election. The OCC will assess a bank's record of helping to meet the credit needs of
its assessment area(s) under a strategic plan if:
(1) The bank has
submitted the plan to the OCC as provided for in this section;
(2) The OCC has
approved the plan;
(3) The plan is in
effect; and
(4) The bank has
been operating under an approved plan for at least one year.
(b) Data
reporting. The OCC's approval of a plan does not affect the bank's obligation, if
any, to report data as required by § 25.42.
(c) Plans in
general--(1) Term. A plan may have a term of no more than five years, and
any multi-year plan must include annual interim measurable goals under which the OCC will
evaluate the bank's performance.
(2) Multiple
assessment areas. A bank with more than one assessment area may prepare a single plan
for all of its assessment areas or one or more plans for one or more of its assessment
areas.
(3) Treatment
of affiliates. Affiliated institutions may prepare a joint plan if the plan provides
measurable goals for each institution. Activities may be allocated among institutions at
the institutions' option, provided that the same activities are not considered for more
than one institution.
(d) Public
participation in plan development. Before submitting a plan to the OCC for approval,
a bank shall:
(1) Informally seek
suggestions from members of the public in its assessment area(s) covered by the plan while
developing the plan;
(2) Once the bank
has developed a plan, formally solicit public comment on the plan for at least 30 days by
publishing notice in at least one newspaper of general circulation in each assessment area
covered by the plan; and
(3) During the
period of formal public comment, make copies of the plan available for review by the
public at no cost at all offices of the bank in any assessment area covered by the plan
and provide copies of the plan upon request for a reasonable fee to cover copying and
mailing, if applicable.
(e) Submission
of plan. The bank shall submit its plan to the OCC at least three months prior to the
proposed effective date of the plan. The bank shall also submit with its plan a
description of its informal efforts to seek suggestions from members of the public, any
written public comment received, and, if the plan was revised in light of the comment
received, the initial plan as released for public comment.
(f) Plan
content--(1) Measurable goals. (i) A bank shall specify in its plan
measurable goals for helping to meet the credit needs of each assessment area covered by
the plan, particularly the needs of low- and moderate-income geographies and low- and
moderate-income individuals, through lending, investment, and services, as appropriate.
(ii) A bank shall
address in its plan all three performance categories and, unless the bank has been
designated as a wholesale or limited purpose bank, shall emphasize lending and
lending-related activities. Nevertheless, a different emphasis, including a focus on one
or more performance categories, may be appropriate if responsive to the characteristics
and credit needs of its assessment area(s), considering public comment and the bank's
capacity and constraints, product offerings, and business strategy.
(2) Confidential
information. A bank may submit additional information to the OCC on a confidential
basis, but the goals stated in the plan must be sufficiently specific to enable the public
and the OCC to judge the merits of the plan.
(3) Satisfactory
and outstanding goals. A bank shall specify in its plan measurable goals that
constitute "satisfactory" performance. A plan may specify measurable goals that
constitute "outstanding" performance. If a bank submits, and the OCC
approves, both "satisfactory" and "outstanding" performance goals, the
OCC will consider the bank eligible for an "outstanding" performance rating.
(4) Election if
satisfactory goals not substantially met. A bank may elect in its plan that, if the
bank fails to meet substantially its plan goals for a satisfactory rating, the OCC will
evaluate the bank's performance under the lending, investment, and service tests, the
community development test, or the small bank performance standards, as appropriate.
(g) Plan
approval--(1) Timing. The OCC will act upon a plan within 60 calendar days
after the OCC receives the complete plan and other material required under paragraph (e)
of this section. If the OCC fails to act within this time period, the plan shall be deemed
approved unless the OCC extends the review period for good cause.
(2) Public
participation. In evaluating the plan's goals, the OCC considers the public's
involvement in formulating the plan, written public comment on the plan, and any response
by the bank to public comment on the plan.
(3) Criteria
for evaluating plan. The OCC evaluates a plan's measurable goals using the following
criteria, as appropriate:
(i) The extent and
breadth of lending or lending-related activities, including, as appropriate, the
distribution of loans among different geographies, businesses and farms of different
sizes, and individuals of different income levels, the extent of community development
lending, and the use of innovative or flexible lending practices to address credit needs;
(ii) The amount and
innovativeness, complexity, and responsiveness of the bank's qualified investments; and
(iii) The
availability and effectiveness of the bank's systems for delivering retail banking
services and the extent and innovativeness of the bank's community development services.
