52026 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

1The OCC is the primary regulator for national 

banks and Federal savings associations. 

2Public Law 95–128, 91 Stat. 1147 (1977), 

codified at 12 U.S.C. 2901 et seq. The CRA was 

enacted to promote access to credit by encouraging 

insured depository institutions to serve their entire 

communities. During this period, Congress also 

enacted fair lending laws to address fairness and 

access to housing and credit. For example, in 1968, 

Congress passed the Fair Housing Act, 42 U.S.C. 

3601 et seq., to prohibit discrimination in renting 

or buying a home. In 1974, Congress passed the 

Equal Credit Opportunity Act, 15 U.S.C. 1691 et 

seq. (amended in 1976), to prohibit creditors from 

discriminating against an applicant on the basis of 

race, color, religion, national origin, sex, marital 

status, or age. These fair lending laws provide a 

legal basis for prohibiting discriminatory lending 

practices, such as redlining. Interagency Fair 

Lending Examination Procedures, p. iv (Aug. 2009), 

available at https://www.ffiec.gov/PDF/fairlend.pdf. 

3The Office of Thrift Supervision (OTS) and its 

predecessor agency, the Federal Home Loan Bank 

Board, also were charged with implementing the 

CRA. The rulemaking authority of OTS with respect 

to CRA transferred to the OCC in Title III of the 

Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, 124 Stat. 1376, 

1520 (2010). See also 12 U.S.C. 2905. The OCC has 

responsibility for examining Federal savings 

associations for CRA while the FDIC examines State 

savings associations for CRA. 

4As used throughout this notice, the term ‘‘bank’’ 

or ‘‘banks’ also includes uninsured Federal 

branches that result from an acquisition described 

in section 5(a)(8) of the International Banking Act 

of 1978 (12 U.S.C. 3103(a)(8)) and State savings 

associations. 

5 85 FR 34734 (June 5, 2020). 

6 60 FR 22156 (May 4, 1995). As used herein, the 

1995 Rules refer to the regulatory framework 

adopted by the Agencies in 1995 and any revisions 

the Agencies have made to that regulatory 

framework, except for the changes made by the OCC 

in the June 2020 Rule. E.g., 70 FR 44256 (Aug. 2, 

2005). 

7NR 2021–77, Interagency Statement on 

Community Reinvestment Act Joint Agency Action 

(July 20, 2021). 

8 12 U.S.C. 1813(c)(2). 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Parts 25 and 195 

[Docket ID OCC–2021–0014] 

RIN 1557–AF12 

Community Reinvestment Act 

Regulations 

AGENCY: Office of the Comptroller of the 

Currency, Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Comptroller of the 

Currency proposes to replace the 

current Community Reinvestment Act 

rule with rules based on the 1995 

Community Reinvestment Act (CRA) 

rules, as revised, issued by the Office of 

the Comptroller of the Currency (OCC), 

Board of Governors of the Federal 

Reserve System (Board), and Federal 

Deposit Insurance Corporation (FDIC). 

The proposal would replace the existing 

rule applicable to both national banks 

and savings associations with two 

separate rules, one for national banks 

and one for savings associations. Such 

action would effectively rescind the 

CRA final rule published by the Office 

of the Comptroller of the Currency on 

June 5, 2020, and facilitate the issuance 

of joint CRA rules with the Board and 

FDIC. 

DATES: Comments must be received on 

or before October 29, 2021. 

ADDRESSES: Commenters are encouraged 

to submit comments through the Federal 

eRulemaking Portal. Please use the title 

‘‘Community Reinvestment Act 

Regulations’’ to facilitate the 

organization and distribution of the 

comments. You may submit comments 

by any of the following methods: 

b Federal eRulemaking Portal— 

Regulations.gov: Go to https://

regulations.gov/. Enter ‘‘Docket ID OCC– 

2021–0014’’ in the Search Box and click 

‘‘Search.’’ Public comments can be 

submitted via the ‘‘Comment’’ box 

below the displayed document 

information or by clicking on the 

document title and then clicking the 

‘‘Comment’’ box on the top-left side of 

the screen. For help with submitting 

effective comments please click on 

‘‘Commenter’s Checklist.’’ For 

assistance with the Regulations.gov site, 

please call (877) 378–5457 (toll free) or 

(703) 454–9859 Monday–Friday, 9am– 

5pm ET or email regulations@

erulemakinghelpdesk.com. 

b Mail: Chief Counsel’s Office, 

Attention: Comment Processing, Office 

of the Comptroller of the Currency, 400 

7th Street SW, Suite 3E–218, 

Washington, DC 20219. 

b Hand Delivery/Courier: 400 7th 

Street SW, Suite 3E–218, Washington, 

DC 20219. 

Instructions: You must include 

‘‘OCC’’ as the agency name and ‘‘Docket 

ID OCC–2021–0014’’ in your comment. 

In general, the OCC will enter all 

comments received into the docket and 

publish the comments on the 

Regulations.gov website without 

change, including any business or 

personal information provided, such as 

name and address information, email 

addresses, or phone numbers. 

Comments received, including 

attachments and other supporting 

materials, are part of the public record 

and subject to public disclosure. Do not 

include any information in your 

comment or supporting materials that 

you consider confidential or 

inappropriate for public disclosure. 

You may review comments and other 

related materials that pertain to this 

action by the following method: 

b Viewing Comments 

Electronically—Regulations.gov: Go to 

https://regulations.gov/. Enter ‘‘Docket 

ID OCC–2021–0014’’ in the Search Box 

and click ‘‘Search.’’ Click on the 

‘‘Documents’’ tab and then the 

document’s title. After clicking the 

document’s title, click the ‘‘Browse 

Comments’’ tab. Comments can be 

viewed and filtered by clicking on the 

‘‘Sort By’’ drop-down on the right side 

of the screen or the ‘‘Refine Results’’ 

options on the left side of the screen. 

Supporting materials can be viewed by 

clicking on the ‘‘Documents’’ tab and 

filtered by clicking on the ‘‘Sort By’’ 

drop-down on the right side of the 

screen or the ‘‘Refine Documents 

Results’’ options on the left side of the 

screen.’’ For assistance with the 

Regulations.gov site, please call (877) 

378–5457 (toll free) or (703) 454–9859 

Monday–Friday, 9am–5pm ET or email 

regulations@erulemakinghelpdesk.com. 

The docket may be viewed after the 

close of the comment period in the same 

manner as during the comment period. 

FOR FURTHER INFORMATION CONTACT: 

Emily Boyes, Counsel, Chief Counsel’s 

Office, (202) 649–5490; Vonda Eanes, 

Director for CRA and Fair Lending 

Policy, Bobbie K. Kennedy, Technical 

Expert for CRA and Fair Lending, or 

Karen Bellesi, Director for Community 

Development, Bank Supervision Policy, 

(202) 649–5470, Office of the 

Comptroller of the Currency, 400 7th 

Street SW, Washington, DC 20219. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Office of the Comptroller of the 

Currency (OCC) 1 proposes to rescind 

and replace its rule implementing the 

Community Reinvestment Act (CRA) 2

for national banks and savings 

associations 3 (collectively, banks),4 that 

was published on June 5, 2020 (June 

2020 Rule).5 The OCC would replace the 

June 2020 Rule with rules largely based 

on those adopted by the OCC, Federal 

Deposit Insurance Corporation (FDIC), 

and Board of Governors of the Federal 

Reserve System (Board) (collectively, 

the Agencies) and the former Office of 

Thrift Supervision on May 4, 1995, as 

revised (1995 Rules).6 The proposal 

would align the OCC’s CRA rules with 

the current Board and FDIC CRA rules 

to facilitate on-going interagency work 

to modernize the CRA rules 7 and create 

consistency for all insured depository 

institutions (IDIs).8

As explained in greater detail below, 

under this proposal, the June 2020 Rule 

would remain in effect until replaced by 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52027 

9 12 U.S.C. 2901(a). 

10 43 FR 47144 (Oct. 12, 1978). The CRA rules of 

the Agencies were codified in 12 CFR parts 25, 563e 

(recodified as 195), 228, and 345. 

11 60 FR 22156 (May 4, 1995). 

12The OCC, along with the Board and the FDIC, 

worked together on an ANPR, which the OCC 

published on September 5, 2018. 83 FR 45053 

(September 5, 2018). 

13 85 FR 1204 (January 9, 2020). 

14 12 CFR 25.01(c)(4). 

15 85 FR 78258 (Dec. 4, 2020). 

16 85 FR 81270 (Dec. 15, 2020). 

17See OCC Bulletin 2021–24, Community 

Reinvestment Act: Implementation of the June 2020 

Final Rule (May 18, 2021), available at https://

www.occ.gov/news-issuances/bulletins/2021/ 

bulletin-2021-24.html. 

18 Id. 

19Public Law 104–208, 110 Stat. 3001 (1996) 

(codified at 12 U.S.C. 3311). 

20See Federal Financial Institutions Examination 

Council, Joint Report to Congress. Economic 

Growth and Regulatory Paperwork Reduction Act, 

pp. 41–48 (March 3, 2017), available at https://

www.ffiec.gov/pdf/2017_FFIEC_EGRPRA_JointReport_to_Congress.pdf. 

21See Memorandum from the U.S. Department of 

the Treasury to the Office of the Comptroller of the 

Currency, Board of Governors of the Federal 

Reserve System, and the Federal Deposit Insurance 

Corporation, Community Reinvestment Act— 

Findings and Recommendations (April 3, 2018), 

available at https://home.treasury.gov/sites/default/ 

files/2018-04/4-3-18%20CRA%20memo.pdf. 22See, e.g., Perspectives from Main Street: 

Stakeholder Feedback on Modernizing the 

Community Reinvestment Act (June 2019) available 

at https://www.federalreserve.gov/publications/ 

files/stakeholder-feedback-on-modernizing-thecommunity-reinvestment-act-201906.pdf. 

23 85 FR 66410. 

final rules based on this proposal. The 

OCC proposes to apply a transition for 

replacing certain aspects of the June 

2020 Rule (e.g., bank type changes, 

approved strategic plans, and qualifying 

activities). Subsequently, as part of the 

ongoing interagency CRA rulemaking, 

the OCC would propose a joint revised 

CRA rule to replace the rules in this 

proposal. The proposed transition 

considerations are described in more 

detail in Section IV. 

II. Background 

Congress enacted the CRA in 1977 to 

encourage IDIs to help meet the credit 

needs of their entire communities, 

including low- and moderate-income 

(LMI) neighborhoods, consistent with 

safe and sound lending practices. 

Specifically, Congress found that ‘‘(1) 

regulated financial institutions are 

required by law to demonstrate that 

their deposit facilities serve the 

convenience and needs of the 

communities in which they are 

chartered to do business; (2) the 

convenience and needs of communities 

include the need for credit as well as 

deposit services; and (3) regulated 

financial institutions have continuing 

and affirmative obligation[s] to help 

meet the credit needs of the local 

communities in which they are 

chartered.’’ 9

The Agencies first issued rules to 

implement the CRA in 1978.10 Between 

1978 and 2018, the Agencies revised 

and sought to clarify the CRA rules 

numerous times, most significantly in 

1995.11 On September 5, 2018, the OCC 

published an Advance Notice of 

Proposed Rulemaking (ANPR) as part of 

its renewed efforts to modernize the 

CRA regulatory framework.12

Subsequently, on January 9, 2020, the 

OCC and FDIC published a joint CRA 

Notice of Proposed Rulemaking (January 

2020 NPR),13 and on June 5, 2020, the 

OCC issued the June 2020 Rule in an 

effort to modernize its CRA rules. 

The June 2020 Rule took effect 

October 1, 2020; however, several 

provisions have delayed compliance 

dates of either January 1, 2023, or 

January 1, 2024.14 To implement certain 

provisions of the June 2020 Rule with a 

January 1, 2023, compliance date, the 

OCC published a Notice of Proposed 

Rulemaking on December 4, 2020 

(December 2020 NPR), that proposed an 

approach to determine the benchmarks, 

thresholds, and minimums in the June 

2020 Rule’s new performance 

standards.15 In connection with the 

December 2020 NPR, the OCC published 

a CRA information collection survey 

(Information Collection) 16 to obtain 

data necessary to calibrate the June 2020 

Rule’s new performance standards. 

Subsequently, on May 18, 2021, the 

OCC announced that it was 

reconsidering the June 2020 Rule, did 

not plan to finalize the December 2020 

NPR, and was discontinuing the 

Information Collection.17 The OCC took 

these steps to provide for an orderly 

reconsideration of the June 2020 Rule 

and provide banks with the flexibility to 

deploy resources in response to the 

COVID–19 pandemic.18

While the June 2020 Rule and the 

subsequent December 2020 NPR and 

Information Collection represent the 

OCC’s most recent efforts to modernize 

the CRA regulatory framework, the 

Agencies’ efforts at reform have spanned 

the past decade. For example, in 2014, 

pursuant to the Economic Growth and 

Regulatory Paperwork Reduction Act of 

1996 (EGRPRA),19 the Agencies began a 

decennial review of all of their 

regulations, with input from the public, 

to identify outdated, unnecessary, or 

unduly burdensome regulations and 

consider how to reduce regulatory 

burden on IDIs—while, at the same 

time, ensuring the safety and soundness 

of these institutions and of the financial 

system. In 2017, the Agencies issued a 

report to Congress that included a 

summary of the public comments and 

recommendations received during the 

EGRPRA review, including those that 

addressed the CRA regulatory 

framework.20 Among the most 

frequently raised CRA-related issues 

were (1) the assessment area definition; 

(2) incentives for banks to serve LMI, 

unbanked, underbanked, and rural 

communities; (3) regulatory burdens 

associated with the recordkeeping and 

reporting requirements and the asset 

thresholds for the various CRA 

examination methods; (4) the need for 

clarity regarding performance measures 

and better examiner training to ensure 

consistency and rigor in CRA 

examinations; and (5) the refinement of 

the CRA ratings methodology. 

On April 3, 2018, the U.S. Department 

of the Treasury released a report on the 

implementation of the CRA, which 

included recommendations for 

modernizing the CRA rules based on 

stakeholder input.21 Starting in 2018, 

the Agencies also engaged with 

stakeholders, including civil rights 

organizations, community groups, 

members of Congress, academics, and 

IDIs, to obtain their perspectives and 

feedback on the CRA and potential 

improvements to the CRA regulatory 

framework. Throughout all phases of the 

OCC’s recent CRA modernization 

efforts, including prior to the issuance 

and during the implementation of the 

June 2020 Rule, many stakeholders 

objected to the OCC independently 

issuing a CRA rule and stressed the 

importance of the Agencies working 

together to issue consistent CRA rules. 

A. Board ANPR 

Separately from the OCC, the Board 

has explored ways to modernize the 

CRA regulatory framework to address 

changes in the banking industry, 

including the increased use of 

technology to deliver banking services. 

Specifically, the Board conducted 

stakeholder outreach through a series of 

roundtable discussions 22 and published 

a CRA ANPR on October 19, 2020 

(Board ANPR),23 that invited public 

comment on an approach to modernize 

its CRA rule. The Board ANPR 

described its objectives as including: 

• Increasing the clarity, consistency, 

and transparency regarding where, how, 

and what activities receive CRA 

consideration, while minimizing data 

burden; 

• Tailoring CRA supervision to reflect 

differences in bank sizes and business 

models, local market needs and 

opportunities, and expectations across 

business cycles; 

52028 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

24 10 U.S.C. 987 et seq. 

25 50 U.S.C. 3901 et seq. 

26 12 U.S.C. 5531. 

27See supra note 16. 

28The OCC received eight comments from the 

banking industry or industry trade associations, two 

comment from community groups, two comments 

from the general public, and one comment from a 

state government. 

29Stakeholders also offered comments on other 

aspects of the December 2020 NPR, including the 

OCC’s proposed approach for addressing declines 

in CRA performance and the proposed technical 

changes. Comments on the approach for addressing 

declines in CRA performance questioned how the 

OCC would measure declines in activities and 

whether the proposed ten percent decline was 

appropriate. Comments regarding the technical 

changes generally sought additional clarifications. 

30See supra note 17. 

31See supra note 7. 

• Updating performance standards to 

address changes in the banking 

industry, particularly the increased use 

of mobile and internet delivery 

channels; 

• Promoting community engagement; 

• Strengthening the special treatment 

of minority depository institutions; and 

• Recognizing that CRA and fair 

lending responsibilities are mutually 

reinforcing. 

The Board ANPR invited public 

comment on different policy options to 

address its objectives. For example, the 

Board invited comment on how to 

delineate assessment areas around 

physical locations. It also sought public 

comment on deposit-based and lendingbased assessment areas for IDIs that 

conduct a significant amount of lending 

and deposit collection outside 

assessment areas around physical 

locations. In addition, the Board ANPR 

invited comment on nationwide 

assessment areas for internet banks. 

The Board ANPR suggested a 

framework for evaluating CRA 

performance based on a retail test 

(comprised of retail lending and retail 

services subtests) and a community 

development (CD) test (comprised of CD 

financing and CD services subtests) that 

would be applicable to Board-regulated 

IDIs, depending on their size or business 

model. In addition, the Board ANPR 

sought feedback on an evaluation 

framework based on IDI-asset-size 

thresholds of $750 million or $1 billion. 

Under this framework, smaller IDIs 

would be subject to a retail lending test 

but would have the option to be 

evaluated based on their retail services 

and CD activities, while larger IDIs 

would be evaluated under all four 

subtests. The suggested framework 

would base CRA examinations for 

wholesale and limited purpose IDIs on 

the CD test. The Board ANPR generally 

suggested a metric-based approach for 

the retail lending and CD financing 

subtests and a qualitative approach to 

evaluating retail and CD services under 

their respective subtests. In addition, 

the Board ANPR suggested a strategic 

plan option that would provide more 

clarity and flexibility for establishing 

bank specific standards to assess 

activities. 

The Board ANPR also discussed ways 

to update the State, multistate 

metropolitan statistical area (MSA), and 

institution ratings by basing these 

ratings on local assessment area 

performance. The Board ANPR 

suggested that the Board could consider 

certain activities outside of IDIs’ 

assessment areas at the institution level 

to achieve an ‘‘outstanding’’ rating. The 

Board also indicated it could revise how 

it would consider discriminatory or 

other illegal credit practices (DOICP) to 

both align that consideration with the 

Uniform Interagency Consumer 

Compliance Rating System and include 

consideration of the Military Lending 

Act (MLA),24 the Servicemembers Civil 

Relief Act (SCRA),25 and the Prohibition 

Against Unfair, Deceptive, or Abusive 

Acts or Practices.26

The Board further sought feedback on 

potential revisions to CRA data 

collection and reporting requirements. 

The Board ANPR acknowledged that an 

increased use of metrics would result in 

an increased need for data collection 

and reporting and noted that the Board 

prioritized using both existing data 

where possible and exempting small 

IDIs from new data collection 

requirements. 

B. OCC December 2020 NPR 

The OCC’s June 2020 Rule included 

new performance standards meant to 

provide large banks with incentives to 

achieve specific performance goals and 

to make CRA evaluations more 

consistent, reproducible, and 

comparable over time. These 

performance standards included the 

CRA evaluation measure, retail lending 

distribution tests, and CD minimums. 

However, the June 2020 Rule did not 

include the specific benchmarks, 

thresholds, and minimum values 

proposed in the January 2020 NPR 

because the OCC believed that it was 

appropriate to gather more information 

to further calibrate these measures. To 

do so, the OCC undertook an 

Information Collection 27 and issued the 

December 2020 NPR, in which it 

proposed processes to calibrate the 

benchmark, threshold, and minimum 

values more precisely. 

