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2000 - Rules and Regulations
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PART 346DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS
Sec. 346.1
Purpose and scope of this part.
346.2
Definition of covered agreement.
346.3
CRA communications.
346.4
Fulfillment of the CRA.
346.5
Related agreements considered a single agreement.
346.6
Disclosure of covered agreements.
346.7
Annual reports.
346.8
Release of information under FOIA.
346.9
Compliance provisions.
346.10
Transition provisions.
346.11
Other definitions and rules of construction used in this part.
Authority: 12 U.S.C.
1831y.
SOURCE: The provisions of this Part 346 appear at 66 Fed. Reg. 2099,
January 10, 2001, effective April 1, 2001, except as otherwise
noted.
§ 346.1 Purpose and scope of this part.
(a) General. This part implements section 711 of the
Gramm-Leach-Bliley Act (12 U.S.C. 1831y). That section requires any
nongovernmental entity or person, insured depository institution, or
affiliate of an insured depository institution that enters into a
covered agreement to--
(1) Make the covered agreement available to the public and the
appropriate Federal banking agency; and
(2) File an annual report with the appropriate Federal banking
agency concerning the covered agreement.
(b) Scope of this part. The provisions of this part
apply to--
(1) State nonmember insured banks;
(2) Subsidiaries of state nonmember insured banks;
(3) Nongovernmental entities or persons that enter into covered
agreements with any company listed in paragraph (b)(1) and (2) of this
section.
(c) Relation to Community Reinvestment Act. This part
does not affect in any way the Community Reinvestment Act of 1977
(12 U.S.C. 2901 et
seq.) or the FDIC's Community Reinvestment regulation found at
12 CFR part 345, or the
FDIC's interpretations or administration of that Act or regulation.
(d) Examples.--(1) The examples in this part are not exclusive.
Compliance with an example, to the extent applicable, constitutes
compliance with this part.
(2) Examples in a paragraph illustrate only the issue described
in the paragraph and do not illustrate any other issues that may arise
in this part.
[Codified to 12 C.F.R. § 346.1]
§ 346.2 Definition of covered agreement.
(a) General definition of covered agreement. A covered
agreement is any contract, arrangement, or understanding that meets all
of the following criteria--
(1) The agreement is in writing.
(2) The parties to the agreement include--
(i) One or more insured depository institutions or affiliates of
an insured depository institution; and
(ii) One or more nongovernmental entities or persons (referred to
hereafter as NGEPs).
(3) The agreement provides for the insured depository institution
or any affiliate to--
(i) Provide to one or more individuals or entities (whether or
not parties to the agreement) cash payments, grants, or other
consideration (except loans) that have an aggregate value of more than
$10,000 in any calendar year; or
{{2-28-01 p.2836}}
(ii) Make to one or more individuals or entities (whether or not
parties to the agreement) loans that have an aggregate principal amount
of more than $50,000 in any calendar year.
(4) The agreement is made pursuant to, or in connection
with, the fulfillment of the Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.) (CRA), as defined in
§ 346.4.
(5) The agreement is with a NGEP that has had a CRA communication
as described in § 346.3 prior to entering into the agreement.
(b) Examples concerning written arrangements or
understandings--(1) Example 1. A NGEP meets with an
insured depository institution and states that the institution needs to
make more community development investments in the NGEP's community.
The NGEP and insured depository institution do not reach an agreement
concerning the community development investments the institution should
make in the community, and the parties do not reach any mutual
arrangement or understanding. Two weeks later, the institution
unilaterally issues a press release announcing that it has established
a general goal of making $100 million of community development grants
in low- and moderate-income neighborhoods served by the insured
depository institution over the next 5 years. The NGEP is not
identified in the press release. The press release is not a written
arrangement or understanding.
(2) Example 2. A NGEP meets with an insured depository
institution and states that the institution needs to offer new loan
programs in the NGEP's community. The NGEP and the insured depository
institution reach a mutual arrangement or understanding that the
institution will provide additional loans in the NGEP's community. The
institution tells the NGEP that it will issue a press release
announcing the program. Later, the insured depository institution
issues a press release announcing the loan program. The press release
incorporates the key terms of the understanding reached between the
NGEP and the insured depository institution. The written press release
reflects the mutual arrangement or understanding of the NGEP and the
insured depository institution and is, therefore, a written arrangement
or understanding.
(3) Example 3. An NGEP sends a letter to an insured
depository institution requesting that the institution provide a
$15,000 grant to the NGEP. The insured depository institution responds
in writing and agrees to provide the grant in connection with its
annual grant program. The exchange of letters constitutes a written
arrangement or understanding.
(c) Loan agreements that are not covered agreements. A
covered agreement does not include--
(1) Any individual loan that is secured by real estate; or
(2) Any specific contract or commitment for a loan or extension
of credit to an individual, business, farm, or other entity, or group
of such individuals or entities if--
(i) The funds are loaned at rates that are not substantially
below market rates; and
(ii) The loan application or other loan documentation does not
indicate that the borrower intends or is authorized to use the borrowed
funds to make a loan or extension of credit to one or more third
parties.