(h) Plan
amendment. During the term of a plan, a bank may request the OCC to approve an
amendment to the plan on grounds that there has been a material change in circumstances.
The bank shall develop an amendment to a previously approved plan in accordance with the
public participation requirements of paragraph (d) of this section.
(i) Plan
assessment. The OCC approves the goals and assesses performance under a plan as
provided for in appendix A of this part.
[60 FR 22180, May 4, 1995, as amended at 60 FR 66050, Dec. 20, 1995]
(a) Ratings in
general. Subject to paragraphs (b) and (c) of this section, the OCC assigns to a bank
a rating of "outstanding," "satisfactory," "needs to
improve," or "substantial noncompliance" based on the bank's performance
under the lending, investment and service tests, the community development test, the small
bank performance standards, or an approved strategic plan, as applicable.
(b) Lending,
investment, and service tests. The OCC assigns a rating for a bank assessed under the
lending, investment, and service tests in accordance with the following principles:
(1) A bank that
receives an "outstanding" rating on the lending test receives an assigned rating
of at least "satisfactory";
(2) A bank that
receives an "outstanding" rating on both the service test and the investment
test and a rating of at least "high satisfactory" on the lending test receives
an assigned rating of "outstanding"; and
(3) No bank may
receive an assigned rating of "satisfactory" or higher unless it receives a
rating of at least "low satisfactory" on the lending test.
(c) Effect of evidence of discriminatory or other illegal credit practices.
(1) The OCC’s evaluation of a bank’s CRA performance is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the bank or in any assessment area by any affiliate whose loans have been considered as part of the bank’s lending performance. In connection with any type of lending activity described in § 25.22(a), evidence of discriminatory or other credit practices that violate an applicable law, rule, or regulation includes, but is not limited to:
(i) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act;
(ii) Violations of the Home Ownership and Equity Protection Act;
(iii) Violations of section 5 of the Federal Trade Commission Act;
(iv) Violations of section 8 of the Real Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending
Act provisions regarding a consumer’s right of rescission.
(2) In determining the effect of evidence of practices described in paragraph (c)(1) of this section on the bank’s assigned rating, the OCC considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the bank (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the bank (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from self assessment; and any other relevant information.
FR 70 44256 August 2, 2005
§ 25.29 Effect of CRA performance on applications.
(a) CRA
performance. Among other factors, the OCC takes into account the record of
performance under the CRA of each applicant bank in considering an application for:
(1) The
establishment of a domestic branch;
(2) The relocation
of the main office or a branch;
(3) Under the Bank
Merger Act (12 U.S.C. 1828(c) [Note added by Pub. L. 105-18, sec. 50004, 111 Stat. 212]),
the merger or consolidation with or the acquisition of assets or assumption of liabilities
of an insured depository institution; and
(4) The conversion
of an insured depository institution to a national bank charter.
(b) Charter
application. An applicant (other than an insured depository institution) for a
national bank charter shall submit with its application a description of how it will meet
its CRA objectives. The OCC takes the description into account in considering the
application and may deny or condition approval on that basis.
(c) Interested
parties. The OCC takes into account any views expressed by interested parties that
are submitted in accordance with the OCC's procedures set forth in part 5 of this chapter
in considering CRA performance in an application listed in paragraphs (a) and (b) of this
section.
(d) Denial or
conditional approval of application. A bank's record of performance may be the basis
for denying or conditioning approval of an application listed in paragraph (a) of this
section.
(e) Insured
depository institution. For purposes of this section, the term "insured
depository institution" has the meaning given to that term in 12 U.S.C. 1813.
Subpart C--Records, Reporting, and Disclosure Requirements
[Source for Subpart C: 60 FR 22184, May 4, 1995, unless otherwise noted.]
§ 25.41 Assessment area delineation.
(a) In general.
A bank shall delineate one or more assessment areas within which the OCC evaluates the
bank's record of helping to meet the credit needs of its community. The OCC does not
evaluate the bank's delineation of its assessment area(s) as a separate performance
criterion, but the OCC reviews the delineation for compliance with the requirements of
this section.