The OCC received 13 comments on 

the December 2020 NPR.28 Although 

one commenter generally supported the 

December 2020 NPR’s approach to 

setting the benchmarks, thresholds, and 

minimums, most commenters expressed 

concerns with the proposal. These 

concerns included that the proposed 

approach would (1) lead to inflated 

ratings; (2) set arbitrary limits on 

ratings; (3) not account for local market 

conditions, which could penalize banks 

that operate in high-cost markets; (4) not 

adequately consider the innovative, 

rapid, and flexible funding solutions 

offered by internet-based banks with 

national footprints; and (5) be 

speculative and complicated. 

One commenter stated that there 

should be hundreds of ratios as opposed 

to the proposed 26 calibrated values. 

Another commenter favored an 

approach where the OCC would take 

into consideration surpassing a 

threshold, but it would not initially 

grant a presumption of a specific rating. 

The commenter asserted that this would 

be a more incremental change from the 

evaluation approach codified in the 

1995 Rules and could be used until 

more data was available for a 

presumption-based approach. Other 

commenters stated that a one-size-fitsall model would not work, with one 

commenter suggesting that the OCC 

should tie benchmarks to historical, 

local bank performance data, and 

community demographics, rather than 

set them at a nationwide level.29

Commenters also generally expressed 

concern with the Information 

Collection, stating that (1) it would 

result in substantial burden and costs 

for the banks responding to the survey; 

(2) the data requested were not routinely 

available or did not exist; and (3) the 

collection would likely yield inaccurate 

results. Due to these concerns, several 

commenters requested that the OCC 

pause or rescind the Information 

Collection. 

Given the specific concerns with the 

December 2020 NPR and the related 

Information Collection, the majority of 

commenters reiterated the request that 

the Agencies work together to create a 

consistent CRA framework. After 

considering these comments, the OCC 

announced that it would not finalize the 

December 2020 NPR and would 

discontinue the Information 

Collection.30 In addition, as noted, the 

OCC later announced that it would work 

with the Board and FDIC on joint rules 

to modernize the CRA.31

C. June 2020 Rule Implementation 

Following publication of the June 

2020 Rule, the OCC began its 

implementation by developing 

transition policies and procedures to 

address the phased compliance dates 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52029 

32 12 CFR 25.01(c)(5). 

33 12 CFR 25.03. 

34OCC Bulletin 2021–5, Community 

Reinvestment Act: Bank Type Determinations, 

Distressed and Underserved Areas, and Banking 

Industry Compensation Provisions of the June 2020 

CRA (January 29, 2021) available at https://

www.occ.gov/news-issuances/bulletins/2021/ 

bulletin-2021-5.html. 

35See Q&A §ll.12(h)—8, 81 FR 48506 (July 25, 

2016). 

36OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020), available at https://

www.occ.gov/news-issuances/bulletins/2020/ 

bulletin-2020-99.html. 

37 Id. 38OCC Bulletin 2021–5, Community 

Reinvestment Act: Bank Type Determinations, 

Distressed and Underserved Areas, and Banking 

Industry Compensation Provisions of the June 2020 

CRA (January 29, 2021). 39 Id. 

40OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

41 12 CFR 25.04(c). 

42See 12 CFR part 25, Appendix C. 

43OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

44 12 CFR 25.05. 

45CRA Qualifying Activities Confirmation 

Request Guidance and Form is available at https:// 

www.occ.gov/topics/consumers-and-communities/ 

cra/qualifying-activity-confirmation-request/indexcra-qualifying-activities-confirmation-request.html. 

46The CRA Illustrative List of Qualifying 

Activities is available at https://www.occ.gov/ 

topics/consumers-and-communities/cra/craillustrative-list-of-qualifying-activities.pdf. 

47 12 CFR 25.14. 

48 12 CFR 25.15. 

49OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

provided in the rule. In addition, the 

OCC (1) issued guidance on 

implementation of key provisions of the 

June 2020 Rule; (2) provided training 

and outreach for examiners, community 

groups, and the banking industry; and 

(3) instituted the CRA illustrative list 

and Qualifying Activities Confirmation 

Request Form. 

To implement the June 2020 Rule 

between the October 1, 2020, effective 

date and the January 1, 2023, or January 

1, 2024, compliance dates, the OCC 

leveraged the flexibility provided by the 

June 2020 Rule’s transition provision.32

It is the OCC’s intention that the June 

2020 Rule and associated guidance 

would continue to apply until such time 

as the OCC modifies the rule. A 

summary of the guidance issued related 

to the transition provision in the June 

2020 Rule includes the following: 

• Definitions.33

Æ Compensation—The OCC issued 

guidance on the calculation of the 

median hourly compensation value for 

the banking industry for use in 

quantifying CD services. Effective 

October 1, 2020, through December 31, 

2021, the median hourly compensation 

value is $39.03.34

Æ Partially—The OCC advised that 

OCC-regulated banks may receive 

consideration in CRA evaluations that 

begin on or after October 1, 2020, for the 

full or partial value of qualifying CD 

activities, as applicable, based on the 

qualifying activities criteria set forth in 

the June 2020 Rule (e.g., affordable 

housing for LMI individuals, 

community support services for LMI 

individuals, financial education, 

essential community facilities, and 

economic development) if those 

activities are conducted on or after 

October 1, 2020. For activities 

conducted before October 1, 2020, the 

OCC explained that the 1995 Rules and 

Interagency Questions and Answers 

Regarding Community Reinvestment 

(Q&As) 35 will continue to apply and 

provide partial credit for the portion of 

mixed-income housing that provides 

affordable housing to LMI individuals.36

Æ Retail lending activities and related 

definitions (i.e., home mortgage loans, 

consumer loans, small loans to 

businesses, small loans to farms, CRAeligible businesses, and CRA-eligible 

farms)—In order to provide OCCregulated banks with sufficient time to 

update systems for data collection, 

recordkeeping, and reporting, the OCC 

advised that examiners will conduct 

CRA examinations of performance 

under the applicable retail lending test 

criteria using the 1995 Rules’ definitions 

of home mortgage loan, small business 

loan, small farm loan, and consumer 

loan and the business and farm gross 

annual revenue threshold of $1 million 

or less during the transition period. 

However, the OCC also provided that, at 

an OCC-regulated bank’s option, the 

OCC also will consider retail loans, as 

defined in the June 2020 Rule, as ‘‘other 

loan data,’’ or ‘‘other lending-related 

activities,’’ as applicable, if those loans 

are not otherwise considered under the 

1995 Rules’ applicable lending test.37

Æ Distressed areas and underserved 

areas—The June 2020 Rule expanded 

the definition of what were termed 

‘‘distressed or underserved 

nonmetropolitan middle-income 

geographies’’ under the 1995 Rules to 

include census tracts that met those 

definitions in MSAs and added to the 

definition of underserved area census 

tracts that did not have a branch within 

specified distances. On January 29, 2021 

the OCC published a list of census tracts 

that meet the revised definitions.38

Æ Small banks and intermediate 

banks—The OCC applied the asset-size 

thresholds in the June 2020 Rule’s small 

bank and intermediate bank definitions 

to determine bank type in December 

2020 and communicated the revised 

bank types for OCC-regulated banks on 

January 29, 2021.39 OCC-regulated 

banks that transitioned from large banks 

under the 1995 Rules to intermediate 

banks under the June 2020 Rule are not 

required to collect data required under 

the 1995 Rules for calendar years 2021 

forward or report data for calendar years 

2022 forward.40

• CD loans, CD investments, and CD 

services.41 The OCC advised that during 

the June 2020 Rule transition period, 

examiners will consider all CD activities 

under the June 2020 Rule that are 

conducted by OCC-regulated banks on 

or after October 1, 2020. Further, during 

the transition period, examiners also 

will consider all CD activities defined in 

12 CFR 25.12(g) of the 1995 Rules 42 that 

are conducted by OCC-regulated banks 

during the transition period to the 

extent there are gaps between the 1995 

Rules’ CD activities and the qualifying 

activities criteria in the June 2020 Rule 

in evaluating performance under the 

applicable lending, investment, service, 

or CD test.43

• Qualifying activities confirmation 

and illustrative list.44 As of October 1, 

2020, banks and interested parties may 

elect to submit confirmation requests 

using the CRA Qualifying Activities 

Confirmation Request Form to 

determine whether an activity is 

consistent with the qualifying activities 

criteria in the June 2020 Rule.45 The 

OCC also published the illustrative list 

on www.OCC.gov to provide examples 

of activities that meet the qualifying 

activities criteria in the June 2020 

Rule.46

• Small and intermediate bank 

performance standards 47 and wholesale 

and limited purpose bank performance 

standards.48 The OCC explained that 

under the June 2020 Rule, the 

performance standards for small and 

intermediate banks and wholesale and 

limited purpose banks would apply 

beginning on October 1, 2020. The OCC 

further explained that examiners would 

apply the Q&As and 1995 Rules’ 

examination procedures, as 

supplemented by the transition 

guidance issued by the OCC, to evaluate 

CRA activities conducted between 

October 1, 2020, and the effective date 

of new guidance or examination 

procedures applicable to the particular 

activities.49 The OCC has not issued 

new guidance replacing the Q&As or 

52030 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

50 12 CFR 25.16. 

51OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

52 12 CFR 25.17. 

53SM 2019–03, Supervisory Policies and 

Processes for Community Reinvestment Act 

Performance Evaluations (April 12, 2019), available 

at https://el.occ/news-issuances/memorandums/sm2019-3.pdf. 

54 12 CFR 25.18. 

55OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

56 12 CFR 25.24. 

57OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

58 12 CFR 25.28. 

59OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

60 12 CFR 25.30. 

61OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

62 12 CFR 25.03. 

63See supra note 7. 

examination procedures applicable to 

the June 2020 Rule. 

• Consideration of performance 

context.50 With regard to performance 

context (i.e., information about a bank, 

its community, and its competitors), the 

OCC stated that it would continue to 

develop and consider a bank’s 

performance context according to the 

1995 Rules’ performance context 

procedures during CRA evaluations 

until the OCC develops and implements 

a system for electronic bank submission 

of performance context under the June 

2020 Rule.51 The OCC has not 

implemented an electronic system and 

is still considering performance context 

as provided in the 1995 Rules. 

• DOICP.52 The June 2020 Rule added 

violations of SCRA and the MLA to the 

list of enumerated credit-related 

violations considered when assessing a 

bank’s CRA performance. The addition 

of these violations codified existing 

policy under the 1995 Rules, and, 

therefore, did not substantively alter 

requirements for OCC-regulated bank 

CRA examinations.53

• Strategic plans.54 As of October 1, 

2020, OCC-regulated banks operating 

under a strategic plan and those that 

submitted new strategic plans for 

approval could create one or more target 

market assessment areas, as permitted in 

12 CFR 25.18(g)(2) of the June 2020 

Rule, in addition to the bank’s 

assessment areas delineated under 12 

CFR 25.41 of the 1995 Rules.55

• Activity location.56 The June 2020 

Rule provided for the allocation of the 

dollar value of qualifying activities 

across multiple assessment areas in 12 

CFR 25.24(b)(2). This provision of the 

June 2020 Rule took effect October 1, 

2020.57

• Content and availability of the 

public file.58 As of October 1, 2020, the 

OCC required OCC-regulated banks to 

make the public file information 

required by the June 2020 Rule available 

to the public in a paper or electronic 

form. The OCC advised that OCCregulated banks could comply with this 

requirement by making the public file 

available solely on their websites.59

• Public notice by banks.60 The OCC 

required OCC-regulated banks to 

comply with the June 2020 Rule’s 

public notice requirements by March 1, 

2021. To comply with the public notice 

requirements, OCC guidance permitted 

these banks to display the notice in their 

main office and branch office locations 

in either paper or an electronic format, 

such as a digital display. In addition to 

the requirement for display of the public 

notice in one of these formats, OCC 

guidance also permitted these banks to 

post the notice on their websites.61

As noted, it is the intention of the 

OCC that the June 2020 Rule and related 

guidance will remain in effect until 

such time as the OCC issues 

replacement rules associated with this 

proposal. 

In addition to providing guidance on 

the above provisions that took effect 

October 1, 2020, the OCC also provided 

guidance on other issues, including the 

circumstances under which OCCregulated banks would receive credit for 

activities outside of their assessment 

areas, the definition of disaster area (a 

term the June 2020 Rule did not define), 

and consideration of affiliate activities 

through April 1, 2022. 

In considering these and other issues, 

the OCC identified areas where the June 

2020 Rule would benefit from 

clarification and revision, some of 

which the December 2020 NPR 

addressed. 

While the OCC’s June 2020 CRA Rule 

was an important step in modernizing 

the CRA regulatory framework, its 

implementation revealed to the OCC 

some of the rule’s complexities and 

demonstrated where there were 

opportunities for improvement. In 

particular, the partial implementation of 

the June 2020 Rule and the responses to 

the December 2020 NPR made clear the 

extent of the burden and complexities 

associated with the data collection and 

reporting integral to the June 2020 Rule. 

Moreover, the disproportionate effect of 

the COVID–19 pandemic on minorities 

and rural and LMI communities 

provided further evidence of the need to 

revisit the June 2020 Rule with the goal 

of better addressing the financial 

services needs of vulnerable 

communities coming out of the 

pandemic. 

In addition, through comment letters, 

stakeholders have identified specific 

opportunities for improvement of the 

June 2020 Rule in areas where the rule 

was not as clear and transparent as 

intended. For example, stakeholders 

have stated that the change in the 

treatment of affiliate activities was not 

clear because those activities are not 

mentioned explicitly in the rule. Rather, 

stakeholders stated that the lack of 

consideration for affiliate activities 

under the June 2020 Rule is inferred 

from the definition of ‘‘activity,’’ which 

is ‘‘a loan, investment, or service by a 

bank.’’ 62 Stakeholders also said that the 

rule is not clear on how the OCC would 

treat qualifying activities outside of 

banks’ assessment areas or the broader 

statewide or regional areas that includes 

a bank’s assessment areas for banks that 

are not evaluated under the general 

performance standards. A third example 

of where the June 2020 Rule could 

benefit from additional clarity involves 

the ‘‘CRA desert’’ definition, which as 

defined in the June 2020 Rule could 

encompass the vast majority of 

geographic areas in the country and may 

be too general to ensure consistent 

application. 

Stakeholder feedback on the lack of 

clarity with certain aspects of the June 

2020 Rule and the OCC’s experience 

with its partial implementation 

highlight that opportunities exist for 

improvements to a modernized CRA 

regulatory framework. Such 

improvements could be achieved 

through a joint rulemaking that 

leverages these lessons learned as well 

as the other feedback the Agencies have 

received since issuance of the June 2020 

Rule. 

The OCC has reviewed the June 2020 

Rule with these considerations in mind. 

Based on this review, the OCC proposes 

to rescind the June 2020 Rule and 

replace it with rules based on the 1995 

Rules (subject to a minor change 

explained below), while simultaneously 

working with the Board and FDIC on a 

joint proposal to modernize the CRA 

rules.63 Both of these actions are 

discussed in more detail below. 

III. June 2020 Rule Proposed Rescission 

and Replacement 

The OCC’s initial reconsideration of 

the June 2020 Rule focused on (1) 

creating consistency and transparency 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52031 

64The OCC has CRA rulewriting authority for 

both Federal and State savings associations, in 

addition to national banks. See 12 U.S.C. 2905. 

in the rules applicable to IDIs; (2) 

limiting burden on banks, their 

communities, and examiners; and (3) 

ensuring that the OCC continues to 

advance the purpose of the CRA—to 

encourage banks to help meet the credit 

needs of their entire communities, 

including LMI neighborhoods, 

consistent with safe and sound 

operations. The OCC considered 

different options for a revised regulatory 

framework, including proposing a 

revised rule that retained aspects of the 

June 2020 Rule that stakeholders 

generally supported. The OCC 

determined, however, that proposing yet 

another regulatory framework would 

impose undue burden on banks, their 

communities, and examiners who 

would need to learn and implement a 

new framework that was neither the 

June 2020 Rule, the 1995 Rules, nor the 

prospective interagency CRA rules. 

Further, proposing a new rule that 

retained aspects of the June 2020 Rule 

would fail to harmonize the OCC’s rule 

with those of the Board and FDIC, 

potentially complicating an interagency 

rulemaking process by introducing 

unique OCC considerations regarding 

necessary changes to the regulatory 

framework and implementation of and 

transition to any prospective 

interagency final rules. 

In contrast, rescinding and replacing 

the June 2020 Rule with rules based on 

the 1995 Rules would provide 

consistency throughout the banking 

industry with respect to the rules that 

apply by statute to all IDIs. A consistent 

regulatory framework would facilitate 

an interagency rulemaking process 

because it would allow all the Agencies 

to propose common solutions for the 

same issues. Further, replacing the June 

2020 Rule with a regulatory framework 

that is familiar to all stakeholders would 

limit the burden associated with 

adapting to new rules. The partial 

implementation of the June 2020 Rule 

further limits the burden on 

stakeholders because much of the 1995 

regulatory framework remains in effect. 

Specifically, for most banks, reverting to 

rules based on the 1995 Rules would 

result in little change to how their CRA 

performance is evaluated, whereas 

retaining the June 2020 Rule or some 

other regulatory framework would 

require continued implementation 

actions on the part of banks and the 

OCC. Finally, reverting to rules based on 

the 1995 Rules would enable the OCC 

to continue to meet the requirements of 

the CRA by ensuring that examiners are 

evaluating banks’ CRA performance 

based on a proven framework that is 

focused on ensuring that banks meet the 

needs of LMI communities. 

A. Proposed 12 CFR Part 25 

The proposal would replace the June 

2020 Rule with a revised 12 CFR part 25 

based on the 1995 Rules. Under the 

proposal, 12 CFR part 25 would be 

applicable to national banks. The 

proposed 12 CFR part 25 would be 

substantively identical to the 1995 

Rules. Consequently, all definitions, 

performance tests and standards, and 

related data collection, recordkeeping, 

and reporting requirements would 

revert to those in place prior to the 

issuance of the June 2020 Rule. Further, 

the 1995 Rules’ public file and public 

notice requirements would replace the 

existing requirements. Proposed Subpart 

E would correct the 1995 Rules’ crossreferenced regulatory citation in 12 CFR 

25.62(a)(2) to the definition of ‘‘foreign 

bank,’’ which would read ‘‘12 CFR 

28.11(i).’’ 

B. Proposed 12 CFR Part 195 

The proposal would reinstate 12 CFR 

part 195 for savings associations.64

Under the proposal, the reinstated 12 

CFR part 195 would apply to both 

Federal savings associations regulated 

by the OCC and State savings 

associations regulated by the FDIC. 

Reinstating part 195 would enable the 

OCC to consult with the FDIC on the 

integration of the CRA rules applicable 

to national banks and savings 

associations as part of the interagency 

rulemaking process to ensure that the 

interests of both regulatory agencies and 

their regulated entities are considered. 

As with the proposed revised 12 CFR 

part 25, the proposed 12 CFR part 195 

would be substantively identical to the 

1995 Rules. 

In the alternative, the OCC is 

considering integrating parts 25 and 195 

into a single rule in part 25 applicable 

to both national banks and savings 

associations. An integrated part 25 rule 

applicable to both national banks and 

savings associations would be 

substantively the same as the separate 

rules. In an integrated rule in part 25, 

proposed Subpart E (Prohibition Against 

Use of Interstate Branches Primarily for 

Deposit Production) would apply only 

to national banks. The OCC requests 

specific comment on whether: 

The OCC should reinstate separate 

rules for national banks and savings 

associations or integrate the rules so 

that part 25 is applicable to both 

national banks and savings 

associations. 

