33884 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 25 

[Docket ID OCC–2022–0002] 

RIN 1557–AF15 

FEDERAL RESERVE SYSTEM 

12 CFR Part 228 

[Regulation BB; Docket No. R–1769] 

RIN 7100–AG29 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 345 

RIN 3064–AF81 

Community Reinvestment Act 

AGENCY: Board of Governors of the 

Federal Reserve System; Federal Deposit 

Insurance Corporation; and Office of the 

Comptroller of the Currency, Treasury 

ACTION: Joint notice of proposed 

rulemaking; request for comment. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (Board), the 

Federal Deposit Insurance Corporation 

(FDIC), and the Office of the 

Comptroller of the Currency (OCC) 

propose to amend their regulations 

implementing the Community 

Reinvestment Act of 1977 (CRA) to 

update how CRA activities qualify for 

consideration, where CRA activities are 

considered, and how CRA activities are 

evaluated. 

DATES: Comments must be received on 

or before August 5, 2022. 

ADDRESSES: Comments should be 

directed to: 

OCC: Commenters are encouraged to 

submit comments through the Federal 

eRulemaking Portal. Please use the title 

‘‘Community Reinvestment Act’’ to 

facilitate the organization and 

distribution of the comments. You may 

submit comments by any of the 

following methods: 

• Federal eRulemaking Portal— 

Regulations.gov: Go to https://

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

2022–0002’’ 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, 9 a.m.– 

5 p.m. EST or email regulations@

erulemakinghelpdesk.com. 

• 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. 

• 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–2022–0002’’ 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: 

• Viewing Comments Electronically— 

Regulations.gov: Go to https://

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

2022–0002’’ 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, 9 a.m.–5 p.m. EST 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. 

Board: You may submit comments, 

identified by Docket No. R–1769 and 

RIN 7100–AG29, by any of the following 

methods: 

• Agency Website: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Email: regs.comments@

federalreserve.gov. Include docket and 

RIN numbers in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Ann E. Misback, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

Instructions: All public comments are 

available from the Board’s website at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm as 

submitted. Accordingly, comments will 

not be edited to remove any identifying 

or contact information. Public 

comments may also be viewed 

electronically or in paper in Room M– 

4365A, 2001 C Street NW, Washington, 

DC 20551, between 9:00 a.m. and 5:00 

p.m. during Federal business weekdays. 

For security reasons, the Board requires 

that visitors make an appointment to 

inspect comments. You may do so by 

calling (202) 452–3684. Upon arrival, 

visitors will be required to present valid 

government-issued photo identification 

and to submit to security screening in 

order to inspect and photocopy 

comments. For users of TTY–TRS, 

please call 711 from any telephone, 

anywhere in the United States. 

FDIC: You may submit comments, 

identified by RIN 3064–AF81, by any of 

the following methods: 

• Agency Website: https://

www.fdic.gov/resources/regulations/ 

federal-register-publications/. Follow 

instructions for submitting comments 

on the Agency website. 

• Email: comments@fdic.gov. Include 

RIN 3064–AF81 on the subject line of 

the message. 

• Mail: James P. Sheesley, Assistant 

Executive Secretary, Attention: 

Comments RIN 3064–AF81, Federal 

Deposit Insurance Corporation, 550 17th 

Street NW, Washington, DC 20429. 

• Hand Delivery/Courier: Comments 

may be hand delivered to the guard 

station at the rear of the 550 17th Street 

NW building (located on F Street NW) 

on business days between 7:00 a.m. and 

5:00 p.m. 

Public Inspection: Comments 

received, including any personal 

information provided, may be posted 

without change to https://www.fdic.gov/ 

resources/regulations/federal-registerpublications/. Commenters should 

submit only information that the 

commenter wishes to make available 

publicly. The FDIC may review, redact, 

or refrain from posting all or any portion 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33885 

1 12 U.S.C. 2901 et seq. 

2For purposes of this SUPPLEMENTARY

INFORMATION, the term ‘‘bank’’ includes insured 

national and state banks, Federal and state savings 

associations, Federal branches as defined in 12 CFR 

part 28, insured State branches as defined in 12 

CFR 345.11(c), and state member banks as defined 

in 12 CFR part 208, except as provided in 12 CFR 

__.11(c). 

3See 12 CFR part 25 (OCC), 12 CFR part 228 

(Regulation BB) (Board), and 12 CFR part 345 

(FDIC). For clarity and to streamline references, 

citations to the agencies’ existing common CRA 

regulations are provided in the following format: 12 

CFR __.xx; for example, references to 12 CFR 25.12 

(OCC), 12 CFR 228.12 (Board), and 12 CFR 345.12 

(FDIC) would be streamlined as follows: ‘‘12 CFR 

__.12.’’ Likewise, references to the agencies’ 

proposed common CRA regulations are provided in 

the following format: ‘‘proposed § __.xx.’’ 

of any comment that it may deem to be 

inappropriate for publication, such as 

irrelevant or obscene material. The FDIC 

may post only a single representative 

example of identical or substantially 

identical comments, and in such cases 

will generally identify the number of 

identical or substantially identical 

comments represented by the posted 

example. All comments that have been 

redacted, as well as those that have not 

been posted, that contain comments on 

the merits of this notice will be retained 

in the public comment file and will be 

considered as required under all 

applicable laws. All comments may be 

accessible under the Freedom of 

Information Act. 

FOR FURTHER INFORMATION CONTACT: 

OCC: Heidi Thomas, Special Counsel, 

or Emily Boyes, Counsel, Chief 

Counsel’s Office, (202) 649–5490; or 

Vonda Eanes, Director for CRA and Fair 

Lending Policy, 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. If you are deaf, 

hard of hearing, or have a speech 

disability, please dial 7–1–1 to access 

telecommunications relay services. 

Board: S. Caroline (Carrie) Johnson, 

Manager, Division of Consumer and 

Community Affairs, (202) 452–2762; 

Amal S. Patel, Counsel, Division of 

Consumer and Community Affairs, (202) 

912–7879, Board of Governors of the 

Federal Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. For users of TTY–TRS, please 

call 711 from any telephone, anywhere 

in the United States. 

FDIC: Patience R. Singleton, Senior 

Policy Analyst, Supervisory Policy 

Branch, Division of Depositor and 

Consumer Protection, (202) 898–6859; 

Pamela Freeman, Chief Fair Lending 

and CRA Examination Section, Division 

of Depositor and Consumer Protection, 

(202) 898–3656; Richard M. Schwartz, 

Counsel, Legal Division, (202) 898– 

7424; or Sherry Ann Betancourt, 

Counsel, Legal Division, (202) 898– 

6560, Federal Deposit Insurance 

Corporation, 550 17th Street NW, 

Washington, DC 20429. 

SUPPLEMENTARY INFORMATION: In this 

Notice of Proposed Rulemaking (NPR or 

proposal), the OCC, Board, and the 

FDIC, (together referred to as ‘‘the 

agencies’’) seek feedback on changes to 

update and clarify the regulations to 

implement the CRA.1 The CRA 

encourages banks 2 to help meet the 

credit needs of the local communities in 

which they are chartered, consistent 

with a bank’s safe and sound operations, 

by requiring the Federal banking 

regulatory agencies to examine banks’ 

records of meeting the credit needs of 

their entire community, including lowand moderate-income neighborhoods. 

The agencies implement the CRA 

through their CRA regulations.3 The 

CRA regulations establish the 

framework and criteria by which the 

agencies assess a bank’s record of 

helping to meet the credit needs of its 

community, including low- and 

moderate-income neighborhoods, 

consistent with safe and sound 

operations. Under the CRA regulations, 

the agencies apply different evaluation 

standards for banks of different asset 

sizes and types. 

This NPR seeks to update the CRA 

regulations in adherence with objectives 

that include the following: 

• Update CRA regulations to 

strengthen the achievement of the core 

purpose of the statute; 

• Adapt to changes in the banking 

industry, including the expanded role of 

mobile and online banking; 

• Provide greater clarity and 

consistency in the application of the 

regulations; 

• Tailor performance standards to 

account for differences in bank size and 

business models and local conditions; 

• Tailor data collection and reporting 

requirements and use existing data 

whenever possible; 

• Promote transparency and public 

engagement; 

• Confirm that CRA and fair lending 

responsibilities are mutually 

reinforcing; and 

• Create a consistent regulatory 

approach that applies to banks regulated 

by all three agencies. 

A key part of the proposal is a new 

evaluation framework for evaluating 

CRA performance for banks. The 

agencies propose an evaluation 

framework that would establish the 

following four tests for large banks: 

Retail Lending Test; Retail Services and 

Products Test; Community Development 

Financing Test; and Community 

Development Services Test. 

Intermediate banks would be evaluated 

under the Retail Lending Test and the 

status quo community development 

test, unless they choose to opt into the 

Community Development Financing 

Test. Small banks would be evaluated 

under the status quo small bank lending 

test, unless they choose to opt into the 

Retail Lending Test. Wholesale and 

limited purpose banks would be 

evaluated under a tailored version of the 

Community Development Financing 

Test. 

The agencies request feedback on all 

aspects of the proposal, including but 

not limited to the specific questions 

outlined in the SUPPLEMENTARY

INFORMATION. The agencies are setting 

forth in this SUPPLEMENTARY

INFORMATION the proposed rule using 

common regulation text for ease of 

commenter review. The agencies are 

proposing agency-specific amendatory 

text where necessary to account for 

differing agency authority and 

terminology. 

Table of Contents 

I. Introduction 

II. Overview of Proposed Rule 

III. Community Development Definitions 

IV. Qualifying Activities Confirmation and 

Illustrative List of Activities 

V. Impact Review of Community 

Development Activities 

VI. Assessment Areas and Areas for Eligible 

Community Development Activity 

VII. Performance Tests, Standards, and 

Ratings in General 

VIII. Retail Lending Test Product Categories 

and Major Product Lines 

IX. Retail Lending Test Evaluation 

Framework for Facility-Based 

Assessment Areas and Retail Lending 

Assessment Areas 

X. Retail Lending Test Evaluation Framework 

for Retail Lending Test Conclusions at 

the State, Multistate MSAs, and 

Institution Level 

XI. Retail Services and Products Test 

XII. Community Development Financing Test 

XIII. Community Development Services Test 

XIV. Wholesale and Limited Purpose Banks 

XV. Strategic Plans 

XVI. Assigned Conclusions and Ratings 

XVII. Performance Standards for Small Banks 

and Intermediate Banks 

XVIII. Effect of CRA Performance on 

Applications 

XIX. Data Collection, Reporting, and 

Disclosure 

XX. Content and Availability of Public File, 

Public Notice by Banks, Publication of 

Planned Examination Schedule, and 

Public Engagement 

XXI. Transition 

XXII. Regulatory Analysis 

XXIII. Text of Common Proposed Rule (All 

Agencies) 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
33886 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

4 12 U.S.C. 2901(a). 

5 12 U.S.C. 2903(a)(1). 

6 12 U.S.C. 2906(a). 

7 12 U.S.C. 2906(b). 

8 12 U.S.C. 2903(a)(2). 

9Public Law 101–73, 103 Stat. 183 (Aug. 9, 1989). 

10Public Law 102–242, 105 Stat. 2236 (Dec. 19, 

1991). 

11Public Law 102–550, 106 Stat. 3874 (Oct. 28, 

1992). 

12Public Law 103–328, 108 Stat. 2338 (Sept. 29, 

1994). 

13Public Law 106–102, 113 Stat. 1338 (Nov. 12, 

1999). 

14 12 U.S.C. 2905. 

15 43 FR 47144 (Oct. 12, 1978). Congress also 

charged, in addition to the agencies, the Office of 

Thrift Supervision (OTS) and its predecessor 

agency, the Federal Home Loan Bank Board, with 

implementing the CRA. The OTS had CRA 

rulemaking and supervisory authority for all 

savings associations. Pursuant to Title III of the 

Dodd-Frank Wall Street Reform and Consumer 

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

1522 (2010), the OTS’s CRA rulemaking authority 

for all savings associations transferred to the OCC 

and the OTS’s CRA supervisory authority for State 

savings associations transferred to the FDIC. As a 

result, the OCC’s CRA regulation applies to both 

State and Federal savings associations, in addition 

to national banks, and the FDIC enforces the OCC’s 

CRA regulations with respect to State savings 

associations. 

16See 81 FR 48506 (July 25, 2016). ‘‘Interagency 

Questions and Answers’’ refers to the ‘‘Interagency 

Questions and Answers Regarding Community 

Reinvestment’’ guidance in its entirety. ‘‘Q&A’’ 

refers to an individual question and answer within 

the Interagency Questions and Answers. 

17See generally 12 CFR l.21 through l.27. The 

agencies annually adjust the CRA asset-size 

thresholds based on the annual percentage change 

in a measure of the Consumer Price Index. 

I. Introduction 

A. Background 

The CRA is designed to encourage 

regulated banks to help meet the credit 

needs of the local communities in 

which they are chartered. 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 to help meet 

the credit needs of the local 

communities in which they are 

chartered.’’ 4

The CRA statute requires the agencies 

to ‘‘assess the institution’s record of 

meeting the credit needs of its entire 

community, including low- and 

moderate-income neighborhoods, 

consistent with the safe and sound 

operation of such institution.’’ 5 Upon 

completing this assessment, the statute 

requires the agencies to ‘‘prepare a 

written evaluation of the institution’s 

record of meeting the credit needs of its 

entire community, including low- and 

moderate-income neighborhoods.’’ 6 In 

addition, the statute requires making 

portions of these written evaluations, 

referred to by the agencies as 

performance evaluations, available to 

the public.7 The statute further provides 

that each agency must consider a bank’s 

CRA performance ‘‘in its evaluation of 

an application for a deposit facility by 

such institution.’’ 8

Since its enactment, Congress has 

amended the CRA several times, 

including through: the Financial 

Institutions Reform, Recovery, and 

Enforcement Act of 1989 9 (which 

required public disclosure of a bank’s 

CRA written evaluation and rating); the 

Federal Deposit Insurance Corporation 

Improvement Act of 1991 10 (which 

required the inclusion of a bank’s CRA 

examination data in the determination 

of its CRA rating); the Housing and 

Community Development Act of 1992 11

(which included assessment of the 

record of nonminority-owned and 

nonwomen-owned banks in cooperating 

with minority-owned and womenowned banks and low-income credit 

unions); the Riegle-Neal Interstate 

Banking and Branching Efficiency Act 

of 1994 12 (which (i) required an agency 

to consider an out-of-state national 

bank’s or state bank’s CRA rating when 

determining whether to allow interstate 

branches, and (ii) prescribed certain 

requirements for the contents of the 

written CRA evaluation for banks with 

interstate branches); and the GrammLeach-Bliley Act of 1999 13 (which, 

among other things, provided regulatory 

relief for smaller banks by reducing the 

frequency of their CRA examinations). 

Congress directed the agencies to 

publish regulations to carry out the 

CRA’s purposes,14 and in 1978 the 

agencies promulgated the first CRA 

regulations, which included evidence of 

prohibited discriminatory or other 

illegal credit practices as a performance 

factor.15 Since then, the agencies have 

together significantly revised and sought 

to clarify their CRA regulations twice, in 

1995 and 2005—with the most 

substantive interagency update 

occurring in 1995. In addition, the 

agencies have periodically jointly 

published the Interagency Questions 

and Answers Regarding Community 

Reinvestment (Interagency Questions 

and Answers) 16 to provide guidance on 

the CRA regulations. 

B. The Current CRA Regulations and 

Guidance for Performance Evaluations 

1. CRA Performance Evaluations 

The agencies’ CRA regulations 

provide different methods to evaluate a 

bank’s CRA performance depending on 

its asset size and business strategy.17

Under the current framework: 

• Small banks—currently, those with 

assets of less than $346 million as of 

December 31 of either of the prior two 

calendar years—are evaluated under a 

lending test and may receive an 

‘‘Outstanding’’ rating based only on 

their retail lending performance. 

Qualified investments, services, and 

delivery systems that enhance credit 

availability in a bank’s assessment areas 

may be considered for an ‘‘Outstanding’’ 

rating, but only if the bank meets or 

exceeds the lending test criteria in the 

small bank performance standards. 

• Intermediate small banks— 

currently, those with assets of at least 

$346 million as of December 31 of both 

of the prior two calendar years and less 

than $1.384 billion as of December 31 of 

either of the prior two calendar years— 

are evaluated under the lending test for 

small banks and a community 

development test. The intermediate 

small bank community development 

test evaluates all community 

development activities together. 

• Large banks—currently, those with 

assets of more than $1.384 billion as of 

December 31 of both of the prior two 

calendar years—are evaluated under 

separate lending, investment, and 

service tests. The lending and service 

tests consider both retail and 

community development activities, and 

the investment test focuses on qualified 

community development investments. 

To facilitate the agencies’ CRA analysis, 

large banks are required to report 

annually certain data on community 

development loans, small business 

loans, and small farm loans (small banks 

and intermediate small banks are not 

required to report these data unless they 

opt into being evaluated under the large 

bank lending test). 

• Designated wholesale banks (those 

engaged in only incidental retail 

lending) and limited purpose banks 

(those offering a narrow product line to 

a regional or broader market) are 

evaluated under a standalone 

community development test. 

• Banks of any size may elect to be 

evaluated under a strategic plan that 

sets out measurable, annual goals for 

lending, investment, and service 

activities in order to achieve a 

‘‘Satisfactory’’ or an ‘‘Outstanding’’ 

rating. A strategic plan must be 

developed with community input and 

approved by the appropriate Federal 

banking agency. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33887 

18 12 CFR l.41. 

19Political subdivisions include cities, counties, 

towns, townships, and Indian reservations. See 

Q&A §l.41(c)(1)–1. 

20 12 CFR l.12(k). 

21 12 U.S.C. 2903(a). 

22 12 CFRl.12(j), (l), (v), and (w). 

23See generally 12 CFR l.21 through l.27 and 

l.24(d). 

24See generally 12 CFR l.12(g), (h), (i), and (t) 

and 12 CFR l.21 through l.27. 

25See, e.g., https://apps.occ.gov/crasearch/ 

default.aspx (OCC); https://www.federalreserve.gov/ 

apps/CRAPubWeb/CRA/BankRating (Board); 

https://crapes.fdic.gov/ (FDIC). 

26See, e.g., Federal Financial Institutions 

Examination Council (FFIEC), ‘‘Community 

Reinvestment Act: CRA Examinations,’’ https://

www.ffiec.gov/cra/examinations.htm. 

27 Id. 

28See, e.g., 80 FR 7980 (Feb. 13, 2015). 

29See FFIEC, Joint Report to Congress: Economic 

Growth and Regulatory Paperwork Reduction Act, 

82 FR 15900 (Mar. 30, 2017), https://www.ffiec.gov/ 

pdf/2017_FFIEC_EGRPRA_Joint-Report_to_

Congress.pdf. 

30 83 FR 45053 (Sept. 5, 2018). 

31For a summary of the Federal Reserve outreach 

session feedback, see ‘‘Perspectives from Main 

Street: Stakeholder Feedback on Modernizing the 

Community Reinvestment Act’’ (June 2019), https:// 

www.federalreserve.gov/publications/files/ 

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

32 85 FR 1204 (Jan. 9, 2020). 

33 85 FR 34734 (June 5, 2020). 

34See OCC, News Release 2020–63, ‘‘OCC 

Finalizes Rule to Strengthen and Modernize 

Community Reinvestment Act Regulations’’ (May 

Continued 

The agencies also consider applicable 

performance context information to 

inform their analysis and conclusions 

when conducting CRA examinations. 

Performance context comprises a broad 

range of economic, demographic, and 

bank- and community-specific 

information that examiners review to 

calibrate a bank’s CRA evaluation to its 

local communities. 

2. Assessment Areas 

The existing CRA regulations require 

a bank to delineate one or more 

assessment areas in which its record of 

meeting its CRA obligations will be 

evaluated.18 The regulations require a 

bank to delineate assessment areas 

consisting of geographic areas 

(metropolitan statistical areas (MSAs) or 

metropolitan divisions) or political 

subdivisions 19 in which its main office, 

branches, and deposit-taking automated 

teller machines (ATMs) are located, as 

well as the surrounding geographies 

(i.e., census tracts) 20 where a substantial 

portion of its loans are originated or 

purchased. 

The assessment area requirements and 

emphasis on branches reflects the 

prevailing business model for financial 

service delivery when the CRA was 

enacted. The statute instructs the 

agencies to assess a bank’s record of 

meeting the credit needs of its ‘‘entire 

community, including low- and 

moderate-income neighborhoods, 

consistent with the safe and sound 

operation of such institution, and to 

take such record into account in its 

evaluation of an application for a 

deposit facility by such institution.’’ 21

The statute does not prescribe the 

delineation of assessment areas, but 

they are an important aspect of the 

regulation because they define 

‘‘community’’ for purposes of the 

evaluation of a bank’s CRA 

performance. 

3. Qualifying Activities 

The CRA regulations and the 

Interagency Questions and Answers 

provide detailed information, including 

applicable definitions and descriptions, 

respectively, regarding activities that are 

eligible for CRA consideration in the 

evaluation of a bank’s CRA 

performance. Banks that are evaluated 

under a performance test that includes 

a review of their retail activities are 

assessed in connection with retail 

lending activity (as applicable, home 

mortgage loans, small business loans, 

small farm loans, and consumer 

loans) 22 and, where applicable, retail 

banking service activities (e.g., the 

current distribution of a bank’s branches 

in geographies of different income 

levels, and the availability and 

effectiveness of the bank’s alternative 

systems for delivering banking services 

to low- and moderate-income 

geographies and individuals).23

Banks evaluated under a performance 

test that includes a review of their 

community development activities are 

assessed with respect to community 

development lending, qualified 

investments, and community 

development services, which by 

definition must have a primary purpose 

of community development.24

4. Guidance for Performance 

Evaluations 

In addition to information included in 

their CRA regulations, the agencies also 

provide information to the public 

regarding how CRA performance tests 

are applied, where CRA activities are 

considered, and what activities are 

eligible through publicly available CRA 

performance evaluations,25 the 

Interagency Questions and Answers, 

interagency CRA examination 

procedures,26 and interagency 

instructions for writing performance 

evaluations.27

C. Stakeholder Feedback and Recent 

Rulemaking 

The financial services industry has 

undergone transformative changes since 

the CRA statute was enacted, including 

the removal of national bank interstate 

branching restrictions and the expanded 

role of mobile and online banking. To 

better understand how these 

developments impact both consumer 

access to banking products and services 

and a bank’s CRA performance, the 

agencies have reviewed feedback from 

the banking industry, community 

groups, academics, and other 

stakeholders on several occasions. 

1. Economic Growth and Regulatory 

Paperwork Reduction Act of 1996 

(EGRPRA) 

From 2013 to 2016, the agencies 

solicited feedback on the CRA as part of 

the EGRPRA review process.28

Stakeholders raised issues related to 

assessment area definitions; incentives 

for banks to serve low- and moderateincome, unbanked, underbanked, and 

rural individuals and communities; 

recordkeeping and reporting 

requirements; the need for clarity 

regarding performance measures and 

better examiner training to ensure 

consistency in examinations; and 

refinement of CRA ratings.29

2. OCC CRA Advance Notice of 

Proposed Rulemaking and Federal 

Reserve Outreach Sessions 

On September 5, 2018, the OCC 

published an Advance Notice of 

Proposed Rulemaking (ANPR) to solicit 

ideas for a new CRA regulatory 

framework.30 More than 1,500 comment 

letters were submitted in response. To 

augment that input, the Federal Reserve 

System (the Board and the Federal 

Reserve Banks) held about 30 outreach 

meetings with representatives of banks, 

community organizations, and the other 

agencies.31

3. OCC–FDIC CRA Notice of Proposed 

Rulemaking and OCC CRA Final Rule 

On December 12, 2019, the FDIC and 

the OCC issued a joint NPR to revise 

and update their CRA regulations.32 In 

response, the FDIC and the OCC 

received over 7,500 comment letters. 

On May 20, 2020, the OCC issued a 

CRA final rule (OCC 2020 CRA final 

rule), retaining the most fundamental 

elements of the proposal but also 

making adjustments to reflect 

stakeholder input.33 The OCC deferred 

establishing the metrics-framework for 

evaluating banks’ CRA performance 

until it was able to assess additional 

data,34 with the final rule having an 


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33888 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

20, 2020), https://www.occ.gov/news-issuances/ 

news-releases/2020/nr-occ-2020-63.html; see also 

85 FR at 34736. 

35 85 FR at 34784. 

36 85 FR 66410 (Oct. 19, 2020). 

37See Interagency Statement on Community 

Reinvestment Act, Joint Agency Action (July 20, 

2021), https://www.occ.gov/news-issuances/newsreleases/2021/nr-ia-2021-77.html (OCC); https://

www.federalreserve.gov/newsevents/pressreleases/ 

bcreg20210720a.htm (Board); https://www.fdic.gov/ 

news/press-releases/2021/pr21067.html (FDIC). 

38See OCC, News Release 2021–76, Statement on 

Rescinding its 2020 Community Reinvestment Act 

Rule (July 20, 2021), https://www.occ.gov/newsissuances/news-releases/2021/nr-occ-2021-76.html. 

39 86 FR 52026 (Sept. 17, 2021). 

40 86 FR 71328 (Dec. 15, 2021). 

41 42 U.S.C. 3601 et seq. 

42 42 U.S.C. 3604 through 3606. 

43 15 U.S.C. 1691 et seq. 

44See Interagency Fair Lending Examination 

Procedures (Aug. 2009), available at https://

www.ffiec.gov/pdf/fairlend.pdf. 

45See University of Richmond’s Digital 

Scholarship Lab, ‘‘Mapping Inequality: Redlining in 

New Deal America,’’ https://dsl.richmond.edu/ 

panorama/redlining/#loc=5/39.1/-94.58 (archive of 

HOLC maps). 

46See, e.g., Daniel Aaronson, Daniel Hartley, and 

Bhashkar Mazumder, Federal Reserve Bank of 

Chicago, ‘‘The Effects of the 1930s HOLC 

‘Redlining’ Map’’ (Revised Aug. 2020), https://

www.chicagofed.org/publications/working-papers/ 

2017/wp2017-12, p.1 (‘‘Neighborhoods were 

classified based on detailed risk-based 

characteristics, including housing age, quality, 

occupancy, and prices. However, non-housing 

attributes such as race, ethnicity, and immigration 

status were influential factors as well. Since the 

lowest rated neighborhoods were drawn in red and 

often had the vast majority of African American 

residents, these maps have been associated with the 

so-called practice of ‘redlining’ in which borrowers 

are denied access to credit due to the demographic 

composition of their neighborhood.’’). 

47 123 Cong. Rec. 17630 (June 6, 1977). 

48Neil Bhutta et al., ‘‘Disparities in Wealth by 

Race and Ethnicity in the 2019 Survey of Consumer 

Finances’’ (Sept. 28, 2020), https://

www.federalreserve.gov/econres/notes/feds-notes/ 

disparities-in-wealth-by-race-and-ethnicity-in-the2019-survey-of-consumer-finances-20200928.htm. 

49 85 FR at 66413. 

October 1, 2020 effective date and 

January 1, 2023 and January 1, 2024 

compliance dates for certain 

provisions.35

4. Board CRA Advance Notice of 

Proposed Rulemaking 

On September 21, 2020, the Board 

issued a CRA ANPR (Board CRA ANPR) 

requesting public comment on an 

approach to modernize the CRA 

regulations by strengthening, clarifying, 

and tailoring them to reflect the current 

banking landscape and better meet the 

core purpose of the CRA.36 The Board 

CRA ANPR sought feedback on ways to 

evaluate how banks meet the needs of 

low- and moderate-income communities 

and address inequities in credit access. 

The Board received over 600 comment 

letters on this ANPR. 

5. Recent Developments 

On July 20, 2021, the agencies issued 

an interagency statement indicating 

their commitment to working 

collectively to, in a consistent manner, 

strengthen and modernize their CRA 

regulations.37 On the same day, the OCC 

stated its intention to rescind the OCC 

2020 CRA final rule.38 Subsequently, on 

September 8, 2021, the OCC issued a 

notice of proposed rulemaking to 

rescind the OCC 2020 CRA final rule 

and replace it with CRA regulations 

based on those that the agencies jointly 

issued in 1995, as amended.39 On 

December 15, 2021, the OCC issued a 

final rule completing the rescission and 

replacement effective January 1, 2022. 

The final rule also integrated the OCC’s 

CRA regulation for savings associations 

into its national bank CRA regulation at 

12 CFR part 25.40

D. CRA, Illegal Discrimination, and Fair 

Lending 

The CRA was one of several laws 

enacted in the 1960s and 1970s to 

address fairness and financial inclusion 

in access to housing and credit. During 

this period, Congress passed the Fair 

Housing Act (FHA) in 1968,41 to 

prohibit discrimination in renting or 

buying a home,42 and the Equal Credit 

Opportunity Act (ECOA) in 1974 43

(amended in 1976), to prohibit creditors 

from discriminating against an applicant 

in any aspect of a credit transaction on 

the basis of race, color, religion, national 

origin, sex, marital status, or age. These 

fair lending laws provide the legal basis 

for prohibiting discriminatory lending 

practices based on race and ethnicity.44

Prior to passage of these laws, 

inequitable access to credit and other 

financial services—due in large part to 

a practice known as ‘‘redlining’’—along 

with a lack of public and private 

investment, greatly contributed to the 

economic distress experienced by 

lower-income and minority 

communities. The former Federal Home 

Owners’ Loan Corporation (HOLC), 

established in 1933, employed colorcoded maps 45 to designate its 

perception of the relative risk of lending 

in a range of neighborhoods, with 

‘‘hazardous’’ (the highest risk) areas 

coded in red often with reference to the 

racial makeup of the neighborhood.46 In 

addition to referring to HOLC maps, the 

term redlining has also been used to 

more broadly describe excluding 

neighborhoods or areas from provision 

of credit or other financial services on 

account of the race or ethnicity of 

residents in those areas. As Senator 

William Proxmire, who authored the 

CRA legislation, testified when 

discussing its purpose: 

By redlining let me make it clear what I am 

talking about. I am talking about the fact that 

banks and savings and loans will take their 

deposits from a community and instead of 

reinvesting them in that community, they 

will actually or figuratively draw a red line 

on a map around the areas of their city, 

sometimes in the inner city, sometimes in the 

older neighborhoods, sometimes ethnic and 

sometimes black, but often encompassing a 

great area of their neighborhood.47

Even with the implementation of the 

CRA and the other complementary laws, 

the wealth gap and disparities in other 

financial outcomes remain persistent. 

For example, ‘‘data from the 2019 

Survey of Consumer Finances (SCF) 

show that long-standing and substantial 

wealth disparities between families in 

different racial and ethnic groups were 

little changed since the last survey in 

2016; the typical White family has eight 

times the wealth of the typical Black 

family and five times the wealth of the 

typical Hispanic family.’’ 48

The Board CRA ANPR discussed this 

history of redlining and racial 

discrimination prior to the enactment of 

these laws and asked for feedback on 

the following question: ‘‘In considering 

how the CRA’s history and purpose 

relate to the nation’s current challenges, 

what modifications and approaches 

would strengthen CRA regulatory 

implementation in addressing ongoing 

systemic inequity in credit access for 

minority individuals and 

communities?’’ 49 The Board received 

comments from a number of 

stakeholders on this question, providing 

feedback across different topics. 

As has been the case since the first 

regulations were issued by the agencies, 

the agencies continue to recognize that 

CRA and fair lending are mutually 

reinforcing. In this NPR, the agencies 

propose to retain the conditions that 

bank assessment areas are prohibited 

from reflecting illegal discrimination or 

arbitrarily excluding low- or moderateincome census tracts. The agencies also 

propose to retain the regulatory 

provision that CRA ratings can be 

downgraded as a result of 

discriminatory practices, among other 

practices. The agencies are committed to 

upholding their regulatory 

responsibilities for both fair lending and 

CRA examinations, and the agencies 

seek to coordinate those examinations 

where feasible to do so. 

In furtherance of the agencies’ 

objective to promote transparency, the 

agencies propose providing additional 

information to the public in CRA 

performance evaluations for large banks 

related to the distribution by borrower 


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50 87 FR 18627, 18830 (Mar. 31, 2022). Of 

particular relevance to the Agencies’ CRA 

regulations, the SBA revised the size standards 

applicable to small commercial banks and savings 

institutions, respectively, from $600 million to $750 

million, based upon the average assets reported on 

such a financial institution’s four quarterly 

financial statements for the preceding year. The 

final rule has a May 2, 2022 effective date. 

race and ethnicity of the bank’s home 

mortgage loan originations and 

applications in each of the bank’s 

assessment areas. This disclosure would 

leverage existing data available under 

the Home Mortgage Disclosure Act 

(HMDA). As discussed in Section XIX of 

this SUPPLEMENTARY INFORMATION, 

providing the data in this disclosure 

would have no independent impact on 

the conclusions or ratings of the bank 

and would not on its own reflect any 

fair lending finding or violation. 

Instead, this proposal is intended to 

provide transparent information to the 

public. 

II. Overview of Proposed Rule 

This SUPPLEMENTARY INFORMATION

includes a detailed discussion of the 

proposed rule, including on the 

following topics: 

Community Development Definitions. 

Section III discusses the following 

proposed definitions for community 

development activities: Affordable 

housing; economic development that 

supports small businesses and small 

farms; community supportive services; 

revitalization activities; essential 

community facilities; essential 

community infrastructure; recovery 

activities in designated disaster areas; 

disaster preparedness and climate 

resiliency activities; activities with 

minority depository institutions (MDIs), 

women’s depository-institutions (WDIs), 

low-income credit unions (LICUs), and 

Community Development Financial 

Institutions (CDFIs) certified by the U.S. 

Department of the Treasury (Treasury 

Department), referred to as Treasury 

Department-certified CDFIs; financial 

literacy; and qualifying activities in 

Native Land Areas. The agencies 

propose using a primary purpose 

standard for determining eligibility of 

the above activities, with pro rata 

consideration for certain affordable 

housing activities. 

Qualifying Activities Confirmation 

and Illustrative List of Activities. 

Section IV describes the agencies’ 

proposal to maintain a publicly 

available illustrative, non-exhaustive 

list of activities eligible for CRA 

consideration. In addition, the agencies 

propose a process, open to banks, for 

confirming eligibility of community 

development activities in advance. 

Impact Review of Community 

Development Activities. Section V 

describes the agencies’ proposal for 

specific impact review factors to inform 

the impact and responsiveness 

evaluation of a bank’s activities under 

the Community Development Financing 

Test, the Community Development 

Services Test, and the Community 

Development Financing Test for 

Wholesale or Limited Purpose Banks. 

Assessment Areas and Areas for 

Eligible Community Development 

Activity. Section VI describes proposals 

on delineating facility-based assessment 

areas for main offices, branches, and 

deposit-taking remote service facilities 

(to include ATMs). Under the proposal, 

large banks would delineate assessment 

areas comprised of full counties, 

metropolitan divisions, or MSAs. 

Intermediate and small banks could 

continue to delineate partial county 

facility-based assessment areas, 

consistent with current practice. 

The section also describes the 

proposal for large banks to delineate 

retail lending assessment areas where a 

bank has concentrations of home 

mortgage and/or small business lending 

outside of its facility-based assessment 

areas. Under this proposal, a large bank 

would delineate retail lending 

assessment areas where it has an annual 

lending volume of at least 100 home 

mortgage loan originations or at least 

250 small business loan originations in 

an MSA or nonmetropolitan area of a 

state for two consecutive years. 

The section also discusses the 

proposal to allow banks to receive CRA 

credit for any qualified community 

development activity, regardless of 

location, although performance within 

facility-based assessment areas would 

be emphasized. 

Performance Tests, Standards, and 

Ratings in General. Section VII 

describes the agencies’ proposed 

evaluation framework tailored for 

differences in bank size and business 

model. The agencies propose the 

following four tests for large banks: 

Retail Lending Test; Retail Services and 

Products Test; Community Development 

Financing Test; and Community 

Development Services Test. 

Intermediate banks would be evaluated 

under the Retail Lending Test and the 

status quo community development 

test, unless they choose to opt into the 

Community Development Financing 

Test. Small banks would be evaluated 

under the status quo small bank lending 

test, unless they choose to opt into the 

Retail Lending Test. Wholesale and 

limited purpose banks would be 

evaluated under a tailored version of the 

Community Development Financing 

Test. 

Under this framework, large banks 

would be banks that had average 

quarterly assets, computed annually, of 

at least $2 billion in both of the prior 

two calendar years; intermediate banks 

would be banks that had average 

quarterly assets, computed annually, of 

at least $600 million in both of the prior 

two calendar years and less than $2 

billion in either of the prior two 

calendar years; and small banks would 

be banks that had average quarterly 

assets, computed annually, of less than 

$600 million in either of the prior two 

calendar years. The agencies are in the 

process of seeking approval from the 

U.S. Small Business Administration 

(SBA) to use the $600 million threshold, 

where applicable and adjusted annually 

for inflation, rather than the SBA’s 

recently updated size standards.50

The agencies propose to further tailor 

aspects of the proposal within the large 

bank category. The agencies propose 

that certain provisions of the Retail 

Services and Products Test and 

Community Development Services Test 

would apply only to large banks that 

had average quarterly assets, computed 

annually, of over $10 billion in both of 

the prior two calendar years. These 

banks are referred to in this 

SUPPLEMENTARY INFORMATION as large 

banks with assets of over $10 billion. 

Large banks that had average quarterly 

assets, computed annually, of $10 

billion or less in either of the prior two 

calendar years are referred to in this 

SUPPLEMENTARY INFORMATION as large 

banks with assets of $10 billion or less. 

The section also discusses a new 

proposed definition of ‘‘operations 

subsidiary’’ to the Board’s CRA 

regulation and ‘‘operating subsidiary’’ 

for the FDIC’s and OCC’s CRA 

regulations (referred to collectively in 

this SUPPLEMENTARY INFORMATION as 

‘‘bank subsidiaries’’) to identify those 

bank affiliates whose activities would be 

required to be attributed to a bank’s 

CRA performance. The agencies propose 

to maintain the current flexibilities that 

would allow a bank to choose to include 

or exclude the activities of other bank 

affiliates that are not considered ‘‘bank 

subsidiaries.’’ The section also discusses 

performance context, and the 

requirement for activity in accordance 

with safe and sound operations. 

Retail Lending Test Product 

Categories and Major Product Lines. 

Section VIII describes the proposed 

categories and standards for 

determining when a bank’s retail 

lending product lines are evaluated 

under the Retail Lending Test. The 

agencies propose the following retail 

lending product line categories: A 


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51See 15 U.S.C. 1691c–2. The CFPB’s Section 

1071 Rulemaking would amend Regulation B to 

implement changes to ECOA made by section 1071 

of the Dodd-Frank Act. This rulemaking would 

require covered financial institutions to collect and 

report to the CFPB data on applications for credit 

for small businesses, including businesses that are 

owned by women or minorities. See 86 FR 56356 

(Oct. 8, 2021), as corrected by 86 FR 70771 (Dec. 

13, 2021). 

52Public Law 111–203, 124 Stat. 1376 (July 21, 

2010). 

53This assumes the CFPB’s section 1071 

rulemaking is finalized as proposed with a ‘‘small 

business’’ defined as having gross annual revenues 

of $5 million or less. 

closed-end home mortgage, open-end 

home mortgage, multifamily, small 

business, and small farm lending. The 

agencies also propose including 

automobile lending as an eligible retail 

lending product line. In addition, the 

agencies propose a major product line 

standard to determine when a retail 

lending product line is evaluated. 

The NPR proposes to define the terms 

‘‘small business’’ and ‘‘small farm’’ 

consistent with the Consumer Financial 

Protection Bureau’s (CFPB) proposal 

under section 1071 (Section 1071 

Rulemaking) 51 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act 52). The CFPB has 

proposed to define a ‘‘small business’’ 

as having gross annual revenues of $5 

million or less in the preceding fiscal 

year. The agencies are in the process of 

seeking approval from the SBA to use 

the standard proposed by the CFPB in 

its Section 1071 Rulemaking rather than 

the SBA’s size standards.53

Retail Lending Test Evaluation 

Framework for Facility-Based 

Assessment Areas and Retail Lending 

Assessment Areas. Section IX discusses 

the proposed Retail Lending Test for 

standardizing evaluations of retail 

lending performance in facility-based 

assessment areas and retail lending 

assessment areas for large and 

intermediate banks. The agencies 

propose using a retail lending volume 

screen to evaluate a bank’s retail lending 

volumes. The agencies also propose to 

evaluate a bank’s major product lines 

using two distribution metrics that 

measure the bank’s record of lending in 

low- and moderate-income census tracts 

and to borrowers of different income or 

revenue levels. Further, the agencies 

propose to establish a standardized 

methodology for setting performance 

expectations for specific product lines. 

The methodology defines performance 

ranges for each conclusion category for 

each product, and this performance is 

then averaged together. Under the 

methodology, the amount of lending 

needed to achieve a given conclusion 

would differ across assessment areas 

according to local credit demand and 

would calibrate across business cycles. 

Retail Lending Test Evaluation 

Framework for Retail Lending Test 

Conclusions in State, Multistate MSAs, 

and at the Institution Level. Section X 

describes the agencies’ proposal to 

assign conclusions on the Retail 

Lending Test for large and intermediate 

banks at the state and multistate MSA 

levels based on the conclusions reached 

at individual facility-based and retail 

lending assessment areas, as applicable. 

The agencies also propose to assign 

conclusions on the Retail Lending Test 

at the institution level by similarly 

combining conclusions from all of a 

bank’s facility-based and retail lending 

assessment areas, as applicable, as well 

as the bank’s retail lending performance 

outside of its assessment areas. The 

consideration of outside lending 

recognizes that some bank lending may 

be geographically diffuse, without 

concentrations in particular local 

markets that would be captured by the 

proposed retail lending assessment 

areas. 

Retail Services and Products Test. 

Section XI describes the agencies’ 

proposal to evaluate large banks under 

the Retail Services and Products Test. 

This test would use a predominantly 

qualitative approach, incorporating 

quantitative measures as guidelines, as 

applicable. First, the delivery systems 

part of the proposed test seeks to 

achieve a balanced evaluation 

framework that considers a bank’s 

branch availability and services, remote 

service facility availability, and its 

digital and other delivery systems. The 

agencies propose that the evaluation of 

digital and other delivery systems and 

deposit products would be required for 

large banks with assets of over $10 

billion, and not required for large banks 

with assets of $10 billion or less. 

Second, the credit and deposit 

products part of the proposed test aims 

to evaluate a bank’s efforts to offer 

products that are responsive to the 

needs of low- and moderate-income 

communities. The agencies propose that 

the evaluation of deposit products 

responsive to the needs of low- or 

moderate-income individuals would be 

required for large banks with assets of 

over $10 billion, and not required for 

large banks with assets of $10 billion or 

less. 

Community Development Financing 

Test. Section XII describes the agencies 

proposals for the Community 

Development Financing Test, which 

would apply to large banks as well as 

intermediate banks that choose to opt 

into this test. The Community 

Development Financing Test would 

consist of a community development 

financing metric, benchmarks, and an 

impact review. These components 

would be assessed at the facility-based 

assessment area, state, multistate MSA 

and institution levels, and would inform 

conclusions at each of those levels. 

Community Development Services 

Test. Section XIII describes the agencies’ 

proposal to assess a large bank’s 

community development services, 

underscoring the importance of these 

activities for fostering partnerships 

among different stakeholders, building 

capacity, and creating the conditions for 

effective community development. The 

agencies propose that in 

nonmetropolitan areas, banks may 

receive community development 

services consideration for volunteer 

activities that meet an identified 

community development need, even if 

unrelated to the provision of financial 

services. The proposed test would 

consist of a primarily qualitative 

assessment of the bank’s community 

development service activities. For large 

banks with assets of over $10 billion, 

the agencies propose also using a metric 

to measure the hours of community 

development services activity per full 

time employee of a bank. 

Wholesale and Limited Purpose 

Banks. Section XIV describes the 

agencies’ proposed Community 

Development Financing Test for 

Wholesale and Limited Purpose Banks, 

which would include a qualitative 

review of a bank’s community 

development lending and investments 

in each assessment area and an 

institution level-metric measuring a 

bank’s volume of activities relative to its 

capacity. The agencies also propose 

giving wholesale and limited purpose 

banks the option to have examiners 

consider community development 

service activities that would qualify 

under the Community Development 

Services Test. 

Strategic Plans. Section XV describes 

the agencies’ proposal to maintain a 

strategic plan option as an alternative 

method for evaluation. Banks that elect 

to be evaluated under a CRA strategic 

plan would continue to request 

approval for the plan from their 

appropriate Federal banking agency. 

The agencies propose more specific 

criteria to ensure that all banks are 

meeting their CRA obligation to serve 

low- and moderate-income individuals 

and communities. Banks approved to be 

evaluated under a CRA strategic plan 

option would have the same assessment 

area requirements as other banks and 

would submit plans that include the 

same performance tests and standards 

that would otherwise apply unless the 


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bank is substantially engaged in 

activities outside the scope of these 

tests. In seeking approval for a plan that 

does not adhere to requirements and 

standards that are applied to other 

banks, the plan would be required to 

include an explanation of why the 

bank’s view is that different standards 

would be more appropriate in meeting 

the credit needs of its communities. 

Assigned Conclusions and Ratings. 

Section XVI describes the agencies’ 

proposal to provide greater transparency 

and consistency on assigning ratings for 

a bank’s overall performance. The 

proposed approach would produce 

performance scores for each applicable 

test, at the state, multistate MSA, and 

institution levels based on a weighted 

average of assessment area conclusions, 

as well as consideration of additional 

test-specific factors at the state, 

multistate MSA, or institution level. 

These performance scores are mapped 

to conclusion categories to provide testspecific conclusions for the state, 

multistate MSA, and at the institution 

level. The agencies propose to combine 

these performance scores across tests to 

produce ratings at the state, multistate 

MSA, and the institution level. 

The agencies propose to determine a 

bank’s overall state, multistate MSA, or 

institution rating by taking a weighted 

average of the applicable performance 

test scores. For large banks the agencies 

propose the following weights: 45 

percent for Retail Lending Test 

performance score; 15 percent for Retail 

Services and Products Test performance 

score; 30 percent for Community 

Development Financing Test 

performance score; and 10 percent for 

Community Development Services Test 

performance score. For intermediate 

banks, the agencies propose to weight 

the Retail Lending test at 50 percent and 

the community development test, or if 

the bank chooses to opt into the 

Community Development Financing 

Test, at 50 percent. 

The agencies also propose updating 

the criteria to determine how 

discriminatory and other illegal 

practices would adversely affect a 

rating, as well as what rating level (state, 

multistate MSA, and institution) would 

be affected. 

Performance Standards for Small and 

Intermediate Banks. Section XVII 

describes the agencies’ proposal to 

continue evaluating small banks under 

the small bank performance standards 

in the current CRA framework and to 

apply the proposed metrics-based Retail 

Lending Test to intermediate banks. 

Under the proposal, small banks could 

opt into the Retail Lending Test and 

could continue to request additional 

consideration for other qualifying CRA 

activities. For intermediate banks, in 

addition to the proposed Retail Lending 

Test, the agencies propose to also 

evaluate an intermediate bank’s 

community development activity 

pursuant to the criteria under the 

current intermediate small bank 

community development test. 

Intermediate banks could also opt to be 

evaluated under the proposed 

Community Development Financing 

Test. 

Effect of CRA Performance on 

Applications. In Section XVIII, the 

agencies propose to maintain the 

current regulatory provisions for 

considering CRA performance on bank 

applications, such as those for mergers 

and acquisitions, deposit insurance, and 

branch openings and relocations. 

Data Collection, Reporting, and 

Disclosure. In Section XIX, the agencies 

propose to revise data collection and 

reporting requirements to increase the 

clarity, consistency, and transparency of 

the evaluation process through the use 

of standard metrics and benchmarks. 

The proposal recognizes the importance 

of using existing data sources where 

possible, and tailoring data 

requirements, where appropriate. 

In addition to leveraging existing data, 

the proposal would require large banks 

to collect, maintain, and report 

additional data. All large banks would 

have the same requirements for certain 

categories of data, including community 

development financing data, branch 

location data, and remote service facility 

location data. Some new data 

requirements would only apply to large 

banks with assets of over $10 billion. 

Large banks with assets of over $10 

billion would have data requirements 

for deposits data, automobile lending 

data, retail services data on digital 

delivery systems, retail services data on 

responsive deposit products, and 

community development services data. 

The proposal also provides updated 

standards for all large banks to report 

the delineation of their assessment 

areas. Data requirements for 

intermediate banks and small banks 

would remain the same as the current 

requirements. 

Content and Availability of Public 

File, Public Notice by Banks, 

Publication of Planned Examination 

Schedule, and Public Engagement. 

Section XX describes the agencies’ 

proposal to provide more transparent 

information to the public on CRA 

examinations and encourage 

communication between members of the 

public and banks. The agencies propose 

to make a bank’s CRA public file more 

accessible to the public by allowing any 

bank with a public website to include 

its CRA public file on its website. The 

agencies also propose publishing a list 

of banks scheduled for CRA 

examinations for the next two quarters 

at least 60 days in advance in order to 

provide additional notice to the public. 

Finally, the agencies propose to 

establish a way for the public to provide 

feedback on community needs and 

opportunities in specific geographies. 