(b) Geographic
area(s) for wholesale or limited purpose banks. The assessment area(s) for a
wholesale or limited purpose bank must consist generally of one or more MSAs or metropolitan divisions (using the
MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the
delineation is made) or one or more contiguous political subdivisions, such as counties,
cities, or towns, in which the bank has its main office, branches, and deposit-taking
ATMs.
(c) Geographic
area(s) for other banks. The assessment area(s) for a bank other than a wholesale or
limited purpose bank must:
(1) Consist
generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January
1 of the calendar year in which the delineation is made) or one or more contiguous
political subdivisions, such as counties, cities, or towns; and
(2) Include the
geographies in which the bank has its main office, its branches, and its deposit-taking
ATMs, as well as the surrounding geographies in which the bank has originated or purchased
a substantial portion of its loans (including home mortgage loans, small business and
small farm loans, and any other loans the bank chooses, such as those consumer loans on
which the bank elects to have its performance assessed).
(d) Adjustments
to geographic area(s). A bank may adjust the boundaries of its assessment area(s) to
include only the portion of a political subdivision that it reasonably can be expected to
serve. An adjustment is particularly appropriate in the case of an assessment area that
otherwise would be extremely large, of unusual configuration, or divided by significant
geographic barriers.
(e) Limitations
on the delineation of an assessment area. Each bank's assessment area(s):
(1) Must consist
only of whole geographies;
(2) May not reflect
illegal discrimination;
(3) May not
arbitrarily exclude low- or moderate-income geographies, taking into account the bank's
size and financial condition; and
(4) May not extend
substantially beyond an MSA boundary or beyond a state boundary unless the assessment area
is located in a multistate MSA. If a bank serves a geographic area that extends
substantially beyond a state boundary, the bank shall delineate separate assessment areas
for the areas in each state. If a bank serves a geographic area that extends substantially
beyond an MSA boundary, the bank shall delineate separate assessment areas for the areas
inside and outside the MSA.
(f) Banks
serving military personnel. Notwithstanding the requirements of this section, a bank
whose business predominantly consists of serving the needs of military personnel or their
dependents who are not located within a defined geographic area may delineate its entire
deposit customer base as its assessment area.
(g) Use of
assessment area(s). The OCC uses the assessment area(s) delineated by a bank in its
evaluation of the bank's CRA performance unless the OCC determines that the assessment
area(s) do not comply with the requirements of this section.
§ 25.42 Data collection, reporting, and disclosure.
(a) Loan
information required to be collected and maintained. A bank, except a small bank,
shall collect, and maintain in machine readable form (as prescribed by the OCC) until the
completion of its next CRA examination, the following data for each small business or
small farm loan originated or purchased by the bank:
(1) A unique number
or alpha-numeric symbol that can be used to identify the relevant loan file;
(2) The loan amount
at origination;
(3) The loan
location; and
(4) An indicator
whether the loan was to a business or farm with gross annual revenues of $1 million or
less.
(b) Loan
information required to be reported. A bank, except a small bank or a bank that was a
small bank during the prior calendar year, shall report annually by March 1 to the OCC in
machine readable form (as prescribed by the OCC) the following data for the prior calendar
year:
(1) Small business
and small farm loan data. For each geography in which the bank originated or purchased a
small business or small farm loan, the aggregate number and amount of loans:
(i) With an amount
at origination of $100,000 or less;
(ii) With amount at
origination of more than $100,000 but less than or equal to $250,000;
(iii) With an
amount at origination of more than $250,000; and
(iv) To businesses
and farms with gross annual revenues of $1 million or less (using the revenues that the
bank considered in making its credit decision);
(2) Community
development loan data. The aggregate number and aggregate amount of community
development loans originated or purchased; and
(3) Home
mortgage loans. If the bank is subject to reporting under part 203 of this title, the
location of each home mortgage loan application, origination, or purchase outside the MSAs
in which the bank has a home or branch office (or outside any MSA) in accordance with the
requirements of part 203 of this title.