C. Summary of Proposed Rules 

As with the 1995 Rules, the proposed 

rules would provide for different 

evaluation methods to respond to basic 

differences in banks’ structures and 

operations. The proposed rules would 

provide (1) a streamlined assessment 

method for small banks that emphasizes 

lending performance; (2) an assessment 

method for intermediate small banks 

(ISB) that considers lending and CD 

activities; (3) an assessment method for 

large, retail banks that focuses on 

lending, investment, and service 

performance; and (4) an assessment 

method for wholesale and limitedpurpose banks based on CD activities. 

Further, the proposed rules also would 

give any bank, regardless of size or 

business strategy, the choice to be 

evaluated under a strategic plan. 

Under the proposed performance tests 

and standards, an examiner would 

consider a bank’s performance context 

in assessing its CRA performance. 

Specifically, an examiner would review 

demographic and economic data about 

the bank’s assessment area(s) and 

information about local economic 

conditions, the institution’s major 

business products and strategies, and its 

financial condition, capacity, and ability 

to lend or invest in its community. The 

examiner also would review 

information a bank chooses to provide 

about lending, investment, and service 

opportunities in its assessment areas. 

Banks would identify one or more 

assessment areas within which 

examiners would evaluate CRA 

performance. In most cases, a bank 

would delineate a town, municipality, 

county, some other political 

subdivision, or an MSA where its main 

office, branches, and deposit-taking 

ATMs are located and a substantial 

portion of its loans are made as an 

assessment area. If a bank chooses, 

however, its assessment areas would not 

need to coincide with the boundaries of 

one or more political subdivisions (e.g., 

counties, cities, and towns or MSAs), so 

long as the adjustments to those 

boundaries reflect the areas that the 

bank reasonably could serve, meet 

regulatory requirements, and do not 

arbitrarily exclude LMI census tracts. 

Large banks, and in some 

circumstances, other banks, would need 

to collect, maintain, and report certain 

data related to the proposed 

performance tests and standards. The 

OCC would make bank CRA data 

available through individual and 

aggregate disclosure statements. Banks 

also would make CRA-related 

52032 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

65The proposed rules also include the 2005 

substantive revisions to the 1995 regulatory 

framework (e.g., the small bank and ISB asset-size 

thresholds and associated changes and the 

inclusion of activities to revitalize and stabilize 

distressed or underserved rural areas and 

designated in the CD definition) as well as other 

revisions made to the 1995 Rules since they were 

adopted by the Agencies. See 70 FR 44256 (Aug. 2, 

2005). 

66The applicable proposed performance tests and 

standards would be based on the asset size of a 

bank. The asset-size thresholds for determining 

whether a bank is a large bank, ISB, or small bank 

would be adjusted annually based on the Consumer 

Price Index and be aligned with the current asset 

size thresholds in the Board and FDIC rules. See 12 

CFR parts 228 and 345. 

67See supra note 53. 

68 12 CFR part 1003. 

69Public Law 79–404, 60 Stat. 237 (1946), 

codified at 5 U.S.C. 500 et seq. 

70 Information related to the June 2020 Rule 

implementation is discussed in Section II.C. 

information available in their public 

files and inform the public through a 

CRA notice in specified locations. 

For a more detailed description of the 

1995 Rules, please see the 

SUPPLEMENTAL INFORMATION section of 

the Federal Register document at: 60 FR 

22156 (May 4, 1995).65 The following is 

a summary of key provisions of the 

proposed rules. 

• Performance tests and standards.66

Æ The proposed rules’ small bank 

(i.e., banks with less than $330 million 

in assets) performance standards would 

establish a retail lending test for 

assessing CRA performance. The 

proposed small bank lending test may 

also consider CD loans. Qualified 

investments and CD services could be 

considered at the bank’s option for an 

‘‘outstanding’’ rating, but only if the 

bank meets or exceeds the lending test 

criteria in the small bank performance 

standards. 

Æ The proposed rules’ ISB (i.e., banks 

with asset sizes of at least $330 million 

and less than $1.322 billion) 

performance standards would assess 

CRA performance under the small bank 

retail lending test and a CD test. The ISB 

CD test would evaluate all CD activities 

together. 

Æ The proposed rules would establish 

lending, investment, and service tests 

applicable to large banks (i.e., banks 

with $1.322 billion or more in assets). 

The large bank lending and service tests 

would consider both retail and CD 

activity, while the investment test 

would focus on qualified investments as 

defined in the proposed rules. 

Æ The proposed rules would evaluate 

wholesale and limited purpose banks 

under a CD test that considers activities 

in a bank’s broader statewide or regional 

area as activities that benefit the bank’s 

assessment area. Activities outside of 

the broader statewide or regional area 

also would be considered if the bank 

has been responsive to needs in its 

assessment area. 

Æ All banks could elect to be 

evaluated under a strategic plan that 

sets out measurable goals for lending, 

investment, and services, as applicable, 

to achieve a ‘‘satisfactory’’ or 

‘‘outstanding’’ rating. The bank would 

develop a strategic plan with 

community input and the plan would be 

approved by the bank’s primary 

regulator. 

• DOICP. Under the proposal MLA 

and SCRA violations would not be 

included in the proposed rules’ 

enumerated list of violations considered 

in evaluating banks’ CRA performance. 

Nonetheless, examiners would continue 

to consider these violations in banks’ 

CRA performance evaluations based on 

guidance that predated the June 2020 

Rule.67

• Retail and CD Activities. Examiners 

would evaluate banks’ CRA 

performance based on retail lending 

(i.e., home mortgage loans, small 

business loans, small farm loans, and 

consumer loans, as applicable) and CD 

loans, qualified investments, and CD 

services as defined in the proposed 

rules and considered in the applicable 

performance tests and standards. 

• Assessment Areas. 

Æ Banks would delineate assessment 

areas that generally 

D Include the geographies (i.e., census 

tracts) where a bank has its main office, 

branches, and deposit-taking automated 

teller machines as well as the 

surrounding geographies where the 

bank has originated or purchased a 

substantial portion of its loans; and 

D Consist of one or more MSAs, 

metropolitan divisions, or political 

subdivisions with banks permitted to 

adjust the boundaries of their 

assessment areas to include only the 

portion of the political subdivision that 

banks can reasonably be expected to 

serve; and 

Æ Assessment areas would be 

required to 

D Consist of whole geographies, 

D Not reflect illegal discrimination, 

D Not arbitrarily exclude LMI 

geographies, and 

D Not extend substantially beyond an 

MSA or State boundary unless the 

bank’s assessment area is in a multistate 

MSA. 

• Data collection, recordkeeping, and 

reporting. 

Æ Banks other than small banks 

would collect, maintain, and report 

certain data related to small business 

loans, small farm loans, CD loans, and 

assessment areas. Banks subject to the 

Home Mortgage Disclosure Act (HMDA) 

reporting requirements 68 also would 

report home mortgage lending outside of 

the MSAs where the bank has a home 

or branch office. The proposed rules 

also would include certain optional data 

collection and reporting. 

Æ The proposal would reinstate 

additional public file and public notice 

requirements eliminated under the June 

2020 Rule regarding the content of the 

public file and the location of the public 

file and public notices. 

• Ratings. Examiners would 

determine ratings as provided in 

proposed Appendix A. 

IV. Transition Considerations 

As discussed above, the June 2020 

Rule included a transition provision, 

effective October 1, 2020, to provide for 

an orderly move to the new regulatory 

framework. As a result, many aspects of 

the 1995 Rules remain in effect, limiting 

the potential disruption associated with 

the proposed reversion to CRA rules 

based on the 1995 Rules. Therefore, the 

OCC is considering an effective date of 

January 1, 2022, for any final rules, 

provided they are published by 

December 1, 2021. A January 1, 2022, 

effective date would provide all 

stakeholders with certainty regarding 

the applicable rules and would 

eliminate the need for banks to continue 

to expend resources developing new 

systems necessary for compliance with 

the June 2020 Rule. 

The OCC recognizes that banks have 

relied in part on the June 2020 Rule in 

planning for their ongoing compliance 

with the CRA. Following publication of 

any final rules pertaining to this 

proposal, banks would have a minimum 

of 30 days, as required by the 

Administrative Procedures Act,69 before 

they would be required to comply with 

most of the provisions described in the 

proposed rules. However, given the 

partial implementation of the June 2020 

Rule, its replacement would result in 

certain changes to the regulatory 

framework that impact, among other 

things, how banks would be evaluated 

and what activities would receive 

consideration in CRA examinations. The 

OCC proposes to address such 

considerations, as discussed below.70

While the proposal does not include 

particular transition provisions in the 

proposed rule text, the OCC invites 

comment on whether, for purposes of 

any final rules the OCC should amend 

the proposed rule text to address any or 

all of the following transition issues. 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52033 

71See OCC Bulletin 2021–5, Community 

Reinvestment Act: Bank Type Determinations, 

Distressed and Underserved Areas, and Banking 

Industry Compensation Provisions of the June 2020 

CRA (January 29, 2021). 

72OCC Senior Deputy Comptroller and Chief 

Counsel’s Interpretation: Community Reinvestment 

Act Qualifying (CRA) Activities Conducted by a 

National Bank’s or Savings Association’s 

Subsidiaries and Affiliates, Including Nonbank 

Parent and Sister Companies of a National Bank or 

Savings Association Under Certain Circumstances, 

Can Receive CRA Credit Under the June 2020 CRA 

Final Rule (January 4, 2021), available at https://

www.occ.gov/topics/charters-and-licensing/ 

interpretations-and-actions/2021/interpretive-letteraffiliates.pdf. 

73OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

74See 12 CFR part 25, Appendix C. 

A. Bank Type Changes 

The June 2020 Rule resulted in a 

change in bank type for some banks due 

to changes in the bank asset-size 

thresholds. For example, certain ISBs 

became small banks (i.e., banks with 

assets between $326 million and $600 

million) and certain large banks became 

intermediate banks (i.e., banks with 

assets between $1.305 billion and $2.5 

billion). These banks are subject to 

different performance standards for 

activities conducted on or after October 

1, 2020, than they were prior to that 

date. In addition, OCC-regulated large 

banks under the 1995 Rules that became 

intermediate banks under the June 2020 

Rule were no longer required to collect 

data for calendar years 2021 forward 

and report data for calendar years 2022 

forward. 

Under the proposed rules, many of 

these banks would transition back to 

their prior bank type based on the 

proposed asset-size thresholds (i.e., 

small banks would be banks with less 

than $330 million in assets, ISBs would 

be banks with at least $330 million but 

less than $1.322 billion, and large banks 

would be banks with assets of $1.322 

billion or more, as adjusted). As a result, 

reinstated data collection and reporting 

requirements would apply to banks 

redesignated as large banks under the 

proposed rules. 

The OCC proposes to treat banks that 

would transition from ISBs to large 

banks under the proposed rules 

consistent with how the OCC has 

historically treated these banks. Under 

the 1995 Rules, the OCC would have 

required banks that transitioned from 

ISBs to large banks to begin collecting 

loan data as provided in proposed 12 

CFR 25.42 one year after the bank type 

changed. Therefore, if the proposed 

rules take effect on January 1, 2022, the 

OCC would require newly classified 

large banks to begin collecting data on 

January 1, 2023, and reporting required 

and optional data the following year. 

For banks that would transition from 

small bank to ISBs under the proposed 

rules, the OCC would not provide 

additional time to transition to the ISB 

performance standards; however, the 

OCC would consider the change in bank 

type as part of the bank’s performance 

context when evaluating the bank’s CRA 

performance. Additionally, the OCC 

intends to continue to issue bulletins to 

inform the public of the annual bank 

asset-size threshold adjustments based 

on changes in the Consumer Price Index 

for Urban Wage Earners and Clerical 

Workers (CPI–W).71 The OCC requests 

specific comment on whether: 

The OCC should apply its historical policy 

for newly designated large banks’ data 

collection, recordkeeping, and reporting 

requirements, with the result that certain 

large banks under the final rules would not 

collect data until January 2023 and would 

not report it until January 2024. In the 

alternative, should banks that were formerly 

large banks under the 1995 Rules and that 

return to large bank status as proposed begin 

data collection in 2022? Are there alternative 

transition policies related to data collection, 

recordkeeping, and reporting requirements 

that the OCC should consider? 

The OCC’s plan to consider changes from 

small bank to ISB bank type as part of 

performance context is a reasonable means of 

addressing the transition from the June 2020 

Rule to the proposed rules’ bank asset-size 

thresholds. 

B. Qualifying Activities 

As of the effective date of the final 

rules, the OCC would rescind the 

qualifying activities criteria in the June 

2020 Rule and replace it with the 1995 

Rules’ home mortgage loan, small 

business loan, small farm loan, 

consumer loan, and CD definitions. 

Also, as of the effective date of any final 

rules, the definitions related to the 

qualifying activities criteria in the June 

2020 Rule, including the compensation, 

distressed area, underserved area, CRAeligible business, CRA-eligible farm, 

small loans to businesses, small loans to 

farms, partially, and primarily 

definitions would revert to the 

applicable definitions under the 1995 

Rules or be eliminated. 

The OCC proposes to address these 

changes by explaining that OCCregulated banks would receive 

consideration in their CRA 

examinations for activities that met the 

qualifying activities criteria or 

definitions that were in effect at the 

time that the bank conducted those 

activities. Consistent with the OCC’s 

historical practice, the OCC also would 

apply this policy to legally binding 

commitments to lend or invest. For 

banks or interested parties that received 

confirmation letters for qualifying 

activities under the June 2020 Rule, 

those letters would be applicable while 

the June 2020 Rule was in effect but 

would not apply to activities conducted 

after any final rules’ effective date. The 

OCC believes this policy is reasonable 

because it honors the qualified status of 

activities when conducted by the bank. 

The OCC requests specific comment on 

whether: 

The proposal to consider activities based 

on whether they qualified at the time the 

activities were conducted is a reasonable 

approach to addressing the changes to the 

type of activities that will receive 

consideration in CRA examinations. 

C. Affiliates 

As explained in a January 2021 

interpretive letter, under the June 2020 

Rule, generally, a bank would not 

receive CRA consideration for affiliate 

activities, including activities 

conducted by the nonbank parent and 

sister companies of the bank, unless the 

bank could demonstrate that it provided 

financing for or otherwise supported the 

qualifying activities of these affiliates.72

This policy represented a significant 

change from how the OCC considered 

affiliate activities under the 1995 Rules, 

and, as such, the OCC used the 

flexibility provided by the transition 

provision to delay compliance with this 

aspect of the June 2020 Rule until April 

1, 2022.73

The proposal would consider affiliate 

activities consistent with their treatment 

under the 1995 Rules and the guidance 

in the Q&As, which permit banks to 

elect to include affiliate activities in 

their CRA evaluations, subject to certain 

limitations. Consequently, the OCC 

would rescind the January 2021 

interpretive letter regarding affiliate 

activities as of the effective date of any 

final rules. 

D. Outside Assessment Area Activities 

Under the 1995 Rules, the agencies 

provided consideration for activities 

conducted outside banks’ assessment 

areas in limited circumstances. 

Specifically, under the 1995 Rules, the 

performance tests and standards 

generally provided that the Agencies 

would evaluate an IDI’s CRA 

performance in its assessment areas.74

In addition, the 1995 Rules provided 

that the Agencies may consider CD 

activities that benefit the broader 

statewide or regional areas that include 

52034 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

75 Id. 

76 Id. 

77Q&A §ll.12(h)—6; Q&A §ll.12(h)—7; and 

Q&A §ll.23(a)—2. 

78See OCC Bulletin 2020–99, Community 

Reinvestment Act: Key Provisions of the June 2020 

CRA Rule and Frequently Asked Questions 

(November 9, 2020). 

an IDI’s assessment areas.75 With 

respect to wholesale and limited 

purpose institutions, the 1995 Rules 

provided that the Agencies may 

consider CD activities nationwide if the 

IDI had adequately addressed the needs 

of its assessment areas.76 The Q&As 

clarified the circumstances in which the 

Agencies would provide consideration 

for activities in the broader statewide or 

regional area but generally did not 

provide consideration for activities 

nationwide.77

In contrast, the June 2020 Rule 

provided nationwide consideration of 

qualifying activities for banks evaluated 

under the general performance 

standards. To provide consistency 

across bank type during the transition 

period, the OCC also explained in 

guidance that any OCC-regulated bank 

may receive consideration for qualifying 

activities outside of its assessment areas 

that do not directly or indirectly serve 

its assessment areas provided certain 

conditions were met.78 The OCC 

requests specific comment on whether: 

The OCC should continue to provide 

consideration for activities that do not 

directly or indirectly serve a bank’s 

assessment areas or the broader statewide or 

regional areas that include a bank’s 

assessment areas under the proposed rules. 

What conditions, if any, should be met in 

order for the OCC to provide consideration 

for activities that do not directly or indirectly 

serve a bank’s assessment areas or the 

broader statewide or regional areas that 

include a bank’s assessment areas? 

E. CD Activity Confirmation Process and 

Illustrative List 

Stakeholders generally supported the 

creation of the qualifying activities 

confirmation process and illustrative list 

in the June 2020 Rule. These provisions 

clarified the activities that would 

receive consideration in an OCCregulated bank’s CRA examination. 

Because the qualifying activity 

confirmation process is procedural and 

applies facts regarding a potential 

qualifying activity to qualifying activity 

criteria set forth in the June 2020 Rule, 

the OCC could have interpreted and 

provided guidance on which activities 

would receive consideration in CRA 

examinations without codifying the 

process in the June 2020 Rule. 

The OCC is considering whether to 

implement a qualifying activities 

confirmation process based on the CD 

definition in the 1995 Rules, as 

interpreted through the Q&As, while the 

OCC is working on the interagency CRA 

rulemaking process. Providing for a 

qualifying activities confirmation 

process outside of the CRA rules would 

be the least disruptive outcome for 

banks and interested parties that have 

found the process beneficial. Moreover, 

maintaining a confirmation process is 

not inconsistent with the Board ANPR, 

which included a suggestion related to 

a qualifying activities confirmation 

process. The OCC also would maintain 

the illustrative list of qualifying 

activities on its website as a reference 

for banks to determine whether 

activities that they conducted while the 

June 2020 Rule was in effect are eligible 

for CRA consideration; however, 

activities included on the illustrative 

list may not receive consideration if 

conducted after the effective date of the 

final rules. The OCC requests specific 

comment on whether: 

The OCC should implement a CD activity 

confirmation process during the period 

between the rescission of the June 2020 Rule 

and the issuance of prospective joint 

interagency rules. 

F. Strategic Plans 

The June 2020 Rule revised the 

requirements for requesting approval of 

a strategic plan. Among other things, the 

June 2020 Rule permitted banks 

requesting approval for a strategic plan 

to include target market assessment 

areas. For purposes of any final rules, 

the OCC proposes to maintain any 

strategic plans approved by the OCC 

under the June 2020 Rule and would not 

require these banks to amend their 

strategic plans. The OCC believes that 

permitting strategic plan banks to 

maintain their target market assessment 

areas is not inconsistent with proposed 

12 CFR 25.41 and would cause the least 

disruption during the transition from 

the OCC’s June 2020 Rule to any future 

interagency final rules. The OCC 

requests specific comment on whether: 

The OCC’s proposed plan to maintain 

strategic plans approved under the June 2020 

Rule with target market assessment areas is 

a reasonable way of addressing this transition 

consideration. 