Transition. Section XXI discusses the 

agencies’ proposed timeline for the 

transition from the current regulatory 

and supervisory framework to the 

proposed rule’s CRA regulatory and 

supervisory framework. 

Regulatory Analysis. Section XXII 

discusses the required regulatory 

analyses for the proposed rule. This 

includes a description of the Board’s 

and the FDIC’s Initial Regulatory 

Flexibility Analyses, which conclude 

that the proposed rule will not have a 

significant economic impact on a 

substantial number of small entities, 

and the OCC’s certification that the 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Text of Common Proposed Rule. 

Section XXIII sets forth the common 

regulatory text for the proposed CRA 

regulation. 

III. Community Development 

Definitions 

Under the current and proposed CRA 

rule, a bank may, depending on its size, 

be evaluated for its community 

development lending, investments, and/ 

or services under various tests. These 

activities must have community 

development as their primary purpose. 

Community development activities 

currently fall into four broad categories: 

Affordable housing; community 

services; economic development; and 

revitalization and stabilization. The 

agencies propose to revise the 

community development definitions in 

order to clarify eligibility criteria for 

different community development 

activities by including eleven categories 

that establish specific eligibility 

standards for a broad range of 

community development activities. The 

new definitions incorporate some 

aspects of guidance that are currently 

provided in the Interagency Questions 

and Answers. The proposed definitions 

reflect an emphasis on activities that are 

responsive to community needs, 

especially the needs of low- and 

moderate-income individuals and 

communities and small businesses and 

small farms. 


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54As discussed in the Interagency Questions and 

Answers, a loan, investment, or service has as its 

primary purpose community development when it 

is designed for the express purpose of revitalizing 

or stabilizing low- or moderate-income areas, 

designated disaster areas, or underserved or 

distressed nonmetropolitan middle-income areas, 

providing affordable housing for, or community 

services targeted to, low- or moderate-income 

persons, or promoting economic development by 

financing small businesses or small farms that meet 

the requirements set forth in 12 CFR l.12(g). See 

Q&A §l.12(h)–8. 55See 75 FR 11642 (Mar. 11, 2010). 

A. Primary Purpose of Community 

Development 

In §l.13, the agencies propose to 

define in the CRA regulations standards 

for determining whether a community 

development activity has a ‘‘primary 

purpose’’ of community development. 

Currently, the approach to 

demonstrating that an activity has a 

primary purpose of community 

development is explained in the 

Interagency Questions and Answers.54

Under the proposal, a loan, investment, 

or service meets the primary purpose 

standard when it is designed for the 

express purpose of community 

development as set forth in proposed 

§ l.13(a)(1). In general, activities with a 

primary purpose of community 

development, as proposed, would 

receive full CRA credit for the 

Community Development Financing 

Test and Community Development 

Services Test, as described below. 

To determine whether an activity is 

designed for an express community 

development purpose, the agencies 

propose applying several approaches. 

First, if a majority of the dollars, 

applicable beneficiaries, or housing 

units of the activity are identifiable to 

one or more of the community 

development activities defined in §l

.13(a)(2), then the activity meets the 

requisite primary purpose and would 

receive full CRA credit. 

Second, and alternatively, where the 

measurable portion of any benefit 

bestowed or dollars applied to the 

community development purpose is less 

than a majority of the entire activity’s 

benefits or dollar value, then the activity 

may still be considered to possess the 

requisite primary purpose, and the bank 

may receive CRA credit for the entire 

activity, if: (i) The express, bona fide 

intent of the activity, as stated, for 

example, in a prospectus, loan proposal, 

or community action plan, is primarily 

one or more of the enumerated 

community development purposes; (ii) 

the activity is specifically structured to 

achieve the expressed community 

development purpose; and (iii) the 

activity accomplishes, or is reasonably 

certain to accomplish, the community 

development purpose involved. 

Pro Rata Credit for Qualified 

Affordable Housing. The agencies 

propose that affordable housing that is 

developed in conjunction with Federal, 

state, local, or tribal government 

programs that have a stated purpose or 

bona fide intent to promote affordable 

housing would be considered even if 

fewer than the majority of the 

beneficiaries of the housing are low- or 

moderate-income individuals. In such 

cases, the activity would be considered 

to have a primary purpose of affordable 

housing only for the percentage of total 

housing units in the development that 

are affordable. For example, if a bank 

makes a $10 million loan to finance a 

mixed-income housing development in 

which 10 percent of the units will be set 

aside as affordable housing for low- or 

moderate-income individuals, the bank 

may treat $1 million of such loan as a 

community development loan. In other 

words, the pro-rata dollar amount of the 

total activity would be based on the 

percentage of units set aside for 

affordable housing for low- or moderateincome individuals. 

The agencies propose a different 

approach for an activity that involves 

low-income housing tax credits 

(LIHTCs). Specifically, a bank would 

receive consideration for the full 

amount of the loan or investment for a 

LIHTC-financed project, regardless of 

the share of units that are considered 

affordable. This proposal is consistent 

with current guidance adopted in 2010 

that clarified that projects developed 

with LIHTCs had a bona fide intent of 

providing affordable housing.55

Pro Rata Consideration for Other 

Community Development Activities. The 

proposal does not specify any other 

application of partial credit for 

activities, but the agencies seek 

feedback on whether such consideration 

is appropriate for this rulemaking in 

other specific cases. For example, an 

essential infrastructure project may 

serve a broad area where low- and 

moderate-income census tracts comprise 

a minority of total census tracts. In such 

cases, the activity could provide benefit 

to some low- or moderate-income 

individuals, although the overall project 

did not focus on low- or moderateincome census tracts or individuals. The 

agencies have considered whether banks 

should receive partial consideration 

more generally for these activities based 

on the share of low- or moderate-income 

census tracts or low- or moderateincome individuals that benefit from the 

project compared to the number of 

census tracts or total population that 

benefited from the project overall. 

However, partial consideration of 

activities could result in a significant 

expansion of the activities that could 

qualify, and thereby serve to divert 

limited resources from projects 

specifically targeted to benefit low- or 

moderate-income people or 

communities. In addition, the agencies 

believe that the proposed primary 

purpose standard retains appropriate 

flexibility to provide consideration for 

activities where less than the majority of 

the entire activity benefits low- or 

moderate-income individuals or 

communities, if those activities have the 

express, bona fide intent of community 

development. 

Request for Feedback 

Question 1. Should the agencies 

consider partial consideration for any 

other community development activities 

(for example, financing broadband 

infrastructure, health care facilities, or 

other essential infrastructure and 

community facilities), or should partial 

consideration be limited to only 

affordable housing? 

Question 2. If partial consideration is 

extended to other types of community 

development activities with a primary 

purpose of community development, 

should there be a minimum percentage 

of the activity that serves low- or 

moderate-income individuals or 

geographies or small businesses and 

small farms, such as 25 percent? If 

partial consideration is provided for 

certain types of activities considered to 

have a primary purpose of community 

development, should the agencies 

require a minimum percentage standard 

greater than 51 percent to receive full 

consideration, such as a threshold 

between 60 percent and 90 percent? 

B. Affordable Housing 

The agencies are proposing a 

definition for affordable housing that 

includes four components: (i) 

Affordable rental housing developed in 

conjunction with Federal, state, and 

local government programs; (ii) 

multifamily rental housing with 

affordable rents; (iii) activities 

supporting affordable low- or moderateincome homeownership; and (iv) 

purchases of mortgage-backed securities 

that finance affordable housing. The 

proposed definition is intended to 

clarify the eligibility of affordable 

housing as well as to recognize the 

importance of promoting affordable 

housing for low- or moderate-income 

individuals. 


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56 12 CFR l.12(g)(1). 

57See Q&A §l.12(g)(1)–1. 

58Single-family home mortgage loans may be 

included as community development under the 

intermediate small bank methodology. See Q&A 

§l.12(h)–3. 

59See Q&A §l.42(b)(2)–2. 

60See Q&A §l.12(t)–2. 

61See Q&A §l.12(g)(1)–2. 

62See Q&A §l.12(g)(1)–1. 

63See Q&A §l.12(g)(1)–1. 

64See HUD, Fair Market Rents, https://

www.hud.gov/program_offices/public_indian_

housing/programs/hcv/landlord/fmr. 

65See Q&A §l.12(h)–3. 

66See Q&A §l.12(t)–2. 

1. Background 

a. Current Approach to Affordable 

Housing 

The current CRA regulations define 

‘‘community development’’ to include 

‘‘affordable housing (including 

multifamily rental housing) for low- or 

moderate-income individuals.’’ 56 The 

agencies have stated in the Interagency 

Questions and Answers that low- or 

moderate-income individuals must 

benefit or be likely to benefit from the 

housing in order to qualify and meet the 

existing primary purpose standard.57

Currently, the agencies consider 

activities that support both single-family 

(1–4 family units) and multifamily 

(more than 4-family units) affordable 

housing. Single-family home mortgage 

loans are generally considered as part of 

the lending test, and other activities that 

are not home mortgage loans and that 

support single-family affordable housing 

may be considered as community 

development.58 Multifamily loans are 

considered separately and may qualify 

for both retail lending and community 

development consideration if they meet 

the definition of affordable housing.59

Purchases of mortgage-backed securities 

that primarily consist of single-family 

mortgage loans to low- or moderateincome individuals, or of multifamily 

affordable housing, are also considered 

as qualifying community development 

activities.60

Multifamily Housing. Multifamily 

housing qualifies under two different 

categories of affordable housing: 

Subsidized or unsubsidized housing. 

Housing that is financed or supported 

by a government affordable housing 

program or a government subsidy is 

considered subsidized affordable 

housing. Subsidized affordable housing 

is generally viewed as qualifying under 

affordable housing criteria if the 

government program or subsidy has a 

stated purpose of providing affordable 

housing to low- or moderate-income 

individuals, thereby satisfying 

Interagency Questions and Answers 

guidance that low- or moderate-income 

individuals benefit, or are likely to 

benefit, from the housing.61 Examples of 

subsidized affordable housing include 

housing financed with LIHTCs, the 

HOME Investment Partnerships 

Program, or Project-Based Section 8 

Rental Assistance. 

Multifamily housing with affordable 

rents, but that is not financed or 

supported by a government affordable 

housing program or a government 

subsidy, is generally considered 

unsubsidized affordable housing, and is 

also referred to in this SUPPLEMENTARY

INFORMATION as ‘‘naturally occurring 

affordable housing.’’ This housing can 

qualify as affordable housing if the rents 

are affordable to low- or moderateincome individuals, and if it is clear 

that low- or moderate-income 

individuals benefit, or are likely to 

benefit, from this housing. However, 

there are no standards currently in place 

for determining that low- or moderateincome individuals will benefit, or are 

likely to benefit, from the housing. 

Guidance indicates that it is not 

sufficient to determine that low- or 

moderate-income individuals are likely 

to benefit from the housing solely 

because the rents or housing prices are 

set according to a particular formula.62

To assess whether the housing will 

benefit low- or moderate-income 

individuals, examiners may consider a 

range of demographic, economic or 

market factors, such as the median rents 

of the assessment area and the project 

based on project rent rolls; the low- or 

moderate-income population in the area 

of the project; or the past performance 

record of the organization(s) 

undertaking the project.63

Under the current framework, there is 

not a specified standard for determining 

when a property or unit is considered 

affordable to low- or moderate-income 

individuals. One approach used by 

banks and examiners is to calculate an 

affordable rent based on what is 

affordable to a moderate-income renter, 

assuming that 30 percent of the renter’s 

income is spent on rent. Alternatively, 

some use the U.S. Department of 

Housing and Urban Development’s 

(HUD) Fair Market Rents as a standard 

for measuring affordability.64

Stakeholders note that lack of a 

consistent standard for affordability, 

combined with unclear methods for 

determining whether low- or moderateincome individuals are likely to benefit, 

leads to inconsistent consideration of 

unsubsidized affordable housing. 

Single-Family Housing. Certain 

activities related to single-family 

housing can also qualify as affordable 

housing provided that the housing is 

affordable and low- or moderate-income 

individuals benefit, or are likely to 

benefit, from the housing. While singlefamily mortgages qualify under the 

lending test,65 activities that support the 

construction of affordable housing or 

other activities to promote affordable 

homeownership for low- or moderateincome individuals are considered as 

affordable housing under the 

community development definition. 

Similar to the issues noted above with 

unsubsidized rental housing, there are 

no consistent standards in place to 

demonstrate that single-family for-sale 

housing is affordable and likely to 

benefit low- or moderate-income 

individuals. Therefore, under the 

current framework, stakeholders note 

that it is difficult for certain singlefamily projects to qualify, unless it is a 

project developed in partnership with a 

government program or non-profit 

organization that has a mission of 

providing affordable housing to low- or 

moderate-income individuals. 

Mortgage-Backed Securities. 

Mortgage-backed securities qualify as an 

affordable housing activity provided 

they demonstrate a primary purpose of 

community development. Specifically, 

the security must primarily address 

affordable housing (including 

multifamily housing) of low- or 

moderate-income individuals.66 Thus, a 

mortgage-backed security that contains a 

majority of mortgages to low- or 

moderate-income borrowers can qualify 

as an investment with a primary 

purpose of affordable housing. 

b. Stakeholder Feedback on Affordable 

Housing 

Stakeholders have expressed support 

for a definition of affordable housing 

that includes both subsidized and 

unsubsidized housing, and that is 

informed by more clear and specific 

eligibility standards. Stakeholders 

generally support the current approach 

of qualifying housing developed, 

purchased, rehabilitated, or preserved in 

conjunction with a Federal, state, local, 

or tribal government program. Many 

stakeholders also indicate support for 

including naturally occurring affordable 

housing in the definition of affordable 

housing, but note that more consistent 

and practically feasible qualification 

standards are needed. They also raise 

concerns about the types of 

requirements or restrictions—if any— 

that should be put in place to ensure 

that these properties remain affordable. 

For example, some stakeholders have 

noted that a bank financing a naturally 


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67See Rural Rental Housing Loans (Section 515) 

(Sept. 2002), https://www.hud.gov/sites/documents/ 

19565_515_RURALRENTAL.pdf, and U.S. 

Department of Agriculture, Multifamily Guaranteed 

Rural Rental Housing (Dec. 2021), https://

www.rd.usda.gov/sites/default/files/fact-sheet/508_

RD_FS_RHS_MFGuarantee.pdf. 

68See, e.g., Federal Housing Financing Agency, 

‘‘Overview of the 2020 High Opportunity Areas 

File’’ (2020), https://www.fhfa.gov/DataTools/ 

Downloads/Documents/Enterprise-PUDB/DTS_

Residential-Economic-Diversity-Areas/DTS_

High%20Opportunity_Areas_2020_README.pdf, 

and HUD’s Office of Policy Development and 

Research (PD&R), Qualified Census Tracts and 

Difficult Development Areas, https://

www.huduser.gov/portal/datasets/qct.html. 

occurring affordable housing activity 

would often not be able to verify and 

document the income of tenants at time 

of rental and on an ongoing basis. 

Regarding the current treatment of 

mortgage-backed securities, some 

stakeholders have expressed concern 

that some banks rely on purchases of 

mortgage-backed securities for CRA 

purposes in lieu of pursuing other 

activities that would have a more direct 

impact on the community or that would 

be more responsive to specific needs. 

Some stakeholders have also noted 

concerns that some banks may purchase 

high volumes of mortgage-backed 

securities shortly before their CRA 

examinations and sell them shortly 

afterwards, reducing any potential 

benefits to liquidity for lenders and 

credit availability for communities. 

Stakeholders generally have not 

opposed the consideration of mortgagebacked securities as a qualified 

investment, although some suggested 

additional requirements, such as 

preventing banks from receiving CRA 

credit for mortgage-backed securities 

that are purchased and then quickly 

resold. 

2. Rental Housing in Conjunction With 

Government Programs 

First, the agencies propose that a 

rental housing unit would be considered 

affordable housing if it is purchased, 

developed, financed, rehabilitated, 

improved, or preserved in conjunction 

with a Federal, state, local, or tribal 

government affordable housing plan, 

program, initiative, tax credit, or 

subsidy with a stated purpose or the 

bona fide intent of providing affordable 

housing for low- or moderate-income 

individuals. Examples below 

demonstrate how this component of the 

definition intends to add greater clarity 

around the many types of subsidized 

activities that currently qualify for 

consideration. 

The proposal covers a broad range of 

government-related affordable rental 

housing activities for low- and 

moderate-income individuals, including 

affordable housing plans, programs, 

initiatives, tax credits, and subsidies 

pertaining to both multifamily and 

single-family properties. This would 

cover government subsidy programs that 

provide affordable rental housing for 

low- or moderate-income individuals, 

such as Project-Based Section 8 Rental 

Assistance and the HOME Investment 

Partnerships Program. The proposal also 

includes activities with rental properties 

receiving LIHTCs. Although LIHTCs are 

sometimes described as a ‘‘program,’’ 

the agencies propose including the term 

‘‘tax credits’’ to provide clarity about the 

eligibility of tax credit programs focused 

on affordable housing for low- or 

moderate-income individuals. 

The proposed language encompasses 

affordable housing activities tied to 

every level of government, not just 

Federal Government programs. In 

addition to affordable housing programs 

at the Federal level, the agencies also 

propose to include state and local 

affordable housing plans, programs, 

initiatives, tax credits, or subsidies that 

support affordable housing for low- or 

moderate-income individuals. This 

would include affordable rental units 

for low- or moderate-income individuals 

created as a result of local government 

inclusionary zoning programs. 

Inclusionary zoning provisions in many 

local jurisdictions provide requirements 

or incentives for developers to set aside 

a portion of housing units within a 

property that meet an affordability 

standard and are occupied by low- or 

moderate-income individuals. In 

addition, affordable multifamily 

housing programs offered by state 

housing finance agencies and affordable 

housing trust funds managed by a local 

government to support the development 

of affordable housing for low- or 

moderate-income individuals would be 

included in this component. The 

proposal also specifies that affordable 

housing activities related to tribal 

governments would be included under 

the scope of the definition. 

To qualify under the proposed 

definition, a government-related 

affordable housing plan, program, 

initiative, tax credit, or subsidy would 

need to have a stated purpose or bona 

fide intent of supporting affordable 

rental housing for low- or moderateincome individuals. The agencies 

propose this requirement to emphasize 

affordable housing activities benefitting 

low- or moderate-income individuals. 

The agencies are not proposing a 

separate affordability standard for this 

prong of the definition and would rely 

upon the affordability standards set in 

each respective government affordable 

housing plan, program, initiative, tax 

credit, or subsidy, provided that the 

program has a stated purpose or bona 

fide intent of providing rental housing 

that is affordable to low- or moderateincome individuals. 

The agencies seek feedback on 

whether additional requirements should 

be included to ensure that activities 

qualifying under this definition support 

housing that is both affordable to and 

occupied by low- or moderate-income 

individuals. For example, the agencies 

are considering whether to include a 

specific affordability standard of 30 

percent of 80 percent of area median 

income for the cost of rents of housing 

that receives consideration under this 

definition, or a requirement that any 

programs verify that occupants of the 

affordable units are low- or moderateincome individuals. 

The agencies seek feedback on 

whether activities involving government 

programs that have a stated purpose or 

bona fide intent to provide affordable 

housing serving low-, moderate-, and 

middle-income individuals should 

qualify under this definition in certain 

circumstances. For example, the 

agencies seek feedback on this 

alternative when the housing is located 

in a nonmetropolitan county, or in High 

Opportunity Areas. The agencies 

recognize that nonmetropolitan counties 

may have limited opportunities for 

affordable housing, and that it may be 

appropriate to consider affordable 

housing activities in these areas that 

include middle-income renters. 

Broadening this category to include 

activities that support housing that is 

affordable to middle-income individuals 

in nonmetropolitan counties could 

include developing affordable housing 

in conjunction with programs such as 

the U.S. Department of Agriculture 

Section 515 Rural Rental Housing or 

Multifamily Guaranteed Rural Rental 

Housing programs.67

Under a second alternative, the 

agencies would consider these activities 

in high opportunity areas. One option 

would be to define high opportunity 

areas to align with the definition of 

these areas by the Federal Housing 

Finance Agency (FHFA), as discussed in 

Section V.68 These areas include census 

tracts with high costs of development 

and low poverty rates, and the agencies 

consider affordable housing activities in 

these areas to be especially responsive. 

For example, these activities may 

include financing for a multifamily 

rental housing development that serves 

middle-income residents in a high 

opportunity area that is supported by 

tax-exempt bonds that are issued by 

state or local agencies to support 

affordable housing. Consideration of 


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69Thyria Alvarez and Barry L. Steffen, HUD, 

Office of Policy Development and Research, ‘‘Worst 

Case Housing Needs 2021 Report to Congress’’ (July 

2020) (agencies’ calculations using Exhibit A–12 at 

74), https://www.huduser.gov/portal/publications/

Worst-Case-Housing-Needs-2021.html. 

activities supporting housing that is 

affordable to middle-income families in 

these geographies would reflect the 

limited supply of affordable housing in 

these markets and would provide 

additional flexibility for banks to 

identify opportunities to address 

community needs. However, the 

agencies have also considered that 

broadening the definition could reduce 

the emphasis on activities that serve 

low-and moderate-income individuals 

more directly and where the need is 

more acute. 

3. Multifamily Rental Housing With 

Affordable Rents 

For the second prong of the affordable 

housing definition in proposed 

§ l.13(b), the agencies propose to 

provide clear and consistent criteria in 

order to qualify affordable low- or 

moderate-income multifamily rental 

housing that does not involve a 

government program, initiative, tax 

credit, or subsidy, also referred to as 

‘‘naturally occurring affordable 

housing’’ in this SUPPLEMENTARY

INFORMATION, for purposes of CRA 

affordable housing consideration. 

The agencies recognize that naturally 

occurring affordable housing is an 

important source of affordable housing 

for many low- and moderate-income 

individuals. In addition, the agencies 

also recognize that this category of 

housing poses unique challenges in 

terms of ensuring that its benefits 

extend to low- or moderate-income 

individuals, since there is often no 

consistent way to confirm renter income 

for these properties, in contrast to 

properties receiving government 

subsidies. The proposed definition 

seeks to address this by clarifying that 

this category of affordable housing can 

receive CRA credit if it meets a specified 

set of applicable standards. 

First, in order to qualify under this 

prong of the proposed definition, the 

agencies propose that the rent for the 

majority of the units in a multifamily 

property could not exceed 30 percent of 

60 percent of the area median income 

for the metropolitan area or 

nonmetropolitan county. These rental 

amounts would need to reflect the rents 

used by the bank to underwrite the 

property, including post-construction or 

post-renovation monthly rents. Second, 

naturally occurring affordable housing 

would also need to meet at least one of 

the following criteria in order to 

increase the likelihood that units benefit 

low- or moderate-income individuals: (i) 

The housing is located in a low- or 

moderate-income census tract; (ii) the 

housing is purchased, developed, 

financed, rehabilitated, improved, or 

preserved by a non-profit organization 

with a stated mission of, or that 

otherwise directly supports, providing 

affordable housing; (iii) there is an 

explicit written pledge by the property 

owner to maintain rents affordable to 

low- or moderate-income individuals for 

at least five years or the length of the 

financing, whichever is shorter; or (iv) 

the bank provides documentation that a 

majority of the residents of the housing 

units are low- or moderate-income 

individuals or families, for example 

documentation that a majority of 

residents have Housing Choice 

Vouchers. 

a. Affordability Standard for Naturally 

Occurring Affordable Housing 

The proposed rental affordability 

standard for naturally occurring 

affordable housing—30 percent of 60 

percent of the area median income—is 

intended to target the definition for 

units affordable to low- or moderateincome households. This would 

establish a higher bar than what is often 

used today to determine whether rents 

are affordable for low- or moderateincome individuals, which is 30 percent 

of 80 percent of area median income. 

The agencies considered using the 

standard of 30 percent of 80 percent of 

area median income but believe it 

would be preferable to use a more 

targeted definition to ensure that rents 

are affordable to low-income 

households and to increase the 

likelihood that low- or moderate-income 

households will occupy the units. For 

example, in 2019, approximately 46 

percent of occupied rental units with 

affordability levels between 61–80 

percent of area median income were 

occupied by middle- or upper-income 

households.69 This is compared to 24 

percent of occupied rental units with 

affordability levels under 60 percent of 

area median income being occupied by 

middle- or upper-income households. 

Limiting eligibility to those units with 

affordability levels under 60 percent of 

area median income may therefore help 

to ensure that the households served by 

this housing are in fact low- or 

moderate-income households. 

However, a potential drawback to 

using an affordability standard anchored 

to 60 percent of area median income is 

that it could restrict eligibility for 

properties with affordability levels at 80 

percent of area median income where 

many, but not all, of the units are 

occupied by low- or moderate-income 

households. The agencies seek feedback 

on the alternative approach of using 80 

percent area median income as the 

affordability standard under proposed 

§ l.13(b)(2). 

In calculating whether rents meet the 

affordability standard, the agencies 

propose using the monthly rental 

amounts as underwritten by the bank. 

The definition further specifies that this 

rent would need to reflect any postconstruction or post-renovation rents 

considered as part of the bank’s 

financing. Consider, for example, a 

multifamily property that meets the 

proposed affordability standard before 

bank financing, but where the property 

owner plans to renovate the building 

after receiving the loan and 

subsequently increases the rents above 

the affordability standard. In this 

example, if the bank relied on the postrenovation rents as part of its 

underwriting, then the loan would not 

count for CRA purposes under the 

proposed affordable housing definition. 

The agencies’ objective in including this 

provision is to target CRA credit to 

properties that are likely to remain 

affordable and to avoid providing credit 

for activities that may result in 

displacement of low- or moderateincome individuals. 

The agencies seek feedback on 

whether there are alternative ways to 

ensure that CRA credit for naturally 

occurring affordable housing is targeted 

to properties where rents remain 

affordable for low- or moderate-income 

individuals. 

The proposed definition would 

require the majority of units in a 

naturally occurring affordable housing 

property to meet the affordability 

standard. Properties in which fewer 

than 50 percent of units are affordable 

would not qualify under the proposed 

definition. This requirement is intended 

to ensure that activities qualifying as 

naturally occurring affordable housing 

support housing that remains affordable 

to and occupied by low- or moderateincome individuals. 

The agencies seek feedback on 

whether single-family rental housing 

should also be considered under the 

naturally occurring affordable housing 

category, provided it meets the same 

combination of criteria proposed for 

multifamily rental housing. The 

agencies also seek feedback on whether 

such an alternative should be limited to 

rural areas. The agencies recognize that 

the composition of the housing stock 

varies across geographies, and that some 

areas, such as rural communities, may 

lack affordable multifamily rental 

housing that is either in conjunction 


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70See Q&A §l.12(g)(1)–1. 

71The sample used for this analysis includes all 

census tracts for which there was non-missing 

renter median income data (2019 5-year American 

Community Survey) plus census tracts that were 

known to be low- or moderate-income but had 

missing data. The agencies’ analysis found that 

there are 69,161 census tracts with non-missing 

renter median income data. Of those census tracts, 

22,521 (33 percent) are designated low- or 

moderate-income; 27,070 (39 percent) are 

designated as renter low- or moderate-income; and 

the remaining 19,570 (28 percent) are neither lowor moderate-income nor renter low- or moderateincome. Seventy-three percent of all census tracts 

could be a geography where affordable housing is 

located under that alternative proposal. 

72The agencies expect that the length of financing 

would often go beyond the five-year written 

affordability pledge. The agencies would scrutinize 

short-term financing (less than five years) to ensure 

such financing is not a way to avoid the 

affordability commitment. 

with a government program or naturally 

occurring affordable housing. In these 

communities, single-family rental 

housing may be an important source of 

affordable housing for low- and 

moderate-income individuals. In 

considering how and whether to 

incorporate affordable single-family 

rental housing into the naturally 

occurring affordable housing definition, 

the agencies are mindful of the fact that 

home mortgage loans for single-family 

rental housing would count in the 

geographic distribution metrics of the 

proposed Retail Lending Test. 

b. Additional Eligibility Standards for 

Naturally Occurring Affordable Housing 

The agencies are proposing four 

additional criteria under proposed 

§ l.13(b) for qualifying multifamily 

housing with affordable rents as 

naturally occurring affordable housing. 

These criteria are intended to focus the 

definition on housing that is more likely 

to benefit low- or moderate-income 

individuals or increase the likelihood 

that rents will remain affordable for 

low- or moderate-income individuals. In 

addition to the underwriting 

requirement (rents not exceeding 30 

percent of 60 percent of area median 

income), the proposal requires a 

property to meet at least one of the 

following criteria: (i) The location of the 

housing is in a low- or moderate-income 

census tract; (ii) the housing is 

developed in association with a nonprofit organization with a mission of, or 

that otherwise directly supports, 

affordable housing; (iii) the financing is 

provided in conjunction with a written 

affordability pledge by the developer of 

at least 5 years, or the length of the 

financing, whichever is shorter; or (iv) 

the bank provides documentation that 

the majority of the housing units are 

occupied by low- or moderate-income 

households. 

Low- or Moderate-Income Census 

Tract. The first proposed criterion is the 

location of eligible properties in a lowor moderate-income census tract, 

because the majority low- or moderateincome status of a census tract indicates 

that affordable rental housing in that 

census tract is likely to benefit low- or 

moderate-income individuals. Using 

geography as a proxy for tenant income 

is generally consistent with current 

guidance.70 In addition, census tract 

income data is readily available and 

verifiable information, in contrast to 

verifying tenant income, which may 

prove infeasible for many property 

owners or developers. 

An additional approach that the 

agencies seek feedback on is whether to 

expand this criterion to also encompass 

middle- and upper-income census tracts 

in which at least 50 percent of renters 

are low- or moderate-income. Following 

the same logic as the proposed low- and 

moderate-income census tract criteria, 

the agencies have considered that 

affordable rental housing in a 

neighborhood in which the majority of 

renters are low- or moderate-income 

would also be likely to benefit low- or 

moderate-income individuals. In 

addition, applying this standard would 

qualify affordable housing in more 

middle-and upper-income census tracts, 

thereby expanding this criterion beyond 

only low- and moderate-income census 

tracts. While 33 percent of census tracts 

are designated as low- or moderateincome, a total of 72 percent of census 

tracts meet either the low- and 

moderate-income census tract standard 

or the low- and moderate-income 

median renter census tract standard.71

The agencies seek feedback on whether 

these additional census tracts should be 

added to the proposed definition. 

Additionally, the agencies seek 

feedback on an alternative in which no 

geographic criteria are included. Under 

this option, activities qualifying as 

supporting naturally occurring 

affordable housing would instead be 

required to meet one of the other criteria 

described below (mission-driven nonprofit organization, written affordability 

pledge, or tenant income 

documentation), in addition to the 

standard of rents not exceeding 30 

percent of 60 percent of area median 

income. By removing the geographic 

criteria, this alternative approach would 

be intended to equally apply the other 

criteria across census tracts of all 

income levels. However, the agencies 

are mindful that this alternative would 

require banks to provide documentation 

required under the other proposed 

criterion in order to receive 

consideration for naturally occurring 

affordable housing. 

Mission-Driven Non-Profit 

Organization. A second proposed 

criterion for determining whether 

multifamily housing with affordable 

rents is eligible is if the housing is 

purchased, developed, financed, 

rehabilitated, improved, or preserved by 

any non-profit organization with a 

stated mission of, or that otherwise 

directly supports, providing affordable 

housing. The agencies intend this 

provision to encompass organizations 

that target services to low- or moderateincome individuals and communities, 

and may also have a mission to serve 

individuals and communities that are 

especially vulnerable to housing 

instability. In addition, affordable 

properties in any census tract, including 

middle- and upper-income census 

tracts, could qualify under this option. 

This criterion does not include 

government programs or entities, as 

such activities would be considered 

under the affordable housing category in 

proposed §l.13(b)(1). 

Written Affordability Pledge. A third 

proposed criterion for determining if 

multifamily housing with affordable 

rents is eligible under the definition is 

the presence of an explicit written 

pledge on the part of the property owner 

to maintain rents that are affordable for 

at least five years or for the length of the 

financing, whichever is shorter.72 This 

prong would address concerns about the 

likelihood of rents in an eligible 

property increasing in the future and 

potentially displacing low- or moderateincome households. In addition, 

affordable properties in any census 

tract, including middle- and upperincome census tracts, could qualify 

under this option. Some stakeholders 

have urged the requirement of a written 

pledge in order for any naturally 

occurring affordable housing to qualify 

for CRA purposes. However, the 

agencies are mindful that such a 

requirement would necessitate 

additional documentation to receive 

consideration for naturally occurring 

affordable housing. For this reason, the 

agencies believe that it is preferable to 

include this criterion as one of several 

options for meeting the eligibility 

standard. 

Tenant Income Documentation. A 

fourth proposed criterion for 

determining if multifamily housing with 

affordable rents is eligible under the 

definition is documentation provided by 

the bank demonstrating that the 

majority of the housing units are 

occupied by low- or moderate-income 


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73The housing choice voucher program is the 

Federal government’s major program for assisting 

very low-income families, the elderly, and the 

disabled to afford decent, safe, and sanitary housing 

in the private market. See 24 CFR part 982 (program 

requirements for the tenant-based housing 

assistance program under Section 8 of the United 

States Housing Act of 1937 (42 U.S.C. 1437f); the 

tenant-based program is the housing choice voucher 

program). See also ‘‘U.S. Department of Housing 

and Urban Development, Housing. Choice Vouchers 

Fact Sheet,’’ https://www.hud.gov/topics/housing_

choice_voucher_program_section_8. 

individuals or households. Such 

documentation would be direct 

evidence that the activity benefits lowor moderate-income individuals. In 

addition, this criterion could apply to 

affordable properties in any census 

tract, including middle- or upperincome census tracts. For example, a 

multifamily rental property with a 

majority of rents set at 30 percent of 60 

percent of area median income that is 

located in a middle-income census tract, 

and where the bank can document that 

the majority of occupants receive 

Housing Choice Vouchers,73 would 

receive consideration under this 

criterion. The agencies recognize that it 

may be challenging for banks to obtain 

this documentation. Accordingly, the 

agencies are proposing to include this 

factor as one of several options for 

meeting the eligibility standard. 

4. Activities That Support Affordable 

Homeownership for Low- or ModerateIncome Individuals 

The agencies propose a third prong 

for the affordable housing definition to 

include: (i) Activities that directly assist 

low- or moderate-income individuals to 

obtain, maintain, rehabilitate, or 

improve affordable owner-occupied 

housing; or (ii) activities that support 

programs, projects, or initiatives that 

assist low- or moderate-income 

individuals to obtain, maintain, 

rehabilitate, or improve affordable 

owner-occupied housing. This category 

could include owner-occupied housing 

in single-family or multifamily 

properties. 

While these activities could be 

conducted in conjunction with a variety 

of financing types, such as conventional 

mortgages, shared equity models, or 

community land trusts, any reported 

mortgage loan that is evaluated under 

the Retail Lending Test would not count 

under this definition. Instead, this 

category would include activities such 

as construction loan financing for a nonprofit housing developer building 

single-family owner-occupied homes 

affordable to low- or moderate-income 

individuals; financing or a grant to a 

non-profit community land trust 

focused on providing affordable housing 

to low- or moderate-income individuals; 

a loan to a resident-owned 

manufactured housing community with 

homes that are affordable to low- or 

moderate-income individuals; a sharedequity program operated by a non-profit 

organization to provide long-term 

affordable homeownership; and 

financing or grants for organizations that 

provide down payment assistance to 

low- or moderate-income homebuyers. 

Activities eligible under this criterion 

may include activities with a 

governmental or non-profit organization 

with a stated purpose of, or that 

otherwise directly supports, providing 

affordable housing. Additionally, this 

category may include activities 

conducted by the bank itself, or with 

other for-profit partners, provided that 

the activity supports affordable 

homeownership for low- or moderateincome individuals. For example, a 

bank providing direct down payment 

assistance or supporting free home 

repairs or maintenance for low- or 

moderate-income homeowners could be 

considered under this prong of the 

definition. 

The agencies seek feedback on what 

conditions or terms, if any, should be 

added to this criterion to ensure that 

activities that support affordable lowand moderate-income homeownership 

are sustainable and beneficial to low- or 

moderate-income individuals and 

communities. 

5. Mortgage-Backed Securities 

The agencies propose to define 

standards for investments in mortgagebacked securities related to affordable 

housing that qualify for community 

development consideration. Consistent 

with current practice, the agencies are 

proposing that mortgage-backed 

securities would qualify as affordable 

housing when the security contains a 

majority of either single-family home 

mortgage loans for low- and moderateincome individuals or loans financing 

multifamily affordable housing that 

otherwise qualifies under the proposed 

affordable housing definition in 

proposed §l.13(b). 

This definition recognizes that 

purchases of qualifying mortgagebacked securities that contain home 

mortgage loans to low- or moderateincome borrowers or that contain 

qualifying affordable housing loans are 

investments in affordable housing. The 

issuance and purchase of these 

securities may improve liquidity for 

affordable housing development and for 

lenders that make home mortgage loans 

to low- or moderate-income borrowers, 

which in turn allows them to make 

more loans to low- or moderate-income 

borrowers than would otherwise be 

possible. However, some stakeholders 

have noted that qualifying purchases of 

mortgage-backed securities are lower in 

impact and responsiveness to 

community credit needs than other 

qualifying affordable housing activities 

that more directly support housing for 

low- or moderate-income individuals. 

The agencies seek feedback on 

alternative approaches that would create 

a more targeted definition of qualifying 

mortgage-backed securities. One 

alternative the agencies are considering 

is to consider mortgage-backed 

securities for only the portion of loans 

in the security that are affordable. For 

example, if 60 percent of a qualifying 

mortgage-backed security consists of 

single-family home mortgage loans to 

low- or moderate-income borrowers, 

and 40 percent of the security consists 

of loans to middle- or upper-income 

borrowers, the mortgage-backed security 

would receive consideration only for the 

dollar value of the loans to low- or 

moderate-income borrowers. This 

treatment would reflect that a qualifying 

mortgage-backed security represents a 

purchase of multiple home mortgage 

loans, some of which may not meet the 

definition of affordable housing or have 

a primary purpose of community 

development. However, the agencies are 

mindful of the added complexity that 

this approach could create. 

The agencies are also considering 

whether to limit consideration of 

mortgage-backed securities to the initial 

purchase of a mortgage-backed security 

from the issuer, and not considering 

subsequent purchases of the security. 

This change would be intended to 

emphasize activities that more directly 

serve low- or moderate-income 

individuals and communities and to 

reduce the possibility of multiple banks 

receiving CRA credit for purchasing the 

same security. 

The agencies seek feedback on these 

alternatives and on other ways of 

appropriately considering qualifying 

mortgage-backed security investments 

so as to emphasize community 

development financing activities that 

are most responsive to low- or 

moderate-income community needs. 

Request for Feedback 

Question 3. Is the proposed standard 

of government programs having a 

‘‘stated purpose or bona fide intent’’ of 

providing affordable housing for low- or 

moderate-income (or, under the 

alternative discussed above, for low-, 

moderate- or middle-income) 

individuals appropriate, or is a different 

standard more appropriate for 

considering government programs that 


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33898 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

74 12 CFR l.12(g)(3). 

75See Q&A §l.12(g)(3)–1. 

76 Id. 

provide affordable housing? Should 

these activities be required to meet a 

specific affordability standard, such as 

rents not exceeding 30 percent of 80 

percent of median income? Should 

these activities be required to include 

verification that at least a majority of 

occupants of affordable units are low- or 

moderate-income individuals? 

Question 4. In qualifying affordable 

rental housing activities in conjunction 

with a government program, should the 

agencies consider activities that provide 

affordable housing to middle-income 

individuals in high opportunity areas, 

in nonmetropolitan counties, or in other 

geographies? 

Question 5. Are there alternative ways 

to ensure that naturally occurring 

affordable housing activities are targeted 

to properties where rents remain 

affordable for low- and moderateincome individuals, including 

properties where a renovation is 

occurring? 

Question 6. What approach would 

appropriately consider activities that 

support naturally occurring affordable 

housing that is most beneficial for lowor moderate-income individuals and 

communities? Should the proposed 

geographic criterion be expanded to 

include census tracts in which the 

median renter is low- or moderateincome, or in distressed and 

underserved census tracts, in order to 

encourage affordable housing in a wider 

range of communities, or would this 

expanded option risk crediting activities 

that do not benefit low- or moderateincome renters? 

Question 7. Should the proposed 

approach to considering naturally 

occurring affordable housing be 

broadened to include single-family 

rental housing that meets the eligibility 

criteria proposed for multifamily rental 

housing? If so, should consideration of 

single-family rental housing be limited 

to rural geographies, or eligible in all 

geographies, provided the eligibility 

criteria to ensure affordability are met? 

Question 8. How should the agencies 

consider activities that support 

affordable low- or moderate-income 

homeownership in order to ensure that 

qualifying activities are affordable, 

sustainable, and beneficial for low- or 

moderate-income individuals and 

communities? 

Question 9. Should the proposed 

approach to considering mortgagebacked securities that finance affordable 

housing be modified to ensure that the 

activity is aligned with CRA’s purpose 

of strengthening credit access for low- or 

moderate-income individuals? For 

example, should the agencies consider 

only the value of affordable loans in a 

qualifying mortgage-backed security, 

rather than the full value of the 

security? Should only the initial 

purchase of a mortgage-backed security 

be considered for affordable housing? 

Question 10. What changes, if any, 

should the agencies consider to ensure 

that the proposed affordable housing 

definition is clearly and appropriately 

inclusive of activities that support 

affordable housing for low- or moderateincome individuals, including activities 

that involve complex or novel solutions 

such as community land trusts, shared 

equity models, and manufactured 

housing? 

C. Economic Development 

The agencies propose several 

revisions to what constitutes economic 

development activities that are intended 

to encourage activities supportive of 

small businesses and small farms. The 

proposal in § l.13(c) is also intended to 

improve the overall transparency of the 

definition by including certain activities 

that are currently addressed in 

guidance. In addition, the agencies seek 

to simplify the way that small business 

and small farm lending is considered 

under CRA evaluations. 

A significant change compared to the 

current CRA regulations’ criteria for 

economic development is that all 

reported lending to small businesses 

and small farms would be considered 

under the proposed Retail Lending Test, 

described in Section IX, and not under 

the proposed economic development 

definition. This change is related to the 

agencies’ proposal to leverage the 

CFPB’s proposed small business 

standard under section 1071 to define 

‘‘small business’’ and ‘‘small farm’’ as 

those with $5 million in gross annual 

revenues and below, as discussed above. 

In some ways, the proposed Retail 

Lending Test approach would afford 

broader consideration of loans to small 

businesses and small farms than the 

current CRA approach taken as a whole 

across the status quo lending and 

community development tests. There 

are also some differences that would 

narrow consideration of some loans that 

currently are considered under the 

economic development criteria. 

1. Background 

a. Current Approach to Economic 

Development 

Under the current regulation, 

community development is defined to 

include ‘‘activities that promote 

economic development by financing 

businesses or farms that meet the size 

eligibility standards of the SBA’s 

Development Company (SBDC) or Small 

Business Investment Company (SBIC) 

programs (13 CFR 121.301) or have 

gross annual revenues of $1 million or 

less’’ 74 (the ‘‘current economic 

development definition’’). Under 

current guidance, activities qualify as 

economic development if they meet 

both a ‘‘size test’’ and a ‘‘purpose 

test.’’ 75 An institution’s loan, 

investment, or service meets the size 

test if it finances, either directly, or 

through an intermediary, businesses or 

farms that either meet the size eligibility 

standards of the SBDC or SBIC 

programs, or have gross annual revenues 

of $1 million or less. For consideration 

under the size test, the term ‘‘financing’’ 

is considered broadly and includes 

technical assistance that readies a 

business that meets the size eligibility 

standards to obtain financing. To meet 

the purpose test, current guidance states 

that a bank’s loan, investment, or 

service must promote economic 

development by creating, retaining, and/ 

or improving jobs for low- or moderateincome persons, low- or moderateincome geographies, areas targeted for 

redevelopment, or by financing certain 

intermediaries. Activities that support 

job training or workforce development 

are also considered to meet the purpose 

test.76

b. Stakeholder Feedback on Economic 

Development 

Stakeholders note various challenges 

with the current economic development 

definition. Some observe that while 

guidance includes a variety of economic 

development activities, the smallest 

businesses and farms may still face 

specific unmet financing needs. 

Industry stakeholders indicate that it 

can be difficult to demonstrate that an 

activity meets both the size test and 

purpose test. Specifically, these 

stakeholders point to difficulty in 

demonstrating that the primary purpose 

of a loan or investment with a small 

business or small farm was to create, 

retain, and/or improve low- or 

moderate-income employment and note 

that this requirement eliminates 

consideration of some other loans to 

small businesses that are also high 

impact, such as loans that help small 

businesses purchase new equipment in 

order to improve efficiency of 

operations. 

Stakeholders generally indicate that 

more clarity is needed in the types of 

activities that will be considered to 

strengthen small business and small 

farms, though some stakeholders note 


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77SBA regulations define ‘‘small entities’’ for 

banking purposes as entities with total assets of 

$600 million or less. See 13 CFR 121.201 (Sector 52, 

Subsector 522). The agencies have requested 

permission from the SBA to use size standards for 

defining small businesses and small farms that 

differ from the SBA’s size standards, as provided in 

15 U.S.C. 632(a)(2)(C). 

78This assumes the CFPB’s section 1071 

rulemaking is finalized as proposed with a ‘‘small 

business’’ defined as having gross annual revenues 

of $5 million or less. 

79See 12 CFR l.12(v) (defining a small business 

loan as a loan included in ‘‘loans to small 

businesses’’ as defined in the instructions for 

preparation of the Call Report). See also 12 CFR l

.12(w) (defining a small farm loan as a loan 

included in ‘‘loans to small farms’’ as defined in the 

instructions for preparation of the Call Report). 

80 12 CFR l.12(g)(3). Activities that promote 

economic development finance businesses and 

farms that meet the size eligibility standards of the 

SBDC or SBIC programs (13 CFR 121.301) or have 

gross annual revenues of $1 million or less. 

that the agencies should take a more 

flexible approach to defining the types 

of activities that qualify. Stakeholders 

also support qualifying workforce 

development for low- or moderateincome individuals regardless of the 

size of the business, as larger industries 

are a source of jobs for low- or 

moderate-income individuals. 

2. Covering Small Business and Small 

Farm Loans Under the Evaluation of a 

Bank’s Retail Lending Performance 

Under the proposal, a bank’s loans to 

small businesses and small farms would 

be evaluated in the Retail Lending Test 

portion of the CRA examination. As 

discussed further in Section VIII 

regarding proposed § l.22 for the Retail 

Lending Test, the agencies are 

considering alternative size standards 

for defining small businesses and small 

farms that would differ from the SBA’s 

size standards.77 Specifically, once 

CFPB section 1071 data is available, the 

agencies would transition from the 

current CRA definitions of small 

business and small farm loans to loans 

to small businesses and small farms 

with gross annual revenues of $5 

million or less.78 In the interim, for 

purposes of evaluation under the Retail 

Lending Test, the agencies propose to 

use the current approach that evaluates 

small business and small farm loans 

using the Reports of Condition and 

Income (Call Report) definitions. This 

current approach captures loans of $1 

million or less to businesses, and loans 

of $500,000 or less to farms, as reported 

in the Call Report.79

Accordingly, the proposed economic 

development definition would not 

include a component to qualify a bank’s 

loans to small businesses or small 

farms—apart from activities undertaken 

consistent with Federal, state, local, or 

tribal government plans, programs, or 

initiatives that support small businesses 

or small farms as those entities are 

defined in the plans, programs, or 

initiatives. With regard to economic 

development, the agencies currently 

evaluate businesses or farms that meet 

the size eligibility standards of the 

SBDC or SBIC programs (13 CFR 

121.301) or have gross annual revenues 

of $1 million or less, only if not reported 

as a small business loan or a small farm 

loan under the CRA.80 This would no 

longer be the case under the agencies’ 

proposed economic development 

definition, since all reported lending for 

small businesses and small farms would 

be considered under the proposed Retail 

Lending Test. 

The proposal to include small 

business loans and small farm loans in 

the Retail Lending Test, instead of 

under the economic development 

definition, is intended to recognize that 

loans to small businesses and small 

farms are primarily retail loan products, 

and more appropriately considered 

under the Retail Lending Test, while 

emphasizing other activities to promote 

access to financing for small businesses 

and small farms under the economic 

development definition. As discussed in 

Section XVII, the agencies are proposing 

that intermediate banks retain flexibility 

to have certain retail loans—small 

business, small farm, and home 

mortgage loans—be considered as 

community development loans. This 

option would be available to an 

intermediate bank if those loans have a 

primary purpose of community 

development and are not required to be 

reported by the bank. 

Small business and small farm 

lending evaluated under the proposed 

Retail Lending Test would not have the 

accompanying requirement that these 

loans demonstrate job creation, 

retention, or improvement for low- or 

moderate-income areas or individuals, 

as is currently required for loans 

considered under the current criterion 

for economic development. As noted 

above, some stakeholders have reported 

having challenges demonstrating that 

activities satisfied this criterion, 

including demonstrating that jobs 

created or retained meaningfully benefit 

low- or moderate-income individuals 

and families. The agencies believe that 

this would appropriately broaden 

consideration of small business and 

small farm lending relative to the status 

quo, although it would involve a change 

of the test under which these loans 

would be considered. 