(c) Optional
data collection and maintenance--(1) Consumer loans. A bank may collect and
maintain in machine readable form (as prescribed by the OCC) data for consumer loans
originated or purchased by the bank for consideration under the lending test. A bank may
maintain data for one or more of the following categories of consumer loans: motor
vehicle, credit card, home equity, other secured, and other unsecured. If the bank
maintains data for loans in a certain category, it shall maintain data for all loans
originated or purchased within that category. The bank shall maintain data separately for
each category, including for each loan:
(i) A unique number
or alpha-numeric symbol that can be used to identify the relevant loan file;
(ii) The loan
amount at origination or purchase;
(iii) The loan
location; and
(iv) The gross
annual income of the borrower that the bank considered in making its credit decision.
(2) Other loan
data. At its option, a bank may provide other information concerning its lending
performance, including additional loan distribution data.
(d) Data on
affiliate lending. A bank that elects to have the OCC consider loans by an affiliate,
for purposes of the lending or community development test or an approved strategic plan,
shall collect, maintain, and report for those loans the data that the bank would have
collected, maintained, and reported pursuant to paragraphs (a), (b), and (c) of this
section had the loans been originated or purchased by the bank. For home mortgage loans,
the bank shall also be prepared to identify the home mortgage loans reported under part
203 of this title by the affiliate.
(e) Data on
lending by a consortium or a third party. A bank that elects to have the OCC consider
community development loans by a consortium or third party, for purposes of the lending or
community development tests or an approved strategic plan, shall report for those loans
the data that the bank would have reported under paragraph (b)(2) of this section had the
loans been originated or purchased by the bank.
(f) Small banks
electing evaluation under the lending, investment, and service tests. A bank that
qualifies for evaluation under the small bank performance standards but elects evaluation
under the lending, investment, and service tests shall collect, maintain, and report the
data required for other banks pursuant to paragraphs (a) and (b) of this section.
(g) Assessment
area data. A bank, except a small bank or a bank that was a small bank during the
prior calendar year, shall collect and report to the OCC by March 1 of each year a list
for each assessment area showing the geographies within the area.
(h) CRA
Disclosure Statement. The OCC prepares annually for each bank that reports data
pursuant to this section a CRA Disclosure Statement that contains, on a state-by-state
basis:
(1) For each county
(and for each assessment area smaller than a county) with a population of 500,000 persons
or fewer in which the bank reported a small business or small farm loan:
(i) The number and
amount of small business and small farm loans reported as originated or purchased located
in low-, moderate-, middle-, and upper-income geographies;
(ii) A list
grouping each geography according to whether the geography is low-, moderate-, middle-, or
upper-income;
(iii) A list
showing each geography in which the bank reported a small business or small farm loan; and
(iv) The number and
amount of small business and small farm loans to businesses and farms with gross annual
revenues of $1 million or less;
(2) For each county
(and for each assessment area smaller than a county) with a population in excess of
500,000 persons in which the bank reported a small business or small farm loan:
(i) The number and
amount of small business and small farm loans reported as originated or purchased located
in geographies with median income relative to the area median income of less than 10
percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or
more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less
than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent,
80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but
less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more;
(ii) A list
grouping each geography in the county or assessment area according to whether the median
income in the geography relative to the area median income is less than 10 percent, 10 or
more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less
than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent,
60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but
less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110
percent, 110 or more but less than 120 percent, and 120 percent or more;
(iii) A list
showing each geography in which the bank reported a small business or small farm loan; and
(iv) The number and
amount of small business and small farm loans to businesses and farms with gross annual
revenues of $1 million or less;
(3) The number and
amount of small business and small farm loans located inside each assessment area reported
by the bank and the number and amount of small business and small farm loans located
outside the assessment area(s) reported by the bank; and
(4) The number and
amount of community development loans reported as originated or purchased.
(i) Aggregate
disclosure statements. The OCC, in conjunction with the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of
Thrift Supervision, prepares annually, for each MSA or metropolitan division (including an MSA or metropolitan division that crosses a state
boundary) and the nonmetropolitan portion of each state, an aggregate disclosure statement of
small business and small farm lending by all institutions subject to reporting under this
part or parts 228, 345, or 563e of this title. These disclosure statements indicate, for
each geography, the number and amount of all small business and small farm loans
originated or purchased by reporting institutions, except that the OCC may adjust the form
of the disclosure if necessary, because of special circumstances, to protect the privacy
of a borrower or the competitive position of an institution.