G. June 2020 Rule Subpart E 

Subpart E of the June 2020 Rule 

includes the data collection, 

recordkeeping, and reporting 

provisions. Most of these provisions 

were subject to a January 1, 2023, or 

January 1, 2024, compliance date, and, 

therefore, do not require any transition. 

However, the changes to the public file 

requirements took effect October 1, 

2020. These changes reduced the 

information required in the public file 

and changed the requirements for how 

an OCC-regulated bank makes the 

public file available to the public, 

including permitting these banks to 

make the public file available solely on 

their websites. Under the proposed 

rules, banks would need to include 

additional information in their public 

file and make the file available at their 

main office, and for interstate banks, at 

one branch in each State and more 

limited information at each branch. 

Since the proposed rules would impose 

additional public file content and 

availability requirements, the OCC 

expects to provide in the final rules that 

banks would comply with these 

requirements no later than three months 

after the effective date of the final rules. 

The OCC specifically requests comment 

on whether: 

Three months is sufficient time for banks 

to make the changes necessary to comply 

with the public file content and availability 

requirements of the proposed rules. 

The OCC should enact a transition period 

for the public notice requirements that took 

effect on October 1, 2020. 

H. Summary Chart of Proposed 

Transition Considerations 

OCC RESCIND AND REPLACE TRANSITION CONSIDERATIONS

Description of the 

proposed provision Proposed transition plan 

Bank Type Changes 

Certain small banks (i.e., banks 

with at least $330 million but less 

than $600 million in assets).

These small banks would become ISBs as of the effective date of any final rules. The change in bank type 

would be considered as part of performance context when evaluating the bank’s CRA performance. No 

additional transition time would be provided for adjusting to the ISB performance standards. 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52035 

79See supra note 7. 

80See supra note 7. 

OCC RESCIND AND REPLACE TRANSITION CONSIDERATIONS—Continued 

Description of the 

proposed provision Proposed transition plan 

Certain ISBs (i.e., banks with at 

least $1.322 billion but not more 

than $2.5 billion in assets).

These ISBs would become large banks as of the effective date of any final rules. The newly classified 

large banks would (1) begin collecting data to be evaluated under the large bank lending, investment, 

and service tests on January 1, 2023, and (2) report required and optional data the following year. 

Qualifying Activities 

Consideration of retail lending (i.e., 

home mortgage loans, small 

loans to businesses, small loans 

to farms, and consumer loans) 

and CD activities (i.e., CD loans, 

CD investments, and CD services—including legally binding 

commitments to lend and invest) 

and their related definitions.

The proposed rules’ revised definitions would apply as of the effective date of any final rules. Banks would 

receive consideration in their CRA examinations for activities that met the qualifying activities criteria or 

definitions that were in effect at the time the bank conducted these activities. 

Qualifying activities confirmation letters issued under the June 2020 

Rule.

Confirmation letters would be applicable while the June 2020 Rule was in effect but would not apply to activities conducted after any final rules’ effective date. 

Affiliates 

Affiliate activities conducted after 

the effective date of any final 

rules.

Banks may to elect to include affiliate activities in their CRA evaluations, subject to certain limitations. The 

OCC also would rescind the January 2021 interpretive letter regarding affiliate activities as of the effective date of any final rules. 

Outside Assessment Area Activities 

Consideration of activities conducted outside bank assessment 

areas.

The OCC is considering whether it should continue to provide consideration for activities that do not directly or indirectly serve a bank’s assessment areas or the broader statewide or regional areas that include a bank’s assessment areas. 

CD Activity Confirmation Process and Illustrative List 

CD activities confirmation process The OCC is considering providing a process for qualifying activities confirmation outside of the CRA rules. 

Qualifying activities illustrative list .. The OCC would maintain the qualifying activities illustrative list on its website as a reference for banks to 

determine whether activities conducted while the June 2020 Rule was in effect are eligible for CRA consideration. 

Strategic Plans 

Strategic plans with target market 

assessment areas approved 

under the June 2020 Rule.

The OCC would maintain any strategic plans approved by the OCC under the June 2020 Rule and would 

not require these banks to amend their strategic plans. 

June 2020 Rule Subpart E 

CRA public file content and location 

requirements.

Banks would comply with the additional public file content and availability requirements no later than three 

months after the effective date of any final rules. 

CRA notice requirements ................ The OCC would not provide additional time for banks to comply with the CRA notice requirements. 

V. Interagency Rulemaking 

As noted, on July 20, 2021, the 

Agencies announced they had initiated 

an interagency rulemaking, stating that 

they are ‘‘committed to working together 

to jointly strengthen and modernize 

rules implementing the [CRA].’’ 79 The 

Agencies’ announcement stated that 

‘‘[j]oint agency action will best achieve 

a consistent, modernized framework 

across all banks to help meet the credit 

needs of the communities in which they 

do business, including [LMI] 

neighborhoods.’’ 80 A reinstatement of 

the 1995 Rules would allow for an 

orderly transition to future, modernized 

CRA rules. 

VI. Regulatory Analysis 

A. Regulatory Flexibility Act 

In general, the Regulatory Flexibility 

Act (RFA) (5 U.S.C. 601 et seq.) requires 

an agency, in connection with a 

proposed rule, to prepare an Initial 

Regulatory Flexibility Analysis 

describing the impact of the rule on 

small entities (defined by the Small 

Business Administration for purposes of 

the RFA to include commercial banks 

and savings institutions with total assets 

of $600 million or less and trust 

companies with total assets of $41.5 

million of less). However, under section 

605(b) of the RFA, this analysis is not 

required if the agency certifies that the 

rule would not have a significant 

economic impact on a substantial 

number of small entities and publishes 

its certification and a short explanatory 

statement in the Federal Register along 

with its rule. 

The OCC currently supervises 

approximately 669 small entities, all of 

which may be impacted by the proposed 

rules. The OCC estimates the annual 

cost for small entities to comply with 

the proposed rules would be 

approximately $1,824 per bank ($114 

per hour × 16 hours). In general, the 

52036 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

OCC classifies the economic impact on 

an individual small entity as significant 

if the total estimated impact in one year 

is greater than 5 percent of the small 

entity’s total annual salaries and 

benefits or greater than 2.5 percent of 

the small entity’s total non-interest 

expense. 

Based on these thresholds, the OCC 

estimates that, if implemented, the 

proposed rules would have a significant 

economic impact on zero small entities, 

which is not a substantial number. 

Therefore, the OCC certifies that the 

proposed rules would not have a 

significant economic impact on a 

substantial number of small entities. 

B. Paperwork Reduction Act 

Certain provisions of the proposed 

rules contain ‘‘collection of 

information’’ requirements within the 

meaning of the Paperwork Reduction 

Act (PRA) of 1995 (44 U.S.C. 3501– 

3521). In accordance with the 

requirements of the PRA, the OCC may 

not conduct or sponsor, and a 

respondent is not required to respond 

to, an information collection unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. The OCC reviewed the 

proposed rules and determined that it 

revises certain information collection 

requirements previously cleared by 

OMB under OMB Control No. 1557– 

0160. The OCC has submitted the 

revised information collection to OMB 

for review under section 3507(d) of the 

PRA (44 U.S.C. 3507(d)) and section 

1320.11 of the OMB’s implementing 

regulations (5 CFR1320). 

Under the proposed rules: 

• 12 CFR 25.25(b) and 195.25(b)— 

Requests for designation as a wholesale 

or limited purpose bank would be made 

in writing with the OCC at least three 

months prior to the proposed effective 

date of the designation. 

• 12 CFR 25.27 and 195.27—Strategic 

plans would be submitted at least three 

months prior to proposed effective 

dates. Plans would include measurable 

goals and address all the performance 

categories. Plans would include a 

description of informal efforts to solicit 

public suggestions, any written public 

comments received, and if revised 

pursuant to public comment, a copy of 

the initial plan. Amendments to plans 

could be submitted in the case of a 

change in material circumstances. 

• 12 CFR 25.42(a) and 195.42(a)— 

Large banks would collect and maintain 

certain small business and small farm 

loan data in a machine-readable form 

and report it annually pursuant to 12 

CFR 25.42(b)(1) and 195.42(b)(1). 

• 12 CFR 25.42(b)(2) and 

195.42(b)(2)—Large banks would report 

annually in machine readable form the 

aggregate number and aggregate amount 

of community development loans 

originated or purchased. 

• 12 CFR 25.42(b)(3) and 

195.42(b)(3)—Large banks, if subject to 

reporting under HMDA, would report 

the location of each home mortgage loan 

application, origination, or purchase 

outside the MSAs where the bank has a 

home or branch office. 

• 12 CFR 25.42(c)(1) and 

195.42(c)(1)—All banks could collect 

and maintain in machine readable form 

certain data for consumer loans 

originated or purchased by a bank for 

consideration under the lending test. 

Under 12 CFR 25.42(c)(2)–(4) and 

195.42(c)(2)–(4), other information 

could be included concerning a bank’s 

lending performance, including 

additional loan distribution data. 

• 12 CFR 25.42(d) and 195.42(d)— 

Banks that elect to have the OCC 

consider loans by an affiliate, for 

purposes of the lending or community 

development test or an approved 

strategic plan, would collect, maintain, 

and report the data that the bank would 

have collected, maintained, and 

reported pursuant to 12 CFR 25.42(a)– 

(c) or 195.42(a)–(c), respectively, had 

the loans been originated or purchased 

by the bank. For home mortgage loans, 

the bank would also be prepared to 

identify the home mortgage loans 

reported under HMDA by the affiliate. 

• 12 CFR 25.42(e) and 195.42(e)— 

Banks that elect to have the OCC 

consider community development loans 

by a consortium or a third party, for 

purposes of the lending or community 

development tests or an approved 

strategic plan, would report for those 

loans the data that the bank would have 

reported under 12 CFR 25.42(b)(2) or 

195.42(b)(2), respectively, had the loans 

been originated or purchased by the 

bank. 

• 12 CFR 25.42(f) and 195.42(f)— 

Small banks that qualify for evaluation 

under the small bank performance 

standards but elect evaluation under the 

lending, investment, and service tests 

would collect, maintain, and report the 

data required for other banks under 12 

CFR 25.42(a), 25.42(b), 195.42(a), and 

195.42(b). 

• 12 CFR 25.42(g) and 195.42(g)— 

Banks, except those that were a small 

bank during the prior calendar year, 

would collect and report to the OCC by 

March 1 each year a list for each 

assessment area showing the 

geographies within the area. 

• 12 CFR 25.43(a) and 195.43(a)—All 

banks would maintain a public file that 

contains with certain specified details: 

all written comments and responses; a 

copy of the public section of the bank’s 

most recent CRA performance 

evaluation; a list of the bank’s branches; 

a list of the branches opened or closed; 

a list of services offered; and a map of 

each assessment area delineated by the 

bank. 

• 12 CFR 25.43(b) and 195.43(b)— 

Large banks would include in their 

public files certain information 

pertaining to the institution and its 

affiliates, if applicable, for each of the 

prior two calendar years. 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, they would include the 

number and amount of loans: to low-, 

moderate-, middle-, and upper-income 

individuals; located in low-, moderate- 

, middle-, and upper-income census 

tracts; and located inside the bank’s 

assessment area(s) and outside the 

bank’s assessment area(s); and their 

CRA Disclosure Statement. A bank 

required to report home mortgage loan 

data pursuant to 12 CFR part 1003 

would include a written notice that the 

institution’s HMDA Disclosure 

Statement may be obtained on the 

Consumer Financial Protection Bureau’s 

(Bureau’s) website. A bank that elected 

to have the OCC consider the mortgage 

lending of an affiliate would include the 

name of the affiliate and a written notice 

that the affiliate’s HMDA Disclosure 

Statement may be obtained at the 

Bureau’s website. A small bank or a 

bank that was a small bank during the 

prior calendar year would include: its 

loan-to-deposit ratio for each quarter of 

the prior calendar year and, at its 

option, additional data on its loan-todeposit ratio; and the information 

required for other banks by 12 CFR 

24.43(b)(1) or 195.43(b)(1), if it has 

elected to be evaluated under the 

lending, investment, and service tests. A 

bank that has been approved to be 

assessed under a strategic plan would 

include in its public file a copy of that 

plan. A bank that received a less than 

satisfactory rating during its most recent 

examination would 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 would update the 

description quarterly. 

• 12 CFR 25.43(c) through (e) and 12 

CFR 195.43(c) through (e)—A bank 

would make available to the public for 

inspection upon request and at no cost 

the information required in these 

provisions at the main office or branch 

as specified. Upon request, bank would 

provide copies, either on paper or in 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52037 

another form acceptable to the person 

making the request, of the information 

in its public file. A bank would ensure 

that this information is current as of 

April 1 of each year. 

OCC Title of Information Collection: 

Community Reinvestment Act. 

Frequency: On Occasion. 

Affected Public: Businesses or other 

for-profit. 

Total estimated annual burden: 

113,351 hours. 

Comments are invited on: 

a. Whether the collections of 

information are necessary for the proper 

performance of the OCC’s functions, 

including whether the information has 

practical utility; 

b. The accuracy or the estimate of the 

burden of the information collections, 

including the validity of the 

methodology and assumptions used; 

c. Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

d. Ways to minimize the burden of the 

information collections on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology; and 

e. Estimates of capital or startup costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

C. Unfunded Mandates Reform Act of 

1995 

The OCC considers whether a 

proposed rule includes a Federal 

mandate, under the Unfunded Mandates 

Reform Act of 1995 (UMRA) (2 U.S.C. 

1501 et seq.), that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year ($158 million as 

adjusted annually for inflation). The 

UMRA does not apply to rules that 

incorporate requirements specifically 

set forth in law. 

The OCC estimates that expenditures 

associated with mandates in the 

proposed rules would be approximately 

$6 million. Therefore, the OCC 

concludes the proposed rules would not 

result in an expenditure of $158 million 

or more annually by State, local, and 

tribal governments or by the private 

sector. 

D. Riegle Community Development and 

Regulatory Improvement Act 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act of 1994 (12 

U.S.C. 4802(a)), in determining the 

effective date and administrative 

compliance requirements for new rules 

that impose additional reporting, 

disclosure, or other requirements on 

insured depository institutions, the OCC 

will consider, consistent with principles 

of safety and soundness and the public 

interest (1) any administrative burdens 

that the proposed rules would place on 

depository institutions, including small 

depository institutions and customers of 

depository institutions; and (2) the 

benefits of the proposed rules. The OCC 

requests comment on (1) any 

administrative burdens that the 

proposed rules would place on 

depository institutions, including small 

depository institutions, and their 

customers and (2) the benefits of the 

proposed rules that the OCC should 

consider in determining the effective 

date and administrative compliance 

requirements for any final rules. 

List of Subjects 

12 CFR Part 25 

Community development, Credit, 

Investments, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

12 CFR Part 195 

Banks, Banking, Community 

development, Credit, Investments, 

Reporting and recordkeeping 

requirements. 

Authority and Issuance 

For the reasons discussed in the 

preamble, and under the authority of 12 

U.S.C. 93a, the Office of the Comptroller 

of the Currency proposes to amend 12 

CFR part 25 and proposes to add part 

195 as follows: 

■ 1. Part 25 is revised to read as follows: 

PART 25—COMMUNITY 

REINVESTMENT ACT AND 

INTERSTATE DEPOSIT PRODUCTION 

REGULATIONS 

Subpart A—General 

Sec. 

25.11 Authority, purposes, and scope. 

25.12 Definitions. 

Subpart B—Standards for Assessing 

Performance 

Sec. 

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 

Sec. 

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 

Sec. 

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 2908, and 3101 through 

3111. 

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 

52038 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

(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 (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. 

§ 25.12 Definitions. 

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) 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 the 

loan is for a multifamily dwelling (as 

defined in § 1003.2(n) 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 § 1026.2 of this 

title; 

(3) Other secured consumer loan, 

which is a secured consumer loan that 

is not included in one of the other 

categories of consumer loans; and 

(4) 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 

closed-end mortgage loan or an openend line of credit as these terms are 

defined under § 1003.2 of this title, and 

that is not an excluded transaction 

under § 1003.3(c)(1) through (10) and 

(13) 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 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52039 

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 $1.322 

billion. Intermediate small bank means 

a small bank with assets of at least $330 

million as of December 31 of both of the 

prior two calendar years and less than 

$1.322 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). 

Subpart B—Standards for Assessing 

Performance 

§ 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), 

(3), and (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), (2), or (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 moderateincome geographies or individuals, only 

if consistent with safe and sound 

operations. 

(e) Low-cost education loans provided 

to low-income borrowers. In assessing 

and taking into account the record of a 

bank under this part, the OCC considers, 

as a factor, low-cost education loans 

originated by the bank to borrowers, 

particularly in its assessment area(s), 

who have an individual income that is 

less than 50 percent of the area median 

income. For purposes of this paragraph, 

‘‘low-cost education loans’’ means any 

education loan, as defined in section 

140(a)(7) of the Truth in Lending Act 

(15 U.S.C. 1650(a)(7)) (including a loan 

under a state or local education loan 

program), originated by the bank for a 

student at an ‘‘institution of higher 

education,’’ as that term is generally 

defined in sections 101 and 102 of the 

Higher Education Act of 1965 (20 U.S.C. 

1001 and 1002) and the implementing 

regulations published by the U.S. 

Department of Education, with interest 

rates and fees no greater than those of 

52040 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

comparable education loans offered 

directly by the U.S. Department of 

Education. Such rates and fees are 

specified in section 455 of the Higher 

Education Act of 1965 (20 U.S.C. 

1087e). 

(f) Activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit 

unions. In assessing and taking into 

account the record of a nonminorityowned and nonwomen-owned bank 

under this part, the OCC considers as a 

factor capital investment, loan 

participation, and other ventures 

undertaken by the bank in cooperation 

with minority- and women-owned 

financial institutions and low-income 

credit unions. Such activities must help 

meet the credit needs of local 

communities in which the minorityand women-owned financial 

institutions and low-income credit 

unions are chartered. To be considered, 

such activities need not also benefit the 

bank’s assessment area(s) or the broader 

statewide or regional area that includes 

the bank’s assessment area(s). 

§ 25.22 Lending test. 

(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, 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 upperincome 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 upperincome 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. 

§ 25.23 Investment test. 

(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; 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52041 

(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. 

§ 25.24 Service test. 

(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 moderateincome 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-bymail programs) in low- and moderateincome geographies and to low- and 

moderate-income individuals; and 

(4) The range of services provided in 

low-, moderate-, middle-, and upperincome 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 that are not intermediate small 

banks. 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 

52042 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

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. 

(d) Small bank performance rating. 

The OCC rates the performance of a 

bank evaluated under this section as 

provided in appendix A of this part. 

§ 25.27 Strategic plan. 

(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 moderateincome 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 lendingrelated 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. 

§ 25.28 Assigned ratings. 

(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. 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52043 

(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 selfassessment; and any other relevant 

information. 

§ 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)), 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 

§ 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 deposittaking 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 

52044 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

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 alphanumeric 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 1003 

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 1003 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, 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 1003 

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 upperincome geographies; 

(ii) A list grouping each geography 

according to whether the geography is 

low-, moderate-, middle-, or upperincome; 

(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 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52045 

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 and the Federal Deposit 

Insurance Corporation, 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 195, 228, or 345 

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 1003 

of this title shall include in its public 

file a written notice that the institution’s 

HMDA Disclosure Statement may be 

obtained on the Consumer Financial 

Protection Bureau’s (Bureau’s) website 

at www.consumerfinance.gov/hmda. In 

addition, a bank that elected to have the 

OCC consider the mortgage lending of 

an affiliate shall include in its public 

file the name of the affiliate and a 

written notice that the affiliate’s HMDA 

Disclosure Statement may be obtained at 

the Bureau’s website. The bank shall 

place the written notice(s) in the public 

file within three business days after 

receiving notification from the Federal 

Financial Institutions Examination 

Council of the availability of the 

disclosure statement(s). 