The agencies recognize that these 

changes would have a number of 

intersecting impacts on the activities 

considered under the economic 

development definition and evaluated 

in the Retail Lending Test. For example, 

loans to certain businesses that meet 

SBIC and SBDC size standards and are 

now covered community development 

loans might not qualify for CRA 

consideration under the proposal. For 

some types of businesses, the SBIC and 

SBDC size standards exceed gross 

annual revenues of $5 million; 

accordingly, loans to businesses that 

meet SBIC and SBDC size standards and 

have gross annual revenues exceeding 

$5 million would no longer be covered 

community development loans. Under 

this scenario, these loans would also not 

be considered under the proposed Retail 

Lending Test. 

Another example of the impact from 

this change involves the existing job 

creation, retention, or improvement for 

low- or moderate-income individuals 

standard. Compared to the volume of 

loans considered under the current 

economic development criteria, a 

greater volume of loans may be 

considered under the proposed Retail 

Lending Test as there would no longer 

be a requirement that loans to small 

businesses and small farms demonstrate 

job creation, retention, or improvement 

for low- or moderate-income 

individuals. The agencies recognize the 

critical importance of job creation as 

part of supporting local economies, and 

therefore seek feedback on the related 

proposals in both the Retail Lending 

Test and economic development 

definition sections. 

The agencies also seek feedback on 

whether to continue considering bank 

loans to small businesses and small 

farms that currently qualify under the 

economic development criteria as 

community development activities 

during the transition period before 

solely considering these loans under the 

Retail Lending Test. 

3. Activities Aligned With Federal, 

State, Local, or Tribal Efforts 

The first prong of the proposed 

economic development definition 

includes activities undertaken 

consistent with Federal, state, local, or 

tribal government plans, programs, or 

initiatives that support small businesses 

or small farms as defined by these plans, 

programs, or initiatives. The current 

community development definitions do 

not include stand-alone criteria for 

economic development activities 

aligned with Federal, state, local, or 

tribal efforts. These activities are, 

however, referenced in the Interagency 


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81See, e.g., Q&A §l.12(g)(4)(i)–1 and Q&A §l

.12(g)(3)–1. 

82See Q&A §l.12(g)(3)–1. 83See Q&A §l.12(g)(3)–1. 

Questions and Answers.81 Aligning 

economic development activities with 

government programs that address 

identified needs for small businesses 

and small farms can encourage 

coordination between banks, 

government agencies, and other program 

participants for activities that can be 

highly responsive to the unmet needs of 

communities. 

In addition, this prong of the 

proposed definition specifies that 

lending to, investing in, or providing 

services to SBDCs, SBICs, New Markets 

Venture Capital Companies, qualified 

Community Development Entities, or 

U.S. Department of Agriculture Rural 

Business Investment Companies would 

qualify as economic development. The 

current regulation does not specifically 

address activities with these entities, 

but the Interagency Questions and 

Answers state that the agencies will 

presume that activities with these 

entities promote economic 

development.82 As a result, the proposal 

is intended to provide greater clarity 

and encourage the continued 

participation in, and support of, 

programs offered through these 

providers of small business and small 

farm financing. 

This prong of the proposed definition 

would not specify a gross annual 

revenue threshold of $5 million or 

under for the businesses or farms 

supported through these government 

plans, programs, or initiatives, or 

through the specified entities. Instead, 

this prong of the definition would 

leverage the size standards used by the 

respective government plans, programs, 

or initiatives. This would include using 

the standards established by SBDCs and 

SBICs for loans, investments, or services 

to these entities. 

4. Support for Financing Intermediaries 

The second prong of the proposed 

economic development definition 

includes activities with financial 

intermediaries that increase access to 

capital for businesses or farms with 

gross annual revenues of $5 million or 

less. The agencies propose using this 

same gross annual revenue standard to 

simplify the approach and to be 

consistent throughout the definition. 

The current regulation does not 

specifically address financing 

intermediaries that increase access to 

capital for small businesses and small 

farms, although both industry and 

community group stakeholders have 

stressed the importance of financial 

intermediaries, such as non-profit 

revolving loans funds, in providing 

access to financing for small businesses 

and small farms that are not ready for 

traditional bank financing. Examples of 

financial intermediaries include a 

Community Development Corporation 

that provides technical assistance to 

recently formed small businesses, or a 

CDFI that provides lending to support 

sustainability of small farms. The 

agencies propose to recognize the role of 

these financial intermediaries—which 

could include organizations, programs, 

and services—by including in the 

definition of economic development a 

component for activities that support 

financial intermediaries that lend to, 

invest in, or provide technical 

assistance to businesses or farms with 

gross annual revenues of $5 million or 

less. 

5. Technical Assistance and Support 

Services for Small Businesses 

The third prong of the proposed 

economic development definition 

includes technical assistance activities 

to support businesses or farms with 

gross annual revenues of $5 million or 

less. This prong would also include 

providing services such as shared space, 

technology, or administrative assistance 

to businesses or farms with gross annual 

revenues of $5 million or less, or to 

organizations that have a primary 

purpose of supporting such businesses 

or farms. While these activities are not 

included in the current regulation, they 

are addressed in the Interagency 

Questions and Answers.83 In addition to 

reflecting current guidance, the agencies 

recognize that some small businesses 

and small farms may not be prepared to 

obtain traditional bank financing and 

may need technical assistance and other 

services in order to obtain credit in the 

future. Supporting these activities fills a 

gap in needed services for small 

businesses and small farms and plays a 

critical role in helping a small business 

and small farms grow and thrive. 

6. Considering Workforce Development 

and Job Training Under Community 

Supportive Services 

The agencies are proposing that 

workforce development and job training 

programs, which are currently qualified 

as a component of economic 

development, would instead be 

considered under the proposed 

definition of community supportive 

services. The current regulations do not 

address workforce development and 

training programs, but the Interagency 

Questions and Answers provide that 

these activities should be considered 

under the economic development 

definition. Stakeholders have affirmed 

the critical importance of workforce 

development and job training programs 

for low- and moderate-income 

individuals or unemployed persons. 

However, stakeholders have also noted 

the limitations of current guidance, 

which requires economic development 

activities to be tied to a financing 

activity for a small business. To address 

this concern, the agencies propose to 

recognize workforce development 

activities under the new community 

supportive services definition. The 

agencies believe that while the 

economic development definition could 

include workforce development and job 

training activities, such activities are 

better aligned with the focus of the 

proposed community supportive 

services definition, which does not 

restrict the size of the business 

involved. The proposal for community 

supportive services is discussed in 

greater detail in Section III.D. 

Request for Feedback 

Question 11. Would lending to small 

businesses and small farms that may 

also support job creation, retention, and 

improvement for low- or moderateincome individuals and communities be 

sufficiently recognized through the 

analysis of small business and small 

farm loans and the qualitative review in 

the Retail Lending Test? 

Question 12. During a transition 

period, should the agencies continue to 

evaluate bank loans to small businesses 

and small farms as community 

development activities until these loans 

are assessed as reported loans under the 

proposed Retail Lending Test? 

Question 13. Should the agencies 

retain a separate component for job 

creation, retention, and improvement 

for low- and moderate-income 

individuals under the economic 

development definition? If so, should 

activities conducted with businesses or 

farms of any size and that create or 

retain jobs for low- or moderate-income 

individuals be considered? Are there 

criteria that can be included to 

demonstrate that the primary purpose of 

an activity is job creation, retention, or 

improvement for low- or moderateincome individuals and that ensure 

activities are not qualified simply 

because they offer low wage jobs? 

D. Community Supportive Services 

The agencies propose to replace 

‘‘community services,’’ which is a type 

of activity that has a community 

development purpose under the current 

regulation, with a new definition of 


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84See 12 CFR l.12(g)(2). 

85See Q&A §l&.12(t)–4; and Q&A §l.12(g)(2)– 

1. 

86See USDA Food and Nutrition Service, 

National School Lunch Program, https://

www.fns.usda.gov/nslp. 

87See Medicaid.gov, Medicaid program, https://

www.medicaid.gov/medicaid/index.html. 

88See Q&A §l.12(g)(2)–1. 

‘‘community supportive services.’’ 

Proposed § __.13(d) defines community 

supportive services as general welfare 

activities that serve or assist low- or 

moderate-income individuals, such as 

childcare, education, workforce 

development and job training programs, 

health services, and housing services 

programs. In specifying these categories, 

the agencies’ goal is to provide clearer 

standards in the regulation for 

identifying the kind of activities that 

qualify under the definition. The change 

in terminology from ‘‘community 

services’’ to ‘‘community supportive 

services’’ is intended to more clearly 

distinguish these activities from 

‘‘community development services,’’ 

which the proposal generally defines in 

§ __.25(d) as volunteer service hours 

that meet any one of the community 

development purposes. 

1. Background 

a. Current Approach to Community 

Services 

The CRA regulations currently define 

community development to include 

‘‘community services targeted to low- or 

moderate-income individuals,’’ but the 

regulations do not further define 

community services.84 The Interagency 

Questions and Answers include 

examples of activities that qualify for 

consideration as community services, 

such as programs for low- or moderateincome youth, homeless centers, soup 

kitchens, healthcare facilities, domestic 

violence shelters, and alcohol and drug 

recovery programs serving low- or 

moderate-income individuals.85

b. Stakeholder Feedback on Community 

Services 

Stakeholders generally support 

continuing to target services to low- or 

moderate-income individuals, and 

various stakeholders have expressed 

support for including clear criteria in 

the regulation for determining whether 

a community service is targeted to lowor moderate-income individuals. In 

addition, some stakeholders have 

indicated that using a geographic proxy, 

such as an activity taking place in a lowor moderate-income census tract, should 

be sufficient to determine whether an 

activity is qualifying. 

2. Defining Community Supportive 

Services 

As discussed above, and in order to 

increase clarity and consistency, the 

agencies propose to define community 

supportive services as general welfare 

activities that serve or assist low- or 

moderate-income individuals such as, 

but not limited to, childcare, education, 

workforce development and job training 

programs, health services and housing 

services programs. The agencies also 

propose to incorporate standards in the 

regulation to demonstrate that a 

community supportive services activity 

has a primary purpose of serving lowor moderate-income individuals. 

Specifically, the agencies propose 

building on current guidance by both 

clarifying and expanding upon a nonexclusive list of standards that banks 

can use to demonstrate that a program 

or organization primarily serves low- or 

moderate-income individuals. Examples 

in the proposal include services 

provided to students or their families at 

a school where the majority of students 

qualify for free or reduced-price meals 

under the U.S. Department of 

Agriculture’s National School Lunch 

Program,86 and services that are targeted 

to individuals who receive or are 

eligible to receive Medicaid.87

Additionally, the agencies propose 

that an activity performed in 

conjunction with a qualified community 

development organization located in a 

low- or moderate-income census tract is 

a community supportive service given 

that these community-based 

organizations often serve the 

community where they are located. This 

change builds on an example currently 

included in the Interagency Questions 

and Answers to clarify within the 

definition the use of a geographic proxy 

to determine eligibility for activities.88

In addition, as noted previously, the 

agencies propose to consider workforce 

development and job training program 

activities under the definition of 

community supportive services and not 

as a component of economic 

development. The inclusion of 

workforce development activities within 

the community supportive services 

definition helps clarify that activities 

that support workforce development 

programs would receive consideration if 

the program’s participants are low- or 

moderate-income individuals, and 

would not consider the size of the 

business. 

E. Redefining Revitalization and 

Stabilization Activities 

The agencies propose to replace the 

current revitalization and stabilization 

activities component of the community 

development definitions with six new 

categories of activities. The agencies 

intend for this new category of 

definitions to provide more clarity on 

the types of activities that qualify, and 

to better tailor the types of activities that 

qualify in different targeted geographies. 

Each of the categories focuses on placebased activities that benefit residents of 

targeted geographic areas: (i) 

Revitalization; (ii) essential community 

facilities; (iii) essential community 

infrastructure; (iv) recovery activities in 

designated disaster areas; (v) disaster 

preparedness and climate resiliency 

activities; and (vi) qualifying activities 

in Native Land Areas. These definitions 

are referred to collectively in this 

SUPPLEMENTARY INFORMATION as the 

place-based definitions. 

The proposed definitions for the first 

four of these categories—revitalization 

activities undertaken with government 

plans, programs or initiatives; essential 

community facilities; essential 

community infrastructure; and recovery 

activities in designated disaster areas— 

build upon the current regulation’s 

revitalization and stabilization 

component of the community 

development definitions and related 

guidance. Each of the new categories 

would provide additional clarity by 

capturing a specific set of activities, 

rather than falling under one broad 

category, as is currently the case under 

the current regulation. In addition, the 

agencies propose adding two new 

categories to the place-based definitions 

that may qualify for CRA consideration: 

(i) Disaster preparedness and climate 

resiliency activities and (ii) activities in 

Native Land Areas. While disaster 

preparedness and climate resiliency 

activities, and activities in Native Land 

Areas are not specified under the 

current approach, some activities that 

would qualify under these new 

categories would also qualify under the 

current approach, either as 

revitalization and stabilization, or under 

other prongs. 

The six proposed place-based 

definitions share four common 

elements. First, each definition has a 

geographic focus (e.g., low- or moderateincome census tracts) where the 

activities must occur. Second, each 

definition has standardized eligibility 

criteria that require the activity to 

benefit local residents, including low- or 

moderate-income residents, of the 

targeted geographies. Third, each 

definition has the eligibility 

requirement that the activity must not 

displace or exclude low- or moderateincome residents in the targeted 

geography. Finally, each definition 

provides that the activity must be 


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89See 12 CFR __.12(g)(4). 

90See Q&A § __.12(g)(4)(i)–1; Q&A § _

_.12(g)(4)(ii)–2; and Q&A § __.12(g)(4)(iii) –3. 

91See Q&A § __.12(g)(4)(iii)–4. 

92See Q&A § __.12(g)(4)(i)–1; Q&A § _

_.12(g)(4)(ii)–2; and Q&A § __.12(g)(4)(iii)–3. 

93See Q&A § __.12(g)(4)(ii)–2 and Q&A § __

.12(g)(4)(iii)–3. 

94See Q&A § __.12(g)(4)(i)–1. 

conducted in conjunction with a 

government plan, program, or initiative 

that includes an explicit focus on 

benefitting the targeted geography. 

Together, these four common elements 

are intended to provide necessary 

clarity regarding the activities that may 

qualify for CRA credit, while 

maintaining sufficient flexibility. In 

addition, these four common elements 

are intended to ensure a strong 

connection between the activities and 

community needs. 

1. Background 

a. Current Approach to Revitalization 

and Stabilization 

Under the current regulation, the 

revitalization and stabilization activities 

component of the community 

development definitions is intended to 

encourage banks to direct additional 

resources toward comprehensive efforts 

to rebuild entire communities, rather 

than solely focusing on the needs of 

low- and moderate-income individuals 

in these communities. The current 

regulations define four types of eligible 

geographies where activities that 

revitalize or stabilize qualify: Low- or 

moderate-income geographies; 

distressed nonmetropolitan middleincome geographies; underserved 

nonmetropolitan middle-income 

geographies; and designated disaster 

areas.89

Current guidance states that 

revitalization and stabilization activities 

are those that help to ‘‘attract new, or 

retain existing, businesses or residents’’ 

in an eligible geography and qualifying 

activities are generally similar in 

eligible low- and moderate-income 

geographies, distressed nonmetropolitan 

middle-income geographies and 

designated disaster areas.90 In all 

targeted geographies, community 

facilities and infrastructure can be 

considered to the extent that these 

activities help to attract or retain 

residents or businesses. However, these 

activities are only explicitly noted in the 

guidance for underserved 

nonmetropolitan middle-income 

areas.91

Current guidance also states that an 

activity will be presumed to revitalize or 

stabilize a geography if the activity is 

consistent with a government plan for 

the revitalization or stabilization of the 

area.92 However, the standards in the 

guidance for the types of plans that can 

be used to determine eligibility are 

inconsistent. 

The current guidance also varies for 

the different targeted geographies. For 

instance, in both distressed and 

undeserved nonmetropolitan middleincome geographies and designated 

disaster areas, the guidance specifies 

that examiners will consider all 

activities that revitalize or stabilize a 

geography but give greater weight to 

those activities that are most responsive 

to community needs, including needs of 

low- or moderate-income individuals or 

neighborhoods.93 However, in 

determining whether an activity 

revitalizes or stabilizes a low- or 

moderate-income geography, in absence 

of a Federal, state, local, or tribal 

government plan, guidance instructs 

examiners to evaluate activities based 

on the actual impact on the geography, 

if that information is available.94 The 

Interagency Questions and Answers do 

not further specify how to measure an 

activity’s actual impact for a targeted 

geography, which may create varying 

interpretations. As a result, considering 

activities under the existing 

revitalization and stabilization 

definition can prove challenging to 

banks, community groups, and 

examiners alike due to these 

inconsistent criteria. 

b. Stakeholder Feedback on 

Revitalization and Stabilization 

Stakeholders have provided feedback 

on a number of issues related to the 

current revitalization and stabilization 

component of the community 

development definition. First, 

stakeholders have noted that current 

guidance does not provide sufficient 

upfront clarity about the range of 

activities that will be eligible for 

consideration or where the activities 

must occur to be considered. Various 

stakeholders also note the need for 

additional clarity in defining eligible 

revitalization and stabilization 

activities, while also maintaining 

flexibility to meet local needs and/or 

changing circumstances. Some 

stakeholders have also indicated that an 

illustrative list of qualifying 

revitalization and stabilization activity 

examples could help provide needed 

clarity. 

Second, some community group 

stakeholders have noted that not all 

qualifying activities with a revitalization 

and stabilization purpose benefit low- or 

moderate-income individuals or 

underserved communities. Various 

community stakeholders indicate that 

the agencies should update the 

revitalization and stabilization activities 

component so that qualifying activities 

primarily benefit low- or moderateincome residents of targeted, 

underserved geographies, noting that 

activities currently considered under 

revitalization and stabilization do not 

always provide direct benefit for low- or 

moderate-income individuals. 

Third, stakeholders have indicated 

varying levels of support for greater 

consistency regarding government plans 

to revitalize or stabilize a geography. 

Some stakeholders have stated that 

activities should not be required to align 

with a government plan, but that 

activities that do align with a 

government plan should receive 

automatic CRA consideration. Other 

stakeholders have stated opposition to 

placing great emphasis on a government 

plan as leading to more-or-less 

automatic qualification of an activity, 

noting government plans vary widely, 

including in scope, purpose, level of 

community engagement, and the rigor of 

included criteria. 

Lastly, many stakeholders have 

supported providing consideration for 

activities related to disaster 

preparedness and climate resiliency. 

Some stakeholders supported evaluating 

these activities as essential 

infrastructure or within the broader 

category of revitalization activities. 

Community group stakeholders noted 

that low- and moderate-income 

communities are particularly vulnerable 

to weather-related disasters and 

expressed that consideration for disaster 

preparedness and climate resiliency 

activities should be limited to activities 

that benefit low- or moderate-income 

individuals or census tracts. Other 

stakeholders expressed concerns that 

the qualifying definitions should not be 

broadened to include activities whose 

purpose is to mitigate climate change, 

such as carbon capture facilities. 

2. Common Elements for Proposed 

Place-Based Definitions 

The agencies propose four common 

elements which would be required 

eligibility standards for each of the six 

place-based definitions. First, across all 

place-based definitions, the agencies 

propose targeted census tracts where 

activities would be eligible for 

consideration. Under this proposal, 

revitalization activities, essential 

infrastructure activities, essential 

community facilities activities, and 

disaster preparedness and climate 

resiliency activities would be eligible if 

they benefit residents of targeted census 

tracts. As set forth in proposed § __.12, 


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95See Q&A § __.12(g)(4)(i)–1; Q&A § __

.12(g)(4)(ii)–2; and Q&A § __.12(g)(4)(iii)–3. 

96See Q&A § __.12(g)(4)(i)–1. 

97See Q&A § __.12(g)(4)(iii)–3. 

targeted census tracts include low- and 

moderate-income census tracts, as well 

as distressed or underserved 

nonmetropolitan middle-income census 

tracts. The proposed approach in § __.13 

provides consistency on activities 

eligible across these targeted census 

tracts. 

Consistent with current guidance, the 

agencies are also proposing that 

recovery activities in designated disaster 

areas qualify in census tracts of all 

income levels, provided that the 

activities benefit residents in an area 

subject to a Federal Major Disaster 

Declaration, excluding Major Disaster 

Categories A and B. Qualified activities 

in Native Land Areas would be eligible 

in those geographies, as separately 

defined in proposed § __.12. The 

agencies’ approach of defining 

geographic eligibility under this 

framework is intended to tailor the 

requirements for each definition, while 

maintaining the flexibility needed for 

diverse, local redevelopment needs. 

Second, the agencies propose that all 

place-based activities benefit or serve 

residents of the targeted census tract(s), 

including low- and moderate-income 

residents. Adding this specific 

eligibility requirement establishes the 

expectation that residents in targeted 

census tracts must benefit from the 

activity and is intended to provide 

greater certainty that an activity is 

responsive to community needs 

compared to the current approach that 

relies upon examiner judgment ‘‘to give 

greater weight to those activities that are 

most responsive to community needs’’ 

in targeted geographies.95 For example, 

financing to support development of a 

new industrial park in conjunction with 

a city-sponsored revitalization plan 

would be eligible for CRA credit if it 

benefitted residents of the targeted 

census tracts by providing new 

employment opportunities, including 

for low- and moderate-income residents. 

The agencies are not proposing that 

all place-based activities solely benefit 

or serve low- or moderate-income 

residents. Rather, the proposal seeks to 

maintain flexibility for activities to meet 

a range of community needs while also 

requiring the inclusion of low- or 

moderate-income residents as 

beneficiaries of an activity. Such 

flexibility is particularly important in 

distressed and underserved 

nonmetropolitan middle-income census 

tracts, which can have fewer low- or 

moderate-income residents. 

Third, the agencies propose that 

eligible place-based activities cannot 

lead to the displacement or exclusion of 

low- or moderate-income residents in 

targeted geographies. For example, if 

low- or moderate-income individuals 

were not able to have access to or 

benefit from an activity, then the 

activity would not meet this part of the 

definition and would be ineligible for 

CRA credit. Likewise, as another 

example, if a project to build 

commercial development to revitalize 

an area involved demolishing housing 

occupied by low- or moderate-income 

individuals, then the activity would not 

meet this part of the definition and 

would be ineligible for CRA credit. In 

proposing these requirements, the 

agencies seek to ensure that qualifying 

activities do not have a detrimental 

effect on low- or moderate-income 

individuals or communities or on other 

underserved communities. 

Lastly, under the proposal, activities 

eligible under the place-based 

community development definitions 

would need to be in conjunction with a 

government plan, program, or initiative 

that includes an explicit focus on 

benefitting the targeted census tracts. 

The current standard in Interagency 

Questions and Answers states that 

activities may qualify if consistent with 

the community’s formal or informal 

plans for the revitalization and 

stabilization of a low- or moderateincome geography.96 In addition, under 

current guidance, activities are 

presumed to revitalize or stabilize a 

distressed nonmetropolitan middleincome area if the activity is consistent 

with a ‘‘bona fide’’ government 

revitalization or stabilization plan.97

The agencies’ proposal to require 

activities eligible under the place-based 

community development definitions to 

be in conjunction with a government 

plan, program, or initiative is intended 

to achieve several objectives. First, this 

standard helps to ensure that the 

activity is responsive to identified 

community needs. Second, the 

proposed standard is intended to 

increase clarity, because all activities 

eligible under the place-based 

community development definitions 

would need to meet this criterion. 

Currently, standards vary across the 

targeted geographies and the reliance on 

a plan to demonstrate that an activity 

helps to attract or retain residents is 

used inconsistently. 

Third, the agencies’ proposal is 

intended to provide flexibility, because 

it would allow consideration of an 

activity to be in conjunction with a 

government plan, program, or initiative. 

By including consideration for activities 

in conjunction with a program or 

initiative, in addition to a government 

plan, banks would have the flexibility to 

pursue responsive place-based activities 

that are in conjunction with a program 

or initiative even if not part of a plan. 

For example, a grant to support a park 

in a low-income census tract could 

qualify if it was in conjunction with a 

citywide initiative, or program, to 

expand greenspace in low- or moderateincome areas. Additionally, the 

standard of ‘‘in conjunction with’’ 

would provide greater clarity than 

provided under current guidance by 

expressly stating that an eligible activity 

must be included as part of a 

government plan, program, or initiative. 

3. Revitalization Activities Undertaken 

With a Government Plan, Program, or 

Initiative 

The agencies are proposing a new 

place-based definition for activities 

undertaken in conjunction with a 

Federal, state, local, or tribal 

government plan, program, or initiative 

that includes an explicit focus on 

revitalizing or stabilizing targeted 

census tracts. While the goals of a plan, 

program or initiative could include 

stabilization or revitalization of other 

geographies, the plan, program, or 

initiative would also need to 

specifically include the targeted census 

tracts. Activities meeting this definition 

would need to meet the four common 

elements for place-based criteria 

described above. This definition 

incorporates some aspects of existing 

guidance for revitalization and 

stabilization but would no longer focus 

eligibility of activities on the extent that 

an activity helps to attract or retain 

residents or businesses in targeted 

geographies. Instead, activities would be 

eligible for consideration under this 

proposal if they are in conjunction with 

a plan, program, or initiative for the 

targeted geography, allowing for more 

comprehensive redevelopment goals. 

Additionally, conducting activities in 

conjunction with a government plan, 

program, or initiative provides a 

mechanism to ensure that activities are 

intentional and support articulated 

community revitalization goals. 

The agencies provide several 

examples in the proposed regulation 

that are drawn from current guidance to 

provide some clarity on the type of 

activities that could be considered 

under this definition. These examples 

include adaptive reuse of vacant or 

blighted buildings, brownfield 

redevelopment, or activities consistent 

with a plan for a business improvement 

district or main street program. 


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98See Q&A § __.12(g)(4)–2. 99See Q&A § __.12(g)(4)(ii)–2. 

However, this list is not exhaustive, and 

the agencies’ intent is to allow 

flexibility for qualifying activities to 

help meet a range of identified 

community needs. 

The agencies propose that housingrelated activities would not be covered 

by the definition of revitalization 

activities. Under current guidance, 

activities that provide housing for 

middle-income and upper-income 

individuals can qualify if the activities 

meet certain criteria and help to 

revitalize or stabilize a distressed or 

underserved nonmetropolitan middleincome geography or designated disaster 

area.98 However, some stakeholders 

have noted concerns that housing that 

benefits middle- or upper-income 

individuals, particularly in a low- or 

moderate-income census tract, can lead 

to displacement of existing residents. In 

addition, the agencies note that 

additional clarity would come from 

qualifying most housing-related 

community development activities in 

the affordable housing definition. The 

agencies recognize that housing 

activities are often components of 

government plans, programs, and 

initiatives to revitalize communities, 

and therefore seek feedback on whether 

housing-related revitalization activities 

should be considered under either the 

affordable housing definition or the 

revitalization activities definition and 

under what circumstances. 

4. Essential Community Infrastructure 

and Essential Community Facilities 

The agencies propose creating 

separate definitions for essential 

community infrastructure and for 

essential community facilities that 

benefit or serve residents in one or more 

of the eligible targeted census tracts. 

Under proposed § __.13(f), activities that 

qualify as essential community 

infrastructure are those that provide 

financing or other support for such 

items as broadband, 

telecommunications, mass transit, water 

supply and distribution, and sewage 

treatment and collection systems. 

Activities that qualify as essential 

community facilities include those that 

finance or provide other support for 

public amenities in targeted areas. 

Illustrative examples of essential 

community facility activities include, 

but are not limited to, financing 

activities to support the development of 

schools, libraries, childcare facilities, 

parks, hospitals, healthcare facilities, 

and community centers. Similar to the 

other place-based definitions, the 

agencies specify that activities would 

need to be in conjunction with a 

Federal, state, local, or tribal 

government plan, program, or initiative 

with an explicit focus on benefitting a 

geographic area that includes the 

targeted census tracts. This proposal is 

intended to ensure that the activities 

have a clear objective of meeting needs 

in targeted communities. 

The proposal builds on the current 

Interagency Questions and Answers 

guidance to clarify that both essential 

community infrastructure activities and 

essential community facilities activities 

would be considered if they are 

conducted in and benefit or serve 

residents of low- or moderate-income 

census tracts, as well as distressed or 

underserved nonmetropolitan middleincome census tracts. Current guidance 

explicitly notes that these activities are 

eligible in underserved middle-income 

nonmetropolitan geographies, but these 

activities are only qualified in low- or 

moderate-income census tracts, 

distressed nonmetropolitan middleincome census tracts or designated 

disaster areas if they help attract or 

retain businesses or residents. 

Consequently, the current treatment of 

these activities in targeted geographies 

is inconsistent, and the agencies’ 

proposal aims to provide more clarity 

and certainty for when these activities 

can be considered and to do so 

consistently across the different 

categories of targeted census tracts. 

The agencies’ proposed requirements 

for all place-based definitions, described 

previously, is intended to ensure that 

any qualifying activity related to 

essential community infrastructure or 

essential community facilities benefits 

or serves residents of the eligible 

targeted census tracts, including low- or 

moderate-income residents. Several 

community stakeholders have raised 

concern that larger scale infrastructure 

projects can often provide limited 

benefits for targeted census tracts, 

especially for low- and moderateincome residents in these geographies. 

Under the agencies’ proposal, such 

activities are eligible for consideration if 

there is a demonstrated benefit for the 

residents of the targeted census tracts 

and it is evident that low- or moderateincome residents would be beneficiaries 

of the activity and not be excluded from 

the larger-scale improvements. For 

example, a bank could purchase a bond 

to fund improvements for a city-wide 

water treatment project that is 

consistent with a city’s capital 

improvement plan. This project would 

qualify if it benefits or serves residents 

in the eligible census tracts to a degree 

sufficient to meet the primary purpose 

standard and does not exclude low- or 

moderate-income residents. The 

agencies seek feedback on whether any 

additional criteria for infrastructure and 

essential community facilities would 

further ensure that activities include a 

benefit to low- or moderate-income 

residents in the communities served by 

these projects. 

5. Recovery Activities in Designated 

Disaster Areas 

The agencies propose a definition for 

activities targeted to the recovery of 

designated disaster areas. The needs of 

these areas often differ from other 

targeted geographic areas, and the 

proposed definition is intended to more 

accurately and specifically describe 

eligible disaster recovery activities. The 

proposed definition includes activities 

that revitalize or stabilize geographic 

areas subject to a Major Disaster 

Declaration administered by the Federal 

Emergency Management Agency 

(FEMA). Consistent with current 

guidance, activities in designated 

disaster areas that meet this eligibility 

standard would be considered, 

regardless of the income level of the 

designated census tracts. The agencies 

believe activities that promote the 

recovery of designated disaster areas 

benefit the entire community, including, 

but not limited to, low- or moderateincome individuals and low- or 

moderate-income communities. 

To qualify under the proposed 

definition, a disaster recovery activity 

would need to be in conjunction with a 

Federal, state, local, or tribal 

government disaster plan that includes 

an explicit focus on the recovery of the 

geographic area. The proposed 

definition incorporates existing 

guidance that states an activity will be 

presumed to revitalize or stabilize a 

designated disaster area if the activity is 

consistent with a bona fide government 

revitalization or stabilization plan or 

disaster recovery plan.99 Examples of 

activities eligible under this definition 

include, but are not limited to, 

assistance with rebuilding infrastructure 

and other community services, 

financing to retain businesses that 

employ local residents, and recoveryrelated housing or financial assistance 

to individuals in the designated disaster 

areas. Additionally, although activities 

in all census tract income-levels would 

be considered, these activities would 

need to be responsive to community 

needs, including low- or moderateincome community needs, and could 

not displace or exclude low- or 


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100Federal Reserve Bank of New York, ‘‘Reducing 

Climate Risk for Low-Income Communities,’’ news 

release, (Nov. 19, 2020), https://

www.newyorkfed.org/newsevents/events/regional_

outreach/2020/1119-2020; Jesse M. Keenan and 

Elizabeth Mattiuzzi, ‘‘Climate Adaptation 

Investment and the Community Reinvestment Act,’’ 

Community Development Research Briefs (June 16, 

2019), https://www.frbsf.org/communitydevelopment/publications/communitydevelopment-research-briefs/2019/june/climateadaptation-investment-and-the-communityreinvestment-act/. 

101Eleanor Kruse and Richard V. Reeves, 

Brookings Institution, ‘‘Hurricanes hit the poor the 

hardest,’’, (Sept. 18, 2017), https://

www.brookings.edu/blog/social-mobility-memos/ 

2017/09/18/hurricanes-hit-the-poor-the-hardest/; 

U.S. Global Research Program, Fourth National 

Climate Assessment, Volume II: Impacts, Risks, and 

Adaptation in the United States (Washington, DC: 

U.S. Global Change Research Program, 2018), 

https://nca2018.globalchange.gov/; Bev Wilson, 

Journal of the American Planning Association, 

Volume 86, 2020—Issue 4, ‘‘Urban Heat 

Management and the Legacy of Redlining’’ (2020), 

https://www.tandfonline.com/doi/full/10.1080/ 

01944363.2020.1759127. 

102Maya K. Buchanan et al., Environ. Res. Lett. 

15 124020 (2020), ‘‘Sea level rise and coastal 

flooding threaten affordable housing,’’ https://

iopscience.iop.org/article/10.1088/1748-9326/ 

abb266. 

103U.S. Global Research Program, Fourth 

National Climate Assessment, Volume II: Impacts, 

Risks, and Adaptation in the United States 

(Washington, DC: U.S. Global Change Research 

Program, 2018), https://nca2018.globalchange.gov/; 

Patrick Sisson, Bloomberg, ‘‘In Many Cities, Climate 

Change Will Flood Affordable Housing’’ (Dec. 1, 

2020), https://www.bloomberg.com/news/articles/

2020-12-01/how-climate-change-is-targetingaffordable-housing; and Eleanor Kruse and Richard 

V. Reeves, Brookings Institution, ‘‘Hurricanes hit 

the poor the hardest,’’ (Sept. 18, 2017), https://

www.brookings.edu/blog/social-mobility-memos/ 

2017/09/18/hurricanes-hit-the-poor-the-hardest/. 

104Eleanor Kruse and Richard V. Reeves, 

‘‘Hurricanes hit the poor the hardest,’’ Brookings 

Institution (Sept. 18, 2017), https://

www.brookings.edu/blog/social-mobility-memos/ 

2017/09/18/hurricanes-hit-the-poor-the-hardest/; 

U.S. Global Research Program, Fourth National 

Climate Assessment, Volume II: Impacts, Risks, and 

Adaptation in the United States (Washington, DC: 

U.S. Global Change Research Program, 2018), 

https://nca2018.globalchange.gov/. 

105See Q&A § __.12(g)(4)(ii)–2. 

106See FEMA, How A Disaster Gets Declared, 

https://www.fema.gov/disaster/how-declared. 

107See Q&A § __.12(h)–1. 

moderate-income residents of 

designated disaster areas. 

The agencies considered whether the 

definition of a designated disaster area 

should include any FEMA disaster 

declaration, including areas receiving 

Categories A and B assistance. However, 

the agencies believe that activities 

covered under Categories A and B are 

generally short-term recovery activities 

that would significantly expand the 

number of designated disaster areas 

where activities could be considered 

without providing long-term benefits to 

impacted communities. Therefore, the 

agencies propose to retain the definition 

of designated disaster areas included in 

the Interagency Questions and Answers 

and propose that exceptions be 

considered, such as the disaster 

declarations for the COVID–19 

pandemic, on a case-by-case basis. 

6. Disaster Preparedness and Climate 

Resiliency Activities 

The agencies propose a definition for 

disaster preparedness and climate 

resiliency activities that is separate from 

the recovery activities in the designated 

disaster areas category that exists under 

the current CRA framework. The 

proposed definition focuses on activities 

that assist individuals and communities 

to prepare for, adapt to, and withstand 

natural disasters, weather-related 

disasters, or climate-related risks. The 

proposal would encompass activities in 

low- or moderate-income census tracts, 

as well as distressed and underserved 

nonmetropolitan middle-income census 

tracts. To be eligible, the proposed 

disaster preparedness and climate 

resiliency definition would require 

these activities to be conducted in 

conjunction with a government plan, 

program, or initiative that is focused on 

disaster preparedness or climate 

resiliency that includes an explicit focus 

on benefitting a geographic area that 

includes the targeted census tracts. 

a. Background 

There is growing evidence that 

highlights the ways in which lowerincome households and communities 

are especially vulnerable to the impact 

of natural disasters and weather-related 

disasters, as well as climate-related 

risks.100 Low- and moderate-income 

communities are more likely to be 

located in areas or buildings that are 

particularly vulnerable to disasters or 

climate-related risks, such as storm 

shocks or drought.101 Since residents of 

affordable housing are more likely to be 

low-income, and affordable housing 

tends to be older and of poorer quality, 

low- and moderate-income households 

are more likely to have housing that is 

susceptible to disaster-related 

damage.102 Additionally, lower-income 

households tend to have fewer financial 

resources, making them less resilient to 

the temporary loss of income, property 

damage, displacement costs, and health 

challenges they face from disasters.103

Finally, low- and moderate-income 

communities are often 

disproportionately affected by the 

health impacts associated with natural 

disasters and climate-related events.104

To date, the agencies’ CRA regulations 

have allowed CRA credit for certain 

activities that help communities, 

including low- or moderate-income 

communities, recover from natural 

disasters. Under the current CRA 

framework, banks can receive 

consideration for activities that help to 

revitalize and stabilize designated 

disaster areas, such as financial 

assistance for services to individuals 

who have been displaced from 

designated disaster areas, and financial 

assistance for rebuilding needs.105 On a 

limited basis, activities that help 

designated disaster areas mitigate the 

impact of future disasters may be 

considered under CRA if Hazard 

Mitigation Assistance is included in the 

FEMA disaster declaration.106 Outside 

of activities related to disaster recovery, 

current CRA guidance provides that 

consideration will be given for loans 

financing renewable energy facilities or 

energy-efficient improvements in either 

affordable housing or community 

facilities that otherwise meet the 

existing definition of community 

development.107 Current guidance does 

not explicitly include activities related 

to helping low- or moderate-income 

individuals, low- or moderate-income 

communities, small businesses, or small 

farms prepare for disasters or build 

resilience to future climate-related 

events. 

b. Defining Disaster Preparedness and 

Climate Resiliency Activities 

Under the proposed definition, 

disaster preparedness and climate 

resiliency activities are defined as 

activities that assist individuals and 

communities to prepare for, adapt to, 

and withstand natural disasters, 

weather-related disasters, or climaterelated risks. The proposed definition 

would encompass activities that help 

low- or moderate-income individuals 

and communities proactively prepare 

for or mitigate the effect of disasters and 

climate-related risks, for example, 

earthquakes, severe storms, droughts, 

flooding, and forest fires. 

Examples of eligible activities could 

include, but would not be limited to, 

developing financial products and 

services that help residents, small 

businesses, and small farms in targeted 

geographies prepare for and withstand 

the impact of future disasters; 

supporting the establishment of flood 

control systems in a flood prone low- or 

moderate-income or underserved or 

distressed nonmetropolitan middleincome census tract; and retrofitting 

affordable housing to withstand future 

disasters or climate-related events. 

Additional examples of qualifying 

activities could include, but would not 

be limited to: Promoting green space in 

low- or moderate-income census tracts 


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108See 12 CFR 1282.34(d)(2) and (d)(3). For 

example, under its Duty to Serve regulation, the 

FHFA sets a standard that energy or water 

efficiency improvements must reduce energy or 

water consumption by at least 15 percent and that 

these energy efficiencies generated over an 

improvement’s expected life will exceed the cost of 

installation. 

in order to mitigate the effects of 

extreme heat, particularly in urban 

areas; energy efficiency improvements 

to community facilities that lower 

energy costs; financing community 

centers that serve as cooling or warming 

centers in low- or moderate-income 

census tracts that are more vulnerable to 

extreme temperatures; infrastructure to 

protect targeted geographies from the 

impact of rising sea levels; and 

assistance to small farms to adapt to 

drought challenges. 

Similar to the other place-based 

definitions, disaster preparedness and 

climate resiliency activities would need 

to meet the required common elements 

specified in proposed §l.13(e). To 

ensure that a range of activities qualify 

for consideration, the agencies have 

proposed a comprehensive definition of 

disaster preparedness and climate 

resiliency activities; however, the 

agencies recognize that there may be 

overlap between the various 

components of the definition. For 

example, a loan to help develop a levee 

to prevent flooding in a moderateincome community could qualify as 

either a preparation to withstand a 

natural disaster or to adapt to climaterelated risks. 

The agencies intend that some energy 

efficiency activities would be eligible 

under the proposed definition for 

activities that help low- or moderateincome individuals and communities 

proactively prepare for, adapt to, or 

withstand natural disasters, weatherrelated disasters, or climate-related 

risks. As noted earlier, under current 

guidance, consideration could be given 

for loans that finance energy-efficient 

improvements in either affordable 

housing or community facilities that 

otherwise meet the existing definition of 

community development. Such 

activities may help lower utility costs, 

therefore making housing more 

affordable to low- and moderate-income 

individuals and lowering operating 

expenses for needed community 

facilities. Examples include, but are not 

limited to, weatherization upgrades to 

affordable housing in a targeted census 

tract, new and more efficient heating 

and air-cooling systems, or new energy 

efficient appliances. The agencies seek 

feedback on whether certain activities 

that support energy efficiency should be 

included as an explicit component of 

the proposed disaster preparedness and 

climate resiliency definition. 

Alternatively, the agencies seek 

feedback on whether these activities 

should be included when appropriate in 

other definitions, such as affordable 

housing and community facilities. 

Additionally, the agencies seek feedback 

on whether there should be energy 

efficiency standards for determining 

whether an activity provides a sufficient 

benefit to targeted census tracts, 

including low- or moderate-income 

residents.108

The agencies also seek feedback on 

the extent to which energy-related 

activities that would benefit residents in 

targeted census tracts should be 

considered as part of a disaster 

preparedness and climate resiliency 

definition. Although distinct from 

projects that focus on energy-efficiency 

improvements to housing or other 

buildings, some stakeholders suggest 

that focusing on access to renewable 

energy could also provide important 

benefits to targeted communities. Under 

the proposed definition an example of 

such a qualifying project could include, 

but would not be limited to, battery 

storage projects in low- and moderateincome areas with high flood or wind 

risk, thereby reducing risks of power 

loss due to flooding and high winds. 

However, the agencies do not intend 

that the proposed definition would 

include utility-scale projects. 

The agencies seek feedback on 

whether the discussion above captures 

the range of activities that promote 

disaster preparedness and climate 

resiliency, and are appropriately 

tailored to meet the needs in low- and 

moderate-income communities and 

distressed or underserved 

nonmetropolitan middle-income areas. 

In order for an activity to be eligible 

under this definition, the agencies 

propose that an activity must benefit or 

serve residents of targeted census 

tracts—specifically, low- or moderateincome census tracts, as well as 

distressed and underserved 

nonmetropolitan middle-income census 

tracts. The agencies considered whether 

eligibility for disaster preparedness and 

climate resiliency activities should 

extend to designated disaster areas. 

Activities related to disaster recovery, 

which can also include some activities 

to mitigate the impact of future 

disasters, would still be considered in 

all designated disaster areas. However, 

the agencies intend to provide eligibility 

for disaster preparedness and climate 

resiliency activities in geographic areas 

with more limited resources to prepare 

for, adapt to, and withstand natural 

disasters, weather-related disasters, or 

climate-related risks. Therefore, the 

agencies propose to limit consideration 

to activities conducted in low- or 

moderate-income census tracts and 

distressed or underserved 

nonmetropolitan middle-income census 

tracts. 

The agencies also seek feedback on 

whether the disaster preparedness and 

climate resiliency definition should 

include a separate prong that 

specifically focuses on activities that 

benefit low- or moderate-income 

individuals. Incorporating a separate 

prong of the definition for low- or 

moderate-income individuals would 

allow consideration in all communities 

for certain activities that are tied 

specifically to assisting low- or 

moderate-income individuals, and not 

just those in targeted geographies. For 

example, this could include activities 

that help low- or moderate-income 

individuals in any community with 

weatherization improvements or to 

establish savings accounts to mitigate 

the impact from future disasters. The 

agencies seek feedback on this option, 

as well as the types of activities that 

would be appropriate to consider under 

this prong. 

Similar to the other place-based 

definitions, the agencies propose that 

disaster preparedness and climate 

resiliency activities must be in 

conjunction with a Federal, state, local, 

or tribal government plan, program, or 

initiative that includes an explicit focus 

on benefitting a geographic area that 

includes the targeted census tracts. This 

proposal is intended to ensure that the 

activities have a clear objective of 

meeting needs in targeted communities. 

However, the agencies recognize that 

disaster preparedness or climate 

resiliency plans or programs may not be 

in place for some targeted communities. 

Additionally, some government plans 

may not be specifically focused on 

disaster preparation or climate 

resiliency. Therefore, the agencies seek 

feedback on whether a plan, program, or 

initiative provides sufficient standards 

around what kinds of activities benefit 

targeted census tracts and should 

qualify for CRA purposes. The agencies 

also seek feedback on whether there are 

other options to determine whether 

disaster preparedness and climate 

resiliency activities are appropriately 

targeted. 

Request for Feedback 

Question 14. Should any or all placebased definition activities be required to 

be conducted in conjunction with a 

government plan, program, or initiative 

and include an explicit focus of 

benefitting the targeted census tract(s)? 


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109The terms minority-owned financial 

institution and women-owned financial institution 

are not defined in the CRA statute. See 12 U.S.C. 

2903(b). The CRA statute does define similar terms 

for minority depository institution (MDI) and 

women’s depository institution (WDI) for purposes 

of the branch-related activities referenced in 12 

U.S.C. 2907(a). This SUPPLEMENTARY INFORMATION

uses MDI and WDI unless it is necessary to use the 

terms minority-owned financial institution or 

women-owned financial institution for clarity. 

110See Treasury Department, Community 

Financial Institutions Fund, CDFI Certification, 

https://www.cdfifund.gov/programs-training/ 

certification/cdfi. 

111Two sections of the CRA statute reference 

minority- and women-owned institutions: 12 U.S.C. 

2903(b) and 12 U.S.C. 2907. However, these 

sections use different terms for these institutions 

(e.g., 12 U.S.C. 2903(b) uses the term ‘‘minority- and 

women-owned financial institutions’’ and 12 U.S.C. 

2907 uses the terms ‘‘minority depository 

institution’’ and ‘‘women’s depository institution’’). 

Note that the definitions in the CRA statute apply 

only to the activities referenced in 12 U.S.C. 2907. 

If so, are there appropriate standards for 

plans, programs, or initiatives? Are 

there alternative options for determining 

whether place-based definition 

activities meet identified community 

needs? 

Question 15. How should the 

proposals for place-based definitions 

focus on benefitting residents in 

targeted census tracts and also ensure 

that the activities benefit low- or 

moderate-income residents? How 

should considerations about whether an 

activity would displace or exclude lowor moderate-income residents be 

reflected in the proposed definitions? 

Question 16. Should the agencies 

include certain housing activities as 

eligible revitalization activities? If so, 

should housing activities be considered 

in all, or only certain, targeted 

geographies, and should there be 

additional eligibility requirements for 

these activities? 

Question 17. Should the agencies 

consider additional requirements for 

essential community infrastructure 

projects and essential community 

facilities to ensure that activities 

include a benefit to low- or moderateincome residents in the communities 

served by these projects? 

Question 18. Should the agencies 

consider any additional criteria to 

ensure that recovery of disaster areas 

benefits low- or moderate-income 

individuals and communities? 

Question 19. Does the disaster 

preparedness and climate resiliency 

definition appropriately define 

qualifying activities as those that assist 

individuals and communities to prepare 

for, adapt to, and withstand natural 

disasters, weather-related disasters, or 

climate-related risks? How should these 

activities be tailored to directly benefit 

low- or moderate-income communities 

and distressed or underserved 

nonmetropolitan middle-income areas? 

Are other criteria needed to ensure these 

activities benefit low- or moderateincome individuals and communities? 

Question 20. Should the agencies 

include activities that promote energy 

efficiency as a component of the disaster 

preparedness and climate resiliency 

definition? Or should these activities be 

considered under other definitions, 

such as affordable housing and 

community facilities? 

Question 21. Should the agencies 

include other energy-related activities 

that are distinct from energy-efficiency 

improvements in the disaster 

preparedness and climate resiliency 

definition? If so, what would this 

category of activities include and what 

criteria is needed to ensure a direct 

benefit to the targeted geographies? 

Question 22. Should the agencies 

consider utility-scale projects, such as 

certain solar projects, that would benefit 

residents in targeted census tracts as 

part of a disaster preparedness and 

climate resiliency definition? 

Question 23. Should the agencies 

include a prong of the disaster 

preparedness and climate resiliency 

definition for activities that benefit lowor moderate-income individuals, 

regardless of whether they reside in one 

of the targeted geographies? If so, what 

types of activities should be included 

under this prong? 

Question 24. Should the agencies 

qualify activities related to disaster 

preparedness and climate resiliency in 

designated disaster areas? If so, are there 

additional criteria needed to ensure that 

these activities benefit communities 

with the fewest resources to address the 

impacts of future disasters and climaterelated risks? 