(d) Examples concerning loan
agreements.--(1) Example 1. An insured depository
institution provides an organization with a $1 million loan that is
documented in writing and is secured by real estate owned or
to-be-acquired by the organization. The agreement is an individual
mortgage loan and is exempt from coverage under paragraph (c)(1) of
this section, regardless of the interest rate on the loan or whether
the organization intends or is authorized to re-loan the funds to a
third party.
(2) Example 2. An insured depository institution
commits to provide a $500,000 line of credit to a small business that
is documented by a written agreement. The loan is made at rates that
are within the range of rates offered by the institution to similarly
situated small businesses in the market and the loan documentation does
not indicate that the small business intends or is authorized to
re-lend the borrowed funds. The agreement is exempt from coverage under
paragraph (c)(2) of this section.
(3) Example 3. An insured depository institution
offers small business loans that are guaranteed by the Small Business
Administration (SBA). A small business obtains a $75,000 loan,
documented in writing, from the institution under the institution's
SBA loan
{{2-28-01 p.2837}}program. The loan documentation
does not indicate that the borrower intends or is authorized to re-lend
the funds. Although the rate charged on the loan is well below that
charged by the institution on commercial loans, the rate is within the
range of rates that the institution would charge a similarly situated
small business for a similar loan under the SBA loan program.
Accordingly, the loan is not made at substantially below market rates
and is exempt from coverage under paragraph (c)(2) of this section.
(4) Example 4. A bank holding company enters into a
written agreement with a community development organization that
provides that insured depository institutions owned by the bank holding
company will make $250 million in small business loans in the community
over the next 5 years. The written agreement is not a specific contract
or commitment for a loan or an extension of credit and, thus, is not
exempt from coverage under paragraph (c)(2) of this section: Each small
business loan made by the insured depository institution pursuant to
this general commitment would, however, be exempt from coverage if the
loan is made at rates that are not substantially below market rates and
the loan documentation does not indicate that the borrower intended or
was authorized to re-lend the funds.
(e) Agreements that include exempt loan agreements. If
an agreement includes a loan, extension of credit or loan commitment
that, if documented separately, would be exempt under paragraph (c) of
this section, the exempt loan, extension of credit or loan commitment
may be excluded for purposes of determining whether the agreement is a
covered agreement.
(f) Determining annual value of agreements that lack schedule
of disbursements. For purposes of paragraph (a)(3) of this
section, a multi-year agreement that does not include a schedule for
the disbursement of payments, grants, loans or other consideration by
the insured depository institution or affiliate, is considered to have
a value in the first year of the agreement equal to all payments,
grants, loans and other consideration to be provided at any time under
the agreement.
[Codified to 12 C.F.R. § 346.2]
§ 346.3 CRA communications.
(a) Definition of CRA communication. A CRA communication
is any of the following--
(1) Any written or oral comment or testimony provided to a
Federal banking agency concerning the adequacy of the performance under
the CRA of the insured depository institution, any affiliated insured
depository institution, or any CRA affiliate.
(2) Any written comment submitted to the insured depository
institution that discusses the adequacy of the performance under the
CRA of the institution and must be included in the institution's CRA
public file.
(3) Any discussion or other contact with the insured depository
institution or any affiliate about--
(i) Providing (or refraining from providing) written or oral
comments or testimony to any Federal banking agency concerning the
adequacy of the performance under the CRA of the insured depository
institution, any affiliated insured depository institution, or any CRA
affiliate;
(ii) Providing (or refraining from providing) written comments to
the insured depository institution that concern the adequacy of the
institution's performance under the CRA and must be included in the
institution's CRA public file; or
(iii) The adequacy of the performance under the CRA of the
insured depository institution, any affiliated insured depository
institution, or any CRA affiliate.
(b) Discussions or contacts that are not CRA
communications--(1) Timing of contacts with a Federal
banking agency. An oral or written communication with a Federal
banking agency is not a CRA communication if it occurred more than 3
years before the parties entered into the agreement.
(2) Timing of contacts with insured depository institutions
and affiliates. A communication with an insured depository
institution or affiliate is not a CRA communication if the
communication occurred--
(i) More than 3 years before the parties entered into the
agreement, in the case of any written communication;
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(ii) More than 3 years before the parties entered into the
agreement, in the case of any oral communication in which the NGEP
discusses providing (or refraining from providing) comments or
testimony to a Federal banking agency or written comments that must be
included in the institution's CRA public file in connection with a
request to, or agreement by, the institution or affiliate to take (or
refrain from taking) any action that is in fulfillment of the CRA; or
(iii) More than 1 year before the parties entered into the
agreement, in the case of any other oral communication not described in
paragraph (b)(2)(ii) of this section.
(3) Knowledge of communication by insured depository
institution or affiliate--(i) A communication is only a CRA
communication under paragraph (a) of this section if the insured
depository institution or its affiliate has knowledge of the
communication under this paragraph (b)(3)(ii) or (b)(3)(iii) of this
section.
(ii) Communication with insured depository institution or
affiliate. An insured depository institution or affiliate has
knowledge of a communication by the NGEP to the institution or its
affiliate under this paragraph only if one of the following
representatives of the insured depository institution or any affiliate
has knowledge of the communication--
(A) An employee who approves, directs, authorizes, or negotiates
the agreement with the NGEP; or
(B) An employee designated with responsibility for compliance
with the CRA or executive officer if the employee or executive officer
knows that the institution or affiliate is negotiating, intends to
negotiate, or has been informed by the NGEP that it expects to request
that the institution or affiliate negotiate an agreement with the NGEP.