(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 

52046 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

(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] 

Subpart E—Prohibition Against Use of 

Interstate Branches Primarily for 

Deposit Production 

§ 25.61 Purpose and scope. 

(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. 

§ 25.62 Definitions. 

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(i). 

(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. 

§ 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-todeposit 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-todeposit ratio, the OCC will make a 

credit needs determination for the bank 

as provided in § 25.64. 

§ 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 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52047 

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. 

§ 25.65 Sanctions. 

(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. 

Appendix A to Part 25—Ratings 

(a) Ratings in general. (1) In assigning a 

rating, the OCC evaluates a bank’s 

performance under the applicable 

performance criteria in this part, in 

accordance with §§ 25.21 and 25.28. This 

includes consideration of low-cost education 

loans provided to low-income borrowers and 

activities in cooperation with minority- or 

women-owned financial institutions and 

low-income credit unions, as well as 

adjustments on the basis of evidence of 

discriminatory or other illegal credit 

practices. 

(2) A bank’s performance need not fit each 

aspect of a particular rating profile in order 

to receive that rating, and exceptionally 

strong performance with respect to some 

aspects may compensate for weak 

performance in others. The bank’s overall 

performance, however, must be consistent 

with safe and sound banking practices and 

generally with the appropriate rating profile 

as follows. 

(b) Banks evaluated under the lending, 

investment, and service tests—(1) Lending 

performance rating. The OCC assigns each 

bank’s lending performance one of the five 

following ratings. 

(i) Outstanding. The OCC rates a bank’s 

lending performance ‘‘outstanding’’ if, in 

general, it demonstrates: 

(A) Excellent responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) A substantial majority of its loans are 

made in its assessment area(s); 

(C) An excellent geographic distribution of 

loans in its assessment area(s); 

(D) An excellent distribution, particularly 

in its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

bank; 

(E) An excellent record of serving the 

credit needs of highly economically 

disadvantaged areas in its assessment area(s), 

low-income individuals, or businesses 

(including farms) with gross annual revenues 

of $1 million or less, consistent with safe and 

sound operations; 

(F) Extensive 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; 

and 

(G) It is a leader in making community 

development loans. 

(ii) High satisfactory. The OCC rates a 

bank’s lending performance ‘‘high 

satisfactory’’ if, in general, it demonstrates: 

(A) Good responsiveness to credit needs in 

its assessment area(s), taking into account the 

number and amount of home mortgage, small 

business, small farm, and consumer loans, if 

applicable, in its assessment area(s); 

(B) A high percentage of its loans are made 

in its assessment area(s); 

(C) A good geographic distribution of loans 

in its assessment area(s); 

(D) A good distribution, particularly in its 

assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

bank; 

(E) A good record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Use of innovative or flexible lending 

practices in a safe and sound manner to 

address the credit needs of low- or moderateincome individuals or geographies; and 

(G) It has made a relatively high level of 

community development loans. 

(iii) Low satisfactory. The OCC rates a 

bank’s lending performance ‘‘low 

satisfactory’’ if, in general, it demonstrates: 

(A) Adequate responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) An adequate percentage of its loans are 

made in its assessment area(s); 

(C) An adequate geographic distribution of 

loans in its assessment area(s); 

(D) An adequate distribution, particularly 

in its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

bank; 

(E) An adequate record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Limited 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; 

and 

(G) It has made an adequate level of 

community development loans. 

(iv) Needs to improve. The OCC rates a 

bank’s lending performance ‘‘needs to 

improve’’ if, in general, it demonstrates: 

(A) Poor responsiveness to credit needs in 

its assessment area(s), taking into account the 

number and amount of home mortgage, small 

business, small farm, and consumer loans, if 

applicable, in its assessment area(s); 

(B) A small percentage of its loans are 

made in its assessment area(s); 

(C) A poor geographic distribution of loans, 

particularly to low- or moderate-income 

geographies, in its assessment area(s); 

(D) A poor distribution, particularly in its 

assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

bank; 

(E) A poor record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Little 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; 

and 

52048 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

(G) It has made a low level of community 

development loans. 

(v) Substantial noncompliance. The OCC 

rates a bank’s lending performance as being 

in ‘‘substantial noncompliance’’ if, in 

general, it demonstrates: 

(A) A very poor responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) A very small percentage of its loans are 

made in its assessment area(s); 

(C) A very poor geographic distribution of 

loans, particularly to low- or moderateincome geographies, in its assessment area(s); 

(D) A very poor distribution, particularly in 

its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

bank; 

(E) A very poor record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) No use of innovative or flexible lending 

practices in a safe and sound manner to 

address the credit needs of low- or moderateincome individuals or geographies; and 

(G) It has made few, if any, community 

development loans. 

(2) Investment performance rating. The 

OCC assigns each bank’s investment 

performance one of the five following ratings. 

(i) Outstanding. The OCC rates a bank’s 

investment performance ‘‘outstanding’’ if, in 

general, it demonstrates: 

(A) An excellent level of qualified 

investments, particularly those that are not 

routinely provided by private investors, often 

in a leadership position; 

(B) Extensive use of innovative or complex 

qualified investments; and 

(C) Excellent responsiveness to credit and 

community development needs. 

(ii) High satisfactory. The OCC rates a 

bank’s investment performance ‘‘high 

satisfactory’’ if, in general, it demonstrates: 

(A) A significant level of qualified 

investments, particularly those that are not 

routinely provided by private investors, 

occasionally in a leadership position; 

(B) Significant use of innovative or 

complex qualified investments; and 

(C) Good responsiveness to credit and 

community development needs. 

(iii) Low satisfactory. The OCC rates a 

bank’s investment performance ‘‘low 

satisfactory’’ if, in general, it demonstrates: 

(A) An adequate level of qualified 

investments, particularly those that are not 

routinely provided by private investors, 

although rarely in a leadership position; 

(B) Occasional use of innovative or 

complex qualified investments; and 

(C) Adequate responsiveness to credit and 

community development needs. 

(iv) Needs to improve. The OCC rates a 

bank’s investment performance ‘‘needs to 

improve’’ if, in general, it demonstrates: 

(A) A poor level of qualified investments, 

particularly those that are not routinely 

provided by private investors; 

(B) Rare use of innovative or complex 

qualified investments; and 

(C) Poor responsiveness to credit and 

community development needs. 

(v) Substantial noncompliance. The OCC 

rates a bank’s investment performance as 

being in ‘‘substantial noncompliance’’ if, in 

general, it demonstrates: 

(A) Few, if any, qualified investments, 

particularly those that are not routinely 

provided by private investors; 

(B) No use of innovative or complex 

qualified investments; and 

(C) Very poor responsiveness to credit and 

community development needs. 

(3) Service performance rating. The OCC 

assigns each bank’s service performance one 

of the five following ratings. 

(i) Outstanding. The OCC rates a bank’s 

service performance ‘‘outstanding’’ if, in 

general, the bank demonstrates: 

(A) Its service delivery systems are readily 

accessible to geographies and individuals of 

different income levels in its assessment 

area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has improved the accessibility of its delivery 

systems, particularly in low- or moderateincome geographies or to low- or moderateincome individuals; 

(C) Its services (including, where 

appropriate, business hours) are tailored to 

the convenience and needs of its assessment 

area(s), particularly low- or moderate-income 

geographies or low- or moderate-income 

individuals; and 

(D) It is a leader in providing community 

development services. 

(ii) High satisfactory. The OCC rates a 

bank’s service performance ‘‘high 

satisfactory’’ if, in general, the bank 

demonstrates: 

(A) Its service delivery systems are 

accessible to geographies and individuals of 

different income levels in its assessment 

area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has not adversely affected the accessibility of 

its delivery systems, particularly in low- and 

moderate-income geographies and to lowand moderate-income individuals; 

(C) Its services (including, where 

appropriate, business hours) do not vary in 

a way that inconveniences its assessment 

area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and 

(D) It provides a relatively high level of 

community development services. 

(iii) Low satisfactory. The OCC rates a 

bank’s service performance ‘‘low 

satisfactory’’ if, in general, the bank 

demonstrates: 

(A) Its service delivery systems are 

reasonably accessible to geographies and 

individuals of different income levels in its 

assessment area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has generally not adversely affected the 

accessibility of its delivery systems, 

particularly in low- and moderate-income 

geographies and to low- and moderateincome individuals; 

(C) Its services (including, where 

appropriate, business hours) do not vary in 

a way that inconveniences its assessment 

area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and 

(D) It provides an adequate level of 

community development services. 

(iv) Needs to improve. The OCC rates a 

bank’s service performance ‘‘needs to 

improve’’ if, in general, the bank 

demonstrates: 

(A) Its service delivery systems are 

unreasonably inaccessible to portions of its 

assessment area(s), particularly to low- or 

moderate-income geographies or to low- or 

moderate-income individuals; 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has adversely affected the accessibility its 

delivery systems, particularly in low- or 

moderate-income geographies or to low- or 

moderate-income individuals; 

(C) Its services (including, where 

appropriate, business hours) vary in a way 

that inconveniences its assessment area(s), 

particularly low- or moderate-income 

geographies or low- or moderate-income 

individuals; and 

(D) It provides a limited level of 

community development services. 

(v) Substantial noncompliance. The OCC 

rates a bank’s service performance as being 

in ‘‘substantial noncompliance’’ if, in 

general, the bank demonstrates: 

(A) Its service delivery systems are 

unreasonably inaccessible to significant 

portions of its assessment area(s), particularly 

to low- or moderate-income geographies or to 

low- or moderate-income individuals; 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has significantly adversely affected the 

accessibility of its delivery systems, 

particularly in low- or moderate-income 

geographies or to low- or moderate-income 

individuals; 

(C) Its services (including, where 

appropriate, business hours) vary in a way 

that significantly inconveniences its 

assessment area(s), particularly low- or 

moderate-income geographies or low- or 

moderate-income individuals; and 

(D) It provides few, if any, community 

development services. 

(c) Wholesale or limited purpose banks. 

The OCC assigns each wholesale or limited 

purpose bank’s community development 

performance one of the four following 

ratings. 

(1) Outstanding. The OCC rates a 

wholesale or limited purpose bank’s 

community development performance 

‘‘outstanding’’ if, in general, it demonstrates: 

(i) A high level of community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) Extensive use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52049 

(iii) Excellent responsiveness to credit and 

community development needs in its 

assessment area(s). 

(2) Satisfactory. The OCC rates a wholesale 

or limited purpose bank’s community 

development performance ‘‘satisfactory’’ if, 

in general, it demonstrates: 

(i) An adequate level of community 

development loans, community development 

services, or qualified investments, 

particularly investments that are not 

routinely provided by private investors; 

(ii) Occasional use of innovative or 

complex qualified investments, community 

development loans, or community 

development services; and 

(iii) Adequate responsiveness to credit and 

community development needs in its 

assessment area(s). 

(3) Needs to improve. The OCC rates a 

wholesale or limited purpose bank’s 

community development performance as 

‘‘needs to improve’’ if, in general, it 

demonstrates: 

(i) A poor level of community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) Rare use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

(iii) Poor responsiveness to credit and 

community development needs in its 

assessment area(s). 

(4) Substantial noncompliance. The OCC 

rates a wholesale or limited purpose bank’s 

community development performance in 

‘‘substantial noncompliance’’ if, in general, it 

demonstrates: 

(i) Few, if any, community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) No use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

(iii) Very poor responsiveness to credit and 

community development needs in its 

assessment area(s). 

(d) Banks evaluated under the small bank 

performance standards—(1) Lending test 

ratings. (i) Eligibility for a satisfactory 

lending test rating. The OCC rates a small 

bank’s lending performance ‘‘satisfactory’’ if, 

in general, the bank demonstrates: 

(A) A reasonable loan-to-deposit ratio 

(considering seasonal variations) given the 

bank’s size, financial condition, the credit 

needs of its assessment area(s), and taking 

into account, as appropriate, other lendingrelated activities such as loan originations for 

sale to the secondary markets and 

community development loans and qualified 

investments; 

(B) A majority of its loans and, as 

appropriate, other lending-related activities, 

are in its assessment area; 

(C) A distribution of loans to and, as 

appropriate, other lending-related activities 

for individuals of different income levels 

(including low- and moderate-income 

individuals) and businesses and farms of 

different sizes that is reasonable given the 

demographics of the bank’s assessment 

area(s); 

(D) A record of taking appropriate action, 

when warranted, in response to written 

complaints, if any, about the bank’s 

performance in helping to meet the credit 

needs of its assessment area(s); and 

(E) A reasonable geographic distribution of 

loans given the bank’s assessment area(s). 

(ii) Eligibility for an ‘‘outstanding’’ lending 

test rating. A small bank that meets each of 

the standards for a ‘‘satisfactory’’ rating 

under this paragraph and exceeds some or all 

of those standards may warrant consideration 

for a lending test rating of ‘‘outstanding.’’ 

(iii) Needs to improve or substantial 

noncompliance ratings. A small bank may 

also receive a lending test rating of ‘‘needs to 

improve’’ or ‘‘substantial noncompliance’’ 

depending on the degree to which its 

performance has failed to meet the standard 

for a ‘‘satisfactory’’ rating. 

(2) Community development test ratings for 

intermediate small banks—(i) Eligibility for a 

satisfactory community development test 

rating. The OCC rates an intermediate small 

bank’s community development performance 

‘‘satisfactory’’ if the bank demonstrates 

adequate responsiveness to the community 

development needs of its assessment area(s) 

through community development loans, 

qualified investments, and community 

development services. The adequacy of the 

bank’s response will depend on its capacity 

for such community development activities, 

its assessment area’s need for such 

community development activities, and the 

availability of such opportunities for 

community development in the bank’s 

assessment area(s). 

(ii) Eligibility for an outstanding 

community development test rating. The 

OCC rates an intermediate small bank’s 

community development performance 

‘‘outstanding’’ if the bank demonstrates 

excellent responsiveness to community 

development needs in its assessment area(s) 

through community development loans, 

qualified investments, and community 

development services, as appropriate, 

considering the bank’s capacity and the need 

and availability of such opportunities for 

community development in the bank’s 

assessment area(s). 

(iii) Needs to improve or substantial 

noncompliance ratings. An intermediate 

small bank may also receive a community 

development test rating of ‘‘needs to 

improve’’ or ‘‘substantial noncompliance’’ 

depending on the degree to which its 

performance has failed to meet the standards 

for a ‘‘satisfactory’’ rating. 

(3) Overall rating—(i) Eligibility for a 

satisfactory overall rating. No intermediate 

small bank may receive an assigned overall 

rating of ‘‘satisfactory’’ unless it receives a 

rating of at least ‘‘satisfactory’’ on both the 

lending test and the community development 

test. 

(ii) Eligibility for an outstanding overall 

rating. (A) An intermediate small bank that 

receives an ‘‘outstanding’’ rating on one test 

and at least ‘‘satisfactory’’ on the other test 

may receive an assigned overall rating of 

‘‘outstanding.’’ 

(B) A small bank that is not an 

intermediate small bank that meets each of 

the standards for a ‘‘satisfactory’’ rating 

under the lending test and exceeds some or 

all of those standards may warrant 

consideration for an overall rating of 

‘‘outstanding.’’ In assessing whether a bank’s 

performance is ‘‘outstanding,’’ the OCC 

considers the extent to which the bank 

exceeds each of the performance standards 

for a ‘‘satisfactory’’ rating and its 

performance in making qualified investments 

and its performance in providing branches 

and other services and delivery systems that 

enhance credit availability in its assessment 

area(s). 

(iii) Needs to improve or substantial 

noncompliance overall ratings. A small bank 

may also receive a rating of ‘‘needs to 

improve’’ or ‘‘substantial noncompliance’’ 

depending on the degree to which its 

performance has failed to meet the standards 

for a ‘‘satisfactory’’ rating. 

(e) Strategic plan assessment and rating— 

(1) Satisfactory goals. The OCC approves as 

‘‘satisfactory’’ measurable goals that 

adequately help to meet the credit needs of 

the bank’s assessment area(s). 

(2) Outstanding goals. If the plan identifies 

a separate group of measurable goals that 

substantially exceed the levels approved as 

‘‘satisfactory,’’ the OCC will approve those 

goals as ‘‘outstanding.’’ 

(3) Rating. The OCC assesses the 

performance of a bank operating under an 

approved plan to determine if the bank has 

met its plan goals: 

(i) If the bank substantially achieves its 

plan goals for a satisfactory rating, the OCC 

will rate the bank’s performance under the 

plan as ‘‘satisfactory.’’ 

(ii) If the bank exceeds its plan goals for 

a satisfactory rating and substantially 

achieves its plan goals for an outstanding 

rating, the OCC will rate the bank’s 

performance under the plan as 

‘‘outstanding.’’ 

(iii) If the bank fails to meet substantially 

its plan goals for a satisfactory rating, the 

OCC will rate the bank as either ‘‘needs to 

improve’’ or ‘‘substantial noncompliance,’’ 

depending on the extent to which it falls 

short of its plan goals, unless the bank 

elected in its plan to be rated otherwise, as 

provided in § 25.27(f)(4). 

Appendix B to Part 25—CRA Notice 

(a) Notice for main offices and, if an 

interstate bank, one branch office in each 

state. 

Community Reinvestment Act Notice 

Under the Federal Community 

Reinvestment Act (CRA), the Comptroller of 

the Currency evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The Comptroller also takes this record into 

account when deciding on certain 

applications submitted by us. 

Your involvement is encouraged. 

You are entitled to certain information 

about our operations and our performance 

under the CRA, including, for example, 

information about our branches, such as their 

location and services provided at them; the 

public section of our most recent CRA 

52050 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

Performance Evaluation, prepared by the 

Comptroller; and comments received from 

the public relating to our performance in 

helping to meet community credit needs, as 

well as our responses to those comments. 

You may review this information today. 

At least 30 days before the beginning of 

each quarter, the Comptroller publishes a 

nationwide list of the banks that are 

scheduled for CRA examination in that 

quarter. This list is available from the Deputy 

Comptroller (address). You may send written 

comments about our performance in helping 

to meet community credit needs to (name 

and address of official at bank) and Deputy 

Comptroller (address). Your letter, together 

with any response by us, will be considered 

by the Comptroller in evaluating our CRA 

performance and may be made public. 

You may ask to look at any comments 

received by the Deputy Comptroller. You 

may also request from the Deputy 

Comptroller an announcement of our 

applications covered by the CRA filed with 

the Comptroller. We are an affiliate of (name 

of holding company), a bank holding 

company. You may request from the (title of 

responsible official), Federal Reserve Bank of 

llll (address) an announcement of 

applications covered by the CRA filed by 

bank holding companies. 

(b) Notice for branch offices. 

Community Reinvestment Act Notice 

Under the Federal Community 

Reinvestment Act (CRA), the Comptroller of 

the Currency evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The Comptroller also takes this record into 

account when deciding on certain 

applications submitted by us. 

Your involvement is encouraged. 