F. Activities With MDIs, WDIs, LICUs, 

and CDFIs 

The agencies are seeking ways to 

strengthen CRA provisions to support 

MDIs, WDIs, LICUs, and Treasury 

Department-certified CDFIs. To 

emphasize such activity, the agencies 

propose several provisions related to 

activities with these entities. 

1. Background 

a. Current Treatment of MDIs, WDIs, 

LICUs, and CDFIs 

Under the CRA statute, nonminorityor nonwomen-owned financial 

institutions can receive CRA credit for 

capital investment, loan participation, 

and other ventures in cooperation with 

MDIs, WDIs,109 and LICUs, provided 

that these activities help meet the credit 

needs of local communities in which 

such institutions and credit unions are 

chartered. These activities need not also 

benefit a bank’s assessment areas or the 

broader statewide or regional area that 

includes the bank’s assessment areas. 

b. Stakeholder Feedback on MDIs, 

WDIs, LICUs, and CDFIs 

Stakeholders have noted that CRA 

activities through bank partnerships 

with MDIs, WDIs, LICUs, and CDFIs are 

key in helping to meet the credit needs 

of low- or moderate-income individuals 

and communities. Stakeholders have 

supported a stronger emphasis on 

community development financing and 

services that support these institutions, 

including equity investments, long-term 

debt financing, technical assistance, and 

contributions to non-profit affiliates. 

Some stakeholders have suggested the 

need to increase certainty surrounding 

the treatment of activities in partnership 

with MDIs, WDIs, LICUs, and CDFIs. 

For example, stakeholders have noted 

that examiners may require extensive 

documentation that a CDFI assists lowincome populations, even though CDFI 

certification by the Treasury Department 

is an indication of having a mission of 

community development.110 To provide 

a stronger incentive and reduce burden, 

most stakeholders support conferring 

automatic CRA community 

development consideration for 

community development activities with 

Treasury Department-certified CDFIs. 

2. Activities Related to MDIs, WDIs, 

LICUs, and Treasury DepartmentCertified CDFIs 

The agencies propose a definition in 

§ l.13 specific to MDIs, WDIs, LICUs, 

and Treasury Department-certified 

CDFIs. In addition, in §l.12, the 

proposal defines the term MDI in two 

ways. For purposes of a bank engaging 

in an activity described in 12 U.S.C. 

2907(a) (i.e., a bank that donates, sells 

on favorable terms, or makes certain 

branches available on a rent-free basis to 

an MDI), the proposal defines MDI by 

cross-reference to the definition of the 

term in 12 U.S.C. 2907(b)(1). Section 

2907(b)(1) states that an MDI is a 

depository institution (as defined in 12 

U.S.C. 1813(c)) in which (i) more than 

50 percent of the ownership or control 

is held by one or more minority 

individuals and (ii) more than 50 

percent of the net profit or loss of which 

accrues to one or more minority 

individuals).111 For all other purposes, 

the proposal defines an MDI as a bank 

that (i) meets the 12 U.S.C. 2907(b)(1) 

definition; (ii) is an MDI as defined in 

section 308 of the Financial Institutions 

Reform, Recovery, and Enforcement Act 

of 1989 (FIRREA) (12 U.S.C. 1463 note); 


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112Under 12 U.S.C. 4703a(a)(6), the term 

‘‘minority depository institution’’ means an entity 

that is (1) an MDI, as defined in section 308 of the 

FIRREA (12 U.S.C. 1463 note); (2) considered to be 

an MDI by (i) the appropriate Federal banking 

agency or (ii) the National Credit Union 

Administration, in the case of an insured credit 

union; or (3) listed in the FDIC’s Minority 

Depository Institutions List published for the Third 

Quarter 2020. In this proposal, the agencies did not 

include insured credit unions designated by the 

National Credit Union Administration as MDIs but 

are seeking feedback on whether they should be 

included. In addition, the proposal does not include 

the FDIC’s Minority Depository Institutions List 

published for the third quarter of 2020 because it 

reflects a point in time and the list is updated 

regularly. 

113See OCC, News Release 2013–94, 

‘‘Comptroller Curry Tells Minority Depository 

Institutions OCC Rules Make It Easier for Minority 

Institutions to Raise Capital,’’ Policy Statement on 

Minority National Banks and Federal Savings 

Associations (June 13, 2013), https://www.occ.gov/ 

news-issuances/news-releases/2013/nr-occ-2013- 

94.html (permits banks that no longer meet the 

minority ownership requirement to continue to be 

considered minority depository institutions if they 

serve a predominantly minority community); Board, 

SR 21–6/CA 21–4: ‘‘Highlighting the Federal 

Reserve System’s Partnership for Progress Program 

for Minority Depository Institutions and Women’s 

Depository Institutions’’ (Mar, 5, 2021), https://

www.federalreserve.gov/supervisionreg/srletters/ 

SR2106.htm (permits designation as a minority 

depository institution if the majority of a bank’s 

board of directors consists of minority individuals 

and the community that the bank serves is 

predominantly minority); and FDIC, Statement of 

Policy Regarding Minority Depository Institutions 

(June 15, 2021), https://www.fdic.gov/regulations/ 

laws/rules/5000-2600.html#fdic5000policyso 

(permits designation as a minority depository 

institution if a majority of the bank’s board of 

directors consists of minority individuals and the 

community that the bank serves is predominantly 

minority). 

114SR 21–6/CA 21–4 (Mar. 5, 2021), https://

www.federalreserve.gov/supervisionreg/srletters/ 

SR2106.htm. See also FDIC (June 15, 2021), https:// 

www.fdic.gov/regulations/laws/rules/5000- 

2600.html#fdic5000policyso; OCC, News Release 

2013–94 (June 11, 2013), https://www.occ.treas.gov/ 

static/licensing/form-minority-owned-policy.pdf 

(including depository institutions that are owned by 

women in the OCC’s definition of MDI but not 

specifically defining WDI in its Policy Statement on 

Minority National Banks and Federal Savings 

Associations). 

or (iii) is considered to be a MDI by the 

appropriate Federal banking agency. 

The agencies based the second part of 

the definition on 12 U.S.C. 

4703a(a)(6).112

By recognizing these two contexts, the 

proposal both ensures consistency with 

the CRA statute and provides flexibility 

for each agency to define MDI as it 

determines appropriate. Specifically, 

the proposal limits the definition of MDI 

to the definition in 12 U.S.C. 2907 

where required by the CRA statute and 

includes a broader definition where 

legally permissible, namely for other 

activities conducted in cooperation with 

‘‘minority- and women-owned financial 

institutions’’ (as described in 12 U.S.C. 

2903(b)). By including both parts of the 

definition, the proposal would ensure 

that activities conducted in cooperation 

with banks owned by minority 

individuals receive consideration and 

provide consideration for activities 

conducted in cooperation with banks 

that the agencies have long considered 

to be MDIs.113 Although 12 U.S.C. 

2903(b) only references banks owned by 

minority individuals, the agencies 

believe including other banks 

designated by the agencies as MDIs in 

the definition is appropriate in light of 

the characteristics of these banks and 

the communities they serve. In addition, 

including all banks designated by the 

agencies as MDIs in the proposed 

definition would provide consistency 

between the CRA regulatory framework 

and the agencies’ other policies and 

initiatives. 

The proposal defines WDI by crossreference to the definition of the term in 

12 U.S.C. 2907(b)(2) (a depository 

institution (as defined in 12 U.S.C. 

1813(c)) in which (i) more than 50 

percent of the ownership or control is 

held by one or more women; (ii) more 

than 50 percent of the net profit or loss 

of which accrues to one or more women; 

and (iii) a significant percentage of 

senior management positions are held 

by women). An alternative definition 

option is unnecessary because none of 

the agencies define the WDI in a way 

that differs from the 12 U.S.C. 2907(b)(2) 

definition. For example, in SR 21–6 

(Highlighting the Federal Reserve 

System’s Partnership for Progress 

Program for Minority Depository 

Institutions and Women’s Depository 

Institutions), the Board defines WDI by 

cross-reference to the 12 U.S.C. 

2907(b)(2) definition.114

The agencies propose two other 

changes to the regulation involving 

MDIs, WDIs, LICUs, and CDFIs. First, 

investments, loan participations, and 

other ventures undertaken by any bank, 

including by MDIs and WDIs, in 

cooperation with other MDIs, other 

WDIs, or LICUs, would be considered. 

The agencies also seek feedback on 

whether activities undertaken by an 

MDI or WDI to promote its own 

sustainability and profitability should 

qualify for consideration. Under this 

approach, eligibility could be limited to 

activities that demonstrate meaningful 

investment in the MDI or WDI’s 

business, such as improving internal 

technology and systems, hiring new 

staff, opening a new branch, or 

expanding product offerings. Allowing 

these activities to qualify could 

encourage new investments to bolster 

the financial positions of these banks, 

allowing them to deploy additional 

resources to help meet the credit needs 

of their communities. Under this 

alternative, the agencies also seek 

feedback on specific eligibility criteria 

to ensure investments by MDIs or WDIs 

in themselves would ultimately benefit 

low- or moderate-income and other 

underserved communities. 

Second, regarding CDFIs, the agencies 

propose that all activities with Treasury 

Department-certified CDFIs would be 

eligible CRA activities. Specifically, 

lending, investment, and service 

activities by any bank undertaken in 

connection with a Treasury Departmentcertified CDFI, at the time of the 

activity, would be presumed to qualify 

for CRA credit given these organizations 

would need to meet specific criteria to 

prove that they have a mission of 

promoting community development and 

provide financial products and services 

to low- or moderate-income individuals 

and communities. The agencies propose 

that activities undertaken by any bank 

in connection with a non-Treasury 

Department-certified CDFI could also 

qualify for CRA consideration if the 

activity separately met the defined 

eligibility criteria of a different prong of 

the community development definition. 

For example, a bank activity with a nonTreasury Department-certified CDFI to 

finance a rental housing project that 

serves low- or moderate-income 

individuals using a state subsidy 

program would qualify by meeting a 

prong of the affordable housing 

definition. 

Request for Feedback 

Question 25. Should the agencies also 

include in the MDI definition insured 

credit unions considered to be MDIs by 

the National Credit Union 

Administration? 

Question 26. Should the agencies 

consider activities undertaken by an 

MDI or WDI to promote its own 

sustainability and profitability? If so, 

should additional eligibility criteria be 

considered to ensure investments will 

more directly benefit low- and 

moderate-income and other underserved 

communities? 

G. Financial Literacy 

The agencies propose a separate 

definition for activities that assist 

individuals and families, including lowand moderate-income individuals and 

families, to make informed financial 

decisions regarding managing income, 

savings, credit, and expenses, including 

with respect to homeownership. Under 

the proposed rule, a bank would receive 

consideration for these activities 

without regard to the income level of 

the beneficiaries. 


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115See Q&A §l.12(i)–3. 

116See Q&A §l.12(h)–8. 

117See Marina L. Myhre and Nicole Elsasser 

Watson, ‘‘Housing Counseling Works,’’ HUD, Office 

of Policy Development and Research (Sept. 2017), 

https://www.huduser.gov/portal/sites/default/files/ 

pdf/Housing-Counseling-Works.pdf. 

118The Federal Reserve Bank of Minneapolis’s 

Center for Indian Country Development calculated 

poverty rates for the American Indian and Alaska 

Native population living on federally recognized 

reservations and off-reservation trust lands using 

the U.S. Census Bureau’s American Community 

Survey 5-Year 2015–2019 data. Thirty of these land 

units had American Indian and Alaska Native 

poverty rates above 50 percent. Under the more 

expansive U.S. Census Bureau definition of Native 

lands, this number grows to 56. 

119HUD, ‘‘Housing Needs of American Indians 

and Alaska Natives in Tribal Areas: A Report From 

the Assessment of American Indian, Alaska Native, 

and Native Hawaiian Housing Needs’’ (2017), 

https://www.huduser.gov/portal/publications/ 

HNAIHousingNeeds.html. 

120Federal Communications Commission, 2020 

Broadband Deployment Report, p. 29 (2020), 

https://www.fcc.gov/reports-research/reports/ 

broadband-progress-reports/2020-broadbanddeployment-report. 

121See Q&A §l.12(g)(4)(i)–2 and Q&A §l

.12(g)(4)(iii)–3. 

122See 85 FR 34734 (June 5, 2020). 

123 ‘‘Hawaiian home lands’’ are areas held in trust 

for Native Hawaiians by the State of Hawaii under 

the Hawaiian Homes Commission Act of 1920. See 

Hawaiian Homes Commission Act, 1920, ch. 42, 42 

Stat. 108 (July 9, 1921). 

1. Background 

Current Approach. Under current 

guidance, eligible financial services, 

education, and housing counseling 

activities are included as examples of 

community development services.115

These activities must be targeted to lowor moderate-income individuals, such 

as financial education in a school where 

the majority of students receive free or 

reduced-price lunch or a housing 

counseling program in a low-income 

neighborhood.116

Stakeholder Feedback. Many industry 

stakeholders have expressed support for 

expanding consideration of financial 

education and housing counseling to 

include activities that benefit all income 

levels, as these activities can provide 

benefit to the financial well-being of an 

entire community. These stakeholders 

have noted that the need for financial 

education also exists for seniors, 

veterans, rural communities, and other 

groups of people of all income levels, 

including low- or moderate-income 

individuals. In addition, because 

financial literacy and housing 

counseling are, in practice, primarily 

delivered to low- or moderate-income 

individuals, some stakeholders have 

stated that the need to obtain income 

documentation may be less important. 

Alternatively, many community group 

stakeholders have opposed expanding 

consideration of financial education and 

housing counseling to include activities 

that benefit all income levels. Some of 

these stakeholders have expressed 

concern that expanding financial 

education and housing counseling 

activities to recipients of all income 

levels will result in a reduction in 

programs directly benefiting low- or 

moderate-income individuals and 

communities. 

2. Activities Related to Financial 

Literacy 

The agencies propose to recognize 

financial literacy activities that assist 

individuals and families, including lowor moderate-income individuals and 

families, to make informed financial 

decisions regarding managing income, 

savings, credit, and expenses, including 

with respect to homeownership.117 This 

expansion would limit the need to track 

income levels of participants taking part 

in financial literacy activities, which is 

sometimes difficult to obtain for persons 

who are not already loan customers of 

banks. 

Under this proposal, for example, a 

financial planning seminar with senior 

citizens or a financial education 

program for children in a middleincome school district would qualify for 

consideration. However, qualifying 

activities could not be targeted to, or 

solely benefit, middle- and upperincome individuals or families in order 

to be consistent with the intent of CRA 

to serve the credit needs of all 

communities, including low- and 

moderate-income communities. 

Therefore, these activities would need 

to benefit and provide needed services 

to the entire community, including lowor moderate-income individuals and 

families. 

Request for Feedback 

Question 27. Should consideration of 

financial literacy activities expand to 

include activities that benefit 

individuals and families of all income 

levels, including low- and moderateincome, or should consideration be 

limited to activities that have a primary 

purpose of benefiting low- or moderateincome individuals or families? 

H. Activities in Native Land Areas 

The agencies propose a new 

definition of qualifying activities in 

Native Land Areas in §l.13(l) for 

community development activities 

related to revitalization, essential 

community facilities, essential 

community infrastructure, and disaster 

preparedness and climate resiliency that 

are specifically targeted to and 

conducted in Native Land Areas (which 

is separately defined in proposed 

§ l.12). The Native Land Areas 

proposed definition in §l.12 leverages 

other Federal and state designations of 

Native and tribal lands. 

1. Background 

Available data indicate that Native 

and tribal communities face significant 

and unique community development 

challenges. For example, the poverty 

rate among Native individuals on 

reservations is 36 percent, and exceeds 

50 percent in some communities.118

Basic infrastructure in tribal 

communities significantly lags the rest 

of the country, with over one-third of 

Native households in tribal areas 

affected by significant physical 

problems with their housing, including 

deficiencies with plumbing, heating, or 

electric—a share nearly five times 

greater than for the United States 

population as a whole.119 In addition, 

there are low rates of broadband and 

cellular access in many tribal 

communities, with 28 percent of all 

tribal lands and 47 percent of rural 

tribal lands lacking broadband and 

cellular access.120

Current Approach. The current CRA 

regulations do not include a specific 

definition for certain community 

development activities in Native Land 

Areas, although current guidance 

encompasses activities consistent with a 

tribal government plan if the activities 

are located in low- or moderate-income 

census tracts.121 The rescinded OCC 

2020 CRA final rule adopted definitions 

of both ‘‘Indian country’’ and ‘‘other 

tribal and Native lands,’’ and designated 

certain activities as being eligible in 

these geographic areas.122

Stakeholder Feedback. Some 

community group stakeholders have 

supported establishing a clear 

geographic definition of tribal areas 

where banks may receive CRA 

consideration for certain qualifying 

activities under the agencies’ CRA 

regulations. Several stakeholders have 

indicated support for a geographic 

definition that is broader than the 

statutory definition for Indian country 

under 18 U.S.C. 1151. These 

stakeholders note that only using this 

statutory definition of Indian country 

would exclude lands that are also 

typically thought of as Native and tribal 

lands. Additional geographic options 

suggested by stakeholders include 

Hawaiian Home Lands,123 staterecognized and tribally-defined U.S. 

Census Bureau Tribal Statistical Areas, 

and certain other U.S. Census Bureau 

statistical areas. 


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124See U.S. Census Bureau, State American 

Indian Reservations, https://www.census.gov/ 

programs-surveys/geography/about/glossary/aiandefinitions.html. 

125See U.S. Census Bureau, TIGERweb: Hawaiian 

Home Lands, https://tigerweb.geo.census.gov/

tigerwebmain/TIGERweb_geography_

details.html#HHL. 

126See U.S. Census Bureau, TIGERweb: Alaska 

Native Village Statistical Areas, https://

tigerweb.geo.census.gov/tigerwebmain/TIGERweb_

geography_details.html#ANVSA. 

127See U.S. Census Bureau, TIGERweb: 

Oklahoma Tribal Statistical Area, https://

tigerweb.geo.census.gov/tigerwebmain/TIGERweb_

geography_details.html#OTSA. 

128See U.S. Census Bureau, Tribal Designated 

Statistical Areas, https://tigerweb.geo.census.gov/

tigerwebmain/TIGERweb_geography_details.html#

TDSA. 

129See U.S. Census Bureau, TIGERweb: American 

Indian Joint Use Areas, https://tigerweb.geo.

census.gov/tigerwebmain/TIGERweb_geography_

details.html#:∼:text=Joint

%2DUse%20Areas%2C%20as%20applied,

purpose%20of%20presenting%20statistical

%20data. 

130See U.S. Census Bureau, State-designated 

Tribal Statistical Areas, https://tigerweb.geo.

census.gov/tigerwebmain/TIGERweb_geography_

details.html#SDTSA. 

131See U.S. Census Bureau, AIANNH shapefile, 

https://www2.census.gov/geo/tiger/TIGER2021/

AIANNH/, and Bureau of Indian Affairs, U.S. 

Department of the Interior, Land Area 

Representation shapefile, https://biamaps.doi.gov/

bogs/datadownload.html. 

132The agencies note that in addition to the 

place-based community development activities 

described in this section, other community 

development activities (i.e., affordable housing or 

economic development) could also qualify for 

consideration in Native Land Areas provided that 

they otherwise meet the eligibility standards for 

that particular activity. 

2. Native Land Areas Definition 

Under § __.12, the agencies propose to 

define ‘‘Native Land Areas’’ to include 

the following geographic areas: Indian 

country, land held in trust by the United 

States for Native Americans, state 

American Indian reservations, Alaska 

Native villages, Hawaiian Home Lands, 

Alaska Native Village Statistical Areas, 

Oklahoma Tribal Statistical Areas, 

Tribal Designated Statistical Areas, 

American Indian Joint-Use Areas, and 

state-designated Tribal Statistical Areas. 

More specifically, the following 

components are reflected in the 

proposed definition: 

• Indian country means, as defined in 

18 U.S.C. 1151: (i) All land within the 

limits of any Indian reservation under 

the jurisdiction of the U.S. Government; 

(ii) all dependent Indian communities 

within the borders of the United States 

whether within the original or 

subsequently acquired territory thereof, 

and whether within or without the 

limits of a state; and (iii) all Indian 

allotments, the Indian titles to which 

have not been extinguished, including 

rights-of-way running through the same. 

• Land held in trust by the United 

States for Native Americans, as 

described in 38 U.S.C. 3765(1)(A). 

• State American Indian reservations 

means those reservations established by 

a state government for tribes recognized 

by the state.124

• Alaska Native village means, as 

defined in 43 U.S.C. 1602(c), any tribe, 

band, clan, group, village, community, 

or association in Alaska that is 

recognized pursuant to the Alaska 

Native Claims Settlement Act of 1972. 

• Hawaiian Home Lands means lands 

that have the status of Hawaiian Home 

Lands as defined in section 204 of the 

state of Hawaii’s Hawaiian Homes 

Commission Act.125

• Alaska Native Village Statistical 

Area means the more densely settled 

portion of Alaska Native villages, as 

presented in statistical data by the 

Census Bureau.126

• Oklahoma Tribal Statistical Area 

means statistical areas identified and 

delineated by the U.S. Census Bureau in 

consultation with federally recognized 

American Indian tribes based in 

Oklahoma.127

• Tribal-Designated Statistical Areas 

means areas identified and delineated 

for the U.S. Census Bureau by American 

Indian tribes that do not currently have 

a reservation or off-reservation trust 

land.128

• American Indian Joint Use Areas 

means a statistical area defined by the 

U.S. Census Bureau that is administered 

jointly and/or claimed by two or more 

American Indian tribes.129

• State-designated Tribal Statistical 

Areas means the land areas of Indian 

tribes and heritage groups that are 

recognized by individual states as 

defined and identified by the U.S. 

Census Bureau’s annual Boundary and 

Annexation Survey.130

Under the agencies’ proposal, Native 

Land Areas would be comprised of a 

very similar list of categories to those 

included in the rescinded OCC 2020 

CRA final rule. This reflects stakeholder 

feedback supporting comprehensive 

incorporation of Native geographies. 

The proposal would include the 

definition of Indian country under 18 

U.S.C. 1151, which includes all land 

within the limits of any Indian 

reservation under the jurisdiction of the 

U.S. Government, whether created by 

statute or executive order. 

The proposed definition of Native 

Land Areas also includes areas typically 

considered by the Bureau of Indian 

Affairs (BIA) and the U.S. Census 

Bureau as Native geographies. 

Accordingly, Native Land Areas would 

include all geographic areas delineated 

as U.S. Census Bureau American 

Indian/Alaska Native/Native Hawaiian 

(AIANNH) Areas and/or BIA Land Area 

Representations. Robust, publicly 

available data files (‘‘shapefiles’’), 

defining the boundaries of these 

geographies are actively maintained by 

the U.S. Census Bureau and BIA, 

respectively.131

3. Qualifying Activities in Native Land 

Areas 

To help address the challenges 

specific to Native Land Areas, the 

agencies propose creating a definition 

for qualifying community development 

activities targeted to and conducted in 

these geographic areas to include: 

• Revitalization activities in Native 

Land Areas; 

• Essential community facilities in 

Native Land Areas; 

• Essential community infrastructure 

in Native Land Areas; and 

• Disaster preparedness and climate 

resiliency activities in Native Land 

Areas.132

The agencies propose that essential 

community facilities, eligible 

community infrastructure, and disaster 

preparedness and climate resiliency 

activities in Native Land Areas must 

benefit or serve residents, including 

low- or moderate-income residents of 

Native Land Areas, without displacing 

or excluding low- or moderate-income 

residents. In addition, these activities 

would need to be conducted in 

conjunction with a Federal, state, local, 

or tribal government plan, program, or 

initiative that benefits or serves 

residents of Native Land Areas, without 

displacing or excluding low- or 

moderate-income residents of such 

geographic areas. 

Separately, the agencies are proposing 

that revitalization activities in Native 

Land Areas have a more specific focus 

on low- and moderate-income 

individuals. Specifically, the agencies 

are proposing that under this definition 

revitalization activities must benefit or 

serve residents of Native Land Areas 

and must include substantial benefits 

for low- or moderate-income residents. 

For example, a bank’s purchase of a 

bond to fund an industrial revitalization 

project in a Native Land Area would 

qualify for consideration if a majority of 

the employment opportunities created 

by the project benefitted low- or 

moderate-income residents, and the 

activity met other required criteria. 

Revitalization activities in Native Land 

Areas also would need to be undertaken 

in conjunction with a Federal, state, 

local, or tribal government plan, 


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133Federal programs such as the Indian 

Community Development Block Grant define 

eligible applicants using 25 U.S.C. 5304, a portion 

of the Indian Self Determination and Education Act. 

Under this definition, eligible applicants or 

recipients for programs serving Native Americans 

are not strictly limited to tribal governments. Other 

examples of this practice include a 2021 expansion 

of eligible Native American groups related to the 

Public Works and Economic Development Act of 

1965 (86 FR 52957 (Sept. 24, 2021)), and the Indian 

Energy Tribal Development and Self-determination 

Act Amendments of 2017, which expanded the 

groups eligible to apply for the Indian Tribal Energy 

Development and Self Determination Act to include 

intertribal organizations and tribal energy 

development organizations. See Public Law 115– 

325, 132 Stat. 4445 (Dec. 18, 2018). 

134See Board, ‘‘Growing Economies in Indian 

Country: Taking Stock of Progress and Partnerships: 

A Summary of Challenges, Recommendations, and 

Promising Efforts,’’ (May 1, 2012), https://

www.federalreserve.gov/newsevents/conferences/

indian-country-publication.htm. 

135The OCC maintains a confirmation process 

that is not codified in the CRA regulations in which 

national banks, savings associations, and other 

interested parties may request confirmation that a 

loan, investment, or service is consistent with 

existing CRA regulations. The OCC also maintains 

an illustrative list on its website as a reference for 

national banks, savings associations, and other 

interested parties to determine whether activities 

that they conducted while the OCC 2020 CRA final 

rule was in effect were eligible for CRA 

consideration; however, activities included on that 

illustrative list may not receive consideration if 

conducted after January 1, 2022, when the 

rescission of the OCC 2020 CRA final rule became 

effective. See OCC, CRA Qualifying Activities and 

Confirmation Request, https://www.occ.gov/topics/ 

consumers-and-communities/cra/qualifyingactivity-confirmation-request/index-cra-qualifyingactivities-confirmation-request.html. 

program, or initiative with explicit focus 

on revitalizing or stabilizing Native 

Land Areas and a particular focus on 

low- or moderate-income households. 

The agencies propose this more targeted 

standard because these areas include 

some middle- and upper-income census 

tracts. The agencies believe that it is 

therefore important to establish a 

stronger nexus between these activities 

and the low- and moderate-income 

residents who reside in these areas to 

ensure that activities provide 

community benefit. 

The agencies seek feedback on 

whether to consider activities in Native 

Land Areas undertaken in conjunction 

with plans, programs, or initiatives 

through designees of tribal governments 

in addition to those with Federal, state, 

local, or tribal governments. Tribal 

government designees such as tribal 

housing authorities, tribal associations 

and intertribal consortiums are central 

to economic development and 

community planning efforts in many 

Native Land Areas. For example, in 

Alaska and California, tribal 

associations or consortiums play a 

significant role in the delivery of 

government services to tribal 

communities. The Federal Government 

sometimes also contracts directly with 

these types of intertribal associations to 

deliver public health and other services 

to meet its trust obligations to these 

tribes.133 Stakeholders also note that 

some tribal governments have limited 

administrative capacity to develop or 

execute formal plans. Expanding this 

criterion to include other types of tribal 

designees would therefore serve to 

expand place-based community 

development activity eligibility for 

Native communities where tribal 

governments are not the primary or only 

entities that deliver government 

services. 

As part of the proposal, the agencies 

considered adding a requirement that 

tribal governments be consulted for an 

activity to be eligible under this 

definition. However, the agencies 

believe that such a requirement could be 

overly restrictive and impractical to 

implement. Instead of focusing only on 

tribal governments, the proposed 

definition would allow an activity to 

qualify if it is undertaken in conjunction 

with a Federal, state, local, or tribal 

government plan, program, or initiative. 

The agencies were concerned that 

limiting eligibility to only those 

activities where tribal governments had 

been consulted could diminish the 

scope of the activities eligible under the 

definition due to the time and resource 

constraints of tribal governments.134

The agencies seek comment on 

appropriate criteria to tailor the 

proposed definition to activities 

benefiting residents of Native Land 

Areas, including low- or moderateincome individuals, and meeting 

revitalization, essential community 

facility, essential community 

infrastructure, or climate resiliency 

needs. 

Request for Feedback 

Question 28. To what extent is the 

proposed definition of Native Land 

Areas inclusive of geographic areas with 

Native and tribal community 

development needs? 

Question 29. In addition to the 

proposed criteria, should the agencies 

consider additional eligibility 

requirements for activities in Native 

Land Areas to ensure a community 

development activity benefits low- or 

moderate-income residents who reside 

in Native Land Areas? 

Question 30. Should the agencies also 

consider activities in Native Land Areas 

undertaken in conjunction with tribal 

association or tribal designee plans, 

programs, or initiatives, in addition to 

the proposed criteria to consider 

activities in conjunction with Federal, 

state, local, or tribal government plans, 

programs, or initiatives? 

IV. Qualifying Activities Confirmation 

and Illustrative List of Activities 

To provide stakeholders with 

additional certainty in determining 

what community development activities 

qualify, the agencies propose 

maintaining a publicly available 

illustrative, non-exhaustive list of 

activities eligible for CRA consideration. 

The agencies also propose including a 

process for modifying the illustrative 

list of activities periodically. In 

addition, the agencies are proposing a 

process, open to banks, for confirming 

eligibility of qualifying community 

development activities. 

A. Current Approaches To Confirming 

Eligibility of Qualifying Community 

Development Activities 

Currently, as part of their CRA 

examinations, banks submit community 

development activities that were 

undertaken without an assurance these 

activities are eligible. Knowing that an 

activity previously qualified can 

frequently provide banks with some 

confidence that the same types of 

activities are likely to receive 

consideration in the future. However, 

new, less common, more complex, or 

innovative activities might require 

examiner judgment and the use of 

performance context to determine 

whether an activity qualifies for CRA 

purposes. For these activities, 

stakeholders might know only at the 

end of an examination—and after a loan 

or investment has been made or a 

service provided—whether an activity 

will receive CRA credit. Stakeholders 

strongly support incorporating 

additional methods into CRA for 

improving upfront certainty related to 

what community development activities 

qualify for consideration.135

B. Stakeholder Feedback on 

Confirmation and Illustrative List 

Stakeholders have indicated broad 

support for a non-exhaustive, 

illustrative list of qualifying activities 

similar to the list required by and 

implemented in accordance with the 

rescinded OCC 2020 CRA final rule. 

Some stakeholders have expressed that 

the illustrative list ensured more 

flexibility in engaging in new and 

innovative activity. Stakeholders noted 

that the list should be specific and 

include the examples of qualified 

activities from the current Interagency 

Questions and Answers. Some 

stakeholders suggested a searchable list, 


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136See Q&A § __.21(a)–2. 

137See Q&A § __.21(a)–3. 

138 Id. 

139See Q&A § __.21(a)–4. 

and others suggested that the list 

identify activities that do not qualify. 

Stakeholders also expressed support 

for a confirmation process for 

determining, in a timely manner, if an 

activity qualifies as a community 

development activity in order to provide 

greater certainty. 

C. Qualifying Activities Confirmation 

and Illustrative List of Activities 

To provide additional upfront 

certainty, in § __.14, the agencies 

propose the maintenance of an 

illustrative list of qualifying activities 

and a method to confirm eligibility of 

activities. 

First, the agencies propose to 

establish a publicly available 

illustrative, non-exhaustive list of 

activities eligible for CRA community 

development consideration. 

Stakeholders have supported this 

approach as a way to illustrate loans, 

investments, and services that meet the 

CRA community development criteria 

while retaining those criteria as the 

determinative factors in eligibility for 

qualifying community development 

activities. Under this approach, the list 

would provide examples that help 

clarify the regulatory meaning of key 

community development terms. 

Although some stakeholders have 

expressed concern that a list may serve 

to limit innovation by leading banks to 

focus primarily on activities found on 

the list, the agencies seek feedback on 

whether the benefit of greater certainty 

outweighs this potential concern. 

The agencies are also proposing a 

formal mechanism for banks to receive 

feedback in advance or after the fact on 

whether proposed community 

development activities would be 

considered eligible for CRA. This 

approach would allow a bank evaluated 

under CRA to request that the agencies 

confirm that an activity is eligible for 

CRA community development 

consideration. Although some 

stakeholders wanted the confirmation 

process to be open to all stakeholders, 

including community groups, as is the 

case for the process implemented by the 

OCC, the agencies believe that the 

proposal to limit the requestors to banks 

evaluated under CRA would accomplish 

the desired goal of increased certainty of 

eligibility. While other stakeholders 

may have an interest in ensuring certain 

activities qualify for community 

development consideration, ultimately, 

these stakeholders are not subject to 

CRA examinations. Banks evaluated 

under CRA may request confirmation of 

activities under consideration, 

including activities that may have been 

presented to them by other stakeholders. 

When the agencies confirm that an 

activity is or is not eligible for CRA 

community development consideration, 

the requestor would be notified, and the 

agencies may add the activity to the 

publicly available list. Instead of being 

static, the periodic update to the list 

would allow it to be flexible and 

incorporate new activities. 

Request for Feedback 

Question 31. Should the agencies also 

maintain a non-exhaustive list of 

activities that do not qualify for CRA 

consideration as a community 

development activity? 

Question 32. What procedures should 

the agencies develop for accepting 

submissions and establishing a timeline 

for review? 

Question 33. Various processes and 

actions under the proposed rule, such as 

the process for confirming qualifying 

community development activities in 

§ __.14, the designation of census tracts 

in § __.12, and, with respect to recovery 

activities in designated disaster areas, 

the determination of temporary 

exception or an extension of the period 

of eligibility of activities under § _

_.13(h)(1), would involve joint action by 

the agencies. The agencies invite 

comment on these proposed joint 

processes and actions, as well as 

alternative processes and actions, such 

as consultation among the agencies, that 

would be consistent with the purposes 

of the Community Reinvestment Act. 

V. Impact Review of Community 

Development Activities 

The agencies propose to conduct an 

impact review of community 

development activities under the 

Community Development Financing 

Test, the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks, and the Community 

Development Services Test. The impact 

review would qualitatively evaluate the 

impact and responsiveness of qualifying 

activities with respect to community 

credit needs and opportunities. 

In § __.15, the agencies propose 

specific impact review factors that 

would inform the evaluation. A greater 

volume of activities aligning with the 

impact review factors would positively 

impact conclusions for each test. The 

approach of incorporating specific 

impact review factors into the 

qualitative evaluation is intended to 

promote clear and consistent 

procedures, which would result in a 

more standardized application of 

qualitative factors compared with 

current practices. In addition, this 

approach encourages banks to pursue 

activities with a high degree of impact 

on and responsiveness to the needs of 

low- or moderate-income communities. 

The evaluation of impact and 

responsiveness would include, but 

would not be limited to, a set of specific 

factors provided in the regulation. In 

addition, the agencies may consider 

information that demonstrates an 

activity’s significant impact on and 

responsiveness to local community 

development needs, such as detailed 

information about a bank’s activities, 

local data regarding community needs, 

and input from community 

stakeholders. 

A. Background 

1. Current Approach to Qualitative 

Review 

Currently, the agencies’ qualitative 

assessment of a bank’s community 

development performance takes into 

account the extent to which a bank’s 

community development activities are 

innovative and complex. In addition, 

the agencies consider whether a bank’s 

activities reflect leadership and are 

responsive to community needs.136

These terms are generally defined in the 

Interagency Questions and Answers, 

and guidance explains that an examiner 

will consider both quantitative and 

qualitative aspects of a bank’s 

community development activities.137

Certain activities may be considered 

more responsive than others if those 

activities effectively meet an identified 

community development need.138

Innovativeness takes into account 

whether a bank implements meaningful 

improvements to products, services, or 

delivery systems to respond to 

community needs.139 The qualitative 

aspects of the bank’s community 

development activities are assessed 

based on information provided by the 

bank and in light of performance 

context and other information about 

credit and community development 

needs in the local community. 

While current guidance emphasizes 

the importance of a qualitative review of 

a bank’s community development 

activities and recognizes that certain 

activities are more responsive than 

others, there are no clear standards for 

how these factors are measured. As a 

result, the evaluation relies heavily on 

examiner judgment. 

2. Stakeholder Feedback 

Stakeholders have suggested that the 

current approach for the qualitative 

evaluation of community development 


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140The Congressional Research Service identifies 

407 counties that meet the criteria for persistent 

poverty using poverty rate estimates from the 1990 

Census, the 2000 Census, and the 2019 Small Area 

Income and Poverty Estimates (See ‘‘The 10–20–30 

Provision: Defining Persistent Poverty Counties’’ 

https://sgp.fas.org/crs/misc/R45100.pdf.). 141The agencies apply population estimates from 

the 2015–2019 American Community Survey to 

estimate population of persistent poverty counties. 

See U.S. Census Bureau, American Community 

Survey 2015–2019 5-Year Data Release (Dec. 10, 

2020), https://www.census.gov/newsroom/presskits/2020/acs-5-year.html. 142For a description of statutory requirements 

related to the allocation of funds to persistentpoverty counties, see Government Accountability 

Office, ‘‘Areas with High Poverty: Changing How 

the 10–20–30 Funding Formula Is Applied Could 

Increase Impact in Persistent Poverty Counties,’’ 

https://www.gao.gov/assets/gao-21-470.pdf. 

activities could be more transparent and 

consistent. For example, determining 

whether an activity is innovative is 

reliant on examiner judgment. In 

addition, stakeholders have expressed 

that the qualitative assessment could 

have a stronger focus on the impact and 

responsiveness of a bank’s community 

development activities and, relatedly, 

that it could be more clearly linked to 

CRA’s core purpose of serving low- and 

moderate-income individuals and 

communities. For example, stakeholders 

have noted that the criteria of 

‘‘innovative’’ and ‘‘complex’’ are not 

necessarily targeted toward the ultimate 

impact of the activity; an activity might 

be highly complex without being highly 

impactful or responsive to low- and 

moderate-income communities. Lastly, 

stakeholders have noted that more 

clarity is needed to better understand 

which activities have been deemed 

more responsive or innovative by 

examiners as this information is not 

consistently presented in performance 

evaluations. 

B. Impact Review Factors 

In § __.15, the agencies propose the 

following impact review factors for the 

qualitative evaluation of community 

development activities under the 

Community Development Financing 

Test, the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks, and the Community 

Development Services Test. 

1. Activities Serving Persistent Poverty 

Counties and Geographies With Low 

Levels of Community Development 

Financing 

The agencies propose several impact 

review factors for activities in specific 

geographic areas with significant 

community development needs. Serving 

these geographies would reflect a high 

level of responsiveness because the 

activities could increase economic 

opportunity where it is needed most 

and may involve a high degree of 

complexity and effort on the part of the 

bank. First, the agencies are proposing 

activities serving persistent poverty 

counties as one impact review factor. 

The agencies are seeking feedback on 

whether activities serving high poverty 

census tracts should be included in this 

impact review factor. Second, the 

agencies are also proposing to include 

activities serving areas with low levels 

of community development financing as 

an impact review factor. 

Persistent Poverty Counties. The 

agencies are proposing to identify 

activities in persistent poverty counties, 

defined as counties with a poverty rate 

of at least 20 percent over each of the 

past three decades, as an impact review 

factor.140 The agencies estimate that 5.3 

percent of the U.S. population lives in 

persistent poverty counties, using 

population estimates from the 2015– 

2019 American Community Survey.141

A focus on persistent poverty counties 

would highlight activities serving areas 

with longstanding economic challenges 

where community development needs 

are significant. For example, the 

agencies analyzed economic data to 

estimate which counties would be 

identified under this approach and 

found a large concentration of counties 

located in the Mississippi Delta, 

Appalachia, and Colonias regions, and 

in Native Land Areas. Congress has 

directed other agencies, including the 

Treasury Department’s Community 

Development Financial Institutions 

Fund, the U.S. Economic Development 

Administration, the U.S. Department of 

Agriculture, and the U.S. Environmental 

Protection Agency, to allocate program 

funding specifically to regions meeting 

the definition of persistent poverty.142

In addition, designating geographic 

areas at the county level offers a high 

degree of clarity and simplicity 

regarding which qualifying activities 

would meet the criterion. Banks that 

seek out qualifying activities that serve 

an entire county, as well as qualifying 

activities that serve only a specific 

portion of the county, would have 

certainty that the activities meet the 

impact review factor. 

The agencies are also seeking 

feedback on including activities in 

census tracts with a current poverty rate 

of at least 40 percent as an impact 

review factor. The agencies estimate that 

3.5 percent of the U.S. population lives 

in census tracts where the poverty rate 

exceeds 40 percent, according to the 

2015–2019 American Community 

Survey. Accounting for overlap between 

persistent poverty counties and census 

tracts that meet this threshold, 

approximately 8.1 percent of the U.S. 

population lives in either a persistent 

poverty county or a high poverty census 

tract, according to the 2015–2019 

American Community Survey. This 

approach would draw attention to 

economically distressed geographies 

that are smaller than an entire county, 

such as a high poverty neighborhood in 

a densely populated urban area. A 

census tract approach would offer the 

advantage of emphasizing activities that 

specifically serve communities, 

including individual neighborhoods, 

with significant community 

development needs, and where barriers 

to credit access and opportunity are 

often the greatest. In addition, the 

designation of census tracts, as opposed 

to counties, emphasizes activities 

serving communities in urban areas, 

including communities that are located 

in a county that is not a persistent 

poverty county. 

Areas with Low Levels of Community 

Development Financing. The agencies 

propose an impact factor for activities 

serving areas with low levels of 

community development financing, 

based on data collected and reported 

under a revised CRA regulation. By 

incorporating local community 

development financing data into the 

designation, this approach would 

highlight areas where CRA capital is 

most limited. Because comprehensive 

CRA community development financing 

data is not currently available at local 

levels, the agencies would first collect 

and analyze data under a revised CRA 

regulation and would then determine 

the appropriate approach for identifying 

areas with low levels of qualified 

community development activities. 

The agencies seek feedback on the 

different options for impact review 

factors for activities that serve 

geographies with significant community 

development needs, and whether to 

include high poverty census tracts along 

with persistent poverty counties and 

areas with low levels of community 

development financing. The agencies 

have considered that expressly 

highlighting both persistent poverty 

counties and high poverty census tracts 

may be appropriate to capture a balance 

of high needs areas in both metropolitan 

and nonmetropolitan areas. 

2. Activities Supporting MDIs, WDIs, 

LICUs, and Treasury DepartmentCertified CDFIs 

The agencies propose an impact 

review factor for activities that support 

or are conducted in partnership with 

MDIs, WDIs, LICUs, and Treasury 


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143This is consistent with 12 U.S.C. 2903(b). 

144See, e.g., Brett Theodos and Eric Hangen, 

Urban Institute, ‘‘Expanding Community 

Development Financial Institutions’’ (2017), https:// 

www.urban.org/research/publication/expandingcommunity-development-financial-institutions. 

145See FDIC, ‘‘How America Banks: Household 

Use of Banking and Financial Services, 2019 FDIC 

Survey’’ (Oct. 2020) (hereinafter ‘‘How America 

Banks’’), https://www.fdic.gov/analysis/householdsurvey/2019report.pdf; Federal Reserve Bank of 

Dallas, ‘‘Closing the Digital Divide: A Framework 

for Meeting CRA Obligations’’ (July 2016, revised 

Dec. 2016), https://www.dallasfed.org/∼/media/ 

documents/cd/pubs/digitaldivide.pdf; and Joint 

Center for Housing Studies of Harvard University, 

‘‘America’s Rental Housing 2022’’ (2022), https://

www.jchs.harvard.edu/sites/default/files/reports/ 

files/Harvard_JCHS_Americas_Rental_Housing_

2022.pdf. 

146See Overview of the 2020 High Opportunity 

Areas File (2020), https://www.fhfa.gov/DataTools/ 

Downloads/Documents/Enterprise-PUDB/DTS_

Residential-Economic-Diversity-Areas/DTS_

High%20Opportunity_Areas_2020_README.pdf. 

147See, e.g., HUD’s Office of Policy Development 

and Research (PD&R), ‘‘Qualified Census Tracts and 

Difficult Development Areas,’’ https://

www.huduser.gov/portal/datasets/qct.html. 

148See FHFA DTS High Opportunity Areas, 

https://www.fhfa.gov/DataTools/Downloads/

Documents/Enterprise-PUDB/DTS_ResidentialEconomic-Diversity-Areas/DTS_

High%20Opportunity_Areas_2020_README.pdf. 

Department-certified CDFIs.143 In 

general, these organizations have a 

mission of meeting the credit needs of 

low- and moderate-income and other 

underserved individuals, communities, 

and small businesses, which is highly 

aligned with CRA’s core purpose.144 In 

addition, these organizations often have 

intimate knowledge of local community 

development needs and opportunities, 

allowing them to conduct highly 

responsive activities. Furthermore, 

emphasizing partnership with these 

organizations is aligned with current 

practices and with the CRA statute, 

reflecting the impact and 

responsiveness of these activities. 

The agencies are considering whether 

this impact review factor should cover 

only certain types of activities 

conducted in support of these 

organizations. One option would be for 

this impact review factor to include 

equity investments, long-term debt 

financing, donations, and services, and 

not to include short term deposits 

placed in an MDI. The goal of this 

alternative approach would be to 

encourage activities that stakeholders 

have noted are most effective in helping 

to advance the mission of these 

organizations. 

3. Activities Serving Low-Income 

Individuals 

The agencies propose an impact 

review factor for activities that serve 

low-income individuals and families, 

defined as those with an income of less 

than 50 percent of the area median 

income. This factor is intended to be 

consistent with the proposed Retail 

Lending Test approach, which includes 

separate metrics to assess lending to 

low-income and to moderate-income 

individuals. Low-income individuals 

have high community development 

needs and experience challenges with 

obtaining basic financial products and 

services, securing stable employment 

opportunities, finding affordable 

housing, and accessing digital 

infrastructure.145 For these reasons, the 

agencies consider activities serving lowincome individuals and families to have 

a high degree of impact and 

responsiveness and recognize that they 

often entail a high level of effort and 

complexity on the part of the bank and 

community partners. 

The agencies are considering an 

alternative approach of defining this 

factor to include only those activities 

that serve individuals with an income of 

less than 30 percent of the area median 

income. This would ensure that the 

focus of this factor is on activities that 

serve the individuals that are most 

vulnerable to the challenges described 

above, such as housing instability and 

unemployment. However, there may be 

comparatively fewer community 

development opportunities for banks to 

take part in that would primarily serve 

individuals in this income category. 

4. Activities that Support Small 

Businesses or Farms With Gross Annual 

Revenues of $250,000 or Less 

The agencies propose an impact 

review factor for activities that support 

small businesses or farms with gross 

annual revenues of $250,000 or less. 

This factor is intended to align 

treatment of these activities with the 

proposed retail lending approach, 

which separately evaluates a bank’s 

distribution of loans to small businesses 

and small farms with gross annual 

revenues of $250,000 or less, as well as 

the bank’s loans to small businesses and 

small farms with gross annual revenue 

of greater than $250,000. The Retail 

Lending Test approach, as well as a 

discussion of the proposed gross annual 

revenue threshold of $250,000, is 

described further in Section IX. 

The agencies seek feedback on 

whether this impact review factor 

should instead be set at a higher 

threshold of gross annual revenue, for 

example at $500,000. The agencies also 

seek feedback on whether this threshold 

should instead be set lower, for example 

at $100,000. These alternatives are also 

discussed in Section IX. In seeking 

feedback on these alternatives, the 

agencies also seek feedback on how to 

weigh the importance of using a 

consistent threshold for identifying 

smaller businesses and smaller farms 

both for the Retail Lending Test and for 

this impact review factor. 

5. Activities That Support Affordable 

Housing in High Opportunity Areas 

The agencies propose an impact 

review factor for activities that support 

the acquisition, development, 

construction, preservation, or 

improvement of affordable housing in 

high opportunity areas. The agencies 

would define high opportunity areas to 

align with the FHFA definition of High 

Opportunity Areas, including: (i) Areas 

designated by HUD as a ‘‘Difficult 

Development Area’’ (DDA); or (ii) areas 

designated by a state or local Qualified 

Allocation Plan as a high opportunity 

area, and where the poverty rate falls 

below 10 percent (for metropolitan 

areas) or 15 percent (for 

nonmetropolitan areas).146

The agencies consider affordable 

housing in high opportunity areas to 

have a high level of impact and 

responsiveness. First, geographic areas 

meeting this definition include areas 

where the cost of residential 

development is high 147 and affordable 

housing opportunities can be limited. 

Efforts to support affordable housing 

can be especially impactful where 

affordable housing needs are heightened 

in this manner. Second, as defined by 

FHFA, these areas are intended to 

describe areas that provide strong 

opportunities for low- and moderateincome individuals; increasing 

affordable housing opportunities in 

these areas helps to provide low- and 

moderate-income individuals with more 

choices of neighborhoods with strong 

economic opportunities.148

6. Activities Benefitting Native 

Communities 

The agencies propose to designate 

activities benefitting or serving Native 

communities, including but not limited 

to those qualifying activities in Native 

Land Areas under proposed § __.13(l) as 

an impact review factor. This factor 

would recognize the unique status and 

credit and community development 

needs of Native and tribal communities 

as discussed above, which make bank 

activities that do serve these 

communities especially responsive. 