(iii) Other communications. An insured depository
institution or affiliate is deemed to have knowledge of--
(A) Any testimony provided to a Federal banking agency at a
public meeting or hearing;
(B) Any comment submitted to a Federal banking agency that is
conveyed in writing by the agency to the insured depository institution
or affiliate; and
(C) Any written comment submitted to the insured depository
institution that must be and is included in the institution's CRA
public file.
(4) Communication where NGEP has knowledge. A NGEP has
a CRA communication with an insured depository institution or affiliate
only if any of the following individuals has knowledge of the
communication--
(i) A director, employee, or member of the NGEP who approves,
directs, authorizes, or negotiates the agreement with the insured
depository institution or affiliate;
(ii) A person who functions as an executive officer of the NGEP
and who knows that the NGEP is negotiating or intends to negotiate an
agreement with the insured depository institution or affiliate; or
(iii) Where the NGEP is an individual, the NGEP.
(c) Examples of CRA communications--(1) Examples
of actions that are CRA communications. The following are examples
of CRA communications. These examples are not exclusive and assume that
the communication occurs within the relevant time period as described
in paragraph (b)(1) or (b)(2) of this section and the appropriate
representatives have knowledge of the communication as specified in
paragraphs (b)(3) and (b)(4) of this section.
(i) Example 1. A NGEP files a written comment with a
Federal banking agency that states than an insured depository
institution successfully addresses the credit needs of its community.
The written comment is in response to a general request from the agency
for comments on an application of the insured depository institution to
open a new branch and a copy of the comment is provided to the
institution.
(ii) Examples 2. A NGEP meets with an executive
officer of an insured depository institution and states that the
institution must improve its CRA performance.
(iii) Example 3. A NGEP meets with an executive
officer of an insured depository institution and states that the
institution needs to make more mortgage loans in low- and
moderate-income neighborhoods in its community.
{{2-28-01 p.2839}}
(iv) Example 4. A bank holding company files an
application with a Federal banking agency to acquire an insured
depository institution. Two weeks later, the NGEP meets with an
executive officer of the bank holding company to discuss the adequacy
of the performance under the CRA of the target insured depository
institution. The insured depository institution was an affiliate of the
bank holding company at the time the NGEP met with the target
institution. (See
§ 346.11(a).)
Accordingly, the NGEP had a CRA communication with an affiliate of the
bank holding company.
(2) Examples of actions that are not CRA communications.
The following are examples of actions that are not by themselves
CRA communications. These examples are not exclusive.
(i) Example 1. A NGEP provides to a Federal banking
agency comments or testimony concerning an insured depository
institution or affiliate in response to a direct request by the agency
for comments or testimony from that NGEP. Direct requests for comments
or testimony do not include a general invitation by a Federal banking
agency for comments or testimony from the public in connection with a
CRA performance evaluation of, or application for a deposit facility
(as defined in section 803 of the CRA
(12 U.S.C. 2902(3)) by, an
insured depository institution or an application by a company to
acquire an insured depository institution.
(ii) Example 2. A NGEP makes a statement concerning an
insured depository institution or affiliate at a widely attended
conference or seminar regarding a general topic. A public or private
meeting, public hearing, or other meeting regarding one or more
specific institutions, affiliates or transactions involving an
application for a deposit facility is not considered a widely attended
conference or seminar.
(iii) Example 3. A NGEP, such as a civil rights group,
community group providing housing and other services in low- and
moderate-income neighborhoods, veterans organization, community theater
group, or youth organization, sends a fundraising letter to insured
depository institutions and to other businesses in its community. The
letter encourages all businesses in the community to meet their
obligation to assist in making the local community a better place to
live and work by supporting the fundraising efforts of the NGEP.
(iv) Example 4. A NGEP discusses with an insured
depository institution or affiliate whether particular loans, services,
investments, community development activities, or other activities are
generally eligible for consideration by a Federal banking agency under
the CRA. The NGEP and insured depository institution or affiliate do
not discuss the adequacy of the CRA performance of the insured
depository institution or affiliate.
(v) Example 5. A NGEP engaged in the sale or purchase
of loans in the secondary market sends a general offering circular to
financial institutions offering to sell or purchase a portfolio of
loans. An insured depository institution that receives the offering
circular discusses with the NGEP the types of loans included in the
loan pool, whether such loans are generally eligible for consideration
under the CRA, and which loans are made to borrowers in the
institution's local community. The NGEP and insured depository
institution do not discuss the adequacy of the institution's CRA
performance.
(d) Multiparty covered agreements.--(1) A NGEP that is
a party to a covered agreement that involves multiple NGEPs is not
required to comply with the requirements of this part if--
(i) The NGEP has not had a CRA communication; and
(ii) No representative of the NGEP identified in paragraph (b)(4)
of this section has knowledge at the time of the agreement that another
NGEP that is a party to the agreement has had a CRA communication.