You are entitled to certain information 

about our operations and our performance 

under the CRA. You may review today the 

public section of our most recent CRA 

evaluation, prepared by the Comptroller, and 

a list of services provided at this branch. You 

may also have access to the following 

additional information, which we will make 

available to you at this branch within five 

calendar days after you make a request to us: 

(1) A map showing the assessment area 

containing this branch, which is the area in 

which the Comptroller evaluates our CRA 

performance in this community; (2) 

information about our branches in this 

assessment area; (3) a list of services we 

provide at those locations; (4) data on our 

lending performance in this assessment area; 

and (5) copies of all written comments 

received by us that specifically relate to our 

CRA performance in this assessment area, 

and any responses we have made to those 

comments. If we are operating under an 

approved strategic plan, you may also have 

access to a copy of the plan. 

[If you would like to review information 

about our CRA performance in other 

communities served by us, the public file for 

our entire bank is available at (name of office 

located in state), located at (address).] 

At least 30 days before the beginning of 

each quarter, the Comptroller publishes a 

nationwide list of the banks that are 

scheduled for CRA examination in that 

quarter. This list is available from the Deputy 

Comptroller (address). You may send written 

comments about our performance in helping 

to meet community credit needs to (name 

and address of official at bank) and Deputy 

Comptroller (address). Your letter, together 

with any response by us, will be considered 

by the Comptroller in evaluating our CRA 

performance and may be made public. 

You may ask to look at any comments 

received by the Deputy Comptroller. You 

may also request from the Deputy 

Comptroller an announcement of our 

applications covered by the CRA filed with 

the Comptroller. We are an affiliate of (name 

of holding company), a bank holding 

company. You may request from the (title of 

responsible official), Federal Reserve Bank of 

llll (address) an announcement of 

applications covered by the CRA filed by 

bank holding companies. 

■ 2. Add 12 CFR part 195 to read as 

follows: 

PART 195—COMMUNITY 

REINVESTMENT ACT 

Subpart A—General 

Sec. 

195.11 Authority, purposes, and scope. 

195.12 Definitions. 

Subpart B—Standards for Assessing 

Performance 

Sec. 

195.21 Performance tests, standards, and 

ratings, in general. 

195.22 Lending test. 

195.23 Investment test. 

195.24 Service test. 

195.25 Community development test for 

wholesale or limited purpose savings 

associations. 

195.26 Small savings association 

performance standards. 

195.27 Strategic plan. 

195.28 Assigned ratings. 

195.29 Effect of CRA performance on 

applications. 

Subpart C—Records, Reporting, and 

Disclosure Requirements 

Sec. 

195.41 Assessment area delineation. 

195.42 Data collection, reporting, and 

disclosure. 

195.43 Content and availability of public 

file. 

195.44 Public notice by savings 

associations. 

195.45 Publication of planned examination 

schedule. 

Appendix A to Part 195—Ratings 

Appendix B to Part 195—CRA Notice 

Authority: 12 U.S.C. 1462a, 1463, 1464, 

1814, 1816, 1828(c), 2901 through 2908, and 

5412(b)(2)(B). 

Subpart A—General 

§ 195.11 Authority, purposes, and scope. 

(a) Authority. This part is issued 

under the Community Reinvestment Act 

of 1977 (CRA), as amended (12 U.S.C. 

2901 et seq.); section 5, as amended, and 

sections 3, and 4, as added, of the Home 

Owners’ Loan Act of 1933 (12 U.S.C. 

1462a, 1463, and 1464); and sections 4, 

6, and 18(c), as amended of the Federal 

Deposit Insurance Act (12 U.S.C. 1814, 

1816, 1828(c)). 

(b) Purposes. In enacting the 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 appropriate 

Federal banking agency assesses a 

savings association’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 savings association; and 

(2) Providing that the appropriate 

Federal banking agency takes that 

record into account in considering 

certain applications. 

(c) Scope—(1) General. This part 

applies to all savings associations 

except as provided in paragraph (c)(2) of 

this section. 

(2) Certain special purpose savings 

associations. This part does not apply to 

special purpose savings associations 

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 

associations include banker’s banks, as 

defined in 12 U.S.C. 24 (Seventh), and 

associations that engage only in one or 

more of the following activities: 

Providing cash management controlled 

disbursement services or serving as 

correspondent associations, trust 

companies, or clearing agents. 

§ 195.12 Definitions. 

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 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52051 

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 § 195.41. 

(d) Automated teller machine (ATM) 

means an automated, unstaffed banking 

facility owned or operated by, or 

operated exclusively for, the savings 

association at which deposits are 

received, cash dispersed, or money lent. 

(e) [Reserved] 

(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) 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 

appropriate Federal banking agency 

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 savings association: 

(i) Has not been reported or collected 

by the savings association or an affiliate 

for consideration in the savings 

association’s assessment as a home 

mortgage, small business, small farm, or 

consumer loan, unless the loan is for a 

multifamily dwelling (as defined in 

§ 1003.2(n) of this title); and 

(ii) Benefits the savings association’s 

assessment area(s) or a broader 

statewide or regional area that includes 

the savings association’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 savings association’s 

retail banking services under 

§ 195.24(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 § 1026.2 of this 

title; 

(3) Other secured consumer loan, 

which is a secured consumer loan that 

is not included in one of the other 

categories of consumer loans; and 

(4) 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 

closed-end mortgage loan or an openend line of credit as these terms are 

defined under § 1003.2 of this title and 

that is not an excluded transaction 

under § 1003.3(c)(1) through (10) and 

(13) 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 savings 

association means a savings association 

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 savings association is in effect, 

in accordance with § 195.25(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 savings association—(1) 

Definition. Small savings association 

means a savings association that, as of 

December 31 of either of the prior two 

calendar years, had assets of less than 

$1.322 billion. Intermediate small 

savings association means a small 

savings association with assets of at 

least $330 million as of December 31 of 

both of the prior two calendar years and 

less than $1.322 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 

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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 Thrift Financial 

Report (TFR) or Consolidated Reports of 

Condition and Income (Call Report), as 

appropriate. 

(w) Small farm loan means a loan 

included in ‘‘loans to small farms’’ as 

defined in the instructions for 

preparation of the TFR or Call Report, 

as appropriate. 

(x) Wholesale savings association 

means a savings association 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 

savings association is in effect, in 

accordance with § 195.25(b). 

Subpart B—Standards for Assessing 

Performance 

§ 195.21 Performance tests, standards, 

and ratings, in general. 

(a) Performance tests and standards. 

The appropriate Federal banking agency 

assesses the CRA performance of a 

savings association in an examination as 

follows: 

(1) Lending, investment, and service 

tests. The appropriate Federal banking 

agency applies the lending, investment, 

and service tests, as provided in 

§§ 195.22 through 195.24, in evaluating 

the performance of a savings 

association, except as provided in 

paragraphs (a)(2), (3), and (4) of this 

section. 

(2) Community development test for 

wholesale or limited purpose savings 

associations. The appropriate Federal 

banking agency applies the community 

development test for a wholesale or 

limited purpose savings association, as 

provided in § 195.25, except as provided 

in paragraph (a)(4) of this section. 

(3) Small savings association 

performance standards. The appropriate 

Federal banking agency applies the 

small savings association performance 

standards as provided in § 195.26 in 

evaluating the performance of a small 

savings association or a savings 

association that was a small savings 

association during the prior calendar 

year, unless the savings association 

elects to be assessed as provided in 

paragraphs (a)(1), (2), or (4) of this 

section. The savings association 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 savings associations under 

§ 195.42. 

(4) Strategic plan. The appropriate 

Federal banking agency evaluates the 

performance of a savings association 

under a strategic plan if the savings 

association submits, and the appropriate 

Federal banking agency approves, a 

strategic plan as provided in § 195.27. 

(b) Performance context. The 

appropriate Federal banking agency 

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 savings association’s 

assessment area(s); 

(2) Any information about lending, 

investment, and service opportunities in 

the savings association’s assessment 

area(s) maintained by the savings 

association or obtained from community 

organizations, state, local, and tribal 

governments, economic development 

agencies, or other sources; 

(3) The savings association’s product 

offerings and business strategy as 

determined from data provided by the 

savings association; 

(4) Institutional capacity and 

constraints, including the size and 

financial condition of the savings 

association, the economic climate 

(national, regional, and local), safety 

and soundness limitations, and any 

other factors that significantly affect the 

savings association’s ability to provide 

lending, investments, or services in its 

assessment area(s); 

(5) The savings association’s past 

performance and the performance of 

similarly situated lenders; 

(6) The savings association’s public 

file, as described in § 195.43, and any 

written comments about the savings 

association’s CRA performance 

submitted to the savings association or 

the appropriate Federal banking agency; 

and 

(7) Any other information deemed 

relevant by the appropriate Federal 

banking agency. 

(c) Assigned ratings. The appropriate 

Federal banking agency assigns to a 

savings association one of the following 

four ratings pursuant to § 195.28 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 appropriate 

Federal banking agency reflects the 

savings association’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 savings association. 

(d) Safe and sound operations. This 

part and the CRA do not require a 

savings association to make loans or 

investments or to provide services that 

are inconsistent with safe and sound 

operations. To the contrary, the 

appropriate Federal banking agency 

anticipates savings associations can 

meet the standards of this part with safe 

and sound loans, investments, and 

services on which the savings 

associations expect to make a profit. 

Savings associations are permitted and 

encouraged to develop and apply 

flexible underwriting standards for 

loans that benefit low- or moderateincome geographies or individuals, only 

if consistent with safe and sound 

operations. 

(e) Low-cost education loans provided 

to low-income borrowers. In assessing 

and taking into account the record of a 

savings association under this part, the 

appropriate Federal banking agency 

considers, as a factor, low-cost 

education loans originated by the 

savings association to borrowers, 

particularly in its assessment area(s), 

who have an individual income that is 

less than 50 percent of the area median 

income. For purposes of this paragraph, 

‘‘low-cost education loans’’ means any 

education loan, as defined in section 

140(a)(7) of the Truth in Lending Act 

(15 U.S.C. 1650(a)(7)) (including a loan 

under a state or local education loan 

program), originated by the savings 

association for a student at an 

‘‘institution of higher education,’’ as 

that term is generally defined in 

sections 101 and 102 of the Higher 

Education Act of 1965 (20 U.S.C. 1001 

and 1002) and the implementing 

regulations published by the U.S. 

Department of Education, with interest 

rates and fees no greater than those of 

comparable education loans offered 

directly by the U.S. Department of 

Education. Such rates and fees are 

specified in section 455 of the Higher 

Education Act of 1965 (20 U.S.C. 

1087e). 

(f) Activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit 

unions. In assessing and taking into 

account the record of a nonminorityowned and nonwomen-owned savings 

association under this part, the 

appropriate Federal banking agency 

considers as a factor capital investment, 

loan participation, and other ventures 

undertaken by the savings association in 

cooperation with minority- and womenowned financial institutions and lowVerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 E:\FR\FM\17SEP2.SGM 17SEP2
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income credit unions. Such activities 

must help meet the credit needs of local 

communities in which the minorityand women-owned financial 

institutions and low-income credit 

unions are chartered. To be considered, 

such activities need not also benefit the 

savings association’s assessment area(s) 

or the broader statewide or regional area 

that includes the savings association’s 

assessment area(s). 

§ 195.22 Lending test. 

(a) Scope of test. (1) The lending test 

evaluates a savings association’s record 

of helping to meet the credit needs of its 

assessment area(s) through its lending 

activities by considering a savings 

association’s home mortgage, small 

business, small farm, and community 

development lending. If consumer 

lending constitutes a substantial 

majority of a savings association’s 

business, the appropriate Federal 

banking agency will evaluate the 

savings association’s consumer lending 

in one or more of the following 

categories: Motor vehicle, credit card, 

other secured, and other unsecured 

loans. In addition, at a savings 

association’s option, the appropriate 

Federal banking agency will evaluate 

one or more categories of consumer 

lending, if the savings association has 

collected and maintained, as required in 

§ 195.42(c)(1), the data for each category 

that the savings association elects to 

have the appropriate Federal banking 

agency evaluate. 

(2) The appropriate Federal banking 

agency considers originations and 

purchases of loans. The appropriate 

Federal banking agency will also 

consider any other loan data the savings 

association may choose to provide, 

including data on loans outstanding, 

commitments and letters of credit. 

(3) A savings association may ask the 

appropriate Federal banking agency to 

consider loans originated or purchased 

by consortia in which the savings 

association participates or by third 

parties in which the savings association 

has invested only if the loans meet the 

definition of community development 

loans and only in accordance with 

paragraph (d) of this section. The 

appropriate Federal banking agency will 

not consider these loans under any 

criterion of the lending test except the 

community development lending 

criterion. 

(b) Performance criteria. The 

appropriate Federal banking agency 

evaluates a savings association’s lending 

performance pursuant to the following 

criteria: 

(1) Lending activity. The number and 

amount of the savings association’s 

home mortgage, small business, small 

farm, and consumer loans, if applicable, 

in the savings association’s assessment 

area(s); 

(2) Geographic distribution. The 

geographic distribution of the savings 

association’s home mortgage, small 

business, small farm, and consumer 

loans, if applicable, based on the loan 

location, including: 

(i) The proportion of the savings 

association’s lending in the savings 

association’s assessment area(s); 

(ii) The dispersion of lending in the 

savings association’s assessment area(s); 

and 

(iii) The number and amount of loans 

in low-, moderate-, middle-, and upperincome geographies in the savings 

association’s assessment area(s); 

(3) Borrower characteristics. The 

distribution, particularly in the savings 

association’s assessment area(s), of the 

savings association’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 upperincome individuals; 

(4) Community development lending. 

The savings association’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 savings association’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 savings 

association’s option, the appropriate 

Federal banking agency will consider 

loans by an affiliate of the savings 

association, if the savings association 

provides data on the affiliate’s loans 

pursuant to § 195.42. 

(2) The appropriate Federal banking 

agency 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 savings association elects to 

have the appropriate Federal banking 

agency consider loans within a 

particular lending category made by one 

or more of the savings association’s 

affiliates in a particular assessment area, 

the savings association shall elect to 

have the appropriate Federal banking 

agency 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 savings association’s affiliates. 

(3) The appropriate Federal banking 

agency does not consider affiliate 

lending in assessing a savings 

association’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 savings association 

participates or by a third party in which 

the savings association has invested: 

(1) Will be considered, at the savings 

association’s option, if the savings 

association reports the data pertaining 

to these loans under § 195.42(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 

appropriate Federal banking agency 

rates a savings association’s lending 

performance as provided in appendix A 

of this part. 

§ 195.23 Investment test. 

(a) Scope of test. The investment test 

evaluates a savings association’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 savings 

association’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 savings 

association’s option, the appropriate 

Federal banking agency will consider, in 

its assessment of a savings association’s 

investment performance, a qualified 

investment made by an affiliate of the 

savings association, 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 

52054 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

branch of the savings association 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 

appropriate Federal banking agency 

evaluates the investment performance of 

a savings association 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 appropriate Federal banking agency 

rates a savings association’s investment 

performance as provided in appendix A 

of this part. 

§ 195.24 Service test. 

(a) Scope of test. The service test 

evaluates a savings association’s record 

of helping to meet the credit needs of its 

assessment area(s) by analyzing both the 

availability and effectiveness of a 

savings association’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 

savings association’s assessment area(s) 

or a broader statewide or regional area 

that includes the savings association’s 

assessment area(s). 

(c) Affiliate service. At a savings 

association’s option, the appropriate 

Federal banking agency will consider, in 

its assessment of a savings association’s 

service performance, a community 

development service provided by an 

affiliate of the savings association, if the 

community development service is not 

claimed by any other institution. 

(d) Performance criteria—retail 

banking services. The appropriate 

Federal banking agency evaluates the 

availability and effectiveness of a 

savings association’s systems for 

delivering retail banking services, 

pursuant to the following criteria: 

(1) The current distribution of the 

savings association’s branches among 

low-, moderate-, middle-, and upperincome geographies; 

(2) In the context of its current 

distribution of the savings association’s 

branches, the savings association’s 

record of opening and closing branches, 

particularly branches located in low- or 

moderate-income geographies or 

primarily serving low- or moderateincome 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 savings association, 

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 upperincome geographies and the degree to 

which the services are tailored to meet 

the needs of those geographies. 

(e) Performance criteria—community 

development services. The appropriate 

Federal banking agency evaluates 

community development services 

pursuant to the following criteria: 

(1) The extent to which the savings 

association provides community 

development services; and 

(2) The innovativeness and 

responsiveness of community 

development services. 

(f) Service performance rating. The 

appropriate Federal banking agency 

rates a savings association’s service 

performance as provided in appendix A 

of this part. 

§ 195.25 Community development test for 

wholesale or limited purpose savings 

associations. 

(a) Scope of test. The appropriate 

Federal banking agency assesses a 

wholesale or limited purpose savings 

association’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 savings association. In 

order to receive a designation as a 

wholesale or limited purpose savings 

association, a savings association shall 

file a request, in writing, with the 

appropriate Federal banking agency, at 

least three months prior to the proposed 

effective date of the designation. If the 

appropriate Federal banking agency 

approves the designation, it remains in 

effect until the savings association 

requests revocation of the designation or 

until one year after the appropriate 

Federal banking agency notifies the 

savings association that the appropriate 

Federal banking agency has revoked the 

designation on its own initiative. 

(c) Performance criteria. The 

appropriate Federal banking agency 

evaluates the community development 

performance of a wholesale or limited 

purpose savings association 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 

savings association, 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 savings association’s 

responsiveness to credit and community 

development needs. 

(d) Indirect activities. At a savings 

association’s option, the appropriate 

Federal banking agency will consider in 

its community development 

performance assessment: 

(1) Qualified investments or 

community development services 

provided by an affiliate of the savings 

association, 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 § 195.22(c) and (d). 

(e) Benefit to assessment area(s)—(1) 

Benefit inside assessment area(s). The 

appropriate Federal banking agency 

considers all qualified investments, 

community development loans, and 

community development services that 

benefit areas within the savings 

association’s assessment area(s) or a 

broader statewide or regional area that 

includes the savings association’s 

assessment area(s). 

(2) Benefit outside assessment area(s). 

The appropriate Federal banking agency 

considers the qualified investments, 

community development loans, and 

community development services that 

benefit areas outside the savings 

association’s assessment area(s), if the 

savings association has adequately 

addressed the needs of its assessment 

area(s). 

(f) Community development 

performance rating. The appropriate 

Federal banking agency rates a savings 

association’s community development 

performance as provided in appendix A 

of this part. 

§ 195.26 Small savings association 

performance standards. 

(a) Performance criteria—(1) Small 

savings associations that are not 

intermediate small savings associations. 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52055 

The appropriate Federal banking agency 

evaluates the record of a small savings 

association that is not, or that was not 

during the prior calendar year, an 

intermediate small savings association, 

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 savings 

associations. The appropriate Federal 

banking agency evaluates the record of 

a small savings association that is, or 

that was during the prior calendar year, 

an intermediate small savings 

association, 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 savings 

association’s lending performance is 

evaluated pursuant to the following 

criteria: 

(1) The savings association’s loan-todeposit 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 savings 

association’s assessment area(s); 

(3) The savings association’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 

savings association’s loans; and 

(5) The savings association’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 savings association’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 savings 

association provides community 

development services; and 

(4) The savings association’s 

responsiveness through such activities 

to community development lending, 

investment, and services needs. 

(d) Small savings association 

performance rating. The appropriate 

Federal banking agency rates the 

performance of a savings association 

evaluated under this section as provided 

in appendix A of this part. 

§ 195.27 Strategic plan. 