(j) Central
data depositories. The OCC makes the aggregate disclosure statements, described in
paragraph (i) of this section, and the individual bank CRA Disclosure Statements,
described in paragraph (h) of this section, available to the public at central data
depositories. The OCC publishes a list of the depositories at which the statements are
available.
§ 25.43 Content and availability of public file.
(a) Information
available to the public. A bank shall maintain a public file that includes the
following information:
(1) All written
comments received from the public for the current year and each of the prior two calendar
years that specifically relate to the bank's performance in helping to meet community
credit needs, and any response to the comments by the bank, if neither the comments nor
the responses contain statements that reflect adversely on the good name or reputation of
any persons other than the bank or publication of which would violate specific provisions
of law;
(2) A copy of the
public section of the bank's most recent CRA Performance Evaluation prepared by the OCC.
The bank shall place this copy in the public file within 30 business days after its
receipt from the OCC;
(3) A list of the
bank's branches, their street addresses, and geographies;
(4) A list of
branches opened or closed by the bank during the current year and each of the prior two
calendar years, their street addresses, and geographies;
(5) A list of
services (including hours of operation, available loan and deposit products, and
transaction fees) generally offered at the bank's branches and descriptions of material
differences in the availability or cost of services at particular branches, if any. At its
option, a bank may include information regarding the availability of alternative systems
for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by
or exclusively for the bank, banking by telephone or computer, loan production offices,
and bank-at-work or bank-by-mail programs);
(6) A map of each
assessment area showing the boundaries of the area and identifying the geographies
contained within the area, either on the map or in a separate list; and
(7) Any other
information the bank chooses.
(b) Additional
information available to the public--(1) Banks other than small banks. A
bank, except a small bank or a bank that was a small bank during the prior calendar year,
shall include in its public file the following information pertaining to the bank and its
affiliates, if applicable, for each of the prior two calendar years:
(i) If the bank has
elected to have one or more categories of its consumer loans considered under the lending
test, for each of these categories, the number and amount of loans:
(A) To low-,
moderate-, middle-, and upper-income individuals;
(B) Located in
low-, moderate-, middle-, and upper-income census tracts; and
(C) Located inside
the bank's assessment area(s) and outside the bank's assessment area(s); and
(ii) The bank's CRA
Disclosure Statement. The bank shall place the statement in the public file within three
business days of its receipt from the OCC.
(2) Banks
required to report Home Mortgage Disclosure Act (HMDA) data. A bank required to
report home mortgage loan data pursuant part 203 of this title shall include in its public
file a copy of the HMDA Disclosure Statement provided by the Federal Financial
Institutions Examination Council pertaining to the bank for each of the prior two calendar
years. In addition, a bank that elected to have the OCC consider the mortgage lending of
an affiliate for any of these years shall include in its public file the affiliate's HMDA
Disclosure Statement for those years. The bank shall place the statement(s) in the public
file within three business days after its receipt.
(3) Small banks.
A small bank or a bank that was a small bank during the prior calendar year shall include
in its public file:
(i) The bank's
loan-to-deposit ratio for each quarter of the prior calendar year and, at its option,
additional data on its loan-to-deposit ratio; and
(ii) The
information required for other banks by paragraph (b)(1) of this section, if the bank has
elected to be evaluated under the lending, investment, and service tests.
(4) Banks with
strategic plans. A bank that has been approved to be assessed under a strategic plan
shall include in its public file a copy of that plan. A bank need not include information
submitted to the OCC on a confidential basis in conjunction with the plan.
(5) Banks with
less than satisfactory ratings. A bank that received a less than satisfactory rating
during its most recent examination shall include in its public file a description of its
current efforts to improve its performance in helping to meet the credit needs of its
entire community. The bank shall update the description quarterly.
(c) Location of
public information. A bank shall make available to the public for inspection upon
request and at no cost the information required in this section as follows:
(1) At the main
office and, if an interstate bank, at one branch office in each state, all information in
the public file; and
(2) At each branch:
(i) A copy of the
public section of the bank's most recent CRA Performance Evaluation and a list of services
provided by the branch; and
(ii) Within five
calendar days of the request, all the information in the public file relating to the
assessment area in which the branch is located.
(d) Copies.