(2) An insured depository institution or affiliate that is a
party to a covered agreement that involves multiple insured depository
institutions or affiliates is not required to comply with the
disclosure and annual reporting requirements in
§§ 346.6 and
346.7 if--
(i) No NGEP that is a party to the agreement has had a CRA
communication concerning the insured depository institution or any
affiliate; and
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(ii) No representative of the insured depository institution or
any affiliate identified in paragraph (b)(3) of this section has
knowledge at the time of the agreement that an NGEP that is a party to
the agreement has had a CRA communication concerning any other insured
depository institution or affiliate that is a party to the agreement.
[Codified to 12 C.F.R. § 346.3]
§ 346.4 Fulfillment of the CRA.
(a) List of factors that are in fulfillment of the CRA.
Fulfillment of the CRA, for purposes of this part, means the
following list of factors--
(1) Comments to a Federal banking agency or included in CRA
public file. Providing or refraining from providing written or
oral comments or testimony to any Federal banking agency concerning the
performance under the CRA of an insured depository institution or CRA
affiliate that is a party to the agreement or an affiliate of a party
to the agreement or written comments that are required to be included
in the CRA public file of any such insured depository institution; or
(2) Activities given favorable CRA consideration.
Performing any of the following activities if the activity is of
the type that is likely to receive favorable consideration by a Federal
banking agency in evaluating the performance under the CRA of the
insured depository institution that is a party to the agreement or an
affiliate of a party to the agreement--
(i) Home-purchase, home-improvement, small business, small farm,
community development, and consumer lending, as described in
12 CFR 345.22, including
loan purchases, loan commitments, and letters of credit;
(ii) Making investments, deposits, or grants, or acquiring
membership shares, that have as their primary purpose community
development, as described in 12
CFR 345.23;
(iii) Delivering retail banking services as described in
12 CFR 345.24(d);
(iv) Providing community development services, as described in 12
CFR 345.24(e);
(v) In the case of a wholesale or limited-purpose insured
depository institution, community development lending, including
originating and purchasing loans and making loan commitments and
letters of credit, making qualified investments, or providing community
development services, as described in
12 CFR 345.25(c);
(vi) In the case of a small insured depository institution, any
lending or other activity described in
12 CFR 345.26(a); or
(vii) In the case of an insured depository institution that is
evaluated on the basis of a strategic plan, any element of the
strategic plan, as described in 12
CFR 345.27(f).
(b) Agreements relating to activities of CRA affiliates.
An insured depository institution or affiliate that is a party to
a covered agreement that concerns any activity described in paragraph
(a) of this section of a CRA affiliate must, prior to the time the
agreement is entered into, notify each NGEP that is a party to the
agreement that the agreement concerns a CRA affiliate.
[Codified to 12 C.F.R. § 346.4]
§ 346.5 Related agreements considered a single agreement.
The following rules must be applied in determining whether an
agreement is a covered agreement under
§ 346.2.
(a) Agreements entered into by same parties. All written
agreements to which an insured depository institution or an affiliate
of the insured depository institution is a party shall be considered to
be a single agreement if the agreements--
(1) Are entered into with the same NGEP;
(2) Were entered into within the same 12-month period; and
(3) Are each in fulfillment of the CRA.
(b) Substantively related contracts. All written
contracts to which an insured depository institution or an affiliate of
the insured depository institution is a party shall be
considered
{{2-28-01 p.2841}}to be a single agreement,
without regard to whether the other parties to the contracts are the
same or whether each such contract is in fulfillment of the CRA, if the
contracts were negotiated in a coordinated fashion and a NGEP is a
party to each contract.
[Codified to 12 C.F.R. § 346.5]
§ 346.6 Disclosure of covered agreements.
(a) Applicability date. This section applies only to
covered agreements entered into after November 12, 1999.
(b) Disclosure of covered agreements to the
public--(1) Disclosure required. Each NGEP and each
insured depository institution or affiliate that enters into a covered
agreement must promptly make a copy of the covered agreement available
to any individual or entity upon request.
(2) Nondisclosure of confidential and proprietary
information permitted. In responding to a request for a covered
agreement from any individual or entity under paragraph (b)(1) of this
section, a NGEP, insured depository institution, or affiliate may
withhold from public disclosure confidential or proprietary information
that the party believes the relevant supervisory agency could withhold
from disclosure under the Freedom of Information Act
(5 U.S.C. 552 et
seq.) (FOIA).
(3) Information that must be disclosed.
Notwithstanding paragraph (b)(2) of this section, a party must
disclose any of the following information that is contained in a
covered agreement--
(i) The names and addresses of the parties to the agreement;
(ii) The amount of any payments, fees, loans, or other
consideration to be made or provided by any party to the agreement;
(iii) Any description of how the funds or other resources
provided under the agreement are to be used;
(iv) The term of the agreement (if the agreement establishes a
term); and
(v) Any other information that the relevant supervisory agency
determines is not properly exempt from public disclosure.
(4) Request for review of withheld information. Any
individual or entity may request that the relevant supervisory agency
review whether any information in a covered agreement withheld by a
party must be disclosed. Any requests for agency review of withheld
information must be filed, and will be processed in accordance with,
the relevant supervisory agency's rules concerning the availability of
information (see the FDIC's rules regarding Disclosure of
Information (12 CFR part
309)).