(a) Alternative election. The 

appropriate Federal banking agency will 

assess a savings association’s record of 

helping to meet the credit needs of its 

assessment area(s) under a strategic plan 

if: 

(1) The savings association has 

submitted the plan to the appropriate 

Federal banking agency as provided for 

in this section; 

(2) The appropriate Federal banking 

agency has approved the plan; 

(3) The plan is in effect; and 

(4) The savings association has been 

operating under an approved plan for at 

least one year. 

(b) Data reporting. The appropriate 

Federal banking agency’s approval of a 

plan does not affect the savings 

association’s obligation, if any, to report 

data as required by § 195.42. 

(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 appropriate 

Federal banking agency will evaluate 

the savings association’s performance. 

(2) Multiple assessment areas. A 

savings association 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 appropriate Federal banking 

agency for approval, a savings 

association 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 savings association 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 savings 

association 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 savings 

association shall submit its plan to the 

appropriate Federal banking agency at 

least three months prior to the proposed 

effective date of the plan. The savings 

association 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 savings association 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 lowand moderate-income individuals, 

through lending, investment, and 

services, as appropriate. 

(ii) A savings association shall 

address in its plan all three performance 

categories and, unless the savings 

association has been designated as a 

wholesale or limited purpose savings 

association, 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 savings association’s 

capacity and constraints, product 

offerings, and business strategy. 

(2) Confidential information. A 

savings association may submit 

additional information to the 

appropriate Federal banking agency on 

a confidential basis, but the goals stated 

in the plan must be sufficiently specific 

to enable the public and the appropriate 

Federal banking agency to judge the 

merits of the plan. 

(3) Satisfactory and outstanding goals. 

A savings association shall specify in its 

plan measurable goals that constitute 

‘‘satisfactory’’ performance. A plan may 

specify measurable goals that constitute 

‘‘outstanding’’ performance. If a savings 

association submits, and the appropriate 

Federal banking agency approves, both 

‘‘satisfactory’’ and ‘‘outstanding’’ 

performance goals, the appropriate 

Federal banking agency will consider 

the savings association eligible for an 

‘‘outstanding’’ performance rating. 

(4) Election if satisfactory goals not 

substantially met. A savings association 

may elect in its plan that, if the savings 

association fails to meet substantially its 

plan goals for a satisfactory rating, the 

appropriate Federal banking agency will 

evaluate the savings association’s 

performance under the lending, 

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investment, and service tests, the 

community development test, or the 

small savings association performance 

standards, as appropriate. 

(g) Plan approval—(1) Timing. The 

appropriate Federal banking agency will 

act upon a plan within 60 calendar days 

after it receives the complete plan and 

other material required under paragraph 

(e) of this section. If the appropriate 

Federal banking agency fails to act 

within this time period, the plan shall 

be deemed approved unless the 

appropriate Federal banking agency 

extends the review period for good 

cause. 

(2) Public participation. In evaluating 

the plan’s goals, the appropriate Federal 

banking agency considers the public’s 

involvement in formulating the plan, 

written public comment on the plan, 

and any response by the savings 

association to public comment on the 

plan. 

(3) Criteria for evaluating plan. The 

appropriate Federal banking agency 

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 

savings association’s qualified 

investments; and 

(iii) The availability and effectiveness 

of the savings association’s systems for 

delivering retail banking services and 

the extent and innovativeness of the 

savings association’s community 

development services. 

(h) Plan amendment. During the term 

of a plan, a savings association may 

request the appropriate Federal banking 

agency to approve an amendment to the 

plan on grounds that there has been a 

material change in circumstances. The 

savings association 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 appropriate 

Federal banking agency approves the 

goals and assesses performance under a 

plan as provided for in appendix A of 

this part. 

§ 195.28 Assigned ratings. 

(a) Ratings in general. Subject to 

paragraphs (b) and (c) of this section, 

the appropriate Federal banking agency 

assigns to a savings association a rating 

of ‘‘outstanding,’’ ‘‘satisfactory,’’ ‘‘needs 

to improve,’’ or ‘‘substantial 

noncompliance’’ based on the savings 

association’s performance under the 

lending, investment and service tests, 

the community development test, the 

small savings association performance 

standards, or an approved strategic plan, 

as applicable. 

(b) Lending, investment, and service 

tests. The appropriate Federal banking 

agency assigns a rating for a savings 

association assessed under the lending, 

investment, and service tests in 

accordance with the following 

principles: 

(1) A savings association that receives 

an ‘‘outstanding’’ rating on the lending 

test receives an assigned rating of at 

least ‘‘satisfactory’’; 

(2) A savings association 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 savings association 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 appropriate Federal 

banking agency’s evaluation of a savings 

association’s CRA performance is 

adversely affected by evidence of 

discriminatory or other illegal credit 

practices in any geography by the 

savings association or in any assessment 

area by any affiliate whose loans have 

been considered as part of the savings 

association’s lending performance. In 

connection with any type of lending 

activity described in § 195.22(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 

savings association’s assigned rating, the 

appropriate Federal banking agency 

considers the nature, extent, and 

strength of the evidence of the practices; 

the policies and procedures that the 

savings association (or affiliate, as 

applicable) has in place to prevent the 

practices; any corrective action that the 

savings association (or affiliate, as 

applicable) has taken or has committed 

to take, including voluntary corrective 

action resulting from self-assessment; 

and any other relevant information. 

§ 195.29 Effect of CRA performance on 

applications. 

(a) CRA performance. Among other 

factors, the appropriate Federal banking 

agency takes into account the record of 

performance under the CRA of each 

applicant savings association, and for 

applications under section 10(e) of the 

Home Owners’ Loan Act (12 U.S.C. 

1467a(e)), of each proposed subsidiary 

savings association, in considering an 

application for: 

(1) The establishment of a domestic 

branch or other facility that would be 

authorized to take deposits; 

(2) The relocation of the main office 

or a branch; 

(3) The merger or consolidation with 

or the acquisition of the assets or 

assumption of the liabilities of an 

insured depository institution requiring 

appropriate Federal banking agency 

approval under the Bank Merger Act (12 

U.S.C. 1828(c)); 

(4) A Federal thrift charter; and 

(5) Acquisitions subject to section 

10(e) of the Home Owners’ Loan Act (12 

U.S.C. 1467a(e)). 

(b) Charter application. An applicant 

for a Federal thrift charter shall submit 

with its application a description of 

how it will meet its CRA objectives. The 

appropriate Federal banking agency 

takes the description into account in 

considering the application and may 

deny or condition approval on that 

basis. 

(c) Interested parties. The appropriate 

Federal banking agency takes into 

account any views expressed by 

interested parties that are submitted in 

accordance with the applicable 

comment procedures in considering 

CRA performance in an application 

listed in paragraphs (a) and (b) of this 

section. 

(d) Denial or conditional approval of 

application. A savings association’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 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52057 

meaning given to that term in 12 U.S.C. 

1813. 

Subpart C—Records, Reporting, and 

Disclosure Requirements 

§ 195.41 Assessment area delineation. 

(a) In general. A savings association 

shall delineate one or more assessment 

areas within which the appropriate 

Federal banking agency evaluates the 

savings association’s record of helping 

to meet the credit needs of its 

community. The appropriate Federal 

banking agency does not evaluate the 

savings association’s delineation of its 

assessment area(s) as a separate 

performance criterion, but the 

appropriate Federal banking agency 

reviews the delineation for compliance 

with the requirements of this section. 

(b) Geographic area(s) for wholesale 

or limited purpose savings associations. 

The assessment area(s) for a wholesale 

or limited purpose savings association 

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 savings association has its main 

office, branches, and deposit-taking 

ATMs. 

(c) Geographic area(s) for other 

savings associations. The assessment 

area(s) for a savings association other 

than a wholesale or limited purpose 

savings association 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 savings association has its main 

office, its branches, and its deposittaking ATMs, as well as the surrounding 

geographies in which the savings 

association 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 savings association 

chooses, such as those consumer loans 

on which the savings association elects 

to have its performance assessed). 

(d) Adjustments to geographic area(s). 

A savings association 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 savings 

association’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 savings association’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 savings association serves a 

geographic area that extends 

substantially beyond a state boundary, 

the savings association shall delineate 

separate assessment areas for the areas 

in each state. If a savings association 

serves a geographic area that extends 

substantially beyond an MSA boundary, 

the savings association shall delineate 

separate assessment areas for the areas 

inside and outside the MSA. 

(f) Savings associations serving 

military personnel. Notwithstanding the 

requirements of this section, a savings 

association 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 

appropriate Federal banking agency 

uses the assessment area(s) delineated 

by a savings association in its evaluation 

of the savings association’s CRA 

performance unless the appropriate 

Federal banking agency determines that 

the assessment area(s) do not comply 

with the requirements of this section. 

§ 195.42 Data collection, reporting, and 

disclosure. 

(a) Loan information required to be 

collected and maintained. A savings 

association, except a small savings 

association, shall collect, and maintain 

in machine readable form (as prescribed 

by the appropriate Federal banking 

agency) until the completion of its next 

CRA examination, the following data for 

each small business or small farm loan 

originated or purchased by the savings 

association: 

(1) A unique number or alphanumeric 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 savings association, except 

a small savings association or a savings 

association that was a small savings 

association during the prior calendar 

year, shall report annually by March 1 

to the appropriate Federal banking 

agency in machine readable form (as 

prescribed by the agency) the following 

data for the prior calendar year: 

(1) Small business and small farm 

loan data. For each geography in which 

the savings association 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 savings 

association 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 

savings association is subject to 

reporting under part 1003 of this title, 

the location of each home mortgage loan 

application, origination, or purchase 

outside the MSAs in which the savings 

association has a home or branch office 

(or outside any MSA) in accordance 

with the requirements of part 1003 of 

this title. 

(c) Optional data collection and 

maintenance—(1) Consumer loans. A 

savings association may collect and 

maintain in machine readable form (as 

prescribed by the appropriate Federal 

banking agency) data for consumer 

loans originated or purchased by the 

savings association for consideration 

under the lending test. A savings 

association may maintain data for one or 

more of the following categories of 

consumer loans: Motor vehicle, credit 

card, other secured, and other 

unsecured. If the savings association 

maintains data for loans in a certain 

category, it shall maintain data for all 

loans originated or purchased within 

that category. The savings association 

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; 

52058 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

(ii) The loan amount at origination or 

purchase; 

(iii) The loan location; and 

(iv) The gross annual income of the 

borrower that the savings association 

considered in making its credit 

decision. 

(2) Other loan data. At its option, a 

savings association may provide other 

information concerning its lending 

performance, including additional loan 

distribution data. 

(d) Data on affiliate lending. A 

savings association that elects to have 

the appropriate Federal banking agency 

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 savings association 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 savings 

association. For home mortgage loans, 

the savings association shall also be 

prepared to identify the home mortgage 

loans reported under part 1003 of this 

title by the affiliate. 

(e) Data on lending by a consortium 

or a third-party. A savings association 

that elects to have the appropriate 

Federal banking agency 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 savings 

association would have reported under 

paragraph (b)(2) of this section had the 

loans been originated or purchased by 

the savings association. 

(f) Small savings associations electing 

evaluation under the lending, 

investment, and service tests. A savings 

association that qualifies for evaluation 

under the small savings association 

performance standards but elects 

evaluation under the lending, 

investment, and service tests shall 

collect, maintain, and report the data 

required for other savings associations 

pursuant to paragraphs (a) and (b) of 

this section. 

(g) Assessment area data. A savings 

association, except a small savings 

association or a savings association that 

was a small savings association during 

the prior calendar year, shall collect and 

report to the appropriate Federal 

banking agency by March 1 of each year 

a list for each assessment area showing 

the geographies within the area. 

(h) CRA Disclosure Statement. The 

appropriate Federal banking agency 

prepares annually for each savings 

association 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 savings association 

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 upperincome geographies; 

(ii) A list grouping each geography 

according to whether the geography is 

low-, moderate-, middle-, or upperincome; 

(iii) A list showing each geography in 

which the savings association 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 savings 

association 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 savings association 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 savings association and the number 

and amount of small business and small 

farm loans located outside the 

assessment area(s) reported by the 

savings association; and 

(4) The number and amount of 

community development loans reported 

as originated or purchased. 

(i) Aggregate disclosure statements. 

The appropriate Federal banking 

agency, in conjunction with the Board 

of Governors of the Federal Reserve 

System and the Federal Deposit 

Insurance Corporation or the OCC, as 

appropriate, 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 25, 

228, or 345 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 appropriate 

Federal banking agency 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 

appropriate Federal banking agency 

makes the aggregate disclosure 

statements, described in paragraph (i) of 

this section, and the individual savings 

association CRA Disclosure Statements, 

described in paragraph (h) of this 

section, available to the public at central 

data depositories. The appropriate 

Federal banking agency publishes a list 

of the depositories at which the 

statements are available. 

§ 195.43 Content and availability of public 

file. 

(a) Information available to the 

public. A savings association 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 savings 

association’s performance in helping to 

meet community credit needs, and any 

response to the comments by the 

savings association, if neither the 

comments nor the responses contain 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52059 

statements that reflect adversely on the 

good name or reputation of any persons 

other than the savings association or 

publication of which would violate 

specific provisions of law; 

(2) A copy of the public section of the 

savings association’s most recent CRA 

Performance Evaluation prepared by the 

appropriate Federal banking agency. 

The savings association shall place this 

copy in the public file within 30 

business days after its receipt from the 

appropriate Federal banking agency; 

(3) A list of the savings association’s 

branches, their street addresses, and 

geographies; 

(4) A list of branches opened or closed 

by the savings association 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 savings association’s 

branches and descriptions of material 

differences in the availability or cost of 

services at particular branches, if any. 

At its option, a savings association 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 savings 

association, 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 savings 

association chooses. 

(b) Additional information available 

to the public—(1) Savings associations 

other than small savings associations. A 

savings association, except a small 

savings association or a savings 

association that was a small savings 

association during the prior calendar 

year, shall include in its public file the 

following information pertaining to the 

savings association and its affiliates, if 

applicable, for each of the prior two 

calendar years: 

(i) If the savings association 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 savings 

association’s assessment area(s) and 

outside the savings association’s 

assessment area(s); and 

(ii) The savings association’s CRA 

Disclosure Statement. The savings 

association shall place the statement in 

the public file within three business 

days of its receipt from the appropriate 

Federal banking agency. 

(2) Savings associations required to 

report Home Mortgage Disclosure Act 

(HMDA) data. A savings association 

required to report home mortgage loan 

data pursuant part 1003 of this title 

shall include in its public file a written 

notice that the institution’s HMDA 

Disclosure Statement may be obtained 

on the Consumer Financial Protection 

Bureau’s (Bureau’s) website at 

www.consumerfinance.gov/hmda. In 

addition, a savings association that 

elected to have the appropriate Federal 

banking agency consider the mortgage 

lending of an affiliate shall include in 

its public file the name of the affiliate 

and a written notice that the affiliate’s 

HMDA Disclosure Statement may be 

obtained at the Bureau’s website. The 

savings association shall place the 

written notice(s) in the public file 

within three business days after 

receiving notification from the Federal 

Financial Institutions Examination 

Council of the availability of the 

disclosure statement(s). 

(3) Small savings associations. A 

small savings association or a savings 

association that was a small savings 

association during the prior calendar 

year shall include in its public file: 

(i) The savings association’s loan-todeposit 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 

savings associations by paragraph (b)(1) 

of this section, if the savings association 

has elected to be evaluated under the 

lending, investment, and service tests. 

(4) Savings associations with strategic 

plans. A savings association that has 

been approved to be assessed under a 

strategic plan shall include in its public 

file a copy of that plan. A savings 

association need not include 

information submitted to the 

appropriate Federal banking agency on 

a confidential basis in conjunction with 

the plan. 

(5) Savings associations with less than 

satisfactory ratings. A savings 

association 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 savings association 

shall update the description quarterly. 

(c) Location of public information. A 

savings association 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 savings association, 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 

savings association’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 savings 

association 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 

savings association 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 savings 

association shall ensure that the 

information required by this section is 

current as of April 1 of each year. 

§ 195.44 Public notice by savings 

associations. 

A savings association 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 savings 

association having more than one 

assessment area shall include the 

bracketed material in the notice for 

branch offices. Only a savings 

association that is an affiliate of a 

holding company shall include the last 

two sentences of the notices. 

§ 195.45 Publication of planned 

examination schedule. 

The appropriate Federal banking 

agency publishes at least 30 days in 

advance of the beginning of each 

calendar quarter a list of savings 

associations scheduled for CRA 

examinations in that quarter. 

Appendix A to Part 195—Ratings 

(a) Ratings in general. (1) In assigning a 

rating, the appropriate Federal banking 

agency evaluates a savings association’s 

performance under the applicable 

performance criteria in this part, in 

accordance with §§ 195.21 and 195.28. This 

includes consideration of low-cost education 

loans provided to low-income borrowers and 

activities in cooperation with minority- or 

women-owned financial institutions and 

low-income credit unions, as well as 

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adjustments on the basis of evidence of 

discriminatory or other illegal credit 

practices. 

(2) A savings association’s performance 

need not fit each aspect of a particular rating 

profile in order to receive that rating, and 

exceptionally strong performance with 

respect to some aspects may compensate for 

weak performance in others. The savings 

association’s overall performance, however, 

must be consistent with safe and sound 

banking practices and generally with the 

appropriate rating profile as follows. 

(b) Savings associations evaluated under 

the lending, investment, and service tests— 

(1) Lending performance rating. The 

appropriate Federal banking agency assigns 

each savings association’s lending 

performance one of the five following ratings. 

(i) Outstanding. The appropriate Federal 

banking agency rates a savings association’s 

lending performance ‘‘outstanding’’ if, in 

general, it demonstrates: 

(A) Excellent responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) A substantial majority of its loans are 

made in its assessment area(s); 

(C) An excellent geographic distribution of 

loans in its assessment area(s); 

(D) An excellent distribution, particularly 

in its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

savings association; 

(E) An excellent record of serving the 

credit needs of highly economically 

disadvantaged areas in its assessment area(s), 

low-income individuals, or businesses 

(including farms) with gross annual revenues 

of $1 million or less, consistent with safe and 

sound operations; 

(F) Extensive 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; 

and 

(G) It is a leader in making community 

development loans. 

(ii) High satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s lending performance ‘‘high 

satisfactory’’ if, in general, it demonstrates: 

(A) Good responsiveness to credit needs in 

its assessment area(s), taking into account the 

number and amount of home mortgage, small 

business, small farm, and consumer loans, if 

applicable, in its assessment area(s); 

(B) A high percentage of its loans are made 

in its assessment area(s); 

(C) A good geographic distribution of loans 

in its assessment area(s); 

(D) A good distribution, particularly in its 

assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

savings association; 

(E) A good record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Use of innovative or flexible lending 

practices in a safe and sound manner to 

address the credit needs of low- or moderateincome individuals or geographies; and 

(G) It has made a relatively high level of 

community development loans. 

(iii) Low satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s lending performance ‘‘low 

satisfactory’’ if, in general, it demonstrates: 

(A) Adequate responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) An adequate percentage of its loans are 

made in its assessment area(s); 

(C) An adequate geographic distribution of 

loans in its assessment area(s); 

(D) An adequate distribution, particularly 

in its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

savings association; 

(E) An adequate record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Limited 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; 

and 

(G) It has made an adequate level of 

community development loans. 