The proposal would include all 

eligible community development 

activities taking place in Native Land 

Areas under this impact review factor. 

This includes activities as defined 

under proposed § __.13(l). In addition, 


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149See, e.g., The Indian Relocation Act of 1956, 

https://www.govinfo.gov/content/pkg/STATUTE70/pdf/STATUTE-70-Pg986.pdf and National 

Archives, ‘‘American Indian Urban Relocation,’’ 

https://www.archives.gov/education/lessons/ 

indian-relocation.html. 

150See, e.g., U.S. Department of the Interior, 

ORDER NO. 3335, ‘‘Reaffirmation of the Federal 

Trust Responsibility to Federally Recognized Indian 

Tribes and Individual Indian Beneficiaries,’’ https:// 

www.doi.gov/sites/doi.gov/files/migrated/news/ 

pressreleases/upload/Signed-SO-3335.pdf. 

the agencies propose to consider eligible 

community development activities that 

benefit Native Land Areas and meet 

other eligibility criteria under this 

impact review factor. For example, an 

affordable housing project that serves a 

Native Land Area or an activity in a 

Native Land Area undertaken with a 

CDFI would be included under this 

impact review factor. 

The agencies also seek feedback on 

whether this proposed impact review 

factor should be defined to include 

activities benefitting Native 

communities but not located in Native 

Land Areas. Such an approach would 

recognize that many tribal members 

reside in areas outside of the proposed 

definition of Native Land Areas, as a 

result of a number of factors, including 

past Federal policies. Some past Federal 

Government policies, such as the policy 

of allotment, have had the effect of 

reducing the amount of land recognized 

as a reservation or as trust land. 

Additionally, some past Federal 

Government policies have relocated 

individual tribal members from 

reservation communities to cities and, 

as a result, away from tribal lands.149

The Federal Government’s trust 

obligation applies to not only tribes but 

also their citizens regardless of 

residency on tribal lands given their 

unique political status.150

7. Activities That Are a Qualifying Grant 

or Contribution 

The agencies propose to include 

community development financing 

activities that are a qualifying grant or 

contribution as a separate impact review 

factor. The agencies recognize that the 

proposed community development 

financing metric provides these 

activities with comparatively little 

emphasis on its own, because the metric 

is based on the dollar amount of 

activities relative to deposits, and does 

not account for the fact that a grant has 

no repayment obligation, unlike a 

typical community development loan or 

qualifying investment. As a result, the 

agencies propose including these 

activities as an impact review factor so 

that they receive appropriate emphasis 

when assessing the metrics and impact 

review together. 

8. Activities That Reflect Bank 

Leadership Through Multi-Faceted or 

Instrumental Support 

The agencies propose an impact 

review factor for activities that involve 

a high degree of leadership on the part 

of the bank, as demonstrated by multifaceted or instrumental support. This 

prong is intended to capture the factors 

of complexity and leadership used 

under the current CRA regulations, but 

with greater specificity and a more 

direct tie to impact and responsiveness. 

Multi-faceted support includes 

activities that entail multiple forms of 

support provided by the bank for a 

particular program or initiative, such as 

a loan to a community-based 

organization that serves low- or 

moderate-income individuals, coupled 

with a service supporting that 

organization in the form of technical 

assistance that leverages the bank’s 

financial expertise. Instrumental 

support may include activities that 

involve a level of support or engagement 

on the part of the bank such that a 

program or project would not have come 

to fruition, or the intended outcomes 

would not have occurred, without the 

bank’s involvement. The agencies 

recognize that activities involving 

multifaceted or instrumental support 

often require significant efforts by the 

bank, reflect a high degree of 

engagement with community partners, 

and are highly responsive to community 

needs. 

9. Activities That Result in a New 

Community Development Financing 

Product or Service 

The agencies propose an impact 

review factor for activities that result in 

a new community development 

financing product or service that 

addresses community development 

needs for low- or moderate-income 

individuals and communities as well as 

small businesses and small farms. This 

factor builds upon the emphasis on 

innovative activities under the current 

approach and is intended to ensure a 

strong connection to impact and 

responsiveness. This factor encourages 

banks and community partners to 

conceive of new strategies for 

addressing community development 

needs, especially those needs which 

existing products and services do not 

adequately address. For example, an 

activity that provides financing for the 

acquisition of land for a shared equity 

housing project that brings permanent 

affordable housing to a community 

could meet this impact review factor, to 

the extent that it involves a new strategy 

to meet a community development 

need. The proposed emphasis on 

activities that support developing new 

products and services helps to ensure 

that the CRA continually improves the 

landscape of product offerings for lowor moderate-income individuals, 

communities and small businesses and 

small farms. 

Request for Feedback 

Question 34. For the proposed impact 

review factors for activities serving 

geographic areas with high community 

development needs, should the agencies 

include persistent poverty counties, 

high poverty census tracts, or areas with 

low levels of community development 

financing? Should all geographic 

designations be included or some 

combination? What considerations 

should the agencies take in defining 

these categories and updating a list of 

geographies for these categories? 

Question 35. For the proposed factor 

focused on activities supporting MDIs, 

WDIs, LICUs, and Treasury Departmentcertified CDFIs, should the factor 

exclude placements of short-term 

deposits, and should any other activities 

be excluded? Should the criterion 

specifically emphasize equity 

investments, long-term debt financing, 

donations, and services, and should 

other activities be emphasized? 

Question 36. Which of the thresholds 

discussed would be appropriate to 

classify smaller businesses and farms for 

the impact review factor relating to 

community development activities that 

support smaller businesses and farms: 

The proposed standard of gross annual 

revenue of $250,000 or less, or an 

alternative gross annual revenue 

threshold of $100,000 or less, or 

$500,000 or less? 

Question 37. For the proposed factor 

of activities that support affordable 

housing in high opportunity areas, is the 

proposed approach to use the FHFA 

definition of high opportunity areas 

appropriate? Are there other options for 

defining high opportunity areas? 

Question 38. For the proposed factor 

to designate activities benefitting or 

serving Native communities, should the 

factor be defined to include activities 

benefitting Native and tribal 

communities that are not located in 

Native Land Areas? If so, how should 

the agencies consider defining activities 

that benefit Native and tribal 

communities outside of Native Land 

Areas? 

VI. Assessment Areas and Areas for 

Eligible Community Development 

Activity 

The agencies propose to update the 

CRA assessment area approach to 


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33916 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

151Application of the performance tests and 

standards would be determined by bank size, as 

specified in proposed § __.21(b). 

evaluate performance in facility-based 

assessment areas for all banks, and in 

retail lending assessment areas for large 

banks. These updates are intended to 

comprehensively establish the local 

communities in which a bank is 

evaluated for its CRA performance and 

to reflect ongoing changes to the 

banking industry. In addition, the 

agencies propose to consider qualifying 

community development activities 

outside of a bank’s assessment areas at 

the state, multistate MSA, and 

institution levels to add certainty and to 

encourage qualifying activities in areas 

with high community development 

needs. Section X also discusses the 

agencies’ proposal to evaluate large 

banks and certain intermediate banks on 

their retail loans that are outside of both 

retail lending assessment areas and 

facility-based assessment areas, to 

ensure that retail lending evaluations for 

these banks are comprehensive. 

First, in § __.16, the agencies propose 

that facility-based assessment areas 

would remain a cornerstone of the 

proposed evaluation framework. The 

agencies propose to update how these 

areas are defined and to affirm that 

assessment areas may not reflect illegal 

discrimination or arbitrarily exclude 

low- or moderate-income census tracts. 

Recognizing the importance of the local 

communities served by a bank’s 

facilities, the agencies propose to 

evaluate a bank on all applicable 

performance tests 151 within each 

facility-based assessment area, and to 

incorporate these performance 

conclusions into the bank’s overall 

rating. 

Second, in § __.17 for large banks 

only, the agencies propose establishing 

retail lending assessment areas to 

provide a means for evaluating lending 

that occurs outside of facility-based 

assessment areas. The agencies propose 

that a large bank would delineate a 

retail lending assessment area where it 

has a concentration of retail loan 

originations outside of its facility-based 

assessment areas, and the agencies 

propose applying only the Retail 

Lending Test in these areas. In 

proposing this approach, the agencies 

recognize that changes in technology 

and in bank business models have 

resulted in banks serving local 

communities that may extend beyond 

the geographic footprint of the bank’s 

main office, branches, and other 

deposit-taking facilities. Consistent with 

the CRA’s focus on a bank’s local 

performance in meeting community 

credit needs, the agencies believe that it 

is appropriate to evaluate a large bank’s 

retail lending under the Retail Lending 

Test as described in Section IX, in a 

community where it has a concentration 

of loans, even if it does not operate a 

facility there. In addition, as discussed 

in § __.22, for large banks and certain 

intermediate banks, the agencies 

propose evaluating a bank’s retail 

lending performance on an aggregate 

basis outside retail lending areas, which 

include areas outside of facility-based or 

retail lending assessment areas. 

Third, the agencies propose to 

evaluate any qualifying community 

development financing and services 

activities that banks elect to conduct in 

broader areas beyond their facility-based 

assessment areas. Banks would receive 

consideration for qualifying activities 

anywhere in a state or multistate MSA 

in which they maintain a facility-based 

assessment area, when determining the 

conclusion for that state or multistate 

MSA. In addition, banks would receive 

consideration at the institution level for 

any qualifying activities conducted 

nationwide. For purposes of the 

Community Development Financing 

Test and Community Development 

Services Test, these areas outside of 

facility-based assessment areas are 

referred to as areas for eligible 

community development activity as 

specified in § __.18. 

The agencies believe this approach is 

preferable to an alternative approach 

that would require evaluating 

community development activities 

specifically within retail lending 

assessment areas. Building on the 

current practice of considering 

qualifying activities in broader 

statewide and regional areas, the 

agencies recognize that community 

development activities often benefit 

broader geographies, such as an entire 

state or region, which may not align 

with the geography of retail lending 

assessment areas. Furthermore, areas in 

greatest need of community 

development activities may not align 

with concentrations of bank lending 

where retail lending assessment areas 

are delineated. As a result, affording 

some additional flexibility may allow 

for community development activities 

that are higher in impact and 

responsiveness. 

A. Background 

1. Current Approach 

Pursuant to the CRA statute, banks 

have a continuing and affirmative 

obligation to help meet the credit needs 

of the local communities in which they 

are chartered. In their current CRA 

regulations, the agencies have 

interpreted local communities to 

include the areas surrounding a bank’s 

main office, branches, and deposittaking ATMs, given the linkage between 

physical facilities and a bank’s customer 

base. Accordingly, one of the CRA 

regulations’ core requirements is that 

each bank delineate areas in which their 

CRA performance will be assessed, 

referred to in the CRA regulations as 

assessment areas. 

The current CRA regulations require 

that assessment areas not reflect illegal 

discrimination and not arbitrarily 

exclude low- or moderate-income 

census tracts. These provisions work 

congruently with ECOA and the FHA, to 

combat redlining. Consequently, it is 

crucial that banks appropriately 

delineate their assessment areas. 

The CRA regulations currently define 

assessment areas for retail banks in 

connection with a bank’s main office, 

branches, and deposit-taking ATMs and 

the surrounding areas in which it has 

originated or purchased a substantial 

portion of its loans. Assessment areas 

are generally composed of one or more 

counties, and in some cases, smaller 

political subdivisions. While a bank 

may currently adjust the boundaries of 

an assessment area to include only the 

portion of a political subdivision that it 

reasonably can be expected to serve, an 

assessment area must be composed of at 

least whole census tracts. Assessment 

areas for wholesale and limited purpose 

banks consist generally of one or more 

MSAs or metropolitan divisions or one 

or more contiguous political 

subdivisions, such as counties, cities, or 

towns in which the bank has its main 

office, branches, and deposit-taking 

ATMs. Banks whose business models 

predominantly focus on serving the 

needs of military personnel or their 

dependents who are not located within 

a defined geographic area may delineate 

their entire deposit customer base as 

their assessment area. 

Assessment areas are used in different 

ways for the current evaluation of retail 

lending, community development loans 

and investments, and retail and 

community development services. 

Examiners evaluate a bank’s retail 

lending and retail services performance 

within assessment areas, and retail 

lending outside of its assessment areas 

is generally not currently part of a 

bank’s CRA evaluation. Conversely, the 

current evaluation of community 

development performance—including 

community development loans, 

investments, and services—considers 

activities within assessment areas as 

well as broader statewide or regional 

areas that include the assessment areas. 


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152See Table 8 and Table 12 of Harris, et al. 

(2020), ‘‘2020 Summary of Deposits Highlights.’’ 

FDIC Quarterly, Vol. 15, Issue 1, https://

www.fdic.gov/analysis/quarterly-banking-profile/ 

fdic-quarterly/2021-vol15-1/article2.pdf. 

The agencies recognize that community 

development organizations and 

programs are efficient and effective 

ways for banks to promote community 

development. These organizations and 

programs often operate on a statewide or 

even multistate basis. Therefore, a 

bank’s activity is considered a 

community development loan or service 

or a qualified investment if it supports 

an organization or activity that covers 

an area that is larger than, but includes, 

the bank’s assessment areas. The bank’s 

assessment areas need not receive an 

immediate or direct benefit from the 

bank’s participation in the organization 

or activity, provided that the purpose, 

mandate, or function of the organization 

or activity includes serving geographies 

or individuals located within the bank’s 

assessment areas. In addition, activities 

in broader statewide or regional areas 

that do not benefit the assessment area 

may be considered if the bank has first 

met the needs of its assessment areas. 

2. Stakeholder Feedback 

Many stakeholders have expressed 

that the current CRA regulations define 

assessment areas too narrowly, 

considering how banking is conducted 

today. Some stakeholders have pointed 

out that banks now use new kinds of 

facilities to collect deposits, such as 

remotely staffed virtual or interactive 

teller machines and other staffed 

physical facilities that are not referred to 

as branches. Stakeholders have 

expressed the importance of 

appropriately defining assessment areas 

to include locations where banks are 

collecting deposits to ensure that banks 

are evaluated on serving low- and 

moderate-income individuals and lowand moderate-income communities. 

Stakeholders differ on how much 

flexibility to give banks in delineating 

the size of a facility-based assessment 

area. For example, some industry 

stakeholders note that the ability to 

designate an assessment area that 

contains only part of a county, rather 

than an entire county, may allow a bank 

to achieve better alignment between its 

business strategy, capacity, and CRA 

activities. As a result, a number of 

industry stakeholders have supported 

continuing flexibility for small banks to 

delineate partial county assessment 

areas, and there is some support for also 

continuing to provide this flexibility to 

large banks. Community group 

stakeholders generally have not 

supported partial county assessment 

areas, and some have the view that 

partial county assessment areas may 

raise redlining risks and reduce 

incentives to lend and invest in lowand moderate-income communities. 

Stakeholders have generally 

supported the objective of revising the 

assessment area approach to include an 

evaluation of retail lending outside of 

assessment areas but have offered 

different recommendations on how to 

address this issue. Some stakeholders 

have favored approaches that would 

designate local assessment areas, akin to 

current assessment areas, in areas where 

a bank’s level of business activity 

exceeded a certain threshold, such as in 

lending volume or market share. Others 

have preferred that retail lending 

performance outside of assessment areas 

be evaluated only on an aggregate basis, 

while others have opposed any changes 

to the current assessment area 

framework for retail lending. 

Stakeholders generally agree that any 

assessment area approach should confer 

a strong CRA obligation for all banks, 

regardless of business model. 

Stakeholders have also noted 

challenges with the current assessment 

area approach for evaluating community 

development financing activity. Some 

stakeholders have noted that there is a 

high degree of uncertainty regarding 

CRA consideration for community 

development activities outside of 

assessment areas. Stakeholders have 

stated that this uncertainty has 

contributed to low levels of community 

development financing in areas where 

few banks maintain an assessment area. 

In addition, stakeholders have 

expressed that the assessment area 

framework leads to high levels of 

competition for limited community 

development opportunities in some 

markets, especially those where banks 

that operate more broadly claim only a 

single main office assessment area. At 

the same time, stakeholders have also 

expressed that any updates to the 

approach should maintain a strong 

emphasis on community development 

financing and services within facilitybased assessment areas. 

B. Facility-Based Assessment Areas 

With certain changes discussed 

below, the agencies propose to maintain 

assessment areas where a bank has its 

main office, branches, and deposittaking remote service facilities. As 

discussed further below, the agencies 

propose replacing the current term 

‘‘deposit-taking ATM’’ with ‘‘deposittaking remote service facility.’’ The 

agencies would refer to assessment areas 

for a bank’s main office, branches, and 

deposit-taking remote service facilities 

as ‘‘facility-based assessment areas’’ in 

order to differentiate them from the new 

proposal for retail lending assessment 

areas, discussed below under proposed 

§ __.17. The agencies propose retaining 

the practice that the facility-based 

assessment area delineated by a bank 

would be used to assess the bank’s CRA 

performance, provided that the facilitybased assessment area does not reflect 

illegal discrimination or arbitrarily 

exclude low- or moderate-income 

census tracts. 

1. Facility-Based Assessment Area 

Requirements for a Bank’s Main Office, 

Branches, and Deposit-Taking Remote 

Service Facilities 

Under the proposal, banks would 

continue to delineate assessment areas 

where they have their main office, 

branches, and deposit-taking remote 

service facilities. While the number of 

bank branches has declined in recent 

years,152 the agencies believe that 

branches remain an essential way of 

defining a bank’s local communities. 

The definition of branch in proposed 

§ l.12 would retain the existing 

regulatory language making it clear that 

staffed physical locations are deemed to 

constitute a branch, regardless of 

whether the physical location is a 

shared or unshared space. 

The agencies are proposing to remove 

the examples of shared physical 

locations in the definition but do not 

intend for this removal to change or 

narrow the meaning of the regulation. 

Although the examples are illustrative 

only, the agencies believe they do not 

fully reflect the breadth of shared space 

locations that might exist under the 

proposed definition, particularly as new 

bank business models emerge in the 

future. The agencies intend that the 

examples provided in the current 

regulation of a mini-branch in a grocery 

store or a branch operated in 

conjunction with a local business or 

non-profit organization, as well as other 

staffed physical locations in shared 

spaces, would continue to require 

delineating a facility-based assessment 

area. 

In addition, the agencies propose 

adding the language ‘‘open to, and 

accepts deposits from, the general 

public’’ to the definition of branch in 

§ __.12 to underscore that this definition 

would capture new bank business 

models, with different types of names 

for staffed physical locations, when 

those locations are open to the public 

and collect deposits from customers. 

The agencies do not view this as a 

change from current standards, but wish 

to emphasize that staffed physical 

locations open to the general public and 


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33918 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

153The agencies propose a definition of county in 

§ __.12 that means any county or statistically 

equivalent entity as defined by the U.S. Census 

Bureau. 

154 12 CFR __.41(e)(4); see also Q&A § __.41(e)(4)– 

1. 

155Q&A § __.41(e)(4)–1. 

156 12 U.S.C. 2902(4). 

that collect deposits from customers 

constitute a branch under the proposed 

CRA regulations regardless of whether 

the location is referred to as a ‘‘branch’’ 

by the bank. By using the word 

‘‘public,’’ the agencies intend for this 

proposed definition to also encompass 

any staffed physical location that is 

open to bank customers by appointment 

only. The proposed language ‘‘open to 

the general public’’ would also clarify 

that certain staffed physical locations 

that are only open to bank employees 

would not meet the definition of a 

branch. In addition, the agencies seek 

feedback on the treatment of business 

models where staff assist customers 

with making deposits on their phones or 

mobile devices while customers are 

onsite at staffed physical locations. 

As proposed, the updated CRA 

regulation would require facility-based 

assessment areas for deposit-taking 

‘‘remote service facilities,’’ defined in 

proposed § __.12. The proposed 

definition of remote service facilities 

would capture not only deposit-taking 

ATMs, but other deposit-taking facilities 

as well, such as interactive or virtual 

ATMs where customers can connect 

with bank staff through a terminal. The 

agencies believe that the term remote 

service facility, as proposed, 

appropriately captures a range of nonbranch facilities, and the agencies 

propose using this term instead of ATM 

throughout the regulation. 

The agencies considered, but are not 

proposing, that a bank’s loan production 

offices (LPOs) should automatically 

constitute a facility-based assessment 

area, given the variety of ways LPOs are 

used by banks. 

2. Geographic Standards for FacilityBased Assessment Areas 

The agencies propose that for large 

banks (including those that elect 

evaluation under an approved strategic 

plan) and wholesale or limited purpose 

banks, facility-based assessment areas 

would be required to consist of one or 

more MSAs or metropolitan divisions or 

one or more contiguous counties within 

an MSA, a metropolitan division, or the 

nonmetropolitan area of a state.153

Consistent with current regulations 

and guidance, a facility-based 

assessment area may not extend 

substantially beyond an MSA or state 

boundary unless the assessment area is 

located in a multistate MSA 154 or a 

combined statistical area.155 As a result, 

these banks would no longer be allowed 

to delineate a partial county for facilitybased assessment areas. 

Compared to the current regulations 

(which allow assessment areas 

composed of partial political 

subdivisions, provided they include at 

least whole census tracts), the proposed 

requirement would create a more 

consistent standard for the delineation 

of assessment areas for large banks, 

wholesale or limited purpose banks, and 

large banks that elect to be evaluated 

pursuant to an approved strategic plan. 

This change also would encourage these 

banks to serve low- and moderateincome individuals and census tracts in 

counties where their deposit-taking 

facilities are located, and would help to 

safeguard and support fair lending. The 

proposed requirement for these banks to 

construct facility-based assessment 

areas out of whole counties also would 

support the proposed use of metrics and 

associated data to evaluate bank 

performance because this allows for 

data collection and reporting at the 

county level rather than at the census 

tract level. 

The agencies propose continuing to 

allow small and intermediate banks to 

delineate facility-based assessment areas 

that include a partial county. However, 

a facility-based assessment area that 

includes a partial county would 

continue to be required to consist of 

whole census tracts. The agencies 

believe this flexibility would be 

appropriate for small and intermediate 

banks, because it reflects these banks’ 

lower asset levels and capacities. 

The agencies propose keeping the 

flexibility afforded a military bank to be 

able to delineate its customer base as its 

assessment area rather than a geographic 

delineation, consistent with the current 

CRA statute.156

In all cases and for all bank categories, 

the agencies propose retaining the 

prohibition that assessment areas may 

not reflect illegal discrimination or 

arbitrarily exclude low- or moderateincome census tracts. Arbitrarily 

excluding certain census tracts from an 

assessment area would reduce a bank’s 

CRA obligation to serve its entire 

community, including low- or 

moderate-income individuals and 

census tracts, and the agencies consider 

this prohibition to be a vital component 

of the assessment area framework. 

Moreover, the agencies continue to 

recognize the importance of 

coordinating fair lending examinations 

with CRA examinations where feasible 

to ensure assessment areas do not reflect 

illegal discrimination. 

Request for Feedback 

Question 39. Should both small and 

intermediate banks continue to have the 

option of delineating partial counties, or 

should they be required to delineate 

whole counties as facility-based 

assessment areas to increase consistency 

across banks? 

Question 40. Do the proposed 

definitions of ‘‘remote service facility’’ 

and ‘‘branch’’ include sufficient 

specificity for the types of facilities and 

circumstances under which banks 

would be required to delineate facilitybased assessment areas, or are other 

changes to the CRA regulations 

necessary to better clarify when the 

delineation of facility-based assessment 

areas would be required? 

Question 41. How should the agencies 

treat bank business models where staff 

assist customers to make deposits on 

their phone or mobile device while the 

customer is onsite. 

Question 42. Should the proposed 

‘‘accepts deposits’’ language be included 

in the definition of a branch? 

C. Retail Lending Assessment Areas 

In § __.17, the agencies are proposing 

an approach for large banks that would 

establish retail lending assessment areas 

where a bank has concentrations of 

home mortgage or small business 

lending outside of its facility-based 

assessment areas. Large banks would be 

evaluated under the Retail Lending Test, 

and not under other performance tests, 

in these areas. 

The agencies consider it appropriate 

to evaluate large banks’ retail lending in 

retail lending assessment areas on a 

local basis because it accords with 

CRA’s focus on a bank’s local 

performance in meeting community 

credit needs. A local evaluation 

promotes transparency by providing 

useful information to the public and 

banks regarding their performance in 

specific markets. The proposed 

approach of designating retail lending 

assessment areas is designed to provide 

a pathway to evaluate banks in a way 

that provides parity between banks that 

lend primarily through branches and 

those banks with different business 

models. Designating new retail lending 

assessment areas would ensure that, 

regardless of delivery channel, large 

banks would have evaluations of their 

retail lending in the local markets where 

they conduct significant retail lending 

business. In addition, as discussed in 

§ __.22, for large banks, the agencies 

propose evaluating a bank’s retail 

lending performance on an aggregate 


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157The agencies’ analysis of home mortgage loan 

and small business loan data from 2017–2019 

indicates that the share of bank loans in non-MSA 

areas that would be evaluated at the local level 

would have increased from 67 percent to 83 percent 

for home mortgage loans, and from 38 percent to 

80 percent for small business loans in 2019 under 

the proposed approach, due to adding retail lending 

assessment areas to existing facility-based 

assessment areas. 

158The median number of home mortgage loans 

and small business loans for facility-based 

assessment areas includes the banks’ total inside 

assessment area loans for each whole MSA or state 

non-MSA area that contains at least one facilitybased assessment area. For example, if a bank has 

two facility-based assessment areas in one MSA, the 

loan count for those two areas was summed and 

treated as one facility-based assessment area. The 

median number of loans in facility-based 

assessment areas without combining those in the 

same MSA or non-MSA area was smaller. This 

analysis included single-family and multifamily 

loan originations; however, the proposed rule 

would include only single-family (i.e., 1- to 4-unit) 

originations. 

159The CRA Analytics Data Tables combine 

HMDA data, CRA small business and small farm 

data, and manually extracted data from CRA 

performance evaluations. Bank and community 

attributes (e.g., assets, deposits, branching, and 

information about communities, such as percentage 

of low- and moderate-income households) and 

other third-party vendor data supplement the data 

tables. See https://www.federalreserve.gov/

consumerscommunities/data_tables.htm. 

basis in areas outside of facility-based 

and retail lending assessment areas. 

This is intended to ensure that bank 

lending that is too geographically 

dispersed to be evaluated on a local 

basis is still considered in the bank’s 

evaluation. 

The agencies do not propose applying 

retail lending assessment area 

requirements to intermediate or small 

banks. For small banks, the agencies 

propose maintaining the status quo 

approach of evaluating a small bank in 

its facility-based assessment areas. For 

intermediate banks with more than 50 

percent of lending outside of facilitybased assessment areas, the agencies 

propose evaluating a bank’s retail 

lending performance on an aggregate 

basis in areas outside of its facilitybased assessment areas, rather than 

evaluating outside assessment area 

performance in specific MSAs or nonMSA portions of states where there are 

concentrations of lending. As discussed 

further in Section X, the agencies 

propose tailoring this approach so it 

applies to the subset of intermediate 

banks doing the most lending outside of 

facility-based assessment areas. 

1. Overview of Requirements for Retail 

Lending Assessment Areas 

Under this proposal, large banks 

would be required to designate retail 

lending assessment areas that would 

consist of either: (i) The entirety of a 

single MSA excluding counties inside 

their facility-based assessment areas; or 

(ii) all of the nonmetropolitan counties 

in a single state, excluding counties 

inside their facility-based assessment 

areas, aggregated into a single retail 

lending assessment area. A large bank 

would be required to delineate a retail 

lending assessment area in any MSA or 

the combined non-MSA areas of a state, 

respectively, in which it originated in 

that geographic area, as of December 31 

of each of the two preceding calendar 

years: (i) At least 100 home mortgage 

loans outside of its facility-based 

assessment areas; or (ii) at least 250 

small business loans outside of its 

facility-based assessment areas. 

The agencies believe retail lending 

assessment areas composed of MSAs 

and non-MSAs provide a way to 

evaluate retail lending that occurs 

outside of facility-based assessment 

areas on a local basis. In establishing a 

bank’s retail lending assessment areas in 

non-MSAs, the agencies would combine 

all loans in nonmetropolitan counties 

within a state that are not part of a 

bank’s facility-based assessment areas to 

determine whether the bank’s lending 

levels in those areas are sufficient to 

trigger a retail lending assessment area, 

using the 100 home mortgage loan or 

250 small business loan thresholds. The 

agencies recognize that in many 

nonmetropolitan areas, retail lending is 

dispersed due to low population density 

and few bank branches. Combining nonMSA areas within a state is intended to 

ensure a sufficient volume of lending to 

require the delineation of retail lending 

assessment areas and ensure appropriate 

emphasis on these areas.157

Two Years of Data. With the objective 

of providing greater stability and 

certainty regarding the use of retail 

lending assessment areas over time, the 

agencies propose using two years of data 

to determine the need to establish retail 

lending assessment areas. Specifically, 

the proposal would be based on a bank’s 

number of loans meeting the thresholds 

in both of the previous two calendar 

years before retail lending assessment 

areas would be required. This approach 

is intended to mitigate uncertainty for 

banks about when a retail lending 

assessment area could be designated 

and make retail lending assessment 

areas more durable over time. 

Furthermore, the agencies are 

considering publishing data, for 

example via an online dashboard, that 

would allow banks to assess how their 

current performance compares with 

relevant benchmarks in both facilitybased assessment areas and retail 

lending assessment areas. 

Thresholds. The agencies propose 

thresholds of 100 home mortgage loans 

and 250 small business loans in two 

consecutive years to require the 

delineation of retail lending assessment 

areas. To determine these thresholds, 

the agencies considered what levels 

would appropriately align with the 

amount of lending typically evaluated 

in a facility-based assessment area. The 

agencies also considered what threshold 

levels would result in a substantial 

percentage of loans that are outside of 

facility-based assessment areas being 

evaluated within a retail lending 

assessment area, as the agencies believe 

retail lending should be evaluated 

within a local context wherever feasible, 

based on a sufficient volume of loans 

and the size and business model of the 

bank. 

For the mortgage loan threshold, the 

agencies found that the median number 

of home mortgage loans within a 

facility-based assessment area by a large 

bank in 2019, defined using the asset 

threshold proposed in § __.12, was 

114.158 The proposed threshold of 100 

home mortgage loans would therefore 

establish a retail lending assessment 

area based on a similar level of lending 

present in a typical facility-based 

assessment area. In addition, as shown 

in Table 1, the proposed threshold of 

100 home mortgage loans would result 

in approximately 50 percent of bank 

home mortgage loans that are currently 

outside of facility-based assessment 

areas being evaluated within a retail 

lending assessment area, based on 

analysis of 2017–2019 lending data from 

the CRA Analytics Data Tables.159

For small business lending, the 

agencies found that the median number 

of small business loans within a facilitybased assessment area by a large bank in 

2019, defined using the asset threshold 

proposed in § __.12, was 101. The 

agencies considered it appropriate to 

propose a higher threshold of 250 small 

business loans for the requirement to 

establish retail lending assessment areas 

because this level would result in a 

large share (62 percent) of bank loans 

that are currently outside of facilitybased assessment areas being evaluated 

within a retail lending assessment area. 

Table 1 also shows, under different 

threshold options for home mortgage 

loans and small business loans, 

respectively: (i) The number of banks 

that would be affected by the 

delineation of a new retail lending 

assessment area; (ii) the number of retail 

lending assessment areas that would be 

delineated; (iii) the percentage of 

outside facility-based assessment area 

lending that would be included in retail 

lending assessment areas; and (iv) the 

percentage of lending overall that would 

be captured under either facility-based 


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160Under the proposed approach, approximately 

10 percent of large banks’ home mortgage loans and 

16 percent of small business loans during 2017– 

2019 would not be captured by facility-based or 

retail lending assessment areas. 

assessment areas or retail lending 

assessment areas, on a combined basis. 

TABLE 1 TO SECTION l.17—SUMMARY OF POTENTIAL EFFECT OF DIFFERENT RETAIL LENDING THRESHOLDS ON LARGE

BANKS

Number of affected 

banks (% of all) 

Number of retail lending assessment areas (MSAs or state nonmetropolitan areas) Outside-facilitybased assessment 

area lending covered by retail lending assessment 

areas (%) 

Lending covered by 

facility-based and 

retail lending assessment areas (% 

of total loans) 

All banks Median Max 

Mortgage Loans: 

-50 loans .................................................................................................................... 148 46% 1,201 2 167 62% 92% 

-100 loans (proposed) ................................................................................................ 91 28 641 2 123 50 90 

-250 loans .................................................................................................................. 38 12 204 2 59 32 86 

Small business loans: 

-50 loans .................................................................................................................... 103 31 2,676 1 386 76 90 

-100 loans .................................................................................................................. 48 15 1,771 5 337 72 88 

-250 loans (proposed) ................................................................................................ 26 8 877 9.5 233 62 84 

-500 loans .................................................................................................................. 18 5 488 7 158 54 81 

Total (meeting either mortgage or small business thresholds) .......................... 104 31 1,382 6 233 60 86 

Note: The Retail Lending Assessment Areas are areas that would have been delineated in 2019 based on 2017 and 2018 data (two-year lending 

thresholds) using the CRA Analytics Data Tables. The bank lending volume was calculated using the 2017–2019 data. The sample includes banks 

with total assets of at least $2 billion in both 2017 and 2018. Wholesale banks, limited purpose banks, and military banks were excluded from this 

analysis. 

Major Product Line. To provide a 

consistent evaluation of large banks’ 

retail lending across different types of 

assessment areas, the agencies would 

use the major product line standard, 

discussed in Section VIII, to determine 

which retail lending product lines 

would be evaluated in a retail lending 

assessment area. As with facility-based 

assessment areas, the major product line 

standard is intended to ensure that a 

bank’s performance in retail lending 

assessment areas reflects performance 

over whichever of a bank’s retail 

lending products it specializes in 

locally. 

The agencies seek feedback on an 

alternative approach to identifying 

major product lines in retail lending 

assessment areas. Under the alternative 

approach, rather than evaluating all of a 

bank’s major product lines in a retail 

lending assessment area, the agencies 

would evaluate only home mortgage and 

small business lending. In addition, 

under the alternative approach, the 

agencies would only evaluate home 

mortgage lending if the bank surpassed 

the proposed 100 home mortgage loans 

threshold in the retail lending 

assessment area and would only 

evaluate small business lending if the 

bank surpassed the proposed 250 small 

business loans threshold. This is in 

contrast to the proposed approach, 

which would evaluate all major product 

lines whether the bank surpasses either 

or both of the proposed retail lending 

assessment area thresholds. The 

agencies considered that this alternative 

would more narrowly tailor the 

evaluation approach in retail lending 

assessment areas. 

Option for Additional Tailoring. The 

agencies seek feedback on an alternative 

approach that would tailor the retail 

lending assessment area approach to 

exempt certain large banks that have a 

significant majority, such as at least 80 

or 90 percent, of their retail loans inside 

their facility-based assessment areas. 

This exemption could tailor the retail 

lending assessment area approach so it 

does not include banks that are 

primarily branch-based, and therefore, 

the bank’s overall Retail Lending Test 

conclusion could be reasonably derived 

by focusing on the activity within its 

facility-based assessment areas. A tradeoff of this alternative is that it could 

exempt large banks which, despite 

having made a relatively low share of 

their loans outside of their facility-based 

assessment areas, have a large volume of 

such loans. As a result, these loans 

would be exempt from local evaluation, 

especially in smaller MSAs and rural 

areas. Under such an alternative, the 

agencies would evaluate the outside 

lending under the outside retail lending 

area approach described below. 

2. Evaluation of Outside Lending of 

Large Banks and Certain Intermediate 

Banks 

The agencies propose that retail loans 

that are located outside of any facilitybased assessment areas or retail lending 

assessment areas for a large bank, 

including a large bank that elects 

evaluation under an approved strategic 

plan, and outside of any facility-based 

assessment areas for intermediate banks 

with substantial outside assessment area 

lending, would be evaluated on an 

aggregate basis at the institution level, 

as discussed in Section X.160 The 

agencies considered that the inclusion 

of lending outside a bank’s facilitybased assessment areas or retail lending 

assessment areas in the evaluation 

framework would allow for a 

comprehensive assessment of a bank’s 

lending to low- and moderate-income 

individuals and communities. This 

approach is also intended to ensure that 

a large bank’s lending that is too 

geographically dispersed to be 

examined within an assessment area 

would still be evaluated. 

3. Descriptive Analysis of Lending to 

Low- and Moderate-Income Borrowers 

or Smaller Businesses, and in Low- and 

Moderate-Income Census Tracts 

As reflected in Table 2, the agencies 

conducted a descriptive analysis 

showing the levels of lending to lowand moderate-income borrowers and 

small businesses or in low- and 

moderate-income census tracts as 

compared across facility-based 

assessment areas, retail lending 

assessment areas, and outside of any 

assessment area. This analysis does not 

account for underlying differences 

between a bank’s facility-based 

assessment areas and other areas that 

could affect low- and moderate-income 

lending levels, including the percentage 

of low- and moderate-income 

individuals and census tracts. The 


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percentage of bank home mortgage loans 

to low- and moderate-income borrowers 

was slightly higher in facility-based 

assessment areas (21 percent) than in 

areas that would have been delineated 

as retail lending assessment areas (19 

percent). The share of bank home 

mortgage loans in low- and moderateincome census tracts showed a similar 

pattern. For bank small business loans, 

the gap was greater in terms of the share 

of loans to smaller businesses in facilitybased assessment areas (62 percent) and 

in retail lending assessment areas (46 

percent). The gap in terms of the share 

of loans to small businesses in low- and 

moderate-income census tracts was 

modest, at 24 percent for facility-based 

assessment areas and 22 percent for 

retail lending assessment areas. 

TABLE 2 TO SECTION l.17—LARGE BANK LOW- AND MODERATE-INCOME LENDING IN FACILITY-BASED ASSESSMENT

AREAS, RETAIL LENDING ASSESSMENT AREAS, AND OTHER AREAS

Total number of 

loans 

(2017–2019) 

Share of loans to 

low- and 

moderate-income 

borrowers or 

smaller 

businesses 

(%) 

Share of loans in 

low- and 

moderate-income 

census tracts 

(%) 

Mortgage Loans: 

Facility-based Assessment Areas ........................................................................................................ 4,777,269 21% 15% 

Retail Lending Assessment Areas ....................................................................................................... 634,258 19 14 

Areas outside Bank Assessment Areas .............................................................................................. 631,062 17 13 

Total .............................................................................................................................................. 6,042,589 20 14 

Small Business Loans: 

Facility-based Assessment Areas ........................................................................................................ 7,848,271 62 24 

Retail Lending Assessment Areas ....................................................................................................... 3,490,558 46 22 

Areas outside Bank Assessment Areas .............................................................................................. 2,097,510 40 21 

Total .............................................................................................................................................. 13,436,339 54 23 

Note: The Retail Lending Assessment Areas are areas that would have been delineated in 2019 based on the 2017 and 2018 data (two-year lending thresholds) 

from CRA Analytics Data Tables. The bank lending volume was calculated using the 2017–2019 data. The sample includes banks with total assets of at least $2 billion in both 2017 and 2018. Wholesale banks, limited purpose banks, and military banks were excluded. 

Request for Feedback 

Question 43. If a bank’s retail lending 

assessment area is located in the same 

MSA (or state non-MSA area) where a 

smaller facility-based assessment area is 

located, should the bank be required to 

expand its facility-based assessment 

area to the whole MSA (or non-MSA 

area) or should it have the option to 

designate the portion of the MSA that 

excludes the facility-based assessment 

area as a new retail lending assessment 

area? 

Question 44. Should a bank be 

evaluated for all of its major product 

lines in each retail lending assessment 

area? In the alternative, should the 

agencies evaluate home mortgage 

product lines only when the number of 

home mortgage loans exceeds the 

proposed threshold of 100 loans, and 

evaluate small business loans only 

when the number of small business 

loans exceeds the proposed threshold of 

250 loans? 

Question 45. The agencies’ proposals 

for delineating retail lending assessment 

areas and evaluating remaining outside 

lending at the institution level for large 

banks are intended to meet the 

objectives of reflecting changes in 

banking over time while retaining a 

local focus to CRA evaluations. What 

alternative methods should the agencies 

consider for evaluating outside lending 

that would preserve a bank’s obligation 

to meet the needs of its local 

communities? 

Question 46. The proposed approach 

for delineating retail lending assessment 

areas would apply to all large banks 

with the goal of providing an equitable 

framework for banks with different 

business models. Should a large bank 

with a significant majority of its retail 

loans inside of its facility-based 

assessment areas be exempted from 

delineating retail lending assessment 

areas? If so, how should an exemption 

be defined for a large bank that lends 

primarily inside its facility-based 

assessment area? 

D. Areas for Eligible Community 

Development Activity 

The agencies propose to evaluate the 

community development performance 

of a large bank, including a large bank 

that elects evaluation under an 

approved strategic plan, a wholesale or 

limited purpose bank, or an 

intermediate bank that elects evaluation 

under the Community Development 

Financing Test within each facilitybased assessment area, and also to 

consider any additional qualifying 

activities that the banks elect to conduct 

outside of their facility-based 

assessment areas, referred to as ‘‘areas 

for eligible community development 

activity’’ in § __.18. The community 

development activities outside of a 

bank’s facility-based assessment areas 

would not be required to serve the 

bank’s retail lending assessment areas or 

any other specific geographies, and 

would be considered to inform state, 

multistate MSA, and institution level 

conclusions. This approach is intended 

to achieve a careful balance between 

emphasizing a bank’s performance in its 

facility-based assessment areas, while 

also allowing banks the option of 

conducting qualifying community 

development activities outside of their 

facility-based assessment areas in 

broader geographic areas. The approach 

is described in detail in §§ __.24 and 

__.26. 

The agencies recognize that the 

current approach to considering 

activities in broader statewide and 

regional areas has been beneficial from 

the standpoint of allowing a degree of 

flexibility but has also contributed to 

uncertainty about whether activities 

will qualify. For example, under the 

current approach, if a bank has 

conducted an activity in a broader 

statewide or regional area that 

examiners determine does not benefit an 

assessment area and the examiners 

determine that the bank has not already 

met the needs of its assessment areas, 

the bank may not receive consideration 

for that activity. In addition, banks may 

receive consideration at the assessment 

area level for an activity that serves a 

broader statewide or regional area 

provided that the assessment area is 

within the scope of the activity, even if 

the activity cannot be shown to have an 

immediate benefit to assessment area. 


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Under the proposed approach, the 

agencies would consider all qualifying 

activities, regardless of the geographies 

served. The agencies would clearly 

distinguish between qualifying activities 

that serve a facility-based assessment 

area and those that serve other areas and 

would establish clear standards for 

performance for facility-based 

assessment areas, states, multistate 

MSAs, and at the institution level. This 

approach is intended to create 

additional flexibility for banks to 

conduct qualifying activities outside of 

facility-based assessment areas, while 

also more directly emphasizing facilitybased assessment area performance. In determining the proposed 

assessment area approach for evaluating 

community development activities, the 

agencies considered the benefits of 

additional flexibility and certainty 

relative to the current approach. 

Granting additional flexibility may 

allow banks to identify impactful 

community development opportunities 

that serve geographies with high unmet 

community development needs, 

including geographies where few banks 

currently have facility-based assessment 

areas or concentrations of retail loans. 

Flexibility would also allow banks to 

identify those opportunities where the 

bank’s business model, strategy, and 

expertise are well aligned with a 

community need. While the agencies consider the 

option of flexibility to be beneficial for 

all banks’ community development 

activities, it may be especially beneficial 

for the community development 

activities that are conducted by banks 

that operate primarily or entirely 

without branches. Under the proposed 

approach, these banks would continue 

to be evaluated in their facility-based 

assessment areas, but would also have 

the ability to conduct activities that 

receive CRA consideration in other 

markets. The agencies consider that the 

additional flexibility and certainty of 

this change could help to address a 

stakeholder concern regarding high 

concentrations of community 

development activities in some markets, 

including those where the main offices 

of internet and wholesale banks are 

located, and where there are significant 

unmet needs in other markets. 

To affirm the current obligation that 

large, intermediate, and wholesale and 

limited purpose banks must meet the 

community development needs of their 

facility-based assessment areas, the 

agencies propose a number of 

provisions for the performance tests and 

overall ratings approach that emphasize 

assessment area performance, discussed 

in §§ __.24 and l.26. For example, the 

agencies would develop a conclusion in 

each facility-based assessment area for 

the applicable community development 

tests, which would be incorporated 

directly into institution ratings. 

Request for Feedback 

Question 47. The agencies propose to 

give CRA consideration for community 

development financing activities that 

are outside of facility-based assessment 

areas. What alternative approaches 

would encourage banks that choose to 

do so to conduct effective community 

development activities outside of their 

facility-based assessment areas? For 

example, should banks be required to 

delineate specific geographies where 

they will focus their outside facilitybased assessment area community 

development financing activity? Question 48. Should all banks have 

the option to have community 

development activities outside of 

facility-based assessment areas 

considered, including all intermediate 

banks, small banks, and banks that elect 

to be evaluated under a strategic plan? 

VII. Performance Tests, Standards, and 

Ratings in General 

The agencies propose to tailor the 

evaluation framework based on three 

bank size categories, revised from the 

current bank size categories used in 

CRA evaluations. The agencies also 

propose a tailored approach for 

wholesale banks, limited purpose banks, 

and banks that are approved to be 

evaluated under a strategic plan. The 

agencies recognize the importance of an 

evaluation framework that reflects 

differences in bank capacities, business 

models, and strategies. In addition, the 

agencies also recognize the importance 

of ensuring that banks meet their 

affirmative obligation under the CRA to 

meet the credit needs of their 

communities, which may encompass a 

wide range of retail lending products, 

services, and community development 

activities. 

Proposed § __.21 details the proposed 

evaluation framework for each bank 

category and describes the treatment of 

bank subsidiaries, affiliates, 

consortiums, and third parties. In 

addition, this section of the proposed 

regulation provides performance context 

information considered, describes the 

categories for bank ratings, and outlines 

the requirement that bank CRA 

activities be conducted in a safe and 

sound manner. 

A. Performance Tests, Tailoring to Bank 

Size, and Asset Thresholds 

1. Current Approach 

The current evaluation approach 

includes different examination 

processes for banks of different sizes 

and business models. Large banks are 

evaluated under three performance 

tests: The lending test, which assesses 

retail and community development 

loans; the investment test, which 

assesses qualified investments; and the 

service test, which assesses retail 

services and community development 

services. Intermediate small banks are 

evaluated under a lending test and a 

community development test, which 

assesses community development loans, 

qualified investments, and community 

development services. Small banks are 

evaluated under a single lending test. 

Wholesale and limited purpose banks 

are evaluated under a single community 

development test which assesses 

community development loans, 

qualified investments, and community 

development services. In addition, any 

bank may seek approval to be evaluated 

under a strategic plan. 

2. Proposed Bank Categories and 

Evaluation Framework 

The agencies propose an evaluation 

framework that is tailored based on 

bank size and business model, with 

different performance tests applied to 

banks of different sizes and to wholesale 

and limited purpose banks. The 

agencies are proposing updates to 

certain performance tests to incorporate 

standardized metrics and benchmarks. 

The agencies would assign conclusions 

for each performance test for each of a 

bank’s facility-based assessment areas, 

states and multistate MSAs and at the 

institution level, as applicable. For large 

banks, the agencies would also assign 

Retail Lending Test conclusions for each 

retail lending assessment area. For large 

banks and certain intermediate banks, 

the agencies would also assign Retail 

Lending Test conclusions for outside 

retail lending areas. 

Large Banks. The agencies propose 

four performance tests for large banks: A 

Retail Lending Test, a Retail Services 

and Products Test, a Community 

Development Financing Test, and a 

Community Development Services Test. 

Each of the four tests measures a 

different aspect of how responsive a 

bank’s retail and community 

development activities are to the credit 

needs of its local communities. This 

proposed approach reflects a similar 

breadth of evaluation approaches as 

compared to the current framework that 

applies to large banks. Given their 

financial resources and market position, 

these banks collectively play a 

significant role in serving low- and 

moderate-income individuals and 

communities. Furthermore, banks in 

this category generally have the capacity 

to deliver a range of credit products and 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33923 

services that are covered under the four 

performance tests. 

The agencies propose that some new 

requirements would apply only to large 

banks with assets of over $10 billion, 

reflecting the increased resources of 

these institutions. For example, the 

agencies propose that only large banks 

with assets of over $10 billion would 

have requirements for deposits data, 

retail services data on digital delivery 

systems, retail services data on 

responsive deposit products, and 

community development services data. 

In addition, the agencies propose that 

banks with assets of over $10 billion, 

including wholesale and limited 

purpose banks, would have automobile 

lending data requirements. 

The proposed Retail Lending Test 

would measure how well a bank’s retail 

lending meets the credit needs of lowand moderate-income individuals, small 

businesses and farms, and low- and 

moderate-income geographies through 

analysis of lending volume and lending 

distribution. To increase consistency in 

evaluations, the agencies propose that 

the Retail Lending Test rely on a set of 

metrics and community and market 

benchmarks that are grounded in local 

data. A bank’s retail lending distribution 

metrics, calculated using the bank’s 

number of loans, would be compared to 

local community and market 

benchmarks as proposed in § __.22 and 

discussed in Section IX. The agencies 

also propose that additional factors 

discussed in § __.22(e) be considered 

when evaluating a bank’s retail lending 

performance. Retail Lending Test 

conclusions would be assigned for each 

of a large bank’s facility-based 

assessment areas, retail lending 

assessment areas, and outside retail 

lending area, as well as at the state, 

multistate MSA, and institution levels, 

as applicable. 