(5) Duration of obligation. The obligation to disclose
a covered agreement to the public terminates 12 months after the end of
the term of the agreement.
(6) Reasonable copy and mailing fees. Each NGEP and
each insured depository institution or affiliate may charge an
individual or entity that requests a copy of a covered agreement a
reasonable fee not to exceed the cost of copying and mailing the
agreement.
(7) Use of CRA public file by insured depository
institution or affiliate. An insured depository institution and
any affiliate of an insured depository institution may fulfill its
obligation under this paragraph (b) by placing a copy of the covered
agreement in the insured depository institution's CRA public file if
the institution makes the agreement available in accordance with the
procedures set forth in 12 CFR
345.43.
(c) Disclosure by NGEPs of covered agreements to the relevant
supervisory agency--(1) Each NGEP that is a party to a covered
agreement must provide the following within 30 days of receiving a
request from the relevant supervisory agency--
(i) A complete copy of the agreement; and
(ii) In the event the NGEP proposes the withholding of any
information contained in the agreement in accordance with paragraph
(b)(2) of this section, a public version of the agreement that excludes
such information and an explanation justifying the exclusions. Any
public version must include the information described in paragraph
(b)(3) of this section.
{{2-28-01 p.2842}}
(2) The obligation of a NGEP to provide a covered agreement to
the relevant supervisory agency terminates 12 months after the end of
the term of the covered agreement.
(d) Disclosure by insured depository institution or affiliate
of covered agreements to the relevant supervisory
agency--(1) In general. Within 60 days of the end of
each calendar quarter, each insured depository institution and
affiliate must provide each relevant supervisory agency with--
(i)(A) A complete copy of each covered agreement entered into by
the insured depository institution or affiliate during the calendar
quarter; and
(B) In the event the institution or affiliate proposes the
withholding of any information contained in the agreement in accordance
with paragraph (b)(2) of this section, a public version of the
agreement that excludes such information (other than any information
described in paragraph (b)(3) of this section) and an explanation
justifying the exclusions; or
(ii) A list of all covered agreements entered into by the insured
depository institution or affiliate during the calendar quarter that
contains--
(A) The name and address of each insured depository institution
or affiliate that is a party to the agreement;
(B) The name and address of each NGEP that is a party to the
agreement;
(C) The date the agreement was entered into;
(D) The estimated total value of all payments, fees, loans, and
other consideration to be provided by the institution or any affiliate
of the institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered agreements contained in list
required.--(i) If an insured depository institution or affiliate
files a list of the covered agreements entered into by the institution
or affiliate pursuant to paragraph (d)(1)(ii) of this section, the
institution or affiliate must provide any relevant supervisory agency a
complete copy and public version of any covered agreement referenced in
the list within 7 calendar days of receiving a request from the agency
for a copy of the agreement.
(ii) The obligation of an insured depository institution or
affiliate to provide a covered agreement to the relevant supervisory
agency under this paragraph (d)(2) terminates 36 months after the end
of the term of the agreement.
(3) Joint filings. In the event that 2 or more insured
depository institutions or affiliates are parties to a covered
agreement, the insured depository institution(s) and affiliate(s) may
jointly file the documents required by this paragraph (d). Any joint
filing must identify the insured depository institution(s) and
affiliate(s) for whom the filings are being made.
[Codified to 12 C.F.R. § 346.6]
§ 346.7 Annual reports.
(a) Applicability date. This section applies only to
covered agreements entered into on or after May 12, 2000.
(b) Annual report required. Each NGEP and each insured
depository institution or affiliate that is a party to a covered
agreement must file an annual report with each relevant supervisory
agency concerning the disbursement, receipt, and uses of funds or other
resources under the covered agreement.
(c) Duration of reporting
requirement--(1) NGEPs. A NGEP must file an annual
report for a covered agreement for any fiscal year in which the NGEP
receives or uses funds or other resources under the agreement.
(2) Insured depository institutions and affiliates. An
insured depository institution or affiliate must file an annual report
for a covered agreement for any fiscal year in which the institution or
affiliate--
{{2-28-01 p.2843}}
(i) provides or receives any payments, fees, or loans under the
covered agreement that must be reported under paragraphs (e)(1)(iii)
and (iv) of this section; or
(ii) has data to report on loans, investments, and services
provided by a party to the covered agreement under the covered
agreement under paragraph (e)(1)(vi) of this section.
(d) Annual reports filed by NGEP--(1) Contents of
report. The annual report filed by a NGEP under this section must
include the following--
(i) The name and mailing address of the NGEP filing the report;
(ii) information sufficient to identify the covered agreement for
which the annual report is being filed, such as by providing the names
of the parties to the agreement and the date the agreement was entered
into or by providing a copy of the agreement;
(iii) The amount of funds or resources received under the covered
agreement during the fiscal year; and
(iv) A detailed, itemized list of how any funds or resources
received by the NGEP under the covered agreement were used during the
fiscal year, including the total amount used for--
(A) Compensation of officers, directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and professional fees; and
(F) Other expenses and uses (specify expense or use).