Upon request, a bank shall provide copies, either on paper or in another form acceptable
to the person making the request, of the information in its public file. The bank may
charge a reasonable fee not to exceed the cost of copying and mailing (if applicable).
(e) Updating.
Except as otherwise provided in this section, a bank shall ensure that the information
required by this section is current as of April 1 of each year.
§ 25.44 Public notice by banks.
A bank shall
provide in the public lobby of its main office and each of its branches the appropriate
public notice set forth in appendix B of this part. Only a branch of a bank having more
than one assessment area shall include the bracketed material in the notice for branch
offices. Only a bank that is an affiliate of a holding company shall include the next to
the last sentence of the notices. A bank shall include the last sentence of the notices
only if it is an affiliate of a holding company that is not prevented by statute from
acquiring additional banks.
§ 25.45 Publication of planned examination schedule.
The OCC publishes
at least 30 days in advance of the beginning of each calendar quarter a list of banks
scheduled for CRA examinations in that quarter.
Subpart D--Reserved
At 60 FR 22189, May 4, 1995, subpart D, Transition Rules, consisting of § 25.51, was removed, effective July 1, 1997.
Subpart E--Prohibition Against Use of Interstate Branches Primarily for Deposit Production
(a) Purpose.
The purpose of this subpart is to implement section 109 (12 U.S.C. 1835a) of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).
(b) Scope.
(1) This subpart applies to any national bank that has operated a covered interstate
branch for a period of at least one year, and any foreign bank that has operated a covered
interstate branch that is a Federal branch for a period of at least one year.
(2) This subpart
describes the requirements imposed under 12 U.S.C. 1835a, which requires the appropriate
Federal banking agencies (the OCC, the Board of Governors of the Federal Reserve System,
and the Federal Deposit Insurance Corporation) to prescribe uniform rules that prohibit a
bank from using any authority to engage in interstate branching pursuant to the Interstate
Act, or any amendment made by the Interstate Act to any other provision of law, primarily
for the purpose of deposit production.
For purposes of
this subpart, the following definitions apply:
(a) Bank
means, unless the context indicates otherwise:
(1) A national
bank; and
(2) A foreign bank
as that term is defined in 12 U.S.C. 3101(7) and 12 CFR 28.11(j).
(b) Covered
interstate branch means:
(1) Any branch of a
national bank, and any Federal branch of a foreign bank, that:
(i) Is established
or acquired outside the bank's home State pursuant to the interstate branching authority
granted by the Interstate Act or by any amendment made by the Interstate Act to any other
provision of law; or
(ii) Could not have
been established or acquired outside of the bank's home State but for the establishment or
acquisition of a branch described in paragraph (b)(1)(i) of this section; and
(2) Any bank or
branch of a bank controlled by an out-of-State bank holding company.
(c) Federal
branch means Federal branch as that term is defined in 12 U.S.C. 3101(6) and 12 CFR
28.11(i).
(d) Home State
means:
(1) With respect to
a State bank, the State that chartered the bank;
(2) With respect to
a national bank, the State in which the main office of the bank is located;
(3) With respect to
a bank holding company, the State in which the total deposits of all banking subsidiaries
of such company are the largest on the later of:
(i) July 1, 1966;
or
(ii) The date on
which the company becomes a bank holding company under the Bank Holding Company Act;
(4) With respect to
a foreign bank:
(i) For purposes
of determining whether a U.S. branch of a foreign bank is a covered interstate branch, the
home State of the foreign bank as determined in accordance with 12 U.S.C. 3103(c) and 12
CFR 28.11(o); and
(ii) For purposes
of determining whether a branch of a U.S. bank controlled by a foreign bank is a covered
interstate branch, the State in which the total deposits of all banking subsidiaries of
such foreign bank are the largest on the later of:
(A) July 1, 1966;
or
(B) The date on
which the foreign bank becomes a bank holding company under the Bank Holding Company Act.
(e) Host State
means a State in which a covered interstate branch is established or acquired.
(f) Host state
loan-to-deposit ratio generally means, with respect to a particular host state, the
ratio of total loans in the host state relative to total deposits from the host state for
all banks (including institutions covered under the definition of "bank" in 12
U.S.C. 1813(a)(1)) that have that state as their home state, as determined and updated
periodically by the appropriate Federal banking agencies and made available to the public.