The proposed Community 

Development Financing Test would 

assess how well a bank meets 

community development financing 

needs. As proposed, the Community 

Development Financing Test would use 

metrics and benchmarks to standardize 

the review of community development 

loans and investments, while also 

incorporating a qualitative impact 

review of community development 

financing activities to complement the 

dollar-based community development 

financing metric and benchmarks. As 

proposed in § __.24 and discussed in 

Section XII, conclusions would reflect 

the agencies’ qualitative assessments of 

a bank’s metric relative to the 

benchmarks and impact review. 

Conclusions would be assigned for each 

of a bank’s facility-based assessment 

areas, states, and multistate MSAs, and 

at the institution level, as applicable. 

The proposed Retail Services and 

Products Test and Community 

Development Services Test would 

evaluate how well a bank’s products 

and services meet community credit and 

community development needs, 

respectively. The agencies propose 

revised standards for these tests to 

reflect changes in banking over time and 

to introduce standard metrics, as well as 

benchmarks for the Retail Services and 

Products Test, to allow a more 

consistent evaluation approach. 

The agencies propose additional 

tailoring of the Retail Services and 

Products Test, as well as the 

Community Development Services Test, 

reflecting the increased resources of 

large banks with assets of over $10 

billion. Under the Retail Services and 

Products Test, the agencies propose that 

all large banks would be evaluated on 

their branch and remote service facility 

availability, as well as responsive credit 

products. The agencies propose that the 

following parts of this evaluation, as 

well as the associated data 

requirements, would be required only 

for large banks with assets of over $10 

billion: (i) Digital and other delivery 

systems; and (ii) responsive deposit 

products. For large banks with assets of 

$10 billion or less, these components 

would be optional. 

Under the Community Development 

Services Test, the agencies propose that 

only large banks with assets of over $10 

billion would be required to collect, 

maintain, or report community 

development services data in a 

standardized format. 

Section __.23 addresses the proposed 

Retail Services and Products Test and is 

discussed in Section XI. Section __.25 

addresses the proposed Community 

Development Services Test and is 

discussed in Section XIII. Conclusions 

for the Retail Services and Products Test 

and Community Development Services 

Test would be assigned for each of a 

bank’s facility-based assessment areas, 

states, and multistate MSAs, and at the 

institution level, as applicable. 

Intermediate Banks. The agencies 

propose to evaluate intermediate banks 

under the proposed Retail Lending Test 

in § __.22 and the current intermediate 

small bank community development 

test as described in § __.29 or, at the 

bank’s option, evaluation under the 

proposed Community Development 

Financing Test as described in § __.24. 

If an intermediate bank opts to be 

evaluated under the proposed 

Community Development Financing 

Test, the bank may request additional 

consideration at the institution level for 

community development services 

activities as described in § __.25 and for 

any retail services activities that serve 

low- or moderate-income individuals or 

communities (i.e., activities covered 

under the proposed Retail Services and 

Products Test in proposed § __.23) when 

bank performance is at least satisfactory 

without consideration of such activities. 

The agencies would tailor certain 

features of the Retail Lending Test and 

Community Development Financing 

Test for intermediate banks, including 

by maintaining current data collection, 

maintenance, and reporting 

requirements for intermediate banks 

that do not elect to be evaluated under 

the Community Development Financing 

Test, as discussed in § __42. By applying 

the Retail Lending Test to banks of this 

size, the proposal is intended to 

improve the clarity, consistency, and 

transparency of the evaluation of retail 

lending. The agencies believe retail 

lending remains a core part of a bank’s 

affirmative obligation under the CRA to 

meet the credit needs of their entire 

communities. At the same time, the 

agencies recognize that, compared to 

large banks, intermediate banks might 

not offer as wide a range of retail 

products and services, have a more 

limited capacity to conduct community 

development activities, and may focus 

on the local communities where their 

branches are located. 

Small Banks. The agencies propose to 

evaluate small banks under the current 

lending test as the default evaluation 

method. However, small banks would 

have the ability to opt into the proposed 

Retail Lending Test. Consistent with the 

current approach, small banks would 

continue to have the ability to request 

additional consideration at the 

institution level for qualifying 

community development activities or 

retail services activities that serve lowor moderate-income individuals and 

communities, when bank performance 

is at least satisfactory without 

consideration of such activities. 

Allowing small banks the option of 

being evaluated under the proposed 

Retail Lending Test is intended to 

ensure that small banks have available 

a metrics-based approach to increase the 

clarity, consistency, and transparency of 

how their retail loans are evaluated. The 

agencies recognize the capacity 

constraints of these banks, and their 

more targeted focus on retail lending as 

opposed to the types of activities 

evaluated by other performance tests. To 

tailor the test to small banks’ more 

limited capacities, the agencies propose 

to evaluate a small bank that opts into 

the Retail Lending Test under the 

provisions that pertain to an 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
33924 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

161 87 FR 18627, 18830 (Mar. 31, 2022). The SBA 

revised the size standards applicable to small 

commercial banks and savings institutions, 

respectively, from $600 million to $750 million, 

based upon the average assets reported on such a 

financial institution’s four quarterly financial 

statements for the preceding year. The final rule has 

a May 2, 2022, effective date. 

162Estimates are based on average assets from 

2020 and 2021 Call Report data and the 2021 FDIC’s 

Summary of Deposits. 

intermediate bank, with the exception 

that no small bank would be evaluated 

on its retail lending outside of its 

assessment areas, regardless of the 

percentage of the bank’s overall retail 

lending it comprises. 

Wholesale and Limited Purpose 

Banks. As proposed in § __.26 and 

discussed further in Section XIV, the 

agencies propose evaluating wholesale 

and limited purpose banks under only 

the Community Development Financing 

Test for Wholesale and Limited Purpose 

Banks, which would retain much of the 

current qualitative approach for this 

evaluation, with the addition of a 

quantitative metric at the institution 

level to improve consistency. The 

agencies also propose giving wholesale 

and limited purpose banks the option to 

have community development service 

activities in § __.25 considered to inform 

a bank’s overall institution rating when 

bank performance is at least satisfactory 

without consideration of community 

development service activities. 

3. Alternative Evaluation Under a CRA 

Strategic Plan 

The agencies propose retaining the 

option for any bank to elect evaluation 

under an approved CRA strategic plan 

as discussed in § __.27 and in Section 

XV. The agencies propose to retain this 

alternative evaluation method to give 

banks flexibility to meet their CRA 

obligations in a manner that is tailored 

to community needs and opportunities 

as well as their own capacities, business 

strategies, and expertise. To ensure that 

banks evaluated under a strategic plan 

meet their CRA obligations, the agencies 

propose that strategic plans incorporate 

a metrics-based analysis of a bank’s 

lending to low- or moderate-income 

individuals and communities. In 

addition, large banks evaluated under 

an approved strategic plan would be 

expected to delineate both facility-based 

and retail lending assessment areas, as 

applicable. For purposes of data 

collection, maintenance, and reporting 

requirements under proposed § __.42, 

the agencies believe that a bank 

evaluated under an approved strategic 

plan should have the same requirements 

as another bank of the same asset sizes. 

For example, a bank evaluated under an 

approved strategic plan with assets of 

over $10 billion would have the same 

data collection, maintenance, and 

reporting requirements of a large bank 

with assets of over $10 billion. 

Conclusions for Tests 

Under the proposal, the agencies 

would assign conclusions on each 

performance test in facility-based 

assessment areas, states, multistate 

MSAs, and at the institution level, as 

applicable. In addition, Retail Lending 

Test conclusions would also be assigned 

to retail lending assessment areas and 

outside retail lending areas, as 

applicable. The agencies propose 

retaining the five categories for 

conclusions composed of 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ 

‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ and ‘‘Substantial 

Noncompliance.’’ The proposed ‘‘High 

Satisfactory’’ and ‘‘Low Satisfactory’’ 

conclusions allow the agencies to better 

differentiate very good performance 

from performance at the lower end of 

the satisfactory range as compared to 

developing conclusions with only four 

categories including a single satisfactory 

category. 

4. Asset Thresholds 

As defined in proposed § __.12, the 

agencies propose to raise the asset 

threshold for each bank category. The 

agencies intend to balance the goals of 

providing more clarity, consistency, and 

transparency in the evaluation process, 

with minimizing the associated data 

requirements for smaller banks. 

Specifically, the proposal would modify 

the definition of a small bank to 

increase the asset threshold from $346 

million to $600 million in assets. The 

proposal would create a new 

intermediate bank category that would 

include banks of at least $600 million 

and not more than $2 billion. The 

proposed intermediate bank threshold 

would be higher than the current 

intermediate small bank category, which 

currently includes banks with assets 

between $346 million and $1.384 

billion. Large banks would be defined as 

banks with assets of at least $2 billion, 

which is higher than the current large 

bank threshold of $1.384 billion. A 

calculation of a bank’s assets would be 

based on its average assets over four 

quarters of the calendar year, for two 

consecutive calendar years. If a bank’s 

average assets correspond to two 

different bank size categories in two 

consecutive years, the bank would be 

considered to belong to the smaller of 

the two size categories. The agencies 

would also use this approach for 

calculating a bank’s assets for purposes 

of distinguishing between large banks 

with assets of $10 billion or less from 

large banks with assets of over $10 

billion for purposes of further tailoring 

certain elements of the proposal, as 

discussed in each respective section. As 

also specified in proposed § __.12, the 

agencies propose that both the $600 

million asset size threshold and the $2 

billion asset size threshold would be 

adjusted annually for inflation (based on 

the annual percentage change in a 

measure of the Consumer Price Index). 

The agencies are proposing changes to 

the definition of a small bank in 

recognition of the potential challenges 

associated with regulatory changes for 

banks with more limited capacity. The 

agencies are in the process of seeking 

approval from the SBA to use the 

proposed $600 million threshold, 

adjusted annually for inflation, rather 

than the SBA’s recently updated size 

standards, which include a $750 million 

threshold for small banks.161 In 

requesting this approval, the agencies 

believe that it is appropriate to evaluate 

banks with assets of between $600 

million and $750 million under the 

proposed intermediate banks standards, 

and that these banks have the capacity 

to conduct community development 

activities, as would be a required 

component of the evaluation for 

intermediate, but not small banks. Based 

on an analysis of current bank size 

characteristics, the agencies estimate 

that the proposed change to the small 

bank asset threshold would result in 

approximately 778 banks, representing 2 

percent of all deposits, transitioning 

from the current intermediate-small 

bank category to the proposed small 

bank category.162

At the same time, by replacing the 

current intermediate small bank 

category with a new intermediate bank 

category that starts at a higher asset size 

threshold, the proposal reflects the 

agencies’ view that banks of this size 

should have meaningful capacity to 

conduct community development 

financing, as they do under the current 

approach. 

In proposing to increase the threshold 

for large banks, the agencies considered 

that banks of this size generally have the 

capacity to conduct the range of 

activities that would be evaluated under 

each of the four applicable performance 

tests. The agencies also recognize that 

the proposed Retail Lending Test and 

Community Development Financing test 

would require new data collection and 

reporting and propose a higher asset 

threshold because smaller large banks 

may have more limited capacity. The 

agencies estimate that the proposed 

increase in the large bank threshold 

would result in approximately 216 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33925 

163 12 CFR __.22(c). A bank may elect to have 

only a particular category of its affiliate’s lending 

considered. The basic categories of loans that can 

be considered are home mortgage loans, small 

business loans, small farm loans, community 

development loans and the five categories of 

consumer loans (automobile loans, credit card 

loans, home equity loans, other secured loans, and 

other unsecured loans). See Q&A § __.22(c)(1)–1. 

164 12 CFR __.23(c). 

165 12 CFR __.24(c). 

166 12 CFR __.22(c); __.23(c); and __.24(c). 

167See Q&A § __.22(c)(2)(i)–1. 

168 12 CFR __.22(c)(2)(ii). 

169See Q&A § __.22(c)(2)(i)–1. 

170The proposed rule defines these terms in 

proposed § __.12. 

banks representing approximately 2 

percent of all deposits transitioning 

from the current large bank category to 

the proposed intermediate bank 

category. The agencies considered that 

increasing the large bank asset threshold 

beyond the proposed $2 billion level 

would remove a greater share of banks 

that play a significant role in fulfilling 

low- and moderate-income credit needs 

in local areas from the more 

comprehensive evaluation included in 

the proposed large bank evaluation 

approach. 

Request for Feedback 

Question 49. The agencies’ proposed 

approach to tailoring the performance 

tests that pertain to each bank category 

aims to appropriately balance the 

objectives of maintaining strong CRA 

obligations and recognizing differences 

in bank capacity. What adjustments to 

the proposed evaluation framework 

should be considered to better achieve 

this balance? 

Question 50. The proposed asset 

thresholds consider the associated 

burden related to new regulatory 

changes and their larger impact on 

smaller banks, and it balances this with 

their obligations to meet community 

credit needs. Are there other asset 

thresholds that should be considered 

that strike the appropriate balance of 

these objectives? 

Question 51. Should the agencies 

adopt an asset threshold for small banks 

that differs from the SBA’s size 

standards of $750 million for purposes 

of CRA regulations? Is the proposed 

asset threshold of $600 million 

appropriate? 

B. Affiliate and Other Considerations 

1. Current Approach for Evaluating 

Affiliate Activities 

Under the current CRA regulations, 

banks are not required to include the 

activities of their affiliates in the 

evaluation of their CRA performance. 

Instead, any bank may elect to include 

affiliate lending,163 community 

development investments,164 and 

community development services,165 as 

applicable, in the bank’s evaluation. A 

bank provides the data necessary for 

evaluation if it elects to have the CRA 

activities of its affiliates considered. 

Affiliate activities evaluated under the 

current CRA framework are subject to 

certain constraints.166 In general, an 

affiliate may not claim a loan 

origination or purchase claimed by 

another affiliate; however, a bank may 

count as a purchase a loan originated by 

an affiliate that the bank subsequently 

purchases (even if the affiliate claimed 

the origination for CRA purposes), or 

count as an origination a loan later sold 

to an affiliate (even if the affiliate also 

claims the purchase for CRA purposes), 

provided the same loans are not sold 

several times to inflate their value for 

CRA purposes.167 In addition, if a bank 

elects to have a particular category of 

affiliate lending in a particular 

assessment area considered, all loans of 

that type made by all of its affiliates in 

that particular assessment area must be 

considered.168 For example, the bank 

cannot elect to include only home 

mortgage loans to low- or moderateincome individuals or in low- or 

moderate-income areas made by its 

affiliates and not include home 

mortgage loans to middle- and upperincome individuals or in middle- and 

upper-income areas.169

There are differing views among 

stakeholders on how to evaluate a 

bank’s affiliates’ activities. Some 

stakeholders have expressed support for 

permitting banks to have the option to 

have their affiliates’ activities 

considered in their CRA evaluations. 

These stakeholders maintain that 

activities of bank affiliates are important 

in the overall strategy of a bank to meet 

the needs of the communities it serves. 

Other stakeholders have disagreed with 

the optionality of including affiliate 

activities, particularly affiliate lending, 

stating that doing so creates deficiencies 

in the examination process of a bank 

and could lead to abuse, because there 

are no consequences for affiliates that 

do not address the credit needs of lowand moderate-income individuals and 

in low- and moderate-income 

communities. 

2. Treatment of Certain Bank 

Subsidiaries 

Regarding the treatment of certain 

bank subsidiaries described below, the 

agencies propose: (i) Requiring the 

inclusion of relevant activities of a state 

member bank’s ‘‘operations 

subsidiaries’’ and a national bank’s, 

Federal savings association’s, state nonmember bank’s, and state savings 

association’s ‘‘operating subsidiaries’’ 

(referred to collectively as ‘‘bank 

subsidiaries’’ in this SUPPLEMENTARY

INFORMATION) in the evaluation of the 

relevant bank’s CRA performance; and 

(ii) maintaining the current flexibility 

for banks to choose to include or 

exclude the relevant activities of other 

bank affiliates.170

The agencies believe that where banks 

exercise a high level of ownership, 

control, and management of their 

subsidiaries, the activities of those 

subsidiaries should reasonably be 

attributable to the bank. Moreover, the 

agencies believe that evidence of 

discriminatory or illegal practices by 

these bank subsidiaries should be 

factored into a bank’s performance 

evaluation, because their activities 

would be considered to be a component 

of the bank’s own operations. 

In this regard, the agencies are 

proposing to add a definition of 

‘‘operations subsidiary’’ to the Board’s 

CRA regulation and a definition of 

‘‘operating subsidiary’’ to the FDIC’s 

and OCC’s CRA regulations to identify 

those bank affiliates whose activities 

would be required to be attributed to a 

bank’s CRA performance. 

Specifically, as defined in proposed 

§ __.12 of the Board’s CRA regulation, 

an ‘‘operations subsidiary’’ would mean 

an organization designed to serve, in 

effect, as a separately incorporated 

department of the bank, performing 

functions that the bank is empowered to 

perform directly at locations at which 

the bank is authorized to engage in 

business. As defined in proposed 

§ 25.12 of the OCC’s CRA regulation, an 

‘‘operating subsidiary’’ would mean an 

operating subsidiary as described in: (i) 

12 CFR 5.34 in the case of an operating 

subsidiary of a national bank; and (ii) 12 

CFR 5.38 in the case of an operating 

subsidiary of a Federal or state savings 

association. As defined in proposed 

§ 345.12 of the FDIC’s CRA regulation, 

‘‘operating subsidiary’’ for state nonmember banks would have the same 

meaning as given to the term in 12 CFR 

5.34 of the OCC’s regulations. 

Although the FDIC’s regulations 

define ‘‘subsidiary’’ under 12 CFR 

362.2(r), the definition includes all 

subsidiaries, not just operating 

subsidiaries. Neither the FDIC’s 

regulations nor its implementing statute 

defines an ‘‘operating’’ or ‘‘operations’’ 

subsidiary. The FDIC and OCC, 

therefore, seek comment on whether, for 

purposes of CRA, the proposed 

definition of ‘‘operating subsidiary’’ for 


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33926 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

171See 12 CFR __.28(c) and proposed § __.28(d). 

172See 12 CFR __.22(d) and __.25(d)(2). 

173See id. 

174See id. 

state non-member banks and state 

savings associations would be the best 

approach, or whether the FDIC and OCC 

should consider alternative definitions 

of operating subsidiary for FDICregulated entities for purposes of their 

CRA regulations. For example, the FDIC 

seeks feedback regarding whether, for 

purposes of CRA, the FDIC should 

develop its own definition of operating 

subsidiary or, alternatively, adopt the 

Board’s proposed definition of 

‘‘operations subsidiary.’’ 

Similarly, the Board requests 

comment on the advantages and 

disadvantages of the proposed 

definition of ‘‘operations subsidiary.’’ 

For example, to make the definitions 

among the agencies more uniform, 

should the Board, for purposes of CRA, 

adopt the OCC’s definition of ‘‘operating 

subsidiary’’? Would it be more 

appropriate for the Board to define, for 

purposes of CRA, an ‘‘operations 

subsidiary’’ to be a company that: (i) Is 

domiciled in a state of the United States 

or in the District of Columbia; (ii) 

engages solely in activities in which the 

parent state member bank may engage, 

at locations at which the state member 

bank may engage in the activity, and 

subject to the same limitations as if the 

state member bank were engaging in the 

activity directly; and (iii) is controlled 

(as defined in 12 CFR 225.2(e)) by the 

parent state member bank? What other 

criteria should the Board include in the 

definition of ‘‘operations subsidiary’’ for 

purposes of CRA? 

3. Treatment of Other Bank Affiliates 

The agencies propose that the current 

flexibilities that allow a bank to choose 

to include or exclude the activities of 

other bank affiliates that are not 

considered ‘‘bank subsidiaries’’ would 

be maintained. Thus, under the 

proposed Retail Lending Test, if a bank 

chooses to have the agencies consider 

retail loans within a retail loan category 

that are made or purchased by one or 

more of the bank’s affiliates in a 

particular assessment area, provided 

those loans are not claimed for purposes 

of CRA by any other bank, the agencies 

would consider all of the retail loans 

within that retail loan category made by 

all of the bank’s affiliates in that 

particular assessment area. The agencies 

are also considering an alternative 

approach when a bank chooses to have 

the agencies consider retail loans within 

a retail loan category that are made or 

purchased by one or more of the bank’s 

affiliates in a particular assessment area. 

Under the alternative approach, the 

agencies would consider all of the retail 

loans within that retail loan category 

made by all of the bank’s affiliates in all 

assessment areas. 

Also similar to current practice, the 

agencies propose to retain the provision 

that discriminatory practices by a bank’s 

affiliates could adversely affect a bank’s 

CRA performance if those bank 

affiliates’ loans were submitted by the 

bank for CRA consideration as part of 

the bank’s lending activity. In addition, 

the agencies propose to expand the 

current provision that provides that 

other illegal credit practice by a bank’s 

affiliates could adversely affect a bank’s 

CRA performance to include all illegal 

practices.171

Thus, proposed § __.21(c) would 

provide that the agencies would 

consider retail loans by a bank 

subsidiary unless the bank subsidiary is 

subject to its own CRA requirements. 

Additionally, at a bank’s option, the 

agencies would consider retail loans by 

other affiliates of the bank, if those 

activities are not claimed for purposes 

of CRA by any other bank. With respect 

to bank subsidiaries, and other affiliates 

the bank elects to include in its retail 

lending performance evaluation, the 

proposal would require that: (i) The 

bank provide data on the retail loans of 

those subsidiaries’ and affiliates’ 

pursuant to proposed § __.42; (ii) no 

affiliate may claim a retail loan 

origination or purchase if another bank 

claims, for purposes of CRA, the same 

retail loan origination or purchase; and 

(iii) if a bank elects to have the agencies 

consider retail loans within a particular 

retail loan category made by one or 

more of the bank’s affiliates in a 

particular facility-based assessment 

area, retail lending assessment area, or 

outside retail lending areas (i.e., outside 

of its facility-based assessment areas 

and retail lending assessment areas), the 

bank must elect to have the agencies 

consider all of the retail loans within 

that loan category made by all of the 

bank’s affiliates in that particular 

facility-based assessment area, retail 

lending assessment area, or outside 

retail lending area (i.e., nationwide), 

provided those loans are not claimed for 

purposes of CRA by any other bank. 

Regarding retail services and products 

activities, community development 

financing activities, and community 

development services activities, the 

proposal provides that the agencies 

would consider the activities conducted 

by a bank subsidiary unless the bank 

subsidiary is subject to its own CRA 

requirements. Additionally, at a bank’s 

option, the agencies would consider the 

activities of other affiliates of the bank, 

if those activities are not claimed for 

purposes of CRA by any other bank. 

With respect to bank subsidiaries and 

other affiliates that the bank elects to 

include in its retail services and 

products and community development 

activities performance evaluation, the 

bank would be required to provide data 

on the bank subsidiaries’ and affiliates’ 

activities, as applicable, pursuant to § _

_.42. Further, a bank would not be able 

to claim an affiliate’s activity if any 

other bank claims, for purposes of CRA, 

the same activity. 

4. Community Development Financing 

by a Consortium or a Third Party 

Currently, community development 

loans and community development 

investments by a consortium in which 

the bank participates or by a third party 

in which the bank has invested are 

considered at the bank’s option.172 If the 

bank requests consideration for these 

activities, the bank must report the data 

pertaining to these loans or investments. 

Although the current CRA regulations 

permit participants or investors to 

choose the allocation of qualifying loans 

or investments among themselves for 

consideration, no participant or investor 

may claim a loan origination or loan 

purchase or investment if another 

participant or investor claims the same 

loan origination or purchase.173 In 

addition, the bank may not claim loans 

accounting for more than its percentage 

share (based on the level of its 

participation or investment) of the total 

qualifying loans or investments made by 

the consortium or third party.174

As specified in proposed § __.21(d), 

the agencies propose to retain the 

current flexibility with respect to 

consideration for community 

development loans and investments by 

a consortium in which the bank 

participates or by a third party in which 

the bank has invested. Consistent with 

current regulations, under the proposal, 

a bank that requests to have these 

activities considered may not claim an 

activity claimed by another participant 

or investor and may not claim more 

than its percentage share of the total 

activity made by the consortium or third 

party. In addition, a bank that requests 

consideration for these activities would 

be required to collect and report the 

data on loans or investments for which 

it seeks consideration under the 

Community Development Financing 

Test pursuant to § __.42. 


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175 12 U.S.C. 2906. 

Request for Feedback 

Question 52. The agencies propose to 

require that the activities of a bank’s 

operations and operating subsidiaries be 

included as part of its CRA evaluation, 

as banks exercise a high level of 

ownership, control, and management of 

their subsidiaries, such that the 

activities of these subsidiaries could 

reasonably be attributable directly to the 

bank. What, if any, other factors should 

be taken into account with regard to this 

requirement? 

Question 53. As discussed above, 

what factors and criteria should the 

agencies consider in adopting 

definitions of ‘‘operating subsidiary’’ for 

state non-member banks and state 

savings associations, and ‘‘operations 

subsidiary’’ for state member banks, for 

purposes of this proposed requirement? 

Question 54. When a bank chooses to 

have the agencies consider retail loans 

within a retail loan category that are 

made or purchased by one or more of 

the bank’s affiliates in a particular 

assessment area, should the agencies 

consider all of the retail loans within 

that retail loan category made by all of 

the bank’s affiliates only in that 

particular assessment area, or should 

the agencies then consider all of the 

retail loans made by all of the bank’s 

affiliates within that retail loan category 

in all of the bank’s assessment areas? 

C. Performance Context Information 

Considered 

The agencies propose that each 

performance test would be applied to a 

bank in light of the relevant 

performance context information. Under 

the current CRA regulations, examiners 

rely on a broad range of economic, 

demographic, and bank- and 

community-specific information to 

understand the context in which a 

bank’s record of performance should be 

evaluated. In order to fairly evaluate the 

responsiveness of a bank’s activities, the 

agencies propose that consideration 

would be given to performance context 

information, including the bank’s 

capacity and constraints, its business 

strategy, the needs of the community, 

and the opportunities for lending, 

investments, and services in the 

community. 

The proposed § __.21(e) provides that 

the agencies could consider 

performance context information to the 

extent it is not otherwise considered as 

part of a proposed performance test. 

This reference is intended to 

acknowledge that the proposed 

performance tests incorporate aspects of 

performance context in different ways. 

The agencies propose using benchmarks 

for the performance tests that would 

help inform and tailor CRA evaluations 

to the local communities being served 

by banks. The agencies considered ways 

in which these proposed metrics, 

benchmarks, and approaches would 

directly capture many aspects of 

performance context. For example, the 

proposed community benchmarks for 

the Retail Lending Test metrics, as 

described in Section X, would reflect 

information about an assessment area, 

such as the percentage of owneroccupied residential units, the 

percentage of low-income families, or 

the percentage of small businesses or 

small farms. The market benchmark of 

the Retail Lending Test, as described in 

Section X, would reflect the aggregate 

lending to targeted areas or targeted 

borrowers by all lenders operating in the 

same assessment area. The use of these 

two kinds of benchmarks is intended to 

tailor the Retail Lending Test to the 

lending opportunities and needs that are 

unique to each assessment area. While 

some aspects of performance context are 

already embedded into the proposed 

metrics evaluation approach for the 

Retail Lending Test and Community 

Development Financing Test, there are 

some aspects that are unique to each 

bank that examiners would consider as 

outlined in § __.21(e). For example, this 

would include bank-specific factors 

such as a bank’s past performance, size 

and financial condition, and safety and 

soundness limitations, as well any other 

information provided by the bank about 

community credit and development 

needs of the bank’s local communities. 

As a complement to the proposed 

performance context factors in § __

.21(e), the agencies intend to explore 

ways to provide more information to 

banks and the public on factors 

impacting community credit needs. The 

agencies believe that this could provide 

greater consistency and transparency, 

while also enhancing public 

participation in the identification of 

community credit needs through both 

quantitative and qualitative information. 

Request for Feedback 

Question 55. The agencies request 

feedback on the proposed performance 

context factors in § __.21(e). Are there 

other ways to bring greater clarity to the 

use of performance context factors as 

applied to different performance tests? 

D. Institution Performance Score and 

Assigned Ratings 

As discussed in each performance test 

section and in § __.28, the agencies 

propose to assign conclusions for each 

applicable performance test at each 

applicable level (e.g., facility-based 

assessment areas). The agencies propose 

to retain the five conclusions used in 

current practice: ‘‘Outstanding, ‘‘High 

Satisfactory,’’ ‘‘Low Satisfactory,’’ 

‘‘Needs to Improve,’’ and ‘‘Substantial 

Noncompliance.’’ 

In proposed § __.21(f)(2), the agencies 

are proposing to retain existing language 

regarding assigning ratings in current § _

_.21(c), indicating that the four 

performance ratings that can be assigned 

a bank are ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ and 

‘‘Substantial Noncompliance.’’ The 

agencies have also retained language 

indicating that ratings reflect a bank’s 

record of helping to meet the credit 

needs of its community, including lowand moderate-income neighborhoods, 

consistent with the safe and sound 

operation of a bank. The agencies are 

proposing to add language referencing 

requirements in the CRA statute 175 to 

provide greater clarity regarding which 

geographic areas receive a rating in 

addition to an institution-level rating. 

Specifically, the agencies propose to 

include language indicating that they 

assign to a bank a rating regarding its 

CRA performance overall, across 

performance tests under which the bank 

is evaluated, and for its performance in, 

as applicable, each state, and multistate 

MSA (for any multistate MSA in which 

a bank maintains a branch in two or 

more states within that multistate MSA). 

As is further discussed in Section XVI, 

the agencies provide the methodology 

for assigning conclusions and ratings in 

more detail in the performance test 

sections of the proposed regulation; in 

the assigned conclusions and ratings 

section in § __.28, and in Appendices C 

and D of the proposed regulations. 

For banks other than a small bank or 

a bank evaluated based on a strategic 

plan, the agencies would assign a 

performance score at the state, 

multistate MSA, as applicable, and 

institution level that reflects the precise 

numeric value on a ten-point scale that 

was derived to determine the overall 

rating category, as proposed in § __.28 

and discussed in Section XVI. The 

agencies intend for the performance 

score to provide greater transparency 

regarding a bank’s overall performance, 

such as whether a bank that earned a 

particular rating was close to the 

numeric threshold for a rating that was 

either higher or lower than the rating it 

ultimately received. 

E. Safe and Sound Operations 

In proposed § __.21(g), the agencies 

would retain the requirement, based in 


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33928 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

176 12 U.S.C. 2901. 

177Current interagency guidance on when to 

consider large banks’ consumer lending states, 

‘‘[t]he Agencies interpret ‘substantial majority’ to be 

so significant a portion of the institution’s lending 

activity by number and dollar volume of loans that 

the lending test evaluation would not meaningfully 

reflect its lending performance if consumer loans 

were excluded.’’ See Q&A § __.22(a)(1)–2. 

the CRA statute,176 that a bank’s CRA 

lending, investment, and service 

activities must be consistent with safe 

and sound banking practices, including 

underwriting standards. The agencies 

would also retain the statement that, 

although banks may employ flexible 

underwriting standards for lending that 

benefits low- or moderate-income 

individuals and low- or moderateincome census tracts, they must also be 

consistent with safe and sound 

operations. The agencies are proposing 

certain revisions to the language in this 

section for clarity, including by 

expressly stating that banks may employ 

flexible underwriting standards for 

small business and small farm lending, 

if consistent with safe and sound 

operations. 

VIII. Retail Lending Test Product 

Categories and Major Product Lines 

The agencies propose to update the 

definitions for certain retail lending 

products, to clarify the evaluation of 

automobile lending, to aggregate certain 

retail loan types for evaluation, and to 

develop a clear quantitative threshold 

for determining when to evaluate a 

retail product line under the Retail 

Lending Test. Specifically, the agencies 

seek to improve transparency and 

streamline retail lending evaluations by: 

• Aggregating, respectively, all 

closed-end home mortgage loans, all 

open-end home mortgage loans, and all 

multifamily loans as separate product 

lines for the purposes of evaluation 

under the Retail Lending Test. 

• Adding definitions of small 

business and small farm that align with 

the CFPB’s proposed small business 

definition in its current rulemaking 

pursuant to section 1071 of the DoddFrank Act to minimize burden. 

• Evaluating automobile lending 

using metrics in recognition of its 

importance to low- and moderateincome borrowers and communities. 

• Establishing a clear major product 

line threshold of 15 percent of the dollar 

value of a bank’s retail lending in each 

facility-based assessment area (and, as 

applicable, in each retail lending 

assessment area and in its outside retail 

lending area) to determine whether to 

evaluate, respectively, closed-end home 

mortgage, open-end home mortgage, 

multifamily, small business, and small 

farm lending under the Retail Lending 

Test. 

• Establishing a major product line 

threshold for automobile lending of 15 

percent based on the average of the 

percentage of automobile lending retail 

lending dollars out of total retail lending 

dollars and percentage of automobile 

loans by loan volume out of total retail 

lending by loan volume. 

A. Background 

1. Current Approach to Retail Lending 

Product Lines 

The CRA regulations do not currently 

define major product line. Large banks 

are generally evaluated on all home 

mortgage, small business, and small 

farm loans. Additionally, a large bank’s 

consumer loans are currently 

considered at its option or if these loans 

constitute a substantial majority of the 

bank’s business.177 There is currently no 

established threshold for determining 

whether consumer loans constitute a 

substantial majority of a bank’s 

business, meaning examiner judgment is 

used to determine whether consumer 

loans meet the standard. 

In contrast, small banks, including 

intermediate small banks, are evaluated 

only with respect to those retail lending 

categories that are considered primary 

products or major product lines (‘‘major 

product lines’’). Examiners select small 

bank major product lines for evaluation 

based on a review of relevant 

information, including the bank’s 

business strategy and its areas of 

expertise. Examiners may evaluate all of 

a small bank’s consumer loans taken 

together or select a category of consumer 

lending (e.g., credit card, automobile) if 

those consumer loans are deemed to 

constitute a major product line. 

2. Stakeholder Feedback on Retail 

Lending Product Lines 

Stakeholders have expressed varying 

opinions on setting a threshold amount 

for determining major product lines in 

individual assessment areas. They have 

also diverged on whether a major 

product line designation should be 

based upon a percentage threshold of 

total loans, a certain level of lending 

volume by dollar amount, or a 

combination of the two. For example, 

some community group stakeholders 

have suggested that the retail lending 

threshold should be based on number of 

loans, rather than the dollar amount of 

loans, to emphasize the importance of 

smaller value loans to low- and 

moderate-income borrowers. 

Stakeholders generally supported 

aligning the definitions of small 

business and small farm used for CRA 

purposes to the CFPB proposed 

definition of small business in its 

proposal to effect changes required by 

section 1071 of the Dodd-Frank Act. 

Stakeholders noted that harmonizing 

the definitions across the two 

rulemakings would bring more certainty 

in measuring CRA performance. It 

would also reduce burden related to 

data collection and reporting, 

particularly if institutions could submit 

data for CRA purposes under the format 

of the CFPB’s Section 1071 Rulemaking. 

For consumer lending, industry 

groups generally preferred to retain the 

current approach of having consumer 

loans considered at a bank’s option and 

when such loans amount to a 

substantial majority of a bank’s 

business. Community groups instead 

favored requiring consideration where 

consumer lending amounts reach a 

significant quantitative threshold and 

emphasized that predatory products 

should not receive CRA credit. Most 

stakeholders favored evaluating 

consumer loans as separate categories 

rather than as a single category 

considered in the aggregate. 

B. Retail Lending Test Product 

Categories 

In § __.22(a)(4), the agencies propose 

the following categories of retail lending 

for evaluation under the Retail Lending 

Test’s metrics-based approach described 

in Section IX: Closed-end home 

mortgage loans, open-end home 

mortgage loans, multifamily loans, small 

business loans, small farm loans, and 

automobile loans. 

1. Aggregating Closed-End Home 

Mortgage Loans 

The agencies propose to analyze all 

closed-end home mortgage loans 

secured by a one-to-four unit dwelling 

as a single major product line under the 

Retail Lending Test. The approach 

streamlines the evaluation process for 

retail lending by consolidating several 

related mortgage loan purposes. The 

agencies propose to use metrics to 

evaluate all closed-end home mortgage 

loans under the approach described in 

Section IX. Multifamily loans would be 

evaluated as a product line separate 

from aggregated closed-end or 

aggregated open-end home mortgage 

loans. 

Given the different credit needs that 

these loan purposes fulfill for low- and 

moderate-income borrowers and 

communities, the agencies seek 

feedback on whether to evaluate home 

purchase and home refinance loans 

separately. In general, the agencies also 

request feedback on whether aggregation 

may lead to less transparency in the 


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178See 86 FR 56356 (Oct. 8, 2021), as corrected 

by 86 FR 70771 (Dec. 13, 2021). The CFPB proposed 

the following definition in its Section 1071 

Rulemaking: ‘‘Small business has the same meaning 

as the term ‘small business concern’ in 15 U.S.C. 

632(a), as implemented in 13 CFR 121.101 through 

121.107. Notwithstanding the size standards set 

forth in 13 CFR 121.201, for purposes of this 

subpart, a business is a small business if and only 

if its gross annual revenue, as defined in 

§ 1002.107(a)(14) of this part, for its preceding fiscal 

year is $5 million or less.’’ 86 FR at 56577. 

179Under the CRA regulations, and as proposed 

until the agencies transition to using the CFPB’s 

proposed data collection, a ‘‘small business loan’’ 

means a loan included in ‘‘loans to small 

businesses’’ as defined in the instructions for 

preparation of Call Report. See 12 CFR __.12(v) and 

proposed § __.12. Under the Call Report, a small 

business loan is defined as a loan made to a 

business in an amount of $1 million or less that is 

secured by nonfarm nonresidential properties or 

Continued 

reported metrics when one loan purpose 

takes prominence over another. For 

example, a bank’s home purchase 

lending performance could be obscured 

during periods of high home mortgage 

refinance lending, and a bank’s 

mortgage refinance performance could 

be similarly obscured during periods of 

high home purchase activity. The 

agencies seek feedback on the 

magnitude of this risk, and whether it 

outweighs the efficiency gained from 

more streamlined closed-end home 

mortgage lending evaluations. 

Similarly, the agencies also seek 

feedback on whether to evaluate home 

improvement loans and ‘‘other purpose’’ 

loans reported under HMDA only under 

the Retail Services and Products Test 

described in Section XI. Because home 

purchase and refinance mortgages 

significantly outnumber home 

improvement mortgages, aggregating 

these categories would give less 

emphasis to a bank’s home 

improvement lending to low- or 

moderate-income individuals. 

The agencies also propose to continue 

the current practice of aggregating home 

mortgage loans for owner-occupied 

units and non-owner-occupied 

properties together under the 

appropriate major product line, for 

example within closed-end home 

mortgage loans. This approach provides 

a fuller picture of the bank’s total 

engagement in home mortgage lending 

across different borrower types and 

geographies. 

The agencies also recognize that home 

mortgage loans for non-owner-occupied 

properties can facilitate the provision of 

affordable housing. As such, the 

proposal considers this aspect of a 

bank’s home mortgage lending, along 

with other qualitative aspects of retail 

lending, under the Retail Services and 

Products Test. 

2. Aggregating Open-End Home 

Mortgage Loans 

The agencies propose to aggregate all 

open-end home mortgage loans secured 

by a one-to-four unit dwelling as a 

separate product line under the Retail 

Lending Test. This category would 

include home equity lines of credit 

loans and other open-end lines of credit 

secured by a dwelling. The proposal 

recognizes that open-end home 

mortgage loans and closed-end home 

mortgage loans serve distinct purposes 

to low- and moderate-income borrowers 

and communities that are different 

enough to warrant separate evaluation. 

The agencies propose to use metrics 

to evaluate all open-end home mortgage 

loans under the approach described in 

Section IX. However, the agencies seek 

feedback on whether to instead evaluate 

open-end home mortgage loans 

qualitatively under the Retail Services 

and Products Test described in Section 

XI. A qualitative review would focus on 

the responsiveness of open-end home 

mortgage loans, which may be 

appropriate given the range of uses that 

an open-end home mortgage loan can 

have. Relatedly, lower lending volumes 

for open-end home mortgage loans may 

limit the usefulness of market 

benchmarks under the Retail Lending 

Test, particularly in assessment areas 

with very little open-end home 

mortgage lending. 

3. Multifamily Loans 

The agencies propose to evaluate 

multifamily loans as a separate product 

line under the Retail Lending Test. The 

approach recognizes the role of 

multifamily loans in helping to meet 

community credit needs by financing 

housing in different geographies and for 

tenants of different income levels. 

Consistent with the current approach, 

the proposal also considers the subset of 

multifamily loans that provide 

affordable housing to low- or moderateincome individuals under the 

Community Development Financing 

Test. 

As with other home mortgage loan 

purposes under the Retail Lending Test, 

a bank’s multifamily lending 

performance would be evaluated using 

loan count rather than the dollar 

amount. The agencies also propose to 

evaluate multifamily loans under only 

the geographic distribution test which 

would not consider the income of 

borrowers. Given that few multifamily 

loans are made to low- or moderateincome borrowers, borrower income 

would not meaningfully measure 

whether multifamily loans met 

community credit needs. And solely 

evaluating geographic distributions for 

multifamily loans would account for 

banks that are primarily multifamily 

lenders and might otherwise fail the 

borrower distribution test because they 

do not lend directly to low- or 

moderate-income individuals. 

Alternatively, the agencies seek 

feedback on whether to evaluate 

multifamily loans only under the 

Community Development Financing 

Test, because a bank’s record of serving 

the credit needs of its community 

through multifamily loans may not be 

effectively measured with only 

geographic distributions. For example, 

the geographic distribution of a bank’s 

multifamily loans does not indicate 

whether low- or moderate-income 

individuals benefit from the loans. The 

location of the housing is likely a less 

significant indicator of serving local 

low- or moderate-income needs than its 

affordability to low- and moderateincome residents, which would be 

reviewed under the Community 

Development Financing Test. Relatedly, 

the number of multifamily loans made 

in low- and moderate-income census 

tracts may not adequately reflect its 

value to the community. Unlike home 

mortgages, one multifamily loan could 

represent housing for anywhere from 

five households to hundreds of 

households, which makes loan count a 

poor measure for how multifamily loans 

benefit local communities. 

Under the Community Development 

Financing Test, examiners could 

alternately account for the affordability 

and degree to which multifamily loans 

serve low- or moderate-income tenants. 

This approach would also avoid doublecounting of multifamily lending under 

retail lending and community 

development performance tests. The 

agencies also seek feedback on whether 

an alternative measure of geographic 

loan distribution for multifamily 

lending under the Retail Lending Test 

would be preferable. For example, the 

agencies could evaluate the number of 

units a bank’s multifamily lending 

financed in low- or moderate-income 

census tracts. This measure may better 

accord with the benefit the bank’s 

lending brought to its community. 

4. Small Business and Small Farm 

Loans 

The agencies propose to define ‘‘small 

business’’ and ‘‘small farm’’ in the CRA 

regulations in alignment with the 

CFPB’s proposed definition of small 

business in its Section 1071 

Rulemaking.178 As such, the agencies 

propose to define ‘‘small business’’ as a 

business having gross annual revenues 

of $5 million or less for its preceding 

fiscal year.179 The agencies propose to 


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33930 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

categorized as a commercial or industrial loan. 

Also, under the CRA regulations, and as proposed 

until the agencies transition to using the CFPB’s 

proposed data collection, ‘‘small farm loan’’ means 

a loan included in ‘‘loans to small farms’’ as defined 

in the instructions for preparation of the Call 

Report. See 12 CFR __.12(w) and proposed § __.12. 

Under the Call Report, a small farm loan is defined 

as a loan to a farm in an amount of $500,000 or less 

that is secured by farmland (including farm 

residential and other improvements) or categorized 

as a loan to finance agricultural production or other 

loan to farmers. 

180The agencies estimated the percentage of large 

banks that would have passed various potential 

retail lending volume thresholds at the assessment 

area level based on historical lending and deposits 

data. Comparing those that received ‘‘very good’’ or 

‘‘excellent’’ conclusions (or ‘‘High Satisfactory’’ or 

‘‘Outstanding’’ ratings if applicable) on the lending 

test in the assessment area to those that received 

‘‘poor’’ conclusions (or ‘‘Needs to Improve’’ 

ratings), the agencies found that the largest 

difference in the estimated pass rate occurred at 30 

percent of the market volume benchmark. As a 

caveat, note that these lending test conclusions 

were based on many factors in addition to the 

volume of retail lending, such as loan distributions 

and (for large banks) community development 

lending. Furthermore, examinations under current 

procedures do not use the retail lending volume 

screen the agencies are proposing to evaluate the 

amount of retail lending a bank engages in. These 

data can be referenced in the CRA Analytics Data 

Tables. 

181This assumes the CFPB’s section 1071 

rulemaking is finalized as proposed with a ‘‘small 

business’’ defined as having gross annual revenues 

of $5 million or less. 

define ‘‘small farm’’ as a farm having 

gross annual revenues of $5 million or 

less for its preceding fiscal year. 

Further, when these small business and 

small farm definitions become effective, 

the agencies would use updated 

definitions for ‘‘small business loan’’ 

and ‘‘small farm loan.’’ Specifically, a 

small business loan would be updated 

to mean a loan to a business with gross 

annual revenues of $5 million or less, 

and a small farm loan would be a loan 

to a farm with gross annual revenues of 

$5 million or less. The current 

definition of ‘‘small business loan’’ and 

‘‘small farm loan’’ would remain in 

effect until the new definitions become 

effective. 

The agencies expect the small 

business lending data proposed to be 

collected by the CFPB would be more 

comprehensive than the data currently 

collected and reported by large banks, 

and used by the agencies, under the 

current interagency CRA regulations. 

The CFPB’s proposed data collection 

would represent an improvement over 

small business lending and small farm 

lending data currently captured under 

CRA in two ways, because the CFPB’s 

small business definition would be 

based on the revenue size of the 

business or farm rather than loan size as 

is the case under the current CRA 

regulations.180 First, the CFPB data 

would capture all lending, including 

larger loans, to small businesses and 

small farms meeting the CFPB’s 

proposed definition. Second, the CFPB 

data would exclude loans made to large 

businesses and large farms. 

The agencies are in the process of 

seeking approval from the SBA to use 

the proposed standard of gross annual 

revenues of $5 million or less, 

consistent with the size proposed by the 

CFPB in its Section 1071 Rulemaking, 

rather than the SBA’s size standards.181

The proposed CRA definitions of ‘‘small 

business’’ and ‘‘small farm’’ would 

enable the agencies to expand and 

improve the current analysis of CRA 

small business and small farm lending. 

The agencies’ proposal to leverage the 

CFPB small business loan definition and 

associated data reporting would enable 

the agencies to use borrower and 

geographic distribution metrics that 

provide more insight into banks’ 

performance relative to the demand for 

small business loans in a given 

geographic area. It would also allow for 

an analysis that uses an expanded data 

set measuring loans to small businesses 

of different revenue sizes, including— 

importantly—to the businesses and 

farms with gross annual revenues of 

$250,000 or less, as discussed in Section 

IX. 

Importantly, the agencies’ proposal to 

leverage the CFPB’s definitions would 

reduce bank data collection and 

reporting burden under CRA 

regulations. The agencies would intend 

to eliminate the current CRA small 

business and small farm data collection 

and reporting and replace it with the 

CFPB’s section 1071 data, once 

available, which covered banks would 

be required to collect and report under 

section 1071. The proposed approach is 

responsive to various stakeholders’ 

request that the agencies coordinate the 

small business and small farm 

definitions across the two rulemakings. 

Should both rulemakings be finalized, 

the agencies anticipate making the 

compliance date similar to the 

compliance date in a final rulemaking 

by the CFPB. 

5. Purchased Loans 

The agencies propose to evaluate a 

bank’s record of helping to meet 

community credit needs through the 

origination and purchase of retail loans 

under the Retail Lending Test by 

counting an examined bank’s purchased 

retail loans as equivalent to its retail 

loan originations. The market for 

purchased loans can provide liquidity to 

banks and other lenders, such as CDFIs, 

and extend their capability to originate 

loans to low- and moderate-income 

individuals and in low- and moderateincome areas. Banks may also purchase 

loans to develop business opportunities 

in markets where they otherwise lack 

the on-the-ground ability to originate 

loans. 

On the other hand, some stakeholders 

have argued that purchased loans 

should not receive the same 

consideration as originated loans for 

CRA credit because they require fewer 

business development and borrower 

outreach resources than originating 

loans. And generally, despite their 

potential value in increasing secondarymarket liquidity, purchases of loans 

may do less to extend the availability of 

credit than new originations. This 

concern is particularly acute where loan 

purchases do not directly provide 

liquidity to the originator, such as with 

purchases of seasoned loans that have 

been sold once or more in the past. 