(2) More detailed reporting of uses of funds or resources
permitted--(i) In general. If a NGEP allocated and
used funds received under a covered agreement for a specific purpose,
the NGEP may fulfill the requirements of paragraph (d)(1)(iv) of this
section with respect to such funds by providing--
(A) A brief description of each specific purpose for which the
funds or other resources were used; and
(B) The amount of funds or resources used during the fiscal year
for each specific purpose.
(ii) Specific purpose defined. A NGEP allocates and
uses funds for a specific purpose if the NGEP receives and uses the
funds for a purpose that is more specific and limited than the
categories listed in paragraph (d)(1)(iv) of this section.
(3) Use of other reports. The annual report filed by a
NGEP may consist of or incorporate a report prepared for any other
purpose, such as the Internal Revenue Service Return of Organization
Exempt From Income Tax on Form 990, or any other Internal Revenue
Service form, state tax form, report to members or shareholders,
audited or unaudited financial statements, audit report, or other
report, so long as the annual report filed by the NGEP contains all of
the information required by this paragraph (d).
(4) Consolidated reports permitted. A NGEP that is a
party to 2 or more covered agreements may file with each relevant
supervisory agency a single consolidated annual report covering all the
covered agreements. Any consolidated report must contain all the
information required by this paragraph (d). The information reported
under paragraphs (d)(1)(iv) and (d)(2) of this section may be reported
on an aggregate basis for all covered agreements.
(5) Examples of annual report requirements for
NGEPs.--(1) Example 1. A NGEP receives an unrestricted
grant of $15,000 under a covered agreement, includes the funds in its
general operating budget, and uses the funds during its fiscal year.
The NGEP's annual report for the fiscal year must provide the name and
mailing address of the NGEP, information sufficient to identify the
covered agreement, and state that the NGEP received $15,000 during the
fiscal year. The report must also indicate the total expenditures made
by the NGEP during the fiscal year for compensation, administrative
expenses, travel expenses, entertainment expenses, consulting and
professional fees, and other expenses and uses. The NGEP's annual
report may provide this information by submitting an Internal Revenue
Service Form 990 that includes the required information. If the
Internal Revenue Service
{{2-28-01 p.2844}}Form does not include
information for all of the required categories listed in this part, the
NGEP must report the total expenditures in the remaining categories
either by providing that information directly or by providing another
form or report that includes the required information.
(ii) Examples 2. An organization receives $15,000
from an insured depository institution under a covered agreement and
allocates and uses the $15,000 during the fiscal year to purchase
computer equipment to support its functions. The organization's annual
report must include the name and address of the organization,
information sufficient to identify the agreement, and a statement that
the organization received $15,000 during the year. In addition, since
the organization allocated and used the funds for a specific purpose
that is more narrow and limited than the categories of expenses
included in the detailed, itemized list of expenses, the organization
would have the option of providing either the total amount it used
during the year for each category of expenses included in paragraph
(d)(1)(iv) of this section, or a statement that it used the $15,000 to
purchase computer equipment and a brief description of the equipment
purchased.
(iii) Examples 3. A community group receives $50,000
from an insured depository institution under a covered agreement.
During its fiscal year, the community group specifically allocates and
uses $5,000 of the funds to pay for a particular business trip and uses
the remaining $45,000 for general operating expenses. The group's
annual report for the fiscal year must include the name and address of
the group, information sufficient to identify the agreement, and a
statement that the group received $50,000. Because the group did not
allocate and use all of the funds for a specific purpose, the group's
annual report must provide the total amount of funds it used during the
year for each category of expenses included in paragraph (d)(1)(iv) of
this section. The group's annual report also could state that it used
$5,000 for a particular business trip and include a brief description
of the trip.
(iv) Example 4. A community development organization
is a party to two separate covered agreements with two unaffiliated
insured depository institutions. Under each agreement, the organization
receives $15,000 during its fiscal year and uses the funds to support
its activities during that year. If the organization elects to file a
consolidated annual report, the consolidated report must identify the
organization and the two covered agreements, state that the
organization received $15,000 during the fiscal year under each
agreement, and provide the total amount that the organization used
during the year for each category of expenses included in paragraph
(d)(1)(iv) of this section.
(e) Annual report filed by insured depository institution or
affiliate.--(1) General. The annual report filed by an
insured depository institution or affiliate must include the
following--
(i) The name and principal place of business of the insured
depository institution or affiliate filing the report;
(ii) Information sufficient to identify the covered agreement for
which the annual report is being filed, such as by providing the names
of the parties to the agreement and the date the agreement was entered
into or by providing a copy of the agreement;
(iii) The aggregate amount of payments, aggregate amount of fees,
and aggregate amount of loans provided by the insured depository
institution or affiliate under the covered agreement to any other party
to the agreement during the fiscal year;
(iv) The aggregate amount of payments, aggregate amount of fees,
and aggregate amount of loans received by the insured depository
institution or affiliate under the covered agreement from any other
party to the agreement during the fiscal year;
(v) A general description of the terms and conditions of any
payments, fees, or loans reported under paragraphs (e)(1)(iii) and (iv)
of this section, or, in the event such terms and conditions are set
forth--
(A) In the covered agreement, a statement identifying the covered
agreement and the date the agreement (or a list identifying the
agreement) was filed with the relevant supervisory agency;
or
{{4-30-01 p.2844.01}}
(B) In a previous annual report filed by the insured depository
institution or affiliate, a statement identifying the date the report
was filed with the relevant supervisory agency; and
(vi) The aggregate amount and number of loans, aggregate amount
and number of investments, and aggregate amount of services provided
under the covered agreement to any individual or entity not a party to
the agreement--
(A) By the insured depository institution or affiliate during its
fiscal year; and
(B) By any other party to the agreement, unless such information
is not known to the insured depository institution or affiliate filing
the report or such information is or will be contained in the annual
report filed by another party under this section.