(iv) Needs to improve. The appropriate 

Federal banking agency rates a savings 

association’s lending performance ‘‘needs to 

improve’’ if, in general, it demonstrates: 

(A) Poor responsiveness to credit needs in 

its assessment area(s), taking into account the 

number and amount of home mortgage, small 

business, small farm, and consumer loans, if 

applicable, in its assessment area(s); 

(B) A small percentage of its loans are 

made in its assessment area(s); 

(C) A poor geographic distribution of loans, 

particularly to low- or moderate-income 

geographies, in its assessment area(s); 

(D) A poor distribution, particularly in its 

assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

savings association; 

(E) A poor record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) Little 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; 

and 

(G) It has made a low level of community 

development loans. 

(v) Substantial noncompliance. The 

appropriate Federal banking agency rates a 

savings association’s lending performance as 

being in ‘‘substantial noncompliance’’ if, in 

general, it demonstrates: 

(A) A very poor responsiveness to credit 

needs in its assessment area(s), taking into 

account the number and amount of home 

mortgage, small business, small farm, and 

consumer loans, if applicable, in its 

assessment area(s); 

(B) A very small percentage of its loans are 

made in its assessment area(s); 

(C) A very poor geographic distribution of 

loans, particularly to low- or moderateincome geographies, in its assessment area(s); 

(D) A very poor distribution, particularly in 

its assessment area(s), of loans among 

individuals of different income levels and 

businesses (including farms) of different 

sizes, given the product lines offered by the 

savings association; 

(E) A very poor record of serving the credit 

needs of highly economically disadvantaged 

areas in its assessment area(s), low-income 

individuals, or businesses (including farms) 

with gross annual revenues of $1 million or 

less, consistent with safe and sound 

operations; 

(F) No use of innovative or flexible lending 

practices in a safe and sound manner to 

address the credit needs of low- or moderateincome individuals or geographies; and 

(G) It has made few, if any, community 

development loans. 

(2) Investment performance rating. The 

appropriate Federal banking agency assigns 

each savings association’s investment 

performance one of the five following ratings. 

(i) Outstanding. The appropriate Federal 

banking agency rates a savings association’s 

investment performance ‘‘outstanding’’ if, in 

general, it demonstrates: 

(A) An excellent level of qualified 

investments, particularly those that are not 

routinely provided by private investors, often 

in a leadership position; 

(B) Extensive use of innovative or complex 

qualified investments; and 

(C) Excellent responsiveness to credit and 

community development needs. 

(ii) High satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s investment performance ‘‘high 

satisfactory’’ if, in general, it demonstrates: 

(A) A significant level of qualified 

investments, particularly those that are not 

routinely provided by private investors, 

occasionally in a leadership position; 

(B) Significant use of innovative or 

complex qualified investments; and 

(C) Good responsiveness to credit and 

community development needs. 

(iii) Low satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s investment performance ‘‘low 

satisfactory’’ if, in general, it demonstrates: 

(A) An adequate level of qualified 

investments, particularly those that are not 

routinely provided by private investors, 

although rarely in a leadership position; 

(B) Occasional use of innovative or 

complex qualified investments; and 

(C) Adequate responsiveness to credit and 

community development needs. 

(iv) Needs to improve. The appropriate 

Federal banking agency rates a savings 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52061 

association’s investment performance ‘‘needs 

to improve’’ if, in general, it demonstrates: 

(A) A poor level of qualified investments, 

particularly those that are not routinely 

provided by private investors; 

(B) Rare use of innovative or complex 

qualified investments; and 

(C) Poor responsiveness to credit and 

community development needs. 

(v) Substantial noncompliance. The 

appropriate Federal banking agency rates a 

savings association’s investment performance 

as being in ‘‘substantial noncompliance’’ if, 

in general, it demonstrates: 

(A) Few, if any, qualified investments, 

particularly those that are not routinely 

provided by private investors; 

(B) No use of innovative or complex 

qualified investments; and 

(C) Very poor responsiveness to credit and 

community development needs. 

(3) Service performance rating. The 

appropriate Federal banking agency assigns 

each savings association’s service 

performance one of the five following ratings. 

(i) Outstanding. The appropriate Federal 

banking agency rates a savings association’s 

service performance ‘‘outstanding’’ if, in 

general, the savings association 

demonstrates: 

(A) Its service delivery systems are readily 

accessible to geographies and individuals of 

different income levels in its assessment 

area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has improved the accessibility of its delivery 

systems, particularly in low- or moderateincome geographies or to low- or moderateincome individuals; 

(C) Its services (including, where 

appropriate, business hours) are tailored to 

the convenience and needs of its assessment 

area(s), particularly low- or moderate-income 

geographies or low- or moderate-income 

individuals; and 

(D) It is a leader in providing community 

development services. 

(ii) High satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s service performance ‘‘high 

satisfactory’’ if, in general, the savings 

association demonstrates: 

(A) Its service delivery systems are 

accessible to geographies and individuals of 

different income levels in its assessment 

area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has not adversely affected the accessibility of 

its delivery systems, particularly in low- and 

moderate-income geographies and to lowand moderate-income individuals; 

(C) Its services (including, where 

appropriate, business hours) do not vary in 

a way that inconveniences its assessment 

area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and 

(D) It provides a relatively high level of 

community development services. 

(iii) Low satisfactory. The appropriate 

Federal banking agency rates a savings 

association’s service performance ‘‘low 

satisfactory’’ if, in general, the savings 

association demonstrates: 

(A) Its service delivery systems are 

reasonably accessible to geographies and 

individuals of different income levels in its 

assessment area(s); 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has generally not adversely affected the 

accessibility of its delivery systems, 

particularly in low- and moderate-income 

geographies and to low- and moderateincome individuals; 

(C) Its services (including, where 

appropriate, business hours) do not vary in 

a way that inconveniences its assessment 

area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and 

(D) It provides an adequate level of 

community development services. 

(iv) Needs to improve. The appropriate 

Federal banking agency rates a savings 

association’s service performance ‘‘needs to 

improve’’ if, in general, the savings 

association demonstrates: 

(A) Its service delivery systems are 

unreasonably inaccessible to portions of its 

assessment area(s), particularly to low- or 

moderate-income geographies or to low- or 

moderate-income individuals; 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has adversely affected the accessibility of its 

delivery systems, particularly in low- or 

moderate-income geographies or to low- or 

moderate-income individuals; 

(C) Its services (including, where 

appropriate, business hours) vary in a way 

that inconveniences its assessment area(s), 

particularly low- or moderate-income 

geographies or low- or moderate-income 

individuals; and 

(D) It provides a limited level of 

community development services. 

(v) Substantial noncompliance. The 

appropriate Federal banking agency rates a 

savings association’s service performance as 

being in ‘‘substantial noncompliance’’ if, in 

general, the savings association 

demonstrates: 

(A) Its service delivery systems are 

unreasonably inaccessible to significant 

portions of its assessment area(s), particularly 

to low- or moderate-income geographies or to 

low- or moderate-income individuals; 

(B) To the extent changes have been made, 

its record of opening and closing branches 

has significantly adversely affected the 

accessibility of its delivery systems, 

particularly in low- or moderate-income 

geographies or to low- or moderate-income 

individuals; 

(C) Its services (including, where 

appropriate, business hours) vary in a way 

that significantly inconveniences its 

assessment area(s), particularly low- or 

moderate-income geographies or low- or 

moderate-income individuals; and 

(D) It provides few, if any, community 

development services. 

(c) Wholesale or limited purpose savings 

associations. The appropriate Federal 

banking agency assigns each wholesale or 

limited purpose savings association’s 

community development performance one of 

the four following ratings. 

(1) Outstanding. The appropriate Federal 

banking agency rates a wholesale or limited 

purpose savings association’s community 

development performance ‘‘outstanding’’ if, 

in general, it demonstrates: 

(i) A high level of community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) Extensive use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

(iii) Excellent responsiveness to credit and 

community development needs in its 

assessment area(s). 

(2) Satisfactory. The appropriate Federal 

banking agency rates a wholesale or limited 

purpose savings association’s community 

development performance ‘‘satisfactory’’ if, 

in general, it demonstrates: 

(i) An adequate level of community 

development loans, community development 

services, or qualified investments, 

particularly investments that are not 

routinely provided by private investors; 

(ii) Occasional use of innovative or 

complex qualified investments, community 

development loans, or community 

development services; and 

(iii) Adequate responsiveness to credit and 

community development needs in its 

assessment area(s). 

(3) Needs to improve. The appropriate 

Federal banking agency rates a wholesale or 

limited purpose savings association’s 

community development performance as 

‘‘needs to improve’’ if, in general, it 

demonstrates: 

(i) A poor level of community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) Rare use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

(iii) Poor responsiveness to credit and 

community development needs in its 

assessment area(s). 

(4) Substantial noncompliance. The 

appropriate Federal banking agency rates a 

wholesale or limited purpose savings 

association’s community development 

performance in ‘‘substantial noncompliance’’ 

if, in general, it demonstrates: 

(i) Few, if any, community development 

loans, community development services, or 

qualified investments, particularly 

investments that are not routinely provided 

by private investors; 

(ii) No use of innovative or complex 

qualified investments, community 

development loans, or community 

development services; and 

(iii) Very poor responsiveness to credit and 

community development needs in its 

assessment area(s). 

(d) Savings associations evaluated under 

the small savings association performance 

standard—(1)Lending test ratings. (i) 

Eligibility for a satisfactory lending test 

rating. The appropriate Federal banking 

agency rates a small savings association’s 

lending performance ‘‘satisfactory’’ if, in 

general, the savings association 

demonstrates: 

52062 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 

(A) A reasonable loan-to-deposit ratio 

(considering seasonal variations) given the 

savings association’s size, financial 

condition, the credit needs of its assessment 

area(s), and taking into account, as 

appropriate, other lending-related activities 

such as loan originations for sale to the 

secondary markets and community 

development loans and qualified 

investments; 

(B) A majority of its loans and, as 

appropriate, other lending-related activities, 

are in its assessment area; 

(C) A distribution of loans to and, as 

appropriate, other lending-related activities 

for individuals of different income levels 

(including low- and moderate-income 

individuals) and businesses and farms of 

different sizes that is reasonable given the 

demographics of the savings association’s 

assessment area(s); 

(D) A record of taking appropriate action, 

when warranted, in response to written 

complaints, if any, about the savings 

association’s performance in helping to meet 

the credit needs of its assessment area(s); and 

(E) A reasonable geographic distribution of 

loans given the savings association’s 

assessment area(s). 

(ii) Eligibility for an ‘‘outstanding’’ lending 

test rating. A small savings association that 

meets each of the standards for a 

‘‘satisfactory’’ rating under this paragraph 

and exceeds some or all of those standards 

may warrant consideration for a lending test 

rating of ‘‘outstanding.’’ 

(iii) Needs to improve or substantial 

noncompliance ratings. A small savings 

association may also receive a lending test 

rating of ‘‘needs to improve’’ or ‘‘substantial 

noncompliance’’ depending on the degree to 

which its performance has failed to meet the 

standard for a ‘‘satisfactory’’ rating. 

(2) Community development test ratings for 

intermediate small savings associations—(i) 

Eligibility for a satisfactory community 

development test rating. The appropriate 

Federal banking agency rates an intermediate 

small savings association’s community 

development performance ‘‘satisfactory’’ if 

the savings association demonstrates 

adequate responsiveness to the community 

development needs of its assessment area(s) 

through community development loans, 

qualified investments, and community 

development services. The adequacy of the 

savings association’s response will depend 

on its capacity for such community 

development activities, its assessment area’s 

need for such community development 

activities, and the availability of such 

opportunities for community development in 

the savings association’s assessment area(s). 

(ii) Eligibility for an outstanding 

community development test rating. The 

appropriate Federal banking agency rates an 

intermediate small savings association’s 

community development performance 

‘‘outstanding’’ if the savings association 

demonstrates excellent responsiveness to 

community development needs in its 

assessment area(s) through community 

development loans, qualified investments, 

and community development services, as 

appropriate, considering the savings 

association’s capacity and the need and 

availability of such opportunities for 

community development in the savings 

association’s assessment area(s). 

(iii) Needs to improve or substantial 

noncompliance ratings. An intermediate 

small savings association may also receive a 

community development test rating of 

‘‘needs to improve’’ or ‘‘substantial 

noncompliance’’ depending on the degree to 

which its performance has failed to meet the 

standards for a ‘‘satisfactory’’ rating. 

(3) Overall rating—(i) Eligibility for a 

satisfactory overall rating. No intermediate 

small savings association may receive an 

assigned overall rating of ‘‘satisfactory’’ 

unless it receives a rating of at least 

‘‘satisfactory’’ on both the lending test and 

the community development test. 

(ii) Eligibility for an outstanding overall 

rating. (A) An intermediate small savings 

association that receives an ‘‘outstanding’’ 

rating on one test and at least ‘‘satisfactory’’ 

on the other test may receive an assigned 

overall rating of ‘‘outstanding.’’ 

(B) A small savings association that is not 

an intermediate small savings association 

that meets each of the standards for a 

‘‘satisfactory’’ rating under the lending test 

and exceeds some or all of those standards 

may warrant consideration for an overall 

rating of ‘‘outstanding.’’ In assessing whether 

a savings association’s performance is 

‘‘outstanding,’’ the appropriate Federal 

banking agency considers the extent to which 

the savings association exceeds each of the 

performance standards for a ‘‘satisfactory’’ 

rating and its performance in making 

qualified investments and its performance in 

providing branches and other services and 

delivery systems that enhance credit 

availability in its assessment area(s). 

(iii) Needs to improve or substantial 

noncompliance overall ratings. A small 

savings association may also receive a rating 

of ‘‘needs to improve’’ or ‘‘substantial 

noncompliance’’ depending on the degree to 

which its performance has failed to meet the 

standards for a ‘‘satisfactory’’ rating. 

(e) Strategic plan assessment and rating— 

(1) Satisfactory goals. The appropriate 

Federal banking agency approves as 

‘‘satisfactory’’ measurable goals that 

adequately help to meet the credit needs of 

the savings association’s assessment area(s). 

(2) Outstanding goals. If the plan identifies 

a separate group of measurable goals that 

substantially exceed the levels approved as 

‘‘satisfactory,’’ the appropriate Federal 

banking agency will approve those goals as 

‘‘outstanding.’’ 

(3) Rating. The appropriate Federal 

banking agency assesses the performance of 

a savings association operating under an 

approved plan to determine if the savings 

association has met its plan goals: 

(i) If the savings association substantially 

achieves its plan goals for a satisfactory 

rating, the appropriate Federal banking 

agency will rate the savings association’s 

performance under the plan as ‘‘satisfactory.’’ 

(ii) If the savings association exceeds its 

plan goals for a satisfactory rating and 

substantially achieves its plan goals for an 

outstanding rating, the appropriate Federal 

banking agency will rate the savings 

association’s performance under the plan as 

‘‘outstanding.’’ 

(iii) If the savings association fails to meet 

substantially its plan goals for a satisfactory 

rating, the appropriate Federal banking 

agency will rate the savings association as 

either ‘‘needs to improve’’ or ‘‘substantial 

noncompliance,’’ depending on the extent to 

which it falls short of its plan goals, unless 

the savings association elected in its plan to 

be rated otherwise, as provided in 

§ 195.27(f)(4). 

Appendix B to Part 195—CRA Notice 

(a) Notice for main offices and, if an 

interstate savings association, one branch 

office in each state. 

Community Reinvestment Act Notice 

Under the Federal Community 

Reinvestment Act (CRA), the [Office of the 

Comptroller of the Currency (OCC) or Federal 

Deposit Insurance Corporation (FDIC)] 

evaluates our record of helping to meet the 

credit needs of this community consistent 

with safe and sound operations. The [OCC or 

FDIC] also takes this record into account 

when deciding on certain applications 

submitted by us. 

Your involvement is encouraged. 

You are entitled to certain information 

about our operations and our performance 

under the CRA, including, for example, 

information about our branches, such as their 

location and services provided at them; the 

public section of our most recent CRA 

Performance Evaluation, prepared by the 

[OCC or FDIC]; and comments received from 

the public relating to our performance in 

helping to meet community credit needs, as 

well as our responses to those comments. 

You may review this information today. 

At least 30 days before the beginning of 

each quarter, the [OCC or FDIC] publishes a 

nationwide list of the savings associations 

that are scheduled for CRA examination in 

that quarter. This list is available from the 

[OCC Deputy Comptroller (address) or FDIC 

appropriate regional director (address)]. You 

may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at savings association) and the [OCC Deputy 

Comptroller (address) or FDIC appropriate 

regional director (address)]. Your letter, 

together with any response by us, will be 

considered by the [OCC or FDIC] in 

evaluating our CRA performance and may be 

made public. 

You may ask to look at any comments 

received by the [OCC Deputy Comptroller or 

FDIC appropriate regional director]. You may 

also request from the [OCC Deputy 

Comptroller or FDIC appropriate regional 

director] an announcement of our 

applications covered by the CRA filed with 

the [OCC or FDIC]. We are an affiliate of 

(name of holding company), a savings and 

loan holding company. You may request 

from the (title of responsible official), Federal 

Reserve Bank of llll (address) an 

announcement of applications covered by the 

CRA filed by savings and loan holding 

companies. 

(b) Notice for branch offices. 

Community Reinvestment Act Notice 

Under the Federal Community 

Reinvestment Act (CRA), the [Office of the 

Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52063 

Comptroller of the Currency (OCC) or Federal 

Deposit Insurance Corporation (FDIC)] 

evaluates our record of helping to meet the 

credit needs of this community consistent 

with safe and sound operations. The [OCC or 

FDIC] also takes this record into account 

when deciding on certain applications 

submitted by us. 

Your involvement is encouraged. 

You are entitled to certain information 

about our operations and our performance 

under the CRA. You may review today the 

public section of our most recent CRA 

evaluation, prepared by the [OCC or FDIC] 

and a list of services provided at this branch. 

You may also have access to the following 

additional information, which we will make 

available to you at this branch within five 

calendar days after you make a request to us: 

(1) A map showing the assessment area 

containing this branch, which is the area in 

which the [OCC or FDIC] evaluates our CRA 

performance in this community; (2) 

information about our branches in this 

assessment area; (3) a list of services we 

provide at those locations; (4) data on our 

lending performance in this assessment area; 

and (5) copies of all written comments 

received by us that specifically relate to our 

CRA performance in this assessment area, 

and any responses we have made to those 

comments. If we are operating under an 

approved strategic plan, you may also have 

access to a copy of the plan. 

[If you would like to review information 

about our CRA performance in other 

communities served by us, the public file for 

our entire savings association is available at 

(name of office located in state), located at 

(address).] 

At least 30 days before the beginning of 

each quarter, the [OCC or FDIC] publishes a 

nationwide list of the savings associations 

that are scheduled for CRA examination in 

that quarter. This list is available from the 

[OCC Deputy Comptroller (address) or FDIC 

appropriate regional office (address)]. You 

may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at savings association) and the [OCC or 

FDIC]. Your letter, together with any 

response by us, will be considered by the 

[OCC or FDIC] in evaluating our CRA 

performance and may be made public. 

You may ask to look at any comments 

received by the [OCC Deputy Comptroller or 

FDIC appropriate regional director]. You may 

also request an announcement of our 

applications covered by the CRA filed with 

the [OCC Deputy Comptroller or FDIC 

appropriate regional director]. We are an 

affiliate of (name of holding company), a 

savings and loan holding company. You may 

request from the (title of responsible official), 

Federal Reserve Bank of llll (address) 

an announcement of applications covered by 

the CRA filed by savings and loan holding 

companies. 

Michael J. Hsu, 

Acting Comptroller of the Currency. 

[FR Doc. 2021–19738 Filed 9–16–21; 8:45 am] 

BILLING CODE 4810–33–P