In response, the agencies propose to 

adjust a retail lending conclusion where 

an examiner determines that loan 

purchases reflect loan churning, after 

conducting the retail lending volume 

and distribution analyses. Loan 

churning would occur where loans to 

targeted borrowers or census tracts were 

purchased and sold repeatedly by 

different banks, with the possibility of 

each bank receiving CRA credit 

equivalent to the banks that originated 

the loans. In such cases, the re-purchase 

of loans does not provide additional 

liquidity to the originating banks nor 

additional benefit for low- and 

moderate-income borrowers and areas. 

The agencies’ analysis of historical 

data suggests that some CRA-motivated 

repeat purchases of home mortgage 

loans may be occurring. A review of 

2017 HMDA data found that bank 

purchased low- and moderate-income 

loans are over five times as likely to be 

repurchased by another bank within a 

year as other purchased home mortgage 

loans. The analysis found that 0.6 

percent of home mortgage loans to nonlow- and moderate-income borrowers 

purchased by commercial banks were 

sold to another commercial bank within 

the same year, whereas the share was 

3.3 percent for low- and moderateincome borrower loans. 

The agencies seek feedback on 

whether only loans purchased from the 

loan originator should be eligible for 

CRA consideration. The agencies also 

seek feedback on whether to engage in 

ongoing analysis of HMDA data to 

identify institutions that appear to 

engage in significant churning of 

mortgage loans, with proposed § __.22 

describing this as the purchase of home 

mortgage loans for the sole or primary 


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purpose of inappropriately influencing 

their retail lending performance 

evaluation. Examiners could use such 

analysis to inform their review of a 

bank’s retail lending for potential loan 

churning. 

6. Treatment of Consumer Loans 

Consumer lending can be important 

for fulfilling the credit needs of lowand moderate-income borrowers. The 

agencies propose to define a consumer 

loan as an automobile loan, credit card 

loan, or other secured or unsecured loan 

to one or more individuals for 

household, family, or other personal 

expenditures. However, apart from 

automobile loans, this category spans 

several product categories that are 

heterogeneous in meeting low- and 

moderate-income credit needs and are 

difficult to evaluate on a consistent 

quantitative basis. Therefore, the 

agencies propose to treat automobile 

lending as the sole consumer loan type 

evaluated under the metrics-based 

Retail Lending Test. The agencies 

propose to consider the qualitative 

aspects of all other consumer loans, 

including credit card loans, only under 

the Retail Services and Products Test. 

Automobile Loans. The agencies 

propose to evaluate automobile lending 

under the Retail Lending Test. Under 

proposed § __.12, the agencies propose 

defining an automobile loan as a 

consumer loan extended for the 

purchase of and secured by a new or 

used passenger car or other vehicle, for 

personal use, as defined in Schedule 

RC–C of the Call Report. Automobile 

loans can be important in areas where 

jobs are a significant distance from 

where people reside and where public 

transportation is not readily available. 

Safe and sound automobile loans can 

also serve as a means of building a 

credit history. 

As discussed further in Section XIX, 

the agencies propose requiring new 

automobile lending data collection and 

reporting by banks with assets of over 

$10 billion because the agencies 

recognize that credit reporting agency 

data and other existing market sources 

lack the comprehensiveness required to 

construct the necessary metrics to 

evaluate automobile lending. Collecting 

and maintaining automobile lending 

data would be optional for small banks 

that elect evaluation under the Retail 

Lending Test, for intermediate banks, 

and for banks with assets of $10 billion 

or less. Although limiting data 

collection and reporting requirements 

for automobile lending to only banks 

with assets of over $10 billion would 

have the benefit of tailoring these 

requirements such that they do not 

apply to banks under this asset level, it 

would also lead to less comprehensive 

metrics for all banks, particularly in 

areas where banks with assets of over 

$10 billion have a low market share of 

bank automobile lending. 

Credit Card Loans and Other 

Consumer Loan Categories. The 

agencies propose to evaluate other 

consumer loan categories, including 

credit cards, qualitatively under the 

Retail Services and Products Test. The 

agencies define a credit card loan as a 

line of credit for household, family, or 

other personal expenditures that is 

accessed by a borrower’s use of a credit 

card. A bank’s record of serving the 

credit needs of its community through 

credit card lending may not be 

effectively measured under the Retail 

Lending Test. Credit card lending is 

concentrated among a relatively small 

number of lenders, with many 

designated as limited purpose banks for 

which credit card lending is a large 

share of their overall lending activity. 

While some banks issue credit card 

loans as a small share of their business, 

most of these business lines would not 

meet a major product line threshold for 

inclusion in a CRA evaluation. Further, 

banks may not currently retain or have 

the capability to capture borrower 

income at origination or subsequently as 

cardholders maintain their accounts, 

location, or other data fields relevant to 

constructing appropriate benchmarks 

for credit card lending. As such, credit 

card-specific retail lending metrics 

would likely require new data collection 

and reporting from large banks. 

Instead, the agencies propose to 

qualitatively review whether credit 

cards and other consumer loan 

categories meet low- or moderateincome credit needs under the Retail 

Services and Products Test. Under this 

approach examiners would review the 

responsiveness of these credit products 

by considering the number of low- and 

moderate-income customers using each 

selected product and how they use the 

product, including rates of successful 

repayment under the original loan 

terms. Other aspects of responsiveness 

could include the loan terms, 

underwriting, pricing, and safeguards 

that minimize adverse borrower 

outcomes. 

The agencies’ overall approach to 

consumer loans recognizes that with the 

exception of automobile lending, 

consumer products are originated, 

structured, and maintained differently 

than home mortgage, small business, 

and small farm loans. Accordingly, the 

agencies seek feedback on whether 

evaluating all consumer lending 

products, including automobile loans, 

qualitatively under the Retail Services 

and Products Test would better meet the 

overarching goals of CRA 

modernization. 

Request for Feedback 

Question 56. Should the agencies 

aggregate closed-end home mortgage 

loans of all purposes? Or should the 

agencies evaluate loans with different 

purposes separately given that the 

factors driving demand for home 

purchase, home refinance, and other 

purpose home mortgage loans vary over 

time and meet different credit needs? 

Question 57. Should the agencies 

exclude home improvement and other 

purpose closed-end home mortgage 

loans from the closed-end home 

mortgage loan product category to 

emphasize home purchase and 

refinance lending? If so, should home 

improvement and other purpose closedend home mortgage loans be evaluated 

under the Retail Lending Test as a 

distinct product category or 

qualitatively under the Retail Services 

and Products Test? 

Question 58. Should the agencies 

include closed-end non-owner-occupied 

housing lending in the closed-end home 

mortgage loan product category? 

Question 59. Should open-end home 

mortgage loans be evaluated 

qualitatively under the Retail Services 

and Products Test rather than with 

metrics under the Retail Lending Test? 

Question 60. Should multifamily 

lending be evaluated under the Retail 

Lending Test and the Community 

Development Financing Test (or the 

Community Development Test for 

Wholesale or Limited Purpose Banks)? 

Or should multifamily lending be 

instead evaluated only under the 

Community Development Financing 

Test? 

Question 61. Should banks that are 

primarily multifamily lenders be 

designated as limited purpose banks 

and have their multifamily lending 

evaluated only under the Community 

Development Financing Test? 

Question 62. Should the agencies 

adopt a size standard for small business 

loans and small farm loans that differs 

from the SBA’s size standards for 

purposes of the CRA? Is the proposed 

size standard of gross annual revenues 

of $5 million or less, which is consistent 

with the size standard proposed by the 

CFPB in its Section 1071 Rulemaking, 

appropriate? Should the CRA 

compliance date for updated ‘‘small 

business,’’ ‘‘small business loan,’’ 

‘‘small farm,’’ and ‘‘small farm loan’’ 

definitions be directly aligned with a 

future compliance date in the CFPB’s 

Section 1071 Rulemaking, or should the 


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33932 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

agencies provide an additional year after 

the proposed updated CRA definitions 

become effective? 

Question 63. Should the agencies’ 

current small business loan and small 

farm loan definitions sunset on the 

compliance date of the definitions 

proposed by the agencies? 

Question 64. Should retail loan 

purchases be treated as equivalent to 

loan originations? If so, should 

consideration be limited to certain 

purchases—such as from a CDFI or 

directly from the originator? What, if 

any, other restrictions should be placed 

on the consideration of purchased 

loans? 

Question 65. Would it be appropriate 

to consider information indicating that 

retail loan purchases were made for the 

sole or primary purpose of 

inappropriately influencing the bank’s 

retail lending performance evaluation as 

an additional factor in considering the 

bank’s performance under the metrics or 

should such purchased loans be 

removed from the bank’s metrics? 

Question 66. Do the benefits of 

evaluating automobile lending under 

the metrics-based Retail Lending Test 

outweigh the potential downsides, 

particularly related to data collection 

and reporting burden? In the alternative, 

should the agencies adopt a qualitative 

approach to evaluate automobile 

lending for all banks under the 

proposed Retail Lending Test? 

Question 67. Should credit cards be 

included in CRA evaluations? If so, 

when credit card loans constitute a 

major project line, should they be 

evaluated quantitatively under the 

proposed Retail Lending Test or 

qualitatively under the proposed Retail 

Services and Products Test? 

Question 68. What data collection and 

reporting challenges, if any, for credit 

card loans could adversely affect the 

accuracy of metrics? 

Question 69. Should the agencies 

adopt a qualitative approach to evaluate 

consumer loans? Should qualitative 

evaluation be limited to certain 

consumer loan categories or types? 

C. Major Product Line Approach 

For banks evaluated under the Retail 

Lending Test, the agencies propose 

using a major product line standard for 

determining when to evaluate a bank’s 

closed-end home mortgage, open-end 

home mortgage, multifamily, small 

business, small farm, and automobile 

lending. The agencies propose to use a 

different standard for automobile loans 

than the other product lines to account 

for the generally lower dollar value of 

automobile loans. 

1. Closed-End Home Mortgage, OpenEnd Home Mortgage, Multifamily, Small 

Business, and Small Farm Major 

Product Line Standard 

The agencies propose to define major 

product lines for each of a bank’s 

facility-based assessment areas and, as 

applicable, for each of its retail lending 

assessment areas and the outside retail 

lending area as a retail lending product 

line constituting 15 percent or more of 

the dollar value of the bank’s retail 

lending in the respective geography. 

The proposal focuses on evaluating 

the retail lending products with the 

biggest impact at each bank and within 

its community. For large banks, the 

proposal would remove less significant, 

incidental home mortgage, small 

business, and small farm product lines 

currently evaluated by default in CRA 

examinations. Small banks that opt into 

the Retail Lending Test would benefit 

from the predictability associated with 

operating under a single defined 

standard for identifying major product 

lines. And all banks would benefit from 

more streamlined retail lending 

evaluations that focus only on their 

most significant retail lending products. 

The proposed definition also ties the 

major product line designation to a 

bank’s retail lending focus in individual 

markets. For example, by focusing on 

major product lines at the assessment 

area or geographical level, a bank that 

primarily extends home mortgage and 

small business loans, but also 

specializes in small farm lending in a 

handful of rural assessment areas would 

have its small farm lending considered 

in those rural assessment areas, but not 

in assessment areas where the bank 

makes few or no small farm loans. 

Lastly, by using a standard specific to 

each facility-based assessment area and 

retail lending assessment area, the 

approach captures lending that affects 

local communities even if it might not 

meet a 15 percent standard at the 

institution level. 

The agencies propose to divide retail 

lending into six distinct categories 

(closed-end home mortgage, open-end 

home mortgage, multifamily, small 

business, small farm, and automobile 

lending). As such, every assessment area 

in which a bank conducts any retail 

lending would have at least one product 

that represents at least 16.6 percent of 

the dollar volume of its total retail 

lending. The agencies propose to set the 

major product line threshold below that 

number at 15 percent to preclude the 

possibility of a bank having no major 

product lines to evaluate. 

The agencies request feedback on 

different standards for determining 

when to evaluate multifamily loans 

under the Retail Lending Test. For 

example, multifamily lending could be 

considered a major product line only 

where the bank is a monoline 

multifamily lender or is predominantly 

a multifamily lender within the 

applicable geographic area (i.e., facilitybased assessment area, retail lending 

assessment area, or outside of facilitybased assessment areas and retail 

lending areas, as applicable, at the 

institution level). The ‘‘predominantly’’ 

standard could mean either that 

multifamily lending ranks first in the 

dollar amount of the bank’s retail 

lending in an assessment area or that it 

accounts for a significant percentage of 

the dollar volume of a bank’s retail 

lending, for example 50 percent. This 

approach helps ensure that the agencies 

assess a bank’s relevant multifamily 

lending performance with respect to 

meeting community credit needs using 

the proposed Retail Lending Test’s retail 

lending volume screen and geographic 

distribution measures. 

2. Automobile Loan Major Product Line 

Standard 

The agencies propose to use both the 

dollar volume and loan count of a 

bank’s automobile lending to determine 

when to evaluate it as a major product 

line under the Retail Lending Test. 

Specifically, the agencies propose a 15 

percent threshold based on the average 

of the percentage of automobile lending 

dollars out of total retail lending dollars, 

and the percentage of automobile loans 

by loan count out of total retail loan 

count in the relevant area. For example, 

if a bank’s automobile lending accounts 

for 10 percent of its total retail lending 

dollars and 22 percent of its total retail 

loans by loan count in an applicable 

geographic area (facility-based 

assessment area, retail lending 

assessment area, or outside of facilitybased assessment areas and retail 

lending assessment areas at the 

institution level), its combined 

percentage would be 16 percent, and 

automobile lending would be evaluated 

as a major product line. 

As automobile loans generally have a 

lower dollar value than the other 

products considered under the Retail 

Lending Test, automobile loans would 

be rarely evaluated under the 15 percent 

dollar volume-only threshold applicable 

to the other product lines. Instead, by 

considering both the average of dollar 

volume and loan count percentage, the 

agencies’ approach would treat 

automobile loans as a major product 

line for banks that would not otherwise 

meet a standard that considers only 

dollar volume. This approach would 


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help account for the lower dollar value 

of automobile loans while also 

recognizing that among other categories 

of consumer loans, automobile loans 

can fulfill unique and important credit 

needs for low- and moderate-income 

borrowers and communities. 

Request for Feedback 

Question 70. Should the agencies use 

a different standard for determining 

when to evaluate closed-end home 

mortgage, open-end home mortgage, 

multifamily, small business, and small 

farm lending? If so, what methodology 

should the agencies use and why? 

Should the agencies use a different 

standard for determining when to 

evaluate automobile loans? 

Question 71. Should the agencies use 

a different standard for determining 

when to evaluate multifamily loans 

under the Retail Lending Test? If so, 

should the standard be dependent on 

whether the lender is a monoline 

multifamily lender or is predominantly 

a multifamily lender within the 

geographic area? Relatedly, what should 

a ‘‘predominantly’’ standard be for 

determining whether multifamily loans 

constitute a major product line entail? 

IX. Retail Lending Test Evaluation 

Framework for Facility-Based 

Assessment Areas and Retail Lending 

Assessment Areas 

A. Overview of Proposed Retail Lending 

Test Approach 

The agencies propose to use metrics 

and performance standards to evaluate a 

bank’s lending to low-income and 

moderate-income borrowers, small 

businesses and small farms, and lowincome and moderate-income 

neighborhoods in its assessment areas. 

The metrics and performance standards 

would apply to all large banks and 

intermediate banks. The approach is 

intended to make a bank’s retail lending 

evaluation more transparent and 

predictable by specifying quantitative 

standards for lending consistent with 

achieving, for example, a ‘‘Low 

Satisfactory’’ or ‘‘Outstanding’’ 

conclusion in an assessment area. 

The agencies propose two sets of 

metrics for this test. First, the agencies 

propose to use a retail lending volume 

screen that would assess a bank’s 

volume of retail lending relative to its 

deposit base, compared to other banks 

in each facility-based assessment area. 

Second, the agencies propose a series of 

distribution metrics and dynamic 

thresholds to individually evaluate each 

of a bank’s major product lines, in each 

facility-based assessment area, and, as 

applicable, in each retail lending 

assessment area and outside retail 

lending area. These metrics would 

separately evaluate the geographic 

distribution and borrower distribution 

of a bank’s lending for each product 

line. As part of this evaluation, the 

metrics would distinguish between 

different income levels and business 

and farm sizes, with separate metrics for 

lending to low- and to moderate-income 

census tracts; to low- and to moderateincome borrowers; and to different sizes 

of small businesses and small farms. 

Each metric would be compared to 

thresholds that would differ across 

assessment areas and across different 

business cycles based on local data that 

reflects credit demand and lending 

opportunities, with the intent of 

incorporating performance context 

information directly into the metricbased approach. 

Through these metrics and thresholds, 

the agencies propose to assign a score 

reflecting performance on each of a 

bank’s major product lines in each 

assessment area and outside retail 

lending area, as applicable. For 

example, under the proposal, a bank 

may receive a score reflecting its closedend home mortgage lending 

performance and a different score for its 

small business lending performance in a 

facility-based assessment area, 

providing transparency at the productline level and showing more granularly 

how a bank is serving the credit needs 

of its communities. The scores across 

the various major product lines would 

be combined to determine a 

recommended Retail Lending Test 

conclusion for each assessment area, 

weighted by the dollar volume 

associated with each product line. This 

aggregation would allow strong 

performance in one product line to 

potentially offset weaker performance in 

another product line. The agencies also 

propose to consider specific additional 

factors discussed in § __.22(e) that 

would allow for adjusting a bank’s 

recommended conclusion, such as the 

bank’s dispersion of loans to different 

geographies in the assessment area, or 

missing or faulty data that affects the 

accuracy of the metrics or thresholds. 

B. Background 

1. Current Approach to Retail Lending 

Evaluations 

Under the current CRA regulations, 

the lending test includes quantitative 

and qualitative criteria, but does not 

specify what level of lending is needed 

to achieve ‘‘Satisfactory’’ or 

‘‘Outstanding’’ performance. Large 

banks are evaluated based on the 

volume of retail lending activity, in 

number and dollars, within their 

assessment areas as well as the 

geographic distribution and borrower 

distribution of retail lending. 

Large bank lending activity is 

evaluated to determine whether the 

bank has a sufficient aggregate value of 

lending in its assessment areas given its 

performance context, including its 

capacity and the lending opportunities 

available in its assessment areas. 

Examiners consider the number and 

dollar amount of loans in assessment 

areas and the number of loans inside 

and outside of assessment areas. These 

approaches rely on examiner judgment 

to draw a conclusion about a bank’s 

level of lending. 

For the geographic distribution 

analysis, examiners evaluate the 

distribution of a bank’s retail loans in 

low-income, moderate-income, middleincome, and upper-income census 

tracts. Examiners review the geographic 

distribution of home mortgage loans by 

income category and compare the 

percentage distribution of lending to the 

percentage of owner-occupied housing 

units in the census tracts. Similarly, in 

each income category of census tract, 

examiners compare small business 

lending to the percentage distribution of 

businesses; small farm lending to the 

percentage distribution of farms; and 

consumer lending to the percentage 

distribution of households in each 

category of census tract, as applicable. 

For the borrower distribution 

analysis, examiners evaluate the 

distribution of a bank’s retail loans 

based on specified borrower 

characteristics, such as the income level 

of borrowers for home mortgage lending. 

The comparators used to inform the 

borrower distribution analysis are 

families by income level for home 

mortgage lending; businesses with gross 

annual revenues of $1 million or less for 

small business lending; farms with gross 

annual revenues of $1 million or less for 

small farm lending; and households by 

income level for consumer lending. 

Examiners supplement these 

distribution analyses by also reviewing 

the dispersion of a bank’s loans 

throughout census tracts of different 

income levels in its assessment areas to 

determine if there are conspicuous 

lending gaps. 

Small banks are evaluated using 

similar, but simplified standards that do 

not rely on data collection or reporting. 

Instead of the lending activity criteria, a 

small bank is evaluated based on its 

loan-to-deposit ratio and the portion of 

its lending within its assessment areas. 

Performance for the loan-to-deposit 

calculation is based on the balance sheet 

dollar values at the institution level, and 


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a review of the number of loans made 

inside and outside of assessment areas 

to determine whether a bank’s lending 

activity is sufficient. The geographic 

and borrower distribution for small 

banks is similar to that for large banks 

but uses bank data collected in the 

normal course of business. The purpose 

of evaluating lending activity for both 

small and large banks is the same—to 

determine whether a bank has a 

sufficient aggregate value of lending in 

its assessment areas in light of a bank’s 

performance context, including its 

capacity and the lending opportunities 

available in its assessment areas. 

2. Stakeholder Feedback on Retail 

Lending Evaluations 

Stakeholders generally supported 

using metrics to increase the clarity and 

transparency of retail lending 

evaluations. However, community 

stakeholders emphasized that the 

performance measures and thresholds 

should be sufficiently rigorous to ensure 

that banks help to meet credit needs in 

their communities. Stakeholders were 

mixed on whether the low- income and 

moderate-income categories of 

borrowers should be combined when 

calculating the distribution metrics, but 

many recommended analyzing them 

separately. And most stakeholders 

agreed that performance context and 

qualitative aspects of performance 

should continue as an important 

dimension of evaluations. 

C. Retail Lending Volume Screen 

In § __.22(c), the agencies propose a 

retail lending volume screen that 

measures the total dollar volume of a 

bank’s retail lending relative to its 

presence and capacity to lend in a 

facility-based assessment area compared 

to peer lenders. Large banks that 

underperform on the retail lending 

volume screen would have, as 

applicable, a recommended ‘‘Needs to 

Improve’’ or ‘‘Substantial 

Noncompliance’’ Retail Lending Test 

conclusion in a facility-based 

assessment area. 

The screen serves to ensure that a 

bank’s performance evaluation reflects 

the amount of a bank’s retail lending 

relative to its presence and lending 

capacity in an assessment area. A bank 

fails to meet the credit needs of its 

entire community if it makes too few 

loans relative to its community 

presence, capacity, and local 

opportunities, even if those loans 

happened to be concentrated among, for 

example, low- and moderate-income 

borrowers and low- and moderateincome census tracts. 

1. Bank Volume Metric 

In each facility-based assessment area, 

the agencies propose using a bank 

volume metric as the measure of how 

much of a bank’s local capacity has been 

oriented toward retail lending. This 

measure is calculated as a ratio, with the 

average annual dollar amount of a 

bank’s originations and purchases of all 

retail loans in the numerator—including 

home mortgage, multifamily, small 

business, small farm, and automobile 

loans. This overall retail lending 

amount would be divided by the annual 

average amount of its deposits collected 

from that assessment area in the 

denominator, if the bank collects and 

maintains this data. 

As proposed in § __.42, collecting and 

maintaining deposits data would be 

required for large banks with assets of 

over $10 billion, and would be optional 

for small banks that elect evaluation 

under the Retail Lending Test, for 

intermediate banks, and for large banks 

with assets of $10 billion or less. For 

any bank evaluated under the Retail 

Lending Test that did not collect 

deposits data, the agencies propose to 

use the deposits assigned to the banks’ 

branches in each assessment area as 

reported in the FDIC’s Summary of 

Deposits to calculate the local deposit 

base in the denominator. As discussed 

elsewhere in this SUPPLEMENTARY

INFORMATION, deposits data that are 

collected and reported as proposed in 

§ __.42 would facilitate metrics that 

accurately reflect a bank’s deposits 

inside and outside of its assessment 

areas. By contrast, the FDIC’s Summary 

of Deposits data necessarily assigns all 

deposits to bank branch locations and 

does not identify the amount or 

percentage of deposits sourced from 

outside of a bank’s facility-based 

assessment areas. As a result, for a bank 

with assets of $10 billion or less that, in 

fact, sources deposits from outside of its 

facility-based assessment areas, electing 

to collect and maintain deposits data 

could meaningfully increase the bank 

volume metric in a facility-based 

assessment area by decreasing the 

amount of deposits included in the 

denominator of that metric. Conversely, 

electing not to collect and maintain 

deposits for such a bank may result in 

a lower bank volume metric, because 

deposits sourced from outside of the 

assessment area would then be included 

in the denominator of the metric. 

The proposed retail lending volume 

screen uses the dollar amount of a 

bank’s retail lending instead of the 

number of loans. Although this 

approach gives more credit to larger 

loans, the agencies propose to use total 

dollar amount to measure how fully a 

bank has utilized its capacity, as 

measured using total deposit dollars. 

The dollars of deposits also serves as a 

measure of the extent of a bank’s local 

presence. 

2. Assessing Performance Using Market 

Volume Benchmark and Threshold 

To assess the level of a bank’s retail 

lending volume, as measured by the 

bank volume metric, relative to local 

opportunities, the agencies propose 

using a market volume benchmark that 

reflects the level of lending by all large 

banks in the facility-based assessment 

area. The market volume benchmark 

would measure the average annual 

dollar amount of retail originations in 

the assessment area by all large banks 

that operate a branch in the assessment 

area in the numerator, divided by the 

annual average amount of deposits 

collected by those same banks from that 

assessment area in the denominator. 

The dollars of deposits in the 

denominator would be based on 

reported data for large banks with assets 

of over $10 billion, and on the FDIC’s 

Summary of Deposits for large banks 

with assets of $10 billion or less, using 

the deposits assigned to branches 

located in each assessment area for 

which the benchmark is calculated. 

Under the proposal, the denominator 

of the market volume benchmark would 

not include deposits data voluntarily 

collected and maintained by a large 

bank with assets of $10 billion or less, 

because the agencies would not require 

a large bank of this size to also report 

that deposits data. Instead, the agencies 

would continue using FDIC’s Summary 

of Deposits data for the market volume 

benchmark, even when a bank 

voluntarily collects and maintains more 

specific information for its own 

examination. The agencies acknowledge 

that there are tradeoffs to this approach. 

On the one hand, this approach reduces 

the burden of a bank that chooses to 

voluntarily collect and maintain 

deposits data by not also having to 

report that data. On the other hand, the 

agencies would not be able to use that 

collected and maintained deposits data 

to construct more accurate market 

volume benchmarks. This downside 

would be most pronounced in markets 

where banks with assets of $10 billion 

or less have a large market share. The 

agencies seek feedback about these 

tradeoffs and the alternative approach of 

requiring a large bank with assets of $10 

billion or less to also report deposits 

data if it wants to voluntarily collect 

and maintain deposits data for use in its 

own examination. 


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182The agencies estimated the percentage of large 

banks that would have passed various potential 

retail lending volume thresholds at the assessment 

area level based on historical lending and deposits 

data. Comparing those that received ‘‘very good’’ or 

‘‘excellent’’ conclusions (or ‘‘High Satisfactory’’ or 

‘‘Outstanding’’ ratings if applicable) on the lending 

test in the assessment area to those that received 

‘‘poor’’ conclusions (or ‘‘Needs to Improve’’ 

ratings), the agencies found that the largest 

difference in the estimated pass rate occurred at 30 

percent of the market volume benchmark. These 

lending test conclusions were based on many 

factors in addition to the volume of retail lending, 

such as loan distributions and (for large banks) 

community development lending. Furthermore, 

examinations under current procedures do not use 

the retail lending volume screen the agencies are 

proposing to evaluate the amount of retail lending 

a bank engages in. These data can be referenced in 

the CRA Analytics Data Tables. 

The agencies also seek feedback on 

whether assigning FDIC’s Summary of 

Deposits data to the county in which a 

bank has a branch, as provided in § __

.12, is the best way to allocate these 

deposits for purposes of constructing 

the market volume benchmark. An 

alternative approach to incorporating 

Summary of Deposits data into the 

market volume benchmark could be 

proportionately allocating the deposits 

associated with a branch of a large bank 

with assets of $10 billion or less to each 

of the counties of that bank’s assessment 

area where the branch is located. 

However, without more data about the 

location of deposits, it is hard for the 

agencies to determine whether this 

method would be more or less accurate 

than assigning deposits to a single 

county. 

Under the proposal, banks would pass 

the retail lending volume screen with a 

bank volume metric of at least 30 

percent of the market volume 

benchmark. If a bank meets or exceeds 

this threshold, the agencies would 

evaluate the bank’s major product lines 

under the distribution metrics approach, 

described in Sections IX.D and IX.E, and 

the bank would be eligible for any 

recommended performance conclusion. 

The relatively low threshold set at 30 

percent of the market volume 

benchmark helps ensure that passing 

the screen would not be onerous for 

banks with different business strategies. 

In particular, banks that generally hold 

loans on their balance sheet may have 

substantially lower bank volume metrics 

than banks that generally sell them on 

the secondary market. The agencies 

therefore propose to set the threshold at 

a level that is well below local averages, 

so banks with various business 

strategies could meet the threshold. 

Based on an analysis of historical 

lending data and assessment area level 

conclusions on the Retail Lending Test, 

the agencies found that a threshold set 

at 30 percent of the market volume 

benchmark created the largest 

distinction in passing rates between 

banks whose performance was judged 

by their examiner to be poor from those 

whose performance was judged to be 

very good or excellent.182 Barring 

additional mitigating information, banks 

that fail to meet 30 percent or more of 

the market volume benchmark are 

substantially underperforming their 

peers in terms of meeting the credit 

needs of their communities. 

3. Additional Review 

The proposal recognizes that not all 

performance context factors are 

captured in the metrics. Therefore, the 

proposal requires a review of specific 

performance context factors to 

determine whether there is an 

acceptable basis for a bank failing to 

meet the threshold for the retail lending 

volume screen in a facility-based 

assessment area. In particular, 

institutional capacity and constraints 

would be considered to determine if a 

bank’s lending volume is sufficient. 

Institutional capacity and constraints 

may include the financial condition of 

a bank, the presence or lack thereof of 

other lenders in the geographic area, 

safety and soundness limitations, the 

bank’s business strategy (for example if 

it holds loans in portfolio or sells them 

into the secondary market), or other 

factors that limit the bank’s ability to 

lend in the assessment area. If the 

performance context assessment 

concludes that the bank failed to meet 

the threshold for the retail lending 

volume screen due to institutional 

capacity or other constraints, the bank 

would pass the retail lending volume 

screen and the agencies would then 

consider the retail loan distribution of 

its major product lines. If such capacity 

and constraints issues do not account 

for the bank’s insufficient volume of 

bank retail lending in the assessment 

area, the agencies propose to consider 

the bank to have failed the retail lending 

volume screen. 

Where a large bank fails the retail 

lending volume screen, barring the 

performance context assessment 

described above, the agencies propose to 

assign that bank either a ‘‘Needs to 

Improve’’ or ‘‘Substantial 

Noncompliance’’ conclusion on the 

Retail Lending Test in the assessment 

area. Which of these two conclusions 

the large bank receives would be 

determined by a consideration of 

additional factors, such as the margin by 

which the bank volume metric fell short 

of the threshold, and the bank’s 

performance on the retail distribution 

metrics described in Sections IX.D and 

IX.E, below. The agencies propose that 

this approach would apply to both large 

banks with assets of over $10 billion 

and large banks with assets of $10 

billion or less. 

Where an intermediate bank or a 

small bank opting to be evaluated under 

the Retail Lending Test fails the retail 

lending volume screen, the agencies 

propose that the bank would not be 

limited to receiving only a conclusion of 

‘‘Needs to Improve’’ or ‘‘Substantial 

Noncompliance’’ on the Retail Lending 

Test in that assessment area. Instead, the 

bank’s outcome on the retail lending 

volume screen would be reviewed as an 

additional factor indicative of its 

lending performance and considered 

when reaching Retail Lending Test 

conclusions for facility-based 

assessment areas as discussed in Section 

IX.H. 

This manual review accounts for the 

lower capacity of intermediate and 

small banks to ensure that their lending 

is commensurate with their deposits. In 

addition, this approach would account 

for the proposed use of FDIC’s Summary 

of Deposits data to calculate the bank 

volume metric for intermediate banks 

and for small banks that opt into the 

Retail Lending Test (if the bank does not 

voluntarily collect and maintain 

deposits data under proposed § __.42). 

Specifically, the agencies have 

considered that the FDIC’s Summary of 

Deposits data may not always accurately 

reflect the location of depositors, which 

could affect whether these banks 

underperform on the retail lending 

volume screen. As such, a manual 

review by examiners could account for 

factors related to a bank’s performance, 

including the degree to which a bank 

gathers deposits and make loans outside 

of its facility-based assessment areas. 

The agencies considered whether this 

approach of reviewing an intermediate 

or small bank’s outcome on the retail 

lending volume screen as an additional 

factor, but not limiting the Retail 

Lending Test conclusion the bank could 

receive in an assessment area in which 

it failed the screen, should also be 

extended to large banks with assets of 

$10 billion or less. However, the 

agencies believe that these large banks 

have greater capacity to ensure their 

lending is commensurate with their 

deposits, and to voluntarily collect and 

maintain deposits data in cases where 

the bank’s FDIC’s Summary of Deposits 

data do not accurately reflect the 

location of the bank’s depositors. 

Request for Feedback 

Question 72. For calculating the bank 

volume metric, what alternatives should 


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33936 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

the agencies consider to the proposed 

approach of using collected deposits 

data for large banks with assets of over 

$10 billion and for other banks that elect 

to collect this data, and using the FDIC’s 

Summary of Deposits data for other 

banks that do not collect this data? For 

calculating the market volume 

benchmark, what alternatives should 

the agencies consider to the proposed 

approach of using reported deposits 

data for large banks with assets of over 

$10 billion, and using the FDIC’s 

Summary of Deposits data for large 

banks with assets of $10 billion or less? 

Question 73. Should large banks 

receive a recommended Retail Lending 

Test conclusion of ‘‘Substantial 

Noncompliance’’ for performance below 

a threshold lower than 30 percent (e.g., 

15 percent of the market volume 

benchmark) on the retail lending 

volume screen? 

D. Bank Geographic Distribution Metrics 

and Borrower Distribution Metrics 

In § __.22(d), the agencies propose to 

use a set of geographic distribution and 

borrower distribution metrics to 

measure bank performance for each 

major product line. The geographic 

distribution metrics measure the level of 

bank lending in low-income and 

moderate-income census tracts in an 

assessment area. The borrower 

distribution metrics measure the level of 

lending to low-income borrowers, 

moderate-income borrowers, small 

businesses or small farms with gross 

annual revenues of $250,000 or less, and 

small businesses or small farms with 

gross annual revenues greater than 

$250,000 but less than or equal to $1 

million, depending on the product line 

being evaluated. The agencies would 

calculate these distribution metrics for 

each major product line evaluated under 

the Retail Lending Test in a facilitybased assessment area or retail lending 

assessment area, as applicable. 

1. Overview 

To calculate these distribution 

metrics, the agencies propose using the 

number of a bank’s loans, not the dollar 

amount of those loans. For example, 

under the proposed approach, one 

$250,000 home mortgage would count 

the same as one $80,000 home mortgage. 

This approach emphasizes the number 

of households, small businesses, and 

small farms served within each product 

line, and avoids weighting larger loans 

(and hence higher-income borrowers) 

more heavily than smaller loans, as 

would occur if the metrics instead used 

dollar amounts. As a result, the 

proposed approach reflects the 

importance and responsiveness of 

smaller value loans to meet the needs of 

lower-income borrowers, smaller 

businesses, and smaller farms. An 

approach that encouraged larger retail 

loans over smaller ones would not 

appropriately emphasize smaller-value 

loans that meet the credit needs of lowand moderate-income communities. 

Table 3 shows the specific 

distribution metric components the 

agencies propose calculating for each 

product line evaluated under the Retail 

Lending Test. 

TABLE 3 TO SECTION l.22—LENDING DISTRIBUTIONS CONSIDERED IN THE BANK METRICS

Retail lending product line 

Geographic distribution metrics 

(percentage of bank loans for the 

following categories) 

Borrower distribution metrics 

(percentage of bank loans for the 

following categories) 

Closed-End Home Mortgage Lending ............... Low-Income Census Tracts ............................. Low-Income Borrowers. 

Moderate-Income Census Tracts ..................... Moderate-Income Borrowers. 

Open-End Home Mortgage Lending ................. Low-Income Census Tracts ............................. Low-Income Borrowers. 

Moderate-Income Census Tracts ..................... Moderate-Income Borrowers. 

Multifamily Lending ............................................ Low-Income Census Tracts ............................. N/A. 

Moderate-Income Census Tracts.

Small Business Lending .................................... Low-Income Census Tracts ............................. Small businesses with gross annual revenues 

of $250,000 or less. 

Moderate-Income Census Tracts ..................... Small businesses with gross annual revenues 

of more than $250,000 but less than or 

equal to $1 million. 

Small Farm Lending .......................................... Low-Income Census Tracts ............................. Small farms with gross annual revenues of 

$250,000 or less. 

Moderate-Income Census Tracts ..................... Small farms with gross annual revenues of 

more than $250,000 but less than or equal 

to $1 million. 

Automobile Lending ........................................... Low-Income Census Tracts ............................. Low-Income Borrowers. 

Moderate-Income Census Tracts ..................... Moderate-Income Borrowers. 

The proposed distribution metrics 

draw upon measures that the agencies 

currently use as part of CRA 

evaluations. The agencies have 

historically evaluated both a bank’s 

geographic and borrower distributions, 

and the proposal would both update 

and standardize these metrics. The 

agencies have long considered, and 

propose to continue considering, a 

bank’s record of providing credit both to 

borrowers of different income or 

revenue levels as well as neighborhoods 

of different income levels to be 

important determinants of its overall 

record of helping to meet the credit 

needs of its entire community. This 

approach recognizes the importance of 

lending that benefits low-income and 

moderate-income communities, 

regardless of the income or revenue size 

of the particular borrower, and lending 

that benefits low-income and moderateincome individuals and smaller farms 

and businesses, regardless of where they 

are located. 

2. Geographic Distribution Metrics 

The agencies propose using two 

geographic distribution components/ 

metrics for each product line: 

• Loans in low-income census tracts; 

and 

• Loans in moderate-income census 

tracts. 

These components are reflected above 

in Table 3. 

The proposed regulation refers to 

these geographic distribution metrics as 

geographic bank metrics. For each 

product line, the geographic bank 


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metrics measure the number of a bank’s 

loans located in low-income and 

moderate-income census tracts, 

respectively, relative to the total number 

of the bank’s loans in the assessment 

area. For example, if Bank A originated 

25 total closed-end home mortgage 

loans in an assessment area, and made 

5 of those loans in low-income census 

tracts, then it has a low-income 

geographic bank metric of 0.2 because 

20 percent of its total loans were made 

in low-income census tracts. 

The agencies propose separately 

calculating a bank’s record of lending in 

low-income census tracts and moderateincome census tracts, respectively. This 

approach recognizes the importance of 

evaluating lending performance in each 

census tract category. The agencies 

considered using a metric that 

combined performance in low-income 

census tracts and moderate-income 

census tracts in order to simplify the 

metrics approach. However, the 

agencies recognize that this could have 

the unintended effect of concealing poor 

performance for an income group. For 

example, a bank practice of avoiding 

lending in low-income census tracts in 

favor of moderate-income census tracts 

may not be apparent in the bank’s 

performance evaluation when using 

only a combined income category. Such 

an outcome would be at odds with the 

objective of evaluating bank 

performance in both low-income and 

moderate-income census tracts, as befits 

a bank’s obligation under the CRA to 

help meet the credit needs of its entire 

community. 

For closed-end home mortgage, openend home mortgage, and automobile 

loans, the agencies propose that loans to 

borrowers of any income would be 

included in the geographic distribution 

metrics if they are in low-income census 

tracts and moderate-income census 

tracts. The evaluation of the borrower 

income distribution of the bank’s 

lending, described below, would ensure 

that a bank would not receive a positive 

rating by solely lending to middle- or 

upper-income borrowers in low- and 

moderate-income neighborhoods. 

Certain assessment areas, particularly 

in rural areas, may have few or no lowor moderate-income census tracts 

within their boundaries. However, they 

may contain geographies with acute 

credit needs. The agencies seek 

feedback on whether the geographic 

distribution metrics described 

previously should be expanded to 

include bank performance in distressed 

and underserved middle-income census 

tracts in assessment areas with few or 

no low- or moderate-income census 

tracts. 

3. Borrower Distribution Metrics 

With the exception of multifamily 

lending, the agencies propose using two 

borrower distribution components for 

each product line. These components 

are reflected above in Table 3: 

• For closed-end home mortgage 

loans, open-end home mortgage loans, 

and automobile lending, the two 

borrower distribution components 

would be: 

Æ Loans to low-income borrowers; 

and 

Æ Loans to moderate-income 

borrowers. 

• For small businesses, the two 

borrower distribution components 

would be: 

Æ Loans to small businesses with 

gross annual revenues of $250,000 or 

less; and 

Æ Loans to small businesses with 

gross annual revenues above $250,000 

and less than or equal to $1 million. 

• For small farms, the two borrower 

distribution components would be: 

Æ Loans to small farms with gross 

annual revenues of $250,000 or less; and 

Æ Loans to small farms with gross 

annual revenues above $250,000 and 

less than or equal to $1 million. 

The proposed regulation refers to 

these borrower distribution metrics as 

borrower bank metrics. For each 

product line, the borrower bank metrics 

measure the number of a bank’s loans in 

each of the categories outlined above 

relative to the total number of the bank’s 

loans in the assessment area. For 

example, if Bank A originated 100 total 

closed-end home mortgage loans in an 

assessment area, and made 20 of those 

loans to low-income borrowers, it has a 

low-income borrower bank metric of 0.2 

because 20 percent of its total loans 

were made to low-income borrowers. 

For closed-end home mortgages, 

open-end home mortgages, and 

automobile lending, the agencies 

propose to separately calculate a bank’s 

record of lending to low-income 

borrowers and moderate-income 

borrowers, respectively. Similar to the 

considerations for separately evaluating 

performance in low-income census 

tracts and moderate-income census 

tracts, this approach recognizes the 

importance of evaluating lending to 

individuals in both income categories. 

As noted with the proposal for 

geographic distribution metrics, the 

agencies have similar concerns about 

using a metric that combines 

performance for low-income borrowers 

and moderate-income borrowers 

because it could fail to identify banks 

that do not lend to low-income 

borrowers, despite available 

opportunities to do so. Such an outcome 

would be at odds with the objective of 

evaluating bank performance to both 

low-income and moderate-income 

borrowers. 

The agencies propose to evaluate the 

geographic distribution of multifamily 

lending under the Retail Lending Test, 

but not the borrower distribution. 

Multifamily loans can help meet the 

credit needs of their communities by 

financing housing in different 

geographies and for tenants of different 

income levels. However, the income of 

the borrower—often a corporate entity— 

is less meaningful for evaluating the 

loans’ benefit to the community. As 

discussed in Section XII, the agencies 

propose to evaluate the provision of 

affordable housing through multifamily 

lending under the Community 

Development Financing Test. 


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Bank Loans in Low-Income Tracts (5) = Geographic Bank Metric (20%) 

Bank Loans (25) 

Bank Loans to Low-Income Borrowers (20) = Borrower Bank Metric (20%) 

Bank Loans (100) 
33938 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

183Federal Reserve System, Small Business Credit 

Survey 2022. Data is available at https://

www.fedsmallbusiness.org/survey/2022/report-onemployer-firms. 

184 Id. 

For small business and small farm 

loans, the agencies propose to separately 

calculate the bank’s record of lending to 

small businesses or small farms with 

gross annual revenues of $250,000 or 

less, and those with gross annual 

revenues greater than $250,000 but less 

than or equal to $1 million, respectively. 

The agencies propose retaining the $1 

million gross annual revenue threshold 

from the current regulation to identify 

smaller businesses and farms and 

adding an evaluation of lending to even 

smaller businesses and farms with gross 

annual revenue of $250,000 or less 

whose access to credit may be lacking. 

According to the 2022 Small Business 

Credit Survey on employer firms, 

employer firms with total annual 

revenues less than $1 million were 

substantially more likely to experience 

difficulties obtaining financing than 

employer firms with total annual 

revenues between $1 million and $5 

million.183 Furthermore, employer firms 

with total annual revenues less than 

$500,000, and particularly those with 

total annual revenues less than 

$100,000, were even more likely to 

report financing challenges.184 The 

agencies therefore believe that making 

small business loans available to these 

very low-revenue firms is an important 

marker of a bank meeting the credit 

needs of its entire community. The 

agencies propose to evaluate bank 

lending to small businesses and small 

farms with gross annual revenues of 

$250,000 or less to maintain focus on 

the borrowers with the greatest need, 

while still capturing a large enough 

population of firms, particularly 

employer firms. The agencies seek 

feedback on whether this threshold 

should instead be set higher, for 

example at $500,000. A higher threshold 

would capture more firms, particularly 

employer firms. However, these 

somewhat higher-revenue small 

businesses and farms may not have very 

different credit needs than those with 

gross annual revenues between 

$500,000 and $1 million. The agencies 

also seek feedback on whether this 

threshold should instead be set lower, 

for example at $100,000. A lower 

threshold would tighten focus on the 

businesses and farms with the greatest 

unmet credit needs. However, these 

businesses and farms may be less likely 

to be employers and, as a result, this 

alternative may detract focus from small 

local employers also in need of credit. 

For both the geographic distribution 

metric and the borrower distribution 

metric, the agencies propose using all 

loans to businesses or farms with gross 

annual revenues of $5 million or below, 

respectively, as the denominator for 

these calculations when measuring 

small business loan or small farm loan 

product lines. This approach would 

establish an appropriately 

comprehensive measure of overall bank 

lending to small businesses and farms. 

As explained above, the agencies 

propose to align the CRA’s small 

business and small farm definitions 

with the CFPB’s proposed ‘‘small 

business’’ definition under its Section 

1071 Rulemaking using a $5 million 

gross annual revenue threshold. As 

described in Section XXI and proposed 

in appendix A, until the data reported 

under the Section 1071 Rulemaking is 

available, the agencies propose to 

calculate a borrower bank metric for 

only a single revenue category for small 

business lending and small farm 

lending: The percentage of a bank’s 

small business or small farm loans that 

went to a business or farm with gross 

annual revenues less than $1 million. 

As discussed in Section XIX, the 

agencies seek feedback on whether to 

require banks, as applicable, to collect 

and report an indicator of whether a 

loan is to a business or farm with gross 

annual revenues of $250,000 or less 

prior to the use of section 1071 data. 

Request for Feedback 

Question 74. Should the geographic 

distribution evaluations of banks with 

few or no low- and moderate-income 

census tracts in their assessment areas 

include the distribution of lending to 

distressed and underserved census 

tracts? Alternatively, should the 

distribution of lending in distressed and 

underserved census tracts be considered 

qualitatively? 

Question 75. Is the choice of $250,000 

gross annual revenue an appropriate 

threshold to distinguish whether a 

business or farm may be particularly 

likely to have unmet credit needs, or 

should the threshold be lower (e.g., 

$100,000) or higher (e.g., $500,000)? 

E. Methodology for Setting Performance 

Ranges 

For each of a bank’s distribution 

metrics described above, the agencies 

propose comparing a bank’s level of 

lending to specific quantitative 

standards. These standards would be set 

using a methodology that leverages local 

data and existing CRA examination 

practices. As a result, the performance 

expectations established under this 

proposal would be tailored and, as a 

result, would vary from product-toproduct and assessment area-toassessment area. 

While the proposal maintains some 

key parts of how examiners carry out 

examinations under the status quo, the 

proposal would set standardized and 

transparent performance expectations 

for the first time. This differs from 

current practice in CRA examinations, 

which does not specify how much 

lending is necessary to achieve, for 

example, a ‘‘Low Satisfactory’’ or 

‘‘Outstanding’’ performance conclusion. 

Under the proposed approach, the 

bank distribution metric for each 

distribution test, income category, and 

major product line would be compared 

to a set of ‘‘performance ranges’’ that 

would correspond to the following 

conclusion categories: ‘‘Outstanding,’’ 

‘‘High Satisfactory,’’ ‘‘Low Satisfactory,’’ 

‘‘Needs to Improve,’’ and ‘‘Substantial 

Noncompliance.’’ As a result, the 

performance ranges approach would 

comprehensively assess bank 

performance across all five conclusion 

categories. The proposed approach 

would produce separate assessments for 

each component described above in 

Table 3. For example, if a bank had a 

major product line for closed-end home 

mortgages, the proposed approach 

would separately assess the bank’s 

closed-end home mortgage performance 

to low-income borrowers and moderateincome borrowers and in low-income 

census tracts and moderate-income 

census tracts in an assessment area. 

1. Thresholds and Performance Ranges 

The agencies propose a transparent 

set of steps, set forth in § __.22 and 

appendix A of the proposed regulations, 

to define performance ranges for 

evaluating a bank’s retail lending 

performance in each of its assessment 

areas. A consistent methodology would 

be used to establish thresholds and 

resulting performance ranges for each 

bank distribution metric in different 

product lines and income categories, 

and in different local markets. Yet, 

because the methodology relies on local 

data points, the resulting performance 

ranges are tailored to each local market 

and product line. 

At its most basic level, the proposal 

involves defining four thresholds that 

would set the boundaries for each 

performance range. The four thresholds 

are represented below in Figure 1. 


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• The ‘‘Outstanding’’ performance 

range would be set at or above the 

‘‘Outstanding’’ threshold level. 

• The ‘‘High Satisfactory’’ 

performance range would be set at or 

above the ‘‘High Satisfactory’’ threshold 

and below the ‘‘Outstanding’’ threshold. 

• The ‘‘Low Satisfactory’’ 

performance range would be set at or 

above the ‘‘Low Satisfactory’’ threshold 

and below the ‘‘High Satisfactory’’ 

threshold. 

• The ‘‘Needs to Improve’’ 

performance range would be set at or 

above the ‘‘Needs to Improve’’ threshold 

and below the ‘‘Low Satisfactory’’ 

threshold. 