(2) Consolidated reports permitted--(i) Party
to multiple agreements. An insured depository institution or
affiliate that is a party to 2 or more covered agreements may file a
single consolidated annual report with each relevant supervisory agency
concerning all the covered agreements.
(ii) Affiliated entities party to the same agreement.
An insured depository institution and its affiliates that are
parties to the same covered agreement may file a single consolidated
annual report relating to the agreement with each relevant supervisory
agency for the covered agreement.
(iii) Content of report. Any consolidated annual
report must contain all the information required by this paragraph (e).
The amounts and data required to be reported under paragraphs
(e)(1)(iv) and (vi) of this section may be reported on an aggregate
basis for all covered agreements.
(f) Time and place of filing--(1) General.
Each party must file its annual report with each relevant
supervisory agency for the covered agreement no later than six months
following the end of the fiscal year covered by the report.
(2) Alternative method of fulfilling annual reporting
requirement for a NGEP--(i) A NGEP may fulfill the filing
requirements of this section by providing the following materials to an
insured depository institution or affiliate that is a party to the
agreement no later than six months following the end of the NGEP's
fiscal year--
(A) A copy of the NGEP's annual report required under paragraph
(d) of this section for the fiscal year; and
(B) Written instructions that the insured depository institution
or affiliate promptly forward the annual report to the relevant
supervisory agency or agencies on behalf of the NGEP.
(ii) An insured depository institution or affiliate that receives
an annual report from a NGEP pursuant to paragraph (f)(2)(i) of this
section must file the report with the relevant supervisory agency or
agencies on behalf of the NGEP within 30 days.
[Codified to 12 C.F.R. § 346.7]
§ 346.8 Release of information under FOIA.
The FDIC will make covered agreements and annual reports available
to the public in accordance with the Freedom of Information Act
(5 U.S.C. 552 et
seq.) and the FDIC's rules regarding Disclosure of Information
(12 CFR part 309). A party to
a covered agreement may request confidential treatment of proprietary
and confidential information in a covered agreement or an annual report
under those procedures.
[Codified to 12 C.F.R. § 346.8]
§ 346.9 Compliance provisions.
(a) Willful failure to comply with disclosure and reporting
obligations.--(1) If the FDIC determines that a NGEP has
willfully failed to comply in a material way with
§§ 346.6 or
346.7, the FDIC will notify
the NGEP in writing of that determination and provide the NGEP a period
of 90 days (or such longer period as the FDIC finds to be reasonable
under the circumstances) to comply.
{{4-30-01 p.2844.02}}
(2) If the NGEP does not comply within the time period
established by the FDIC, the agreement shall thereafter be
unenforceable by that NGEP by operation of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y).
(3) The FDIC may assist any insured depository institution or
affiliate that is a party to a covered agreement that is unenforceable
by a NGEP by operation of section 48 of the Federal Deposit Insurance
Act (12 U.S.C. 1831y) in identifying a successor to assume the NGEP's
responsibilities under the agreement.
(b) Diversion of funds. If a court or other body of
competent jurisdiction determines that funds or resources received
under a covered agreement have been diverted contrary to the purposes
of the covered agreement for an individual's personal financial gain,
the FDIC may take either or both of the following actions--
(1) Order the individual to disgorge the diverted funds or
resources received under the agreement.
(2) Prohibit the individual from being a party to any covered
agreement for a period not to exceed 10 years.
(c) Notice and opportunity to respond. Before making a
determination under paragraph (a)(1) of this section, or taking any
action under paragraph (b) of this section, the FDIC will provide
written notice and an opportunity to present information to the FDIC
concerning any relevant facts or circumstances relating to the matter.
(d) Inadvertent or de minimis errors. Inadvertent or de
minimis errors in annual reports or other documents filed with the FDIC
under §§ 346.6 or
346.7 will not subject the
reporting party to any penalty.
(e) Enforcement of provisions in covered agreements. No
provision of this part shall be construed as authorizing the FDIC to
enforce the provisions of any covered agreement.
[Codified to 12 C.F.R. § 346.9]
[Section 346.9 corrected at 66 Fed. Reg. 14071, March 9,
2001, effective April 1, 2001]
§ 346.10 Transition provisions.
(a) Disclosure of covered agreements entered into before the
effective date of this part.
(1) Disclosure to the public. Each NGEP and each
insured depository institution or affiliate that was a party to the
agreement must make the agreement available to the public under
§ 346.6 until at least
April 1, 2002.