(g) Out-of-State
bank holding company means, with respect to any State, a bank holding company whose
home State is another State.
(h) State
means state as that term is defined in 12 U.S.C. 1813(a)(3).
(i) Statewide
loan-to-deposit ratio means, with respect to a bank, the ratio of the bank's loans to
its deposits in a state in which the bank has one or more covered interstate branches, as
determined by the OCC.
[Editor's Note: Final rule, 67 FR 38844, 38847-38848, June 6, 2002, amended paragraphs (b), (d), and (e) of § 25.62, redesignated ¶¶ (g) and (h) as ¶¶ (h) and (i), and added a new ¶ (g), effective Oct. 1, 2002; and technical correction to paragraph (d) of § 25.62, 67 FR 46842, July 17, 2002, effective Oct. 1, 2002.]
§ 25.63 Loan-to-deposit ratio screen.
(a) Application
of screen. Beginning no earlier than one year after a covered interstate branch is
acquired or established, the OCC will consider whether the bank's statewide
loan-to-deposit ratio is less than 50 percent of the relevant host State loan-to-deposit
ratio.
(b) Results of
screen. (1) If the OCC determines that the bank's statewide loan-to-deposit ratio is
50 percent or more of the host state loan-to-deposit ratio, no further consideration under
this subpart is required.
(2) If the OCC
determines that the bank's statewide loan-to-deposit ratio is less than 50 percent of the
host state loan-to-deposit ratio, or if reasonably available data are insufficient to
calculate the bank's statewide loan-to-deposit ratio, the OCC will make a credit needs
determination for the bank as provided in § 25.64.
[Editor's Note: Final rule, 67 FR 38844, 38848, June 6, 2002, amended § 25.63(a), effective Oct. 1, 2002.]
§ 25.64 Credit needs determination.
(a) In general.
The OCC will review the loan portfolio of the bank and determine whether the bank is
reasonably helping to meet the credit needs of the communities in the host state that are
served by the bank.
(b) Guidelines.
The OCC will use the following considerations as guidelines when making the determination
pursuant to paragraph (a) of this section:
(1) Whether covered
interstate branches were formerly part of a failed or failing depository institution;
(2) Whether covered
interstate branches were acquired under circumstances where there was a low
loan-to-deposit ratio because of the nature of the acquired institution's business or loan
portfolio;
(3) Whether covered
interstate branches have a high concentration of commercial or credit card lending, trust
services, or other specialized activities, including the extent to which the covered
interstate branches accept deposits in the host state;
(4) The CRA ratings
received by the bank, if any;
(5) Economic
conditions, including the level of loan demand, within the communities served by the
covered interstate branches;
(6) The safe and
sound operation and condition of the bank; and
(7) The OCC's CRA
regulations (subparts A through D of this part) and interpretations of those regulations.
(a) In general.
If the OCC determines that a bank is not reasonably helping to meet the credit needs
of the communities served by the bank in the host state, and that the bank's statewide
loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, the
OCC:
(1) May order that
a bank's covered interstate branch or branches be closed unless the bank provides
reasonable assurances to the satisfaction of the OCC, after an opportunity for public
comment, that the bank has an acceptable plan under which the bank will reasonably help to
meet the credit needs of the communities served by the bank in the host state; and
(2) Will not permit
the bank to open a new branch in the host state that would be considered to be a covered
interstate branch unless the bank provides reasonable assurances to the satisfaction of
the OCC, after an opportunity for public comment, that the bank will reasonably help to
meet the credit needs of the community that the new branch will serve.
(b) Notice
prior to closure of a covered interstate branch. Before exercising the OCC's
authority to order the bank to close a covered interstate branch, the OCC will issue to
the bank a notice of the OCC's intent to order the closure and will schedule a hearing
within 60 days of issuing the notice.
(c) Hearing.
The OCC will conduct a hearing scheduled under paragraph (b) of this section in accordance
with the provisions of 12 U.S.C. 1818(h) and 12 CFR part 19.
[Source for subpart E: 62 FR 47728 (September 10, 1997)]
APPENDIX A TO PART 25--RATINGS
APPENDIX B TO PART 25--CRA NOTICE
Last Revised: October 12, 2005 |