Wholesale/Limited Purpose CRA Examination Procedures 

OCC, FRB, FDIC February 2006 

COMMUNITY REINVESTMENT ACT 

EXAMINATION PROCEDURES FOR LIMITED PURPOSE AND WHOLESALE 

INSTITUTIONS 

Examination Scope 

1. For institutions with more than one assessment area, identify assessment areas for full 

scope review. In making those selections, review prior performance evaluations, 

available community contact materials, reported lending data and demographic data on 

each assessment area and consider factors such as: 

a. The lending, investment, and service activity in the different assessment areas, 

particularly community development activities; 

b. The lending, investment, and service opportunities available in the different 

assessment areas, particularly community development opportunities; 

c. The length of time since the assessment area(s) received a full scope review; 

d. The institution's prior CRA performance in different assessment areas; 

e. The number of other institutions in the assessment areas and the importance of the 

institution under examination in addressing community development needs in the 

different assessment areas, particularly in areas with a limited number of financial 

service providers; 

f. The existence of apparent anomalies in the reported HMDA data for any particular 

assessment area; 

g. Examiners’ knowledge of the same or similar assessment areas; and 

h. Comments from the public regarding the institution's CRA performance. 

2. For interstate institutions, a rating must be assigned for each state where the institution 

has a branch and for each multi-state metropolitan statistical areas/metropolitan divisions 

(MSA/MD) where the institution has branches in two or more of the states that comprise 

the multi-state MSA/MD. Select one or more assessment areas in each state for 

examination using the full scope procedures. 

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Performance Context 

1. Review standardized worksheets and other agency information sources to obtain relevant 

demographic, economic, and loan data, to the extent available, for each assessment area 

under review. Consider, among other things, whether housing costs are particularly high 

in relation to area median income. 

2. Consider any information the institution may provide on its local community and 

economy and its community development lending, qualified investment, and community 

development service capacity or that otherwise assists in the evaluation of the institution's 

community development activities. 

3. Review community contact forms prepared by the regulatory agencies to obtain 

information that assists in the evaluation of the institution's community development 

activities. Contact local community, government, or economic development 

representatives to update or supplement information about community development 

activities in the assessment area(s) or the broader statewide or regional areas of which the 

assessment area(s) is a part. 

4. Identify barriers, if any, to participation by the institution in local community 

development activities. For example, evaluate the institution's ability and capacity to help 

meet the community development needs of its assessment area(s) through a review of the 

uniform bank performance report (UBPR), the consolidated report of condition (Call 

Report), annual reports, supervisory reports, prior CRA performance evaluations, and 

financial information for other wholesale/limited purpose institutions serving 

approximately the same assessment area(s). 

5. Review the institution's public file and any comments received by the institution or the 

agency since the last CRA performance evaluation for information that assists in the 

evaluation of the institution. 

6. Document the performance context information gathered for use in evaluating the 

institution's CRA record. 

Assessment Area 

1. Review the institution's stated assessment area(s) to ensure that it: 

a. Consists of one or more MSAs/MDs or contiguous political subdivisions (i.e., 

counties, cities, or towns) where the institution has its main office, branches, and 

deposit-taking ATMs; 

b. Consists only of whole census tracts; 

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Wholesale/Limited Purpose CRA Examination Procedures 

OCC, FRB, FDIC February 2006 

c. Consists of separate delineations for areas that extend substantially across MSA/MD 

or state boundaries unless the assessment area is located in a multistate MSA/MD; 

d. Does not reflect illegal discrimination; and 

e. Does not arbitrarily exclude any low- or moderate-income area(s) taking into account 

the institution's size and financial condition. 

2. If the assessment area(s) does not coincide with the boundaries of an MSA/MD or 

political subdivision(s), assess whether the adjustments to the boundaries were made 

because the assessment area would otherwise be too large for the institution to reasonably 

serve, have an unusual configuration, or include significant geographic barriers. 

3. If the assessment area(s) fails to comply with the applicable criteria described above, 

develop, based on discussions with management, a revised assessment area(s) that 

complies with the criteria. Use this assessment area(s) to evaluate the institution's 

performance, but do not otherwise consider the revision in determining the institution's 

rating. 

Community Development Test 

1. Identify the number and amount of the institution's community development loans, 

(originations and purchases of loans and any other data the institution chooses to 

provide), qualified investments, and community development services. Obtain this 

information through discussions with management, HMDA data collected by the 

institution, as applicable; investment portfolios; any other relevant financial records; and 

materials available to the public. Include, at the institution's option: 

a. Community development loans, qualified investments, and community development 

services provided by affiliates, if they are not claimed by any other institution; and 

b. Community development lending by consortia or third parties. 

2. Review community development loans, qualified investments, and community 

development services to verify that they qualify as community development. 

3. If the institution participates in community development lending by consortia or third 

parties, or claims activities provided by affiliates, review records provided to the 

institution by the consortia or third parties or affiliates to ensure that the community 

development loans claimed by the institution do not account for more than the 

institution's share (based on the level of its participation or investment) of the total loans 

originated by the consortium or third party. 