(2) Disclosure to the relevant supervisory
agency.--(i) Each NGEP that was a party to the agreement must
make the agreement available to the relevant supervisory agency under
§ 346.6 until at least April 1, 2002.
(ii) Each insured depository institution or affiliate that was a
party to the agreement must, by June 30, 2001, provide each relevant
supervisory agency either--
(A) A copy of the agreement under § 346.6(d)(1)(i); or
(B) The information described in § 346.6(d)(1)(ii) for each
agreement.
(b) Filing of annual reports that relate to fiscal years
ending on or before December 31, 2000. In the event that a NGEP,
insured depository institution or affiliate has any information to
report under § 346.7 for
a fiscal year that ends on or before December 31, 2000, and that
concerns a covered agreement entered into between May 12, 2000, and
December 31, 2000, the annual report for that fiscal year must be
provided no later than June 30, 2001, to--
(1) Each relevant supervisory agency; or
(2) In the case of a NGEP, to an insured depository institution
or affiliate that is a party to the agreement in accordance with
§ 346.7(f)(2).
[Codified to 12 C.F.R. § 346.10]
§ 346.11 Other definitions and rules of construction used in
this part.
(a) Affiliate. "Affiliate" means--
(1) Any company that controls, is controlled by, or is under
common control with another company; and
{{4-30-01 p.2844.03}}
(2) For the purpose of determining whether an agreement is a
covered agreement under
§ 346.2, an
"affiliate" includes any company that would be under common
control or merged with another company on consummation of any
transaction pending before a Federal banking agency at the time--
(i) The parties enter into the agreement; and
(ii) The NGEP that is a party to the agreement makes a CRA
communication, as described in
§ 346.3.
(b) Control. "Control" is defined in section 2(a)
of the Bank Holding Company Act (12
U.S.C. 1841(a)).
(c) CRA affiliate. A "CRA affiliate" of an insured
depository institution is any company that is an affiliate of an
insured depository institution to the extent, and only to the extent,
that the activities of the affiliate were considered by the appropriate
Federal banking agency when evaluating the CRA performance of the
institution at its most recent CRA examination prior to the agreement.
An insured depository institution or affiliate also may designate any
company as a CRA affiliate at any time prior to the time a covered
agreement is entered into by informing the NGEP that is a party to the
agreement of such designation.
(d) CRA public file. "CRA public file" means the
public file maintained by an insured depository institution and
described in 12 CFR
345.43.
(e) Executive officer. The term "executive
officer" has the same meaning as in § 215.2(e)(1) of the Board of
Governors of the Federal Reserve System's Regulation O
(12 CFR 215.2(e)(1)).
(f) Federal banking agency; appropriate Federal banking
agency. The terms "Federal banking agency" and
"appropriate Federal banking agency" have the same meanings as in
section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813).
(g) Fiscal year. (1) The fiscal year for a NGEP that
does not have a fiscal year shall be the calendar year.
(2) Any NGEP, insured depository institution, or affiliate that
has a fiscal year may elect to have the calendar year be its fiscal
year for purposes of this part.
(h) Insured depository institution. "Insured
depository institution" has the same meaning as in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
(i) NGEP. "NGEP" means a nongovernmental entity
or person.
(j) Nongovernmental entity or
person--(1) General. A "nongovernmental entity or
person" is any partnership, association, trust, joint venture, joint
stock company, corporation, limited liability corporation company,
firm, society, other organization, or individual.
(2) Exclusions. A nongovernmental entity or person
does not include--
(i) The United States government, a state government, a unit of
local government (including a county, city, town, township, parish,
village, or other general-purpose subdivision of a state) or an Indian
tribe or tribal organization established under Federal, state or Indian
tribal law (including the Department of Hawaiian Home Lands), or a
department, agency, or instrumentality of any such entity;
(ii) A federally-chartered public corporation that receives
Federal funds appropriated specifically for that corporation;
(iii) An insured depository institution or affiliate of an
insured depository institution; or
(iv) An officer, director, employee, or representative (acting in
his or her capacity as an officer, director, employee, or
representative) of an entity listed in paragraphs (j)(2)(i) through
(iii) of this section.
(k) Party. The term "party". The authority
citation for part 405 continues to read as follows: with respect to a
covered agreement means each NGEP and each insured depository
institution or affiliate that entered into the agreement.
(l) Relevant supervisory agency. The "relevant
supervisory agency" for a covered agreement means the appropriate
Federal banking agency for--
(1) Each insured depository institution (or subsidiary thereof)
that is a party to the covered agreement;
{{4-30-01 p.2844.04}}
(2) Each insured depository institution (or subsidiary thereof)
or CRA affiliate that makes payments or loans or provides services that
are subject to the covered agreement; and
(3) Any company (other than an insured depository institution or
subsidiary thereof) that is a party to the covered agreement.
(m) Term of agreement. An agreement that does not have a
fixed termination date is considered to terminate on the last date on
which any party to the agreement makes any payment or provides any loan
or other resources under the agreement, unless the relevant supervisory
agency for the agreement otherwise notifies each party in writing.
[Codified to 12 C.F.R. § 346.11]
[Section 346.11 corrected at 66 Fed. Reg. 14071, March 9,
2001, effective April 1, 2001]
[The page following this is 2845.]
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