4. Considering the institution's capacity and constraints and other information obtained 

through the performance context review, form conclusions about: 

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Wholesale/Limited Purpose CRA Examination Procedures 

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a. The extent, by number and dollar amount of community development loans, services, 

and qualified investments; 

b. The degree of innovation in community development activities (e.g., serving low- or 

moderate-income borrowers in new ways or serving groups of creditworthy 

borrowers not previously served by the institution); 

c. The complexity of those community development activities, such as the use of 

enhancements or other features specifically designed to expand community 

development lending; 

d. The responsiveness to the opportunities for community development lending, 

qualified investments, and community development services; and 

e. The degree to which the institution's qualified investments serve needs not routinely 

provided by other private investors. 

5. Summarize conclusions regarding the institution's community development performance 

and retain in the work papers. 

Ratings 

1. Review the analyses of the institution's performance in each assessment area examined, 

considering only those community development activities that benefit the assessment 

area(s) and the broader statewide or regional area(s) that include the assessment area(s). 

2. Group the analyses of the assessment areas examined by MSA (Footnote 1. The reference to MSA may also reference MD.) and nonmetropolitan 

areas within each state where the institution has branches. If an institution has branches in 

two or more states of a multi-state MSA, group the assessment areas in that MSA. 

3. Summarize conclusions about the institution's performance in each MSA and the 

nonmetropolitan portion of each state in which an assessment area was examined using 

these procedures. If two or more assessment areas in an MSA or in the nonmetropolitan 

portion of a state were examined using these procedures, determine the relative 

significance of the institution's performance in each assessment area by considering: 

a. The significance of the institution's activities in each compared to the institution's 

overall activities; 

b. The community development opportunities in each; 

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Wholesale/Limited Purpose CRA Examination Procedures 

OCC, FRB, FDIC February 2006 

c. The significance of the institution's activities for each, particularly in light of the 

number of other institutions and the extent of their activities in each; and 

d. Demographic and economic conditions in each. 

4. For assessment areas in MSAs and nonmetropolitan areas that were not examined, 

consider facts and data related to the institution's community development lending, 

investment, and service activities to ensure that performance in those areas is not 

inconsistent with the conclusions based on the assessment areas examined. 

5. Assign a preliminary rating for an institution with operations in one state only using the 

Community Development Ratings Matrix. For an institution with operations in more than 

one state or multi-state MSA, assign a preliminary rating for each state, using the 

Community Development Ratings Matrix. To determine the relative significance of each 

MSA and nonmetropolitan area to the institution's overall rating (institutions operating in 

only one state) or state-wide or multi-state MSA rating (institutions operating in more 

that one state), consider: 

a. The significance of the institution's activities in each compared to the institution's 

overall activities; 

b. The community development opportunities in each; 

c. The significance of the institution's activities for each, particularly in light of the 

number of other institutions and the extent of their activities in each; and 

d. Demographic and economic conditions in each. 

6. For institutions with operations in more than one state or multi-state MSA, assign a 

preliminary rating for the institution as a whole. To determine the relative significance of 

each state or multi-state MSA consider: 

a. The significance of the institution's activities in each compared to the institution's 

overall activities; 

b. The community development opportunities in each; 

c. The significance of the institution's activities for each, particularly in light of the 

number of other institutions and the extent of their activities in each; and 

d. Demographic and economic conditions in each. 

7. If the institution is adequately meeting the community development needs of each of its 

assessment area(s), consider those community development activities, if any, that benefit 

areas outside of the assessment area(s) or a broader statewide or regional area that 

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Wholesale/Limited Purpose CRA Examination Procedures 

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includes the assessment area(s). Determine whether those activities enhance the 

preliminary rating. If so, adjust the rating(s) accordingly. 

8. Consider an institution's past performance if the prior rating was "Needs to Improve." If 

the poor performance has continued, an institution could be considered for a "Substantial 

Noncompliance" rating. 

9. Review the results of the most recent compliance examination and determine whether 

evidence of discrimination or other illegal credit practices that violate an applicable law, 

rule, or regulation should lower the institution's preliminary composite rating or the 

preliminary CRA rating for a state or multistate MSA. (Footnote 2. “Evidence of discriminatory or other illegal credi

against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair 

Housing Act; (b) Violations of the Home Ownership and Equity Protection Act; (c) Violations of section 5 of the 

Federal Trade Commission Act; (d) Violations of section 8 of the Real Estate Settlement Procedures Act; and (e) 

Violations of the Truth in Lending Act regarding a consumer’s right of rescission.) If evidence of discrimination or 

other illegal credit practices by the institution in any geography, or in any assessment 

area by any affiliate whose loans have been considered as part of the bank’s lending 

performance, was found, consider the following: 

. 

a. The nature, extent, and strength of the evidence of the practices; 

b. The policies and procedures that the institution (or affiliate, as applicable) has in 

place to prevent the practices; 

c. Any corrective action the institution (or affiliate, as applicable) has taken, or has 

committed to take, including voluntary corrective action resulting from selfassessment; and 

d. Any other relevant information. 

10. Assign a final composite rating to the institution, considering the preliminary rating and 

any evidence of discriminatory or other illegal credit practices, and discuss conclusions 

with management. 

11. Write comments for the public evaluation and examination report. 

12. Prepare recommendations for supervisory strategy and matters that require attention for 

follow-up activities. 

Public File Checklist 

1. There is no need to review each branch or each complete public file during every 

examination. In determining the extent to which the institution’s public files should be 

reviewed, consider the institution's record of compliance with the public file requirements 

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Wholesale/Limited Purpose CRA Examination Procedures 

OCC, FRB, FDIC February 2006 

in previous examinations, its branching structure and changes to it since its last 

examination, complaints about the institution's compliance with the public file 

requirements, and any other relevant information. 

2. In any review of the public file undertaken, determine whether branches display an 

accurate public notice in their lobbies, a complete public file is available in the 

institution's main office and at least one branch in each state, and the public file(s) in the 

main office and in each state contain: 

a. All written comments from the public relating to the institution's CRA performance 

and any responses to them for the current and preceding two calendar years (except 

those that reflect adversely on the good name or reputation of any persons other than 

the institution); 

b. The institution's most recent CRA Performance Evaluation; 

c. A map of each assessment area showing its boundaries and, on the map or in a 

separate list, the geographies contained within the assessment area; 

d. A list of the institution's branches, branches opened and closed during the current and 

each of the prior two calendar years, their street addresses and geographies; 

e. A list of services (loan and deposit products and transaction fees generally offered, 

and hours of operation at the institution's branches), including a description of any 

material differences in the availability or cost of services between those locations; 

f. The institution's CRA Disclosure Statement(s) for the prior two calendar years; 

g. A quarterly report of the institution's efforts to improve its record if it received a less 

than satisfactory rating during its most recent CRA examination; 

h. HMDA Disclosure Statements for the prior two calendar years and those of each nondepository affiliate the institution has elected to include in assessment of its CRA 

record, if applicable; and 

i. If applicable, the number and dollar amount of consumer loans made to the four 

income categories of borrowers and geographies (low-, moderate-, middle-, and 

upper-income), located inside and outside of the assessment area(s). 

3. In any branch review undertaken, determine whether the branch provides the most recent 

public evaluation, and a list of services generally available at its branches, and a 

description of any material differences in the availability or cost of services at the branch 

(or a list of services available at the branch). 

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Wholesale/Limited Purpose CRA Examination Procedures 

OCC, FRB, FDIC February 2006 

Community Development Ratings Matrix 

Community Development 

Test Characteristic column heading 

OUTSTANDING column heading SATISFACTORYcolumn headinNEED g S TO IMPROVE column heading SUBSTANTIAL 

NONCOMPLIANCE column heading 

Investment, loan, and service 

activity 

OUTSTANDING 

Investment, loan, and service 

activity 

The institution has a high 

level of community 

development loans, 

community development 

services, or qualified 

investments, particularly 

investments that are not 

routinely provided by private 

investors. 

SATISFACTORY 

Investment, loan, and service 

activity 

The institution has an 

adequate level of community 

development loans, 

community 

development services, or 

qualified investments, 

particularly investments that 

are not routinely provided by 

private investors. 

NEEDS TO IMPROVE 

Investment, loan, and service 

activity 

The institution has a poor level 

of community development 

loans, community 

development services, or 

qualified investments, 

particularly investments that 

are not routinely provided by 

private investors 

SUBSTANTIAL 

NONCOMPLIANCE 

Investment, loan, and service 

activity 

The institution has few, if 

any, community 

development loans, 

community development 

services, or qualified 

investments, particularly 

investments that are not 

routinely provided by 

Investment, loan, and service private investors. 

initiatives 

OUTSTANDING 

Investment, loan, and service 

initiatives 

The institution extensively 

uses innovative or complex 

qualified investments, 

community development 

loans, or community 

development services. 

SATISFACTORY 

Investment, loan, and service 

initiatives 

The institution occasionally 

uses innovative or complex 

qualified investments, 

community development 

loans, or community 

development services. 

NEEDS TO IMPROVE 

Investment, loan, and service 

initiatives 

The institution rarely uses 

innovative or complex 

qualified investments, 

community development 

loans, or community 

development services. 

SUBSTANTIAL 

NONCOMPLIANCE 

Investment, loan, and service 

initiatives 

The institution does not use 

innovative or complex 

qualified investments, 

community development 

loans, or community 

development services. Responsiveness to 

community development 

needs 

OUTSTANDING 

Responsiveness to 

community development 

needs 

The institution exhibits 

excellent responsiveness to 

credit and community 

economic development needs 

in its assessment area(s). 

SATISFACTORY 

Responsiveness to 

community development 

needs 

The institution exhibits 

adequate responsiveness to 

credit and community 

economic development needs 

in its assessment area(s). 

NEEDS TO IMPROVE 

Responsiveness to 

community development 

needs 

The institution exhibits poor 

responsiveness to credit and 

community economic needs in 

its assessment area(s). 

SUBSTANTIAL 

NONCOMPLIANCE 

Responsiveness to 

community development 

needs 

The institution exhibits very 

poor responsiveness to 

credit and community 

economic development 

needs in its assessment 

area(s). 

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