• The ‘‘Substantial Noncompliance’’ 

performance range would be set below 

the ‘‘Needs to Improve’’ threshold. 

2. Using Local Data for Benchmarks 

Under the proposal, the four 

thresholds are calculated using local 

data points referred to as benchmarks. 

By leveraging local data in the form of 

the proposed benchmarks, the approach 

seeks to tailor the CRA retail lending 

expectations to the assessment areas in 

which a bank lends. The benchmarks 

include both community benchmarks 

and market benchmarks. Community 

benchmarks reflect the demographics of 

an assessment area, such as the 

percentage of owner-occupied units that 

are in census tracts of different income 

levels, the percentage of families that 

are low-income, and the percentage of 

small businesses or small farms of 

different levels of revenue in an 

assessment area. Market benchmarks 

reflect the aggregate lending to targeted 

areas or targeted borrowers in an 

assessment area by all reporting lenders. 

Unlike the bank metrics, which include 

both loan purchases and originations, 

the market benchmarks are based only 

on originations by reporting lenders. 

While loan purchases can help improve 

the credit environment for borrowers 

and thus represent a way in which 

banks can help meet the credit needs of 

their community, the agencies do not 

consider the aggregate level of loan 

purchases to reflect the extent of local 

lending opportunities. Aggregate loan 

originations, in contrast, are directly 

tied to these opportunities. 

The two sets of benchmarks provide 

complementary information about local 

lending opportunities. The community 

benchmarks measure the presence of 

potential borrowers but lack other 

information about local factors that 

might influence the local lending 

environment (such as an economic 

shock that causes local credit demand to 

be higher or lower than expected). The 

market benchmarks more closely reflect 

local demand by measuring the actual 

loan distribution resulting from 

aggregate lending in the area; however, 

they lack information about how well 

that aggregate lending actually serves all 

potential borrowers. 

The proposed benchmarks and data 

sources used to measure them 

(described below) generally align with 

what examiners use today to evaluate 

bank retail lending performance, with 

some differences. Current CRA 

examinations use local data as points of 

comparison prescribed in the 

interagency examination procedures to 

aid examiners in assessing bank 

performance. However, the current CRA 

regulations and examination procedures 

give examiners discretion when 

evaluating bank lending in comparison 

to the local data points. While examiner 

judgment allows for tailoring to reflect 

local community needs, some 

stakeholders have noted that it can also 

lead to inconsistent outcomes. 

The agencies considered several 

benefits of the proposed approach to 

setting quantitative thresholds for 

performance ranges based on local data. 

One benefit is that this approach would 

provide a bank with greater certainty 

about CRA performance expectations in 

an assessment area because the 

performance ranges are based on a 

consistent formula and set of data 

points. The agencies contemplate 

providing banks and the public with a 

means (e.g., an online dashboard) to 

track bank performance over time. 

Another benefit of the proposal is that 

it would consistently tailor expectations 

to the unique conditions in different 

local communities across the country. 

For example, expectations for mortgage 

lending to low-income borrowers would 

be higher in markets that have 

proportionately more potential, and 

actual, low-income borrowers. 

A third benefit of the proposed 

approach is that the threshold levels 

also automatically adjust over time in a 

way that can reflect changes in the 

business cycle because the market 

benchmarks follow overall lending 

activity in each assessment area. This 

approach reduces the need for the 

agencies to adjust the threshold levels 

and performance ranges through a 

rulemaking or other regulatory action, or 

for examiners to make a subjective 

adjustment. If, for example, a market 

downturn affected an assessment area 

by making low- and moderate-income 

lending relatively more difficult, the 

market benchmark would decrease, 

causing thresholds for the performance 

ranges (described below in Section 

IX.E.3) to adjust downward. Conversely, 

if overall low- and moderate-income 

lending opportunities expanded, the 

market benchmark would rise, creating 

greater expectations of local banks to 

make loans in low- and moderateincome census tracts, to low- and 

moderate-income borrowers, and to 

small businesses and small farms. 

Closed-End and Open-End Home 

Mortgage Lending Benchmarks. For 

closed-end and open-end home 

mortgages, the proposed benchmarks 

and data sources are provided in Table 

4 and are the same as examiners 

generally use today. 


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Figure 1: Illustration of thresholds and performance ranges 

Needs to Improve 

Threshold 

Low Satisfactory 

Threshold 

High Satisfactory 

Threshold 

Outstanding 

Threshold 
33940 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

TABLE 4 TO SECTION __.22—BENCHMARKS FOR CLOSED-END HOME MORTGAGE AND OPEN-END HOME MORTGAGE

LOANS

Distribution metric Community benchmark Market benchmark 

Closed-End Home Mortgage, Open-End Home Mortgage 

Geographic Distribution Metric: 

Data Point ................................ Percentage of owner-occupied residential units in 

low-income census tracts or moderate-income 

census tracts, as applicable, in assessment area.

Percentage of home mortgages in low-income census tracts or moderate-income census tracts in 

assessment area, as applicable, by all lender-reporters. 

Data Source ............................. American Community Survey (Census) .................... HMDA Data. 

Borrower Distribution Metric: 

Data Point ................................ Percentage of low-income families or moderate-income families, as applicable, in assessment area.Percentage of home mortgages to low-income borrowers or moderate-income borrowers in assessment area, as applicable, by all lender-reporters. 

Data Source ............................. American Community Survey (Census) .................... HMDA Data. 

For the geographic distribution 

metric, the proposed community 

benchmark is intended to measure the 

opportunities for home mortgage 

lending in the low-income and 

moderate-income census tracts of an 

assessment area. The proposed market 

benchmark is intended to show the 

overall level of mortgage lending taking 

place in the assessment area’s lowincome and moderate-income census 

tracts by all HMDA reporting lenders. 

For the borrower distribution metric, 

the proposed community benchmark is 

intended to measure the opportunities 

for banks to lend to low-income or 

moderate-income families in a specific 

assessment area. The proposed market 

benchmark is intended to show the 

overall level of mortgage lending by all 

HMDA reporting lenders to low-income 

and moderate-income borrowers in the 

assessment area. The agencies propose 

to continue the practice commonly used 

by examiners under current procedures 

of using family counts to measure 

lending opportunities. 

For the borrower distribution metric, 

the agencies also seek feedback on 

alternative community benchmark 

options. For example, one option could 

measure the share of low-income or 

moderate-income households in owneroccupied housing units in an 

assessment area. This alternative 

approximates the level of existing 

homeowners at these income levels, 

including households that recently 

became homeowners. A potential 

downside of this alternative is that it 

could be seen as failing to reflect the full 

level of opportunity for lending to lowincome or moderate-income 

households. 

For both of the home mortgage market 

benchmarks, the agencies propose using 

benchmarks that capture mortgage 

lending by all reporting lenders, not just 

mortgage lending by banks. Using 

HMDA reporter data enables this 

benchmark to reflect a larger percentage 

of the mortgage market, including bank 

and non-bank mortgage lending. The 

agencies propose to set bank 

performance expectations relative to all 

mortgage lending, as captured in HMDA 

data, in a community, rather than just to 

mortgage lending by banks. This 

measure is a more complete reflection of 

a community’s total credit needs than is 

a measure that only captures those met 

by bank lenders. 

Multifamily Mortgage Lending 

Benchmarks. For multifamily mortgage 

lending, the proposed benchmarks are 

in Table 5. The proposed community 

benchmarks and data sources would be 

comparable to what is used in 

evaluations today. 

For the geographic distribution 

metric, the proposed community 

benchmark is intended to measure the 

opportunities for multifamily mortgage 

lending in the low-income or moderateincome census tracts of an assessment 

area; the proposed market benchmark is 

intended to show the overall level of 

mortgage lending taking place in lowand moderate-income census tracts by 

all HMDA reporting lenders. 

TABLE 5 TO SECTION __.22—BENCHMARKS FOR MULTIFAMILY LOANS

Distribution metric Community benchmark Market benchmark 

Multifamily 

Geographic Distribution Metric: 

Data Point ................................ Percentage of multifamily units in low-income census tracts or moderate-income census tracts as 

applicable, in assessment area.

Percentage of multifamily mortgages in low-income 

census tracts or moderate-income census tracts 

in assessment area, as applicable, by all lenderreporters. 

Data Source ............................. American Community Survey (Census) .................... HMDA Data. 

Small Business and Small Farm 

Lending Benchmarks. For small 

business and small farm lending, the 

proposed benchmarks are in Table 6. 

The proposed community benchmarks 

and data sources would be comparable 

to what is used in evaluations today, 

and the agencies propose using section 

1071 data, once available, to develop 

market benchmarks. 


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TABLE 6 TO SECTION __.22—BENCHMARKS FOR SMALL BUSINESS AND SMALL FARM LOANS

Distribution metric Community benchmark Market benchmark 

Small Business 

Geographic Distribution Metric: 

Data Point ................................ Percentage of small businesses with gross annual 

revenue less than $5M in low income or moderate-income census tracts, as applicable, in assessment area.

Percentage of small business loans in low- income 

or moderate-income census tracts in assessment 

area, as applicable, by all lender-reporters. 

Data Source ............................. Third-party data provider ........................................... CFPB section 1071 data.* 

Borrower Distribution Metric: 

Data Point ................................ Percentage of small businesses with gross annual 

revenue more than $250K and less than or equal 

to $1M or $250K or less, as applicable, in assessment area.

Percentage of small business loans to small businesses with gross annual revenue more than 

$250K and less than or equal to $1M or $250K or 

less in assessment area, as applicable, by all 

lender-reporters. 

Data Source ............................. Third-party data provider ........................................... CFPB section 1071 data.* 

Small Farm 

Geographic Distribution Metric: 

Data Point ................................ Percentage of small farms with gross annual revenue less than $5M in low income or moderateincome census tracts, as applicable, in assessment area.Percentage of small farms loans in low- income or 

moderate-income census tracts in assessment 

area, as applicable, by all lender-reporters. 

Data Source ............................. Third-party data provider ........................................... CFPB section 1071 data.* 

Borrower Distribution Metric: 

Data Point ................................ Percentage of small farms with gross annual revenue of more than $250K and less than or equal 

to $1M or $250K or less, as applicable, in assessment area.

Percentage of small farms loans to small farms with 

gross annual revenue or more than $250K and 

less than or equal to $1M or $250K or less in assessment area, as applicable, by all lender-reporters. 

Data Source ............................. Third-party data provider ........................................... CFPB section 1071 data.* 

* As proposed in § __.51 and discussed in Section XXI, the agencies would continue to maintain the current definitions related to small business loans and small farm loans until, and subject to a transition period, such time as the CFPB finalizes and implements its Section 1071 Rulemaking and section 1071 data becomes available. 

For the geographic distribution 

metric, the proposed community 

benchmark is intended to measure the 

opportunities for small business lending 

in, respectively, the low-income and 

moderate-income census tracts of an 

assessment area. The proposed market 

benchmark is intended to show the 

overall level of small bank or small farm 

lending taking place in low-income and 

moderate-income census tracts in the 

assessment area by all section 1071 

reporting lenders. 

For the borrower distribution metric, 

the proposed community benchmark is 

intended to measure the opportunities 

for banks to lend to small businesses or 

small farms with gross annual revenues 

of $250,000 or less and gross annual 

revenues more than $250,000 and less 

than or equal to $1 million in an 

assessment area. The proposed market 

benchmark is intended to show the 

overall level of small business or small 

farm lending to businesses or farms 

using the same gross annual revenue 

thresholds. As described in Section XXI, 

until the data reported under the 

Section 1071 Rulemaking is available, 

the agencies propose to calculate a 

borrower market benchmark for only a 

single revenue category for small 

business lending and small farm 

lending: The percentage of all reporter 

banks’ small business or small farm 

loans that went to a business or farm 

with gross annual revenues of less than 

$1 million. Likewise, the agencies 

propose to calculate a borrower 

community benchmark for only a single 

revenue category: The percentage of all 

small businesses or farms with gross 

annual revenues of less than $1 

million—until the data reported under 

the Section 1071 Rulemaking is 

available. 

Automobile Lending Benchmarks. For 

automobile lending, the proposed 

benchmarks are in Table 7. The 

proposed community benchmarks and 

data sources would be comparable to 

what is currently used in evaluations, 

and the agencies propose using new 

data collection and reporting for large 

banks with assets of over $10 billion, 

once available, to develop market 

benchmarks. 

TABLE 7 TO SECTION __.22—BENCHMARKS FOR AUTOMOBILE LOANS

Distribution metric Community benchmark Market benchmark 

Automobile 

Geographic Distribution Metric: 

Data Point ................................ Percentage of households in low-income or moderate-income census tracts, as applicable, in assessment area.Percentage of automobile loans in low-income or 

moderate-income census tracts in assessment 

area, as applicable, by all lender-reporters. 

Data Source ............................. American Community Survey (Census) .................... CRA reported data. 

Borrower Distribution Metric: 


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33942 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

TABLE 7 TO SECTION __.22—BENCHMARKS FOR AUTOMOBILE LOANS—Continued 

Distribution metric Community benchmark Market benchmark 

Data Point ................................ Percentage of low-income or moderate-income 

households, as applicable in assessment area.

Percentage of automobile loans to low-income, or 

moderate-income borrowers, in assessment area 

as applicable, by all lender-reporters. 

Data Source ............................. American Community Survey (Census) .................... CRA reported data. 

For the geographic distribution 

metric, the proposed community 

benchmark is intended to measure the 

opportunities for automobile lending in 

the low-income or moderate-income 

census tracts of an assessment area. The 

proposed market benchmark is intended 

to show the overall level of automobile 

lending taking place in low-income and 

moderate-income census tracts in an 

assessment area by banks with assets of 

over $10 billion. For the borrower 

distribution metric, the proposed 

community benchmark is intended to 

measure the opportunities for 

automobile lending to low-income or 

moderate-income households in an 

assessment area. The proposed market 

benchmark is intended to show the 

overall level of automobile lending by 

all large banks to low-income or 

moderate-income borrowers in an 

assessment area. 

For both the geographic and borrower 

community benchmarks, the agencies 

propose to use household counts to 

measure lending opportunities. The 

market benchmark would involve 

comparing a bank’s automobile lending 

only to the automobile lending by banks 

with assets of over $10 billion. This 

reflects that only banks with assets of 

over $10 billion evaluated under CRA 

would be required to report automobile 

lending data under this proposal. 

The agencies considered not 

developing market benchmarks for 

automobile lending to avoid introducing 

an additional data collection and 

reporting requirement for banks with 

assets of over $10 billion, but believe 

that a lack of benchmarks would 

diminish the value in adopting a 

metrics-based approach to evaluating a 

bank’s automobile lending. Without a 

market benchmark, a bank’s automobile 

lending could only be compared to the 

community benchmark, which could 

lead to performance expectations that 

are too high in some markets, such as 

metropolitan areas with accessible 

public transportation. 

The agencies also considered whether 

credit bureau data could be used as a 

data source for creating market 

benchmarks for automobile lending. 

However, the agencies found that credit 

bureau data could not be used to 

construct a market benchmark for the 

borrower distribution metric since 

sufficiently accurate borrower income 

information is not available from the 

credit bureaus. The agencies instead 

propose to require data collection and 

reporting in order to construct market 

benchmarks for both distribution 

metrics—geographic distribution metric 

and borrower distribution metric— 

rather than pursuing an incomplete 

metrics approach using credit bureau 

data. 

Timing Issues for Using Benchmarks. 

For all the community benchmarks 

described in this section, the agencies 

are considering whether to calculate 

them using the most recent data 

available as of the first day of a bank’s 

CRA examination. This would provide 

the most accurate possible picture of the 

potential borrowers in the bank’s 

community during an evaluation period. 

However, under this approach, the 

values of the community benchmarks 

may not be known at the outset of the 

evaluation period if additional data 

subsequently becomes available in later 

years, which may result in the 

benchmarks changing. The agencies 

seek feedback on alternative methods to 

set the community benchmark. An 

alternative approach would be to lock in 

the community benchmarks at the 

outset of the evaluation period, using 

the most recent data available at that 

time. This approach would provide 

more certainty to banks, but the 

thresholds in place could be out-of-date 

by the end of a performance evaluation 

period. 

Another approach would be to lock in 

the community benchmark at the outset 

of the evaluation period using data 

available then, but let the benchmark 

decrease if demographic data collected 

during the evaluation period would lead 

to a lower benchmark. This ‘‘float 

down’’ approach has the advantage of 

both giving banks a pre-specified bar to 

clear, while also providing leniency if 

lending opportunities worsen during 

their evaluation period. However, the 

agencies have also considered that this 

alternative may reduce the expectations 

for banks to meet the credit needs of 

their communities under certain market 

conditions. 

For all the market benchmarks, the 

agencies are considering measuring the 

benchmarks using all the available 

reported data from the years of the 

bank’s evaluation period, recognizing 

that some evaluation periods could 

include a year for which reported data 

is not yet available. Similarly, the 

market volume benchmark described in 

Section IX.C and proposed appendix A 

would be calculated using reported 

lending data from the bank’s evaluation 

period. In some cases, this approach has 

the potential to create a mismatch 

between the economic conditions 

described by the market benchmarks 

and those faced by the bank during the 

full course of its evaluation period. The 

agencies seek feedback on whether this 

approach to comparing bank metrics to 

market benchmarks is appropriate. An 

alternative approach would be to only 

include in the bank distribution metrics 

and bank volume metrics data from the 

same years that the market distribution 

benchmarks and market volume 

benchmarks are able to be measured 

over. This approach would have the 

advantage of setting performance 

standards for banks that correspond to 

the period (and the economic conditions 

during that period) over which an 

agency is evaluating a bank’s 

performance. However, this approach 

has the disadvantage of, in some 

circumstances, not fully covering the 

recent lending a bank has done. 

3. Setting Thresholds Using Benchmarks 

The agencies propose to translate the 

proposed benchmarks into the four 

thresholds. First, the community 

benchmark and market benchmark 

would each be calibrated using defined 

percentages, referred to in proposed 

appendix A as a community multiplier 

and a market multiplier. The multipliers 

are proposed as follows, with the 

objective of aligning the benchmarks 

with the agencies’ performance 

expectations: 

• 33 percent of the market benchmark 

and 33 percent of the community 

benchmark are intended to reflect 

performance expectations for the 

‘‘Needs to Improve’’ threshold. 

• 80 percent of the market benchmark 

and 65 percent of the community 

benchmark are intended to reflect 

performance expectations for the ‘‘Low 

Satisfactory’’ threshold. 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33943 

• 110 percent of the market 

benchmark and 90 percent of the 

community benchmark are intended to 

reflect performance expectations for the 

‘‘High Satisfactory’’ threshold. 

• 125 percent of the market 

benchmark and 100 percent of the 

community benchmark are intended to 

reflect performance expectations for the 

‘‘Outstanding’’ threshold. 

Second, the four thresholds would be 

set by selecting, for each conclusion 

category, the lesser of the calibrated 

market benchmark (the product of the 

market multiplier times the market 

benchmark) and calibrated community 

benchmark (the product of the 

community multiplier and the 

community benchmark). This proposed 

approach is reflected in Table 8. 

TABLE 8 TO SECTION __.22—THRESHOLDS FOR DEFINING PERFORMANCE RANGES

Market multiplier and market benchmark Community multiplier and 

community benchmark 

Select the Lesser of the Two Values 

‘‘Needs to Improve’’ Threshold ......... 33% of the Market Benchmark ...................................... OR 33% of the Community Benchmark. 

‘‘Low Satisfactory’’ Threshold ........... 80% of the Market Benchmark ...................................... OR 65% of the Community Benchmark. 

‘‘High Satisfactory’’ Threshold .......... 110% of the Market Benchmark .................................... OR 90% of the Community Benchmark. 

‘‘Outstanding’’ Threshold .................. 125% of the Market Benchmark .................................... OR 100% of the Community Benchmark. 

The agencies propose to set 

thresholds as the lesser of the two 

calibrated benchmarks because, as 

described below, this establishes 

standards that are achievable 

everywhere, while still ensuring that the 

performance standards are set 

appropriately in markets in which lowand moderate-income individuals and 

census tracts, and small businesses and 

small farms may be underserved. 

Specifically, the agencies’ proposal 

would tend to assign better ratings in 

markets where more banks were 

meeting the credit needs of the 

community. At the same time, it would 

also prevent thresholds from becoming 

too stringent in markets with fewer 

opportunities to lend to lower-income 

communities or smaller establishments. 

To demonstrate the importance of 

using both benchmarks in this manner, 

the agencies outline a hypothetical 

assessment area in which the market 

benchmark is close to or above the 

community benchmark and one in 

which the market benchmark is well 

below the community benchmark. First, 

in the area with a higher market 

benchmark, lower-income communities 

or smaller establishments are receiving 

loans at close to the same rate as higher 

income or larger establishments. The 

calibrated community benchmark, with 

its lower multipliers, would set the 

threshold for performance ranges there. 

Local lenders—whose strong 

performance is the reason for the high 

market benchmark—would generally 

perform well on the performance ranges 

set by the community benchmark. The 

proposal would therefore reward more 

banks for contributing to the overall 

strong distribution of credit in such a 

market. 

In the second area, the low level of 

the market benchmark may be due to 

reduced lending opportunities not 

reflected in the community benchmark, 

so basing performance ranges on the 

community benchmark there could set 

thresholds unattainably high. However, 

the low level of the market benchmark 

could also reflect local lenders failing to 

meet their community’s credit needs. By 

setting thresholds based on the 

calibrated market benchmark with its 

higher multipliers, the proposal would 

assign lower conclusions to more banks 

in these potentially underserved 

markets, while ensuring that satisfactory 

or better conclusions are attainable by 

the better local performers. 

The agencies also seek feedback on an 

alternative approach to determining the 

thresholds based on the market and 

community benchmarks to address 

potential concerns that the proposed 

approach may set performance 

expectations too low in places where all 

lenders, or a significant share of lenders, 

are underserving the market and failing 

to meet community credit needs. In 

cases where the calibrated community 

benchmark is higher than the calibrated 

market benchmark, instead of using the 

lower of the calibrated community and 

market benchmark as proposed, an 

alternative approach could instead 

calculate a weighted average of the 

calibrated benchmarks for each 

threshold. The agencies are considering 

applying a weight ranging between 10 

percent and 30 percent to the calibrated 

community benchmark, and a weight of 

70 percent to 90 percent to the 

calibrated market benchmark, for 

purposes of computing the weighted 

average. However, in cases in which the 

calibrated community benchmark is 

lower than the calibrated market 

benchmark, the calibrated community 

benchmark alone would be used to set 

the threshold. 

In places where all lenders, or a 

significant fraction of lenders, are 

underserving the market and failing to 

meet community credit needs, this 

weighted average approach would 

ensure that in such a community, the 

performance ranges are based on a 

combination of community 

characteristics and market lending 

patterns, both of which reflect local 

credit needs and opportunities. 

However, for components of the retail 

lending distribution metrics in which 

the calibrated community benchmark is 

much higher than the calibrated market 

benchmark due to limited lending 

opportunities (such as low demand), 

this alternative approach could set 

thresholds higher in some areas than 

may be desirable. 

Under this alternative, the agencies 

would apply more weight to the 

calibrated market benchmark than to the 

calibrated community benchmark. This 

is intended to adequately reflect 

changes in credit demand and lending 

opportunities over time that are not 

reflected in the community benchmark, 

such as the emergence of new products 

and services, or economic shocks that 

affect the level of low- and moderateincome credit needs and opportunities. 

Furthermore, a lower weight on the 

community benchmark lessens the risk 

of setting the effective thresholds 

unattainably high in circumstances in 

which the calibrated community 

benchmark is much higher than the 

calibrated market benchmark. In 

determining the exact weighting that 

would be used under this alternative 

approach, the agencies consider a 

weight on the calibrated community 

benchmark as high as 30 percent may 

give a strong emphasis on local 

demographic factors and to aim towards 

equitable lending outcomes for 


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33944 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

individuals and communities of all 

income levels. However, a lower weight 

on the community benchmark of 10 

percent may make the resulting 

thresholds more responsive to changes 

in lending conditions over time and 

would capture more information about 

credit demand that is better reflected by 

the market benchmark than the 

community benchmark. 

4. Proposed Multiplier Levels 

The agencies have proposed threshold 

levels—using the proposed multipliers 

identified in Table 8—that recognize the 

existing strong retail lending 

performance of many banks while also 

seeking to appropriately strengthen 

performance expectations for a 

‘‘Satisfactory’’ Retail Lending Test 

conclusion. The agencies analyzed 

historical bank lending data under the 

proposed metrics-based approach with 

these multipliers. The analysis, and the 

estimated conclusions banks would 

have received, are presented in Section 

X.E. The implied outcomes, as 

measured by the distribution of 

conclusions that would have been 

assigned under the proposed approach 

historically, indicate that the proposed 

multipliers are producing a level of 

stringency that the agencies believe to 

be appropriate. 

A discussion of each set of proposed 

multipliers follows: 

Proposed Multipliers for ‘‘Needs to 

Improve’’ Threshold. The agencies 

propose multipliers for the needs to 

improve threshold as shown in Table 8. 

Market multiplier and market benchmark Community multiplier and 

community benchmark 

Select the Lesser of the Two Values 

‘‘Needs to Improve’’ Threshold ......... 33% of the Market Benchmark ...................................... OR 33% of the Community Benchmark. 

The agencies propose setting both the 

market multiplier and the community 

multiplier at 33 percent for the ‘‘Needs 

to Improve’’ threshold, reflecting bank 

performance that is extremely poor 

relative to opportunities. Performance 

that falls below this threshold would be 

in the ‘‘Substantial Noncompliance’’ 

performance range. 

The agencies propose that 

performance serving less than 33 

percent of the market average is an 

appropriate dividing line between 

performance low enough to warrant the 

lowest conclusion category and 

performance that is not satisfactory but 

is more appropriately recognized as 

needing improvement. Similarly, the 

agencies propose that 33 percent of the 

community benchmark is also 

appropriate for distinguishing between 

‘‘Substantial Noncompliance’’ 

performance and ‘‘Needs to Improve’’ 

performance. 

The agencies considered setting both 

of these multipliers at 25 percent but 

considered that this would set standards 

that may be too narrow for ‘‘Substantial 

Noncompliance’’ performance. 

Similarly, the agencies considered that 

setting a higher set of percentages for 

these multipliers, such as 50 percent, 

may be too wide for ‘‘Substantial 

Noncompliance’’ performance and may 

reduce the effectiveness of the ‘‘Needs 

to Improve’’ category. 

Proposed Multipliers for ‘‘Low 

Satisfactory’’ Threshold. The agencies 

propose multipliers for the ‘‘Low 

Satisfactory’’ threshold as shown in 

Table 8. 

Market multiplier and market benchmark Community multiplier and 

community benchmark 

Select the Lesser of the Two Values 

‘‘Low Satisfactory’’ Threshold ........... 80% of the Market Benchmark ...................................... OR 65% of the Community Benchmark. 

The agencies propose setting the 

market multiplier at 80 percent and the 

community multiplier at 65 percent for 

the ‘‘Low Satisfactory’’ threshold, 

reflecting performance that is adequate 

relative to opportunities. Performance 

that falls below this threshold would be 

in the ‘‘Needs to Improve’’ performance 

range. 

The agencies consider the industry’s 

performance to be broadly, although not 

universally, satisfactory and, as such, 

the proposed 80 percent market 

multiplier is meaningfully below the 

average performance of banks in an 

assessment area. This would provide 

banks with average performance—100 

percent of the market benchmark—with 

a passing conclusion on a distribution 

metric in the ‘‘Low Satisfactory’’ 

performance range. 

While the agencies consider that this 

proposed market multiplier would 

appropriately calibrate the ‘‘Low 

Satisfactory’’ threshold to capture some 

performance below the market average, 

this proposal is also intended to set 

strong performance expectations 

necessary to achieve a ‘‘Low 

Satisfactory’’ conclusion. The agencies 

considered alternative market 

multipliers of 75 percent and 70 

percent, but considered that these levels 

may be too far below average for 

performance necessary to demonstrate 

adequately meeting community credit 

needs. 

For the proposed community 

multiplier, the agencies propose to 

select a percentage below the market 

multiplier to account for the fact that 

the community benchmark figures are 

generally higher, and therefore more 

difficult to achieve. While the agencies 

believe that it is appropriate to raise 

standards for the market multiplier, the 

agencies believe that 65 percent for the 

community multiplier is more 

appropriate for the ‘‘Low Satisfactory’’ 

threshold. The agencies considered a 

community multiplier of 55 percent for 

the ‘‘Low Satisfactory’’ threshold. 

However, the agencies considered that 

performance just above 50 percent of the 

community benchmark—reflecting, for 

example, the percentage of low-income 

or moderate-income families in an 

assessment area—may be too low for 

performance necessary to demonstrate 

adequately meeting community credit 

needs. 

Proposed Multipliers for ‘‘High 

Satisfactory’’ Threshold. The agencies 

propose multipliers for the ‘‘High 


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Satisfactory’’ threshold as shown in 

Table 8. 

Market multiplier and market benchmark Community multiplier and 

community benchmark 

Select the Lesser of the Two Values 

‘‘High Satisfactory’’ Threshold .......... 110% of the Market Benchmark .................................... OR 90% of the Community Benchmark. 

The agencies propose setting the 

market multiplier for a ‘‘High 

Satisfactory’’ conclusion at 110 percent. 

This reserves the ‘‘High Satisfactory’’ 

conclusion for banks that are not just 

average, but a meaningful increment 

above the average of local lenders. A 

community multiplier of 90 percent 

would establish a recommended ‘‘High 

Satisfactory’’ conclusion if a bank 

achieved close to per-capita parity in its 

lending across different income groups. 

Proposed Multipliers for 

‘‘Outstanding’’ Threshold. The agencies 

propose multipliers for the 

‘‘Outstanding’’ threshold as shown in 

Table 8. 

Market multiplier and market benchmark Community multiplier and 

community benchmark 

Select the Lesser of the Two Values 

‘‘Outstanding’’ Threshold .................. 125% of the Market Benchmark .................................... OR 100% of the Community Benchmark. 

The agencies propose to set the 

market multiplier at 125 percent for an 

‘‘Outstanding’’ conclusion. This sets a 

threshold well in excess of the average 

of local lenders, while still being an 

attainable target for many better 

performers. The agencies recognize that 

many banks, especially large banks, 

frequently employ dedicated CRA teams 

with strong relationships to the 

community to ensure that the bank 

appropriately identifies and helps to 

meet community credit and community 

development needs. Thus, the agencies 

propose to set the threshold for an 

‘‘Outstanding’’ conclusion at a point 

that is attainable for banks that are 

actively working and making choices to 

be leaders in helping to meet 

community credit and community 

development needs. At the same time, 

the agencies propose not to set the 

‘‘Outstanding’’ conclusion threshold too 

low to ensure that an ‘‘Outstanding’’ 

conclusion is awarded only to banks 

that have demonstrated an exceptional 

level of performance. 

The agencies propose to set the 

community multiplier at 100 percent. 

As bank metrics and market benchmarks 

are usually substantially below the 

community benchmark, the agencies 

considered that a 100 percent multiplier 

represents an aspirational goal. 

Furthermore, it represents equal percapita lending to communities of 

different income levels. 

Example of Performance Ranges 

Methodology. For example, in an 

assessment area with 30 percent of 

owner-occupied housing units and 

where 25 percent of all closed-end home 

mortgage loans were in moderateincome census tracts, the closed-end 

home mortgage moderate-income 

geographic community and market 

benchmarks would be 30 percent and 25 

percent, respectively. 

A bank making 18 loans in moderateincome census tracts out of 100 total 

closed-end home mortgage loans in the 

assessment area would have a bank 

metric of 18 percent for this component 

of lending. The bank metric would fall 

into the ‘‘Needs to Improve’’ 

performance range because it is between 

the threshold (8.25 percent and 19.5 

percent) for the ‘‘Needs to Improve’’ 

conclusion. 

Thresholds for the relevant 

performance ranges are calculated using 

the multipliers in Table 8 as follows: 

• For the ‘‘Low Satisfactory’’ 

category: the calibrated market 

benchmark is 80 percent of the market 

benchmark (0.8 × 25 percent = 20 

percent), and the calibrated community 

benchmark is 65 percent of the 

community benchmark (0.65 × 30 

percent = 19.5 percent). The threshold 

for a ‘‘Low Satisfactory’’ conclusion 

would be 19.5 percent, the lesser of 

these two calibrated benchmarks. 

• For the ‘‘Needs to Improve’’ 

category: the calibrated market 

benchmark is 33 percent of the market 

benchmark (0.33 × 25 percent = 8.25 

percent), and the calibrated community 

benchmark is 33 percent of the 

Community Benchmark (0.33 × 30 

percent = 9.9 percent). The threshold for 

a ‘‘Needs to Improve’’ conclusion would 

be 8.25 percent, the lesser of these two 

calibrated benchmarks. 

The Board has developed a search 

tool, which includes illustrative 

examples of the thresholds and 

performance ranges in a given 

geography, using past lending data. 

Specifically, this tool provides 

illustrative examples of the thresholds 

for the relevant performance ranges in 

each MSA, metropolitan division, and 

county based on historical lending from 

2017–2019. This tool can be found on 

the Board’s website at https://

www.federalreserve.gov/consumers

communities/performance-thresholdssearch-tool.htm. 

Request for Feedback 

Question 76. Should the community 

benchmarks be set using the most recent 

data available at the time of the 

examination? Would an alternative 

method that establishes benchmarks 

earlier be preferable? 

Question 77. Should the bank volume 

metric and distribution bank metrics use 

all data from the bank’s evaluation 

period, while the market volume 

benchmark and distribution market 

benchmarks use only reported data 

available at the time of the exam? 

Would an alternative in which the bank 

volume metrics and distribution bank 

metrics were calculated from bank data 


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33946 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

covering only the same years for which 

that reported data was available be 

preferable? 

Question 78. Are the proposed 

community benchmarks appropriate, 

including the use of low-income and 

moderate-income family counts for the 

borrower distribution of home mortgage 

lending? Would alternative benchmarks 

be preferable? If so, which ones? 

Question 79. Should automobile 

lending for all banks be evaluated using 

benchmarks developed only from the 

lending of banks with assets of over $10 

billion? 

Question 80. Are the proposed market 

and community multipliers for each 

conclusion category set at appropriate 

levels? If not, what other set of 

multipliers would be preferable? In 

general, are the resulting thresholds set 

at an appropriate level for each 

conclusion category? 

Question 81. How should the agencies 

use the calibrated market benchmark 

and calibrated community benchmark to 

set performance thresholds? Should the 

agencies set thresholds based on the 

lower of the calibrated market 

benchmark or calibrated community 

benchmark? 

Question 82. How should the agencies 

address the potential concern that the 

proposed approach may set performance 

expectations too low in places where all 

lenders, or a significant share of lenders, 

are underserving the market and failing 

to meet community credit needs? 

Should the agencies consider an 

alternative approach to setting the 

performance thresholds that would use 

a weighted average of the calibrated 

market benchmark and calibrated 

community benchmark? 

F. Developing Product Line Scores in 

Each Assessment Area 

For each major product line in an 

assessment area, the agencies propose to 

use a product line score to synthesize 

lending performance in the geographic 

and borrower distribution metrics. For 

example, a bank’s closed-end home 

mortgage product line score in an 

assessment area would encompass its 

lending within four categories: (i) In 

low-income census tracts and (ii) in 

moderate-income census tracts (both are 

geographic distribution metrics); and 

(iii) to low-income borrowers and (iv) to 

moderate-income borrowers (both are 

borrower distribution metrics). The 

agencies propose combining the 

conclusions into a product line score for 

each major product to enable 

stakeholders to better understand 

performance by providing greater 

transparency and to differentiate 

lending performance for each major 

product line in the same assessment 

area. The approach could also highlight 

exemplary performance in a product 

line and provide context for why a bank 

received a particular recommended 

Retail Lending Test conclusion. 

Scoring Approach. The agencies 

propose that the two income categories 

within each distribution test receive a 

conclusion ranging from ‘‘Outstanding’’ 

to ‘‘Substantial Noncompliance,’’ 

associated with a point value as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). As a result, 

each major product line in an 

assessment area would receive four 

scores, except that multifamily lending 

would receive two scores for the 

geographic distribution metrics only. 

This proposed mapping between 

conclusion categories and point values 

fulfills two purposes. First, it creates a 

meaningful difference between each 

category, including between the ‘‘Low 

Satisfactory’’ and ‘‘High Satisfactory’’ 

categories. Second, it makes the 

difference between ‘‘Low Satisfactory’’ 

and ‘‘High Satisfactory’’ less than the 

differences between the other categories. 

This choice emphasizes that ‘‘Low 

Satisfactory’’ and ‘‘High Satisfactory’’ 

represent different degrees of 

performance within the broader 

‘‘Satisfactory’’ range. 

The agencies also considered an 

alternate mapping that would use a 

four-point scale with uniform spacing of 

point values between the conclusion 

categories (i.e., each category would be 

assigned an integer from 0 through 4). 

However, under the method of deriving 

assessment area, state, multistate MSA, 

and institution-level conclusions 

described below and in Section X.D, 

this four-point scale would have the 

tendency to cause more banks to receive 

one of the ‘‘Satisfactory’’ conclusions, as 

these two categories would cover a 

greater fraction of the range of possible 

scores. The agencies found that the 

proposed 10-point scale better allowed 

a distinction between the strongest- and 

weakest-performing banks and those 

with closer to average performance. 

Combining Income Categories. After 

assigning each category a score, a 

weighted average of the scores for the 

two income categories (or revenue 

categories for small business and small 

farm borrower distribution metrics) 

would then be taken to produce a 

geographic income average for the 

geographic distribution metrics scores 

and a borrower income average for the 

borrower distribution metrics scores for 

that product line within each 

assessment area. 

The agencies propose to weight these 

two scores by the community 

benchmark to make the scores 

proportional to the population of 

potential borrowers in the assessment 

area. For example, for the closed-end 

home mortgage borrower distribution 

metrics, the weights are based on the 

percentage of families in the assessment 

area that are either low-income or 

moderate-income. In a hypothetical 

assessment area in which twice as many 

low-income families as moderateincome families resided, the lowincome borrower score would carry 

twice the weight of the moderateincome borrower score in forming the 

borrower income average for closed-end 

home mortgage lending. 

Combining Borrower Distribution and 

Geographic Distribution Averages. For 

each major product line, the two 

distribution income averages 

(geographic income average and 

borrower income average) are then 

averaged to arrive at the product line 

average. The scores from the two 

distribution metrics are weighted 

equally to ensure parity between the 

borrower and geographic distribution 

metrics. The agencies believe that both 

geographic and borrower distributions 

are important measures of how a bank 

is meeting its community’s credit needs, 

and an equal weighting ensures that 

both distributions are important to 

overall conclusions and ratings. The 

agencies seek feedback on whether the 

equal weighting approach is appropriate 

or if the geographic distribution score 

should be weighted less heavily than 

the borrower distribution, and whether 

this would account for banks operating 

in rural areas, or other areas with few 

low- and moderate-income census 

tracts. In assessment areas with no lowand moderate-income census tracts, and 

hence no geographic distribution scores, 

the agencies propose to set the product 

line average equal to the borrower 

income average. 

Request for Feedback 

Question 83. Should the agencies 

weight the two distribution results 

equally? Should the borrower 

distribution conclusion be weighted 

more heavily than the geographic 

distribution conclusion to provide an 

additional incentive for lending to lowand moderate-income borrowers in 

certain areas? Are there circumstances 

under which the geographic distribution 

conclusion should be weighed less 

heavily, such as in rural areas with few 

low- and moderate-income census tracts 


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or where the number of investor loans 

is increasing rapidly? 

G. Using Weighted Average of Product 

Line Scores To Create Recommended 

Retail Lending Test Conclusion 

The agencies propose to develop a 

recommended conclusion on the Retail 

Lending Test for each assessment area 

by combining the scores the bank 

received on each of its major product 

lines in that assessment area. The 

proposal recognizes the importance of 

using a clear and transparent method 

that appropriately weights product lines 

when creating a recommended Retail 

Lending Test conclusion for each 

assessment area. The agencies propose 

weighting each product by the dollar 

volume of lending the bank engaged in 

for that product line within that 

assessment area, so that assessment area 

conclusions reflect performance in each 

of a bank’s major product lines, with 

more weight assigned to a bank’s larger 

major product lines. 

The recommended Retail Lending 

Test conclusion for an assessment area 

would be derived by taking a weighted 

average of all the product line scores, 

weighting each product by the dollar 

volume of lending the bank engaged in 

each product line in that assessment 

area. The resulting score would be 

rounded to the nearest conclusion 

category using the same point value 

correspondence as before: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). This would 

be the recommended conclusion on the 

Retail Lending Test for the assessment 

area. The examiner would determine a 

final conclusion based on this metricderived recommendation, as well as a 

consideration of additional factors 

described in Section IX.H. 

This approach would give 

proportionate weight to a bank’s 

product offerings so that more 

prominent product lines, as measured in 

dollars, have more weight on the bank’s 

overall conclusion in an assessment 

area. The test is, thus, tailored to 

individual bank business model, as 

evaluations are based on the lending a 

bank specializes in locally. Moreover, 

weighing product lines by dollar 

recognizes the continued importance of 

home mortgage and small business 

lending to low- and moderate-income 

communities, which have been a focus 

of the CRA, while also accounting for 

the importance of consumer loans to 

low- and moderate-income individuals. 

Considering the role of consumer 

loans to low- and moderate-income 

communities, the agencies seek 

feedback on alternatives to the proposed 

weighting approach, including 

incorporating loan count with dollar 

volume. For example, averaging the 

percentage by dollar volume and the 

percentage by number of loans would 

give consumer lending more weight 

than under an approach that only 

considers dollar volume. This 

alternative recognizes that loan size can 

vary among different product lines (e.g., 

automobile loans versus home mortgage 

loans) and seeks to balance the value of 

dollars invested in a community with 

the number of borrowers served. 

Request for Feedback 

Question 84. Should the agencies use 

loan count in conjunction with, or in 

place of, dollar volume in weighting 

product line conclusions to determine 

the overall Retail Lending Test 

conclusion in an assessment area? 

H. Additional Factors Considered for 

Retail Lending Test Conclusion 

While the proposed metrics and 

benchmarks are calibrated to reflect 

differences in local market conditions, 

bank capacities, business models and 

strategies, there are a limited number of 

additional factors that would not be 

captured in the proposed metrics and 

benchmarks that the agencies believe 

should be considered when evaluating a 

bank’s retail lending performance. 

Therefore, the agencies propose to 

consider additional factors that are 

indicative of a bank’s lending 

performance or lending opportunities, 

but are not captured in the metrics, 

when reaching Retail Lending Test 

conclusions for facility-based 

assessment areas. The agencies propose 

to limit this consideration to a 

prescribed set of factors to create more 

certainty regarding when to depart from 

a recommended conclusion derived 

from the metrics and performance 

ranges. The agencies seek feedback on 

whether the agencies should consider a 

different or broader set of additional 

factors. For example, the agencies seek 

feedback on whether oral or written 

comments about a bank’s retail lending 

performance, as well as the bank’s 

responses to those comments, should be 

considered by the agencies in 

developing Retail Lending Test 

conclusions. 

Specifically, under the proposal, 

performance context related to a bank’s 

retail lending performance that is not 

reflected in the metrics, such as 

information related to the bank’s 

capacity and constraints, could raise the 

assigned conclusion under the ranges 

approach. The proposal also recognizes 

that lowering an assigned conclusion 

may be warranted in other situations as 

provided in proposed § __.22(e). For 

example, an assigned conclusion could 

be lowered where a bank manipulated 

loan data to obtain better scores under 

the distribution tests. Examples of 

manipulation could include loan 

churning, defined as the purchase of 

loans for the sole or primary purpose of 

influencing a bank’s retail lending 

performance evaluation, as evidenced 

by the subsequent resale of some or all 

of those loans within a short time 

period, or when some or all of the loans 

were considered in multiple banks’ CRA 

evaluations. 

The geographic dispersion of loans is 

another aspect of performance not 

captured in the retail lending measures. 

For example, an assigned conclusion 

may be lowered where geographic 

lending patterns exhibit gaps in census 

tracts served that cannot be explained 

by performance context. 

Further, the proposal allows for 

consideration of data anomalies that 

could produce an inappropriate 

recommended conclusion. For example, 

where there are very few banks 

reporting retail lending and deposits 

data, or where one bank has an outsized 

market share, the proposed benchmarks 

may not provide an accurate measure of 

local opportunities. Measurement errors 

in the data could also cause issues: For 

example, due to sampling noise, the 

American Community Survey might 

indicate a particular assessment area 

had zero owner-occupied units in lowor moderate-income census tracts (and 

hence no geographic income average) in 

an assessment area that the bank did do 

some mortgage lending in low- or 

moderate-income census tracts. Another 

problem could occur if a monoline 

multifamily lender were evaluated in an 

assessment area with no low- or 

moderate-income census tracts. The 

metric approach would not be 

appropriate in such a situation, as the 

bank would have neither a geographic 

nor a borrower distribution conclusion. 

An additional approach that the 

agencies are considering is to use data 

to identify assessment areas in which 

lenders may be underperforming in the 

aggregate and the credit needs of 

substantial parts of the community are 

not being met. This information about 

the assessment area could be used as an 

additional factor to consider when 

assigning Retail Lending Test 

conclusions. In such an assessment area, 

the agencies may consider that the 

market benchmark is not an accurate 

measure of the credit needs and 

opportunities of low- and moderateincome communities, small businesses, 


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33948 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

185See Q&A § __.22(b)(2) and § __.22(b)(3)–4. 186See Appendix A to part __—Ratings. 

or small farms, because lenders as a 

whole are not meeting their obligations. 

The agencies would apply additional 

qualitative review of retail lending in 

these assessment areas, the results of 

which could be used to adjust the 

recommended conclusion produced by 

the bank metrics and performance 

ranges. 

One way the agencies could 

implement such an approach would be 

by developing statistical models that 

predict the level of the market 

benchmark that would have been 

expected in each assessment area based 

on its demographics (e.g., income 

distributions, household compositions), 

housing market conditions (e.g., housing 

affordability, the share of housing units 

that are rentals), and economic activity 

(e.g., employment growth, cost of 

living). A model could be estimated 

using data at the census tract or county 

level that are collected nationwide. An 

assessment area in which market 

benchmarks fell significantly below 

their expected levels would be 

considered underperforming for the 

relevant product line, distribution test, 

and income level. 

The agencies could identify 

underperforming markets using a 

relative standard—for example, 

assessment areas in which the 

difference between the market 

benchmark and its expected value was 

two standard deviations below average. 

They could also identify 

underperforming markets using an 

absolute standard—for example, 

assessment areas in which the market 

benchmark was less than 75 percent of 

its expected value. Alternatively, rather 

than designate a specific set of 

underperforming markets, the agencies 

could use the difference between the 

actual and expected market benchmarks 

as an additional factor to consider in 

every assessment area. 

Request for Feedback 

Question 85. Would identifying 

underperforming markets appropriately 

counter the possibility that the market 

benchmarks might be set too low in 

some assessment areas? If so, what data 

points should be used to set 

expectations for the market benchmark? 

How far below this expectation should 

an observed market benchmark be 

allowed to fall before the market is 

designated as underperforming? 

Question 86. Should the agencies 

consider other factors, such as oral or 

written comments about a bank’s retail 

lending performance, as well as the 

bank’s responses to those comments, in 

developing Retail Lending Test 

conclusions? 

X. Retail Lending Test: Evaluation 

Framework for Retail Lending Test 

Conclusions at the State, Multistate 

MSA, and Institution Level 

The agencies propose a transparent 

and standardized approach to 

determining Retail Lending Test 

conclusions at the state, multistate 

MSA, and institution level. The 

proposed approach would leverage 

performance in a bank’s local 

assessment areas. In addition, the 

agencies also propose evaluating a large 

bank’s retail lending performance in 

areas outside of its assessment areas, 

referred to as the outside retail lending 

area. This approach is intended to 

complement the proposed retail lending 

assessment areas, as described in 

Section VI. The agencies propose a 

tailored application of this approach for 

intermediate banks. Specifically, the 

agencies propose evaluating an 

intermediate bank’s retail lending 

performance outside of its facility-based 

assessment areas only if it does more 

than 50 percent of its lending outside of 

its facility-based assessment areas. 

As discussed in Section VI, the 

agencies recognize that changing 

technology increasingly allows banks to 

reach consumers with loans and deposit 

products without any in-person contact 

at a branch office. As a result, a bank’s 

lending may be geographically 

dispersed, without concentrations in 

particular local markets that would be 

captured by the proposed retail lending 

assessment areas. As shown in Table 1 

in Section VI, the agencies estimate that 

approximately 11 percent of home 

mortgage loans and 16 percent of small 

business loans originated by large banks 

would fall outside of facility-based 

assessment areas or the proposed retail 

lending assessment areas. 

A. Background 

Under the current CRA regulations, 

lending test ratings are assigned at the 

state, multistate MSA, and institution 

levels using conclusions reached about 

performance on the various performance 

criteria in a bank’s assessment areas. 

Retail lending conducted outside of 

assessment areas is not evaluated using 

the Lending Test criteria. However, the 

Interagency Questions and Answers do 

allow for consideration of loans to lowor moderate-income persons, and small 

business and small farm loans outside of 

a bank’s assessment areas.185

The current process relies on 

examiner judgment to reach conclusions 

(inside assessment areas and outside 

when applicable), using the descriptions 

of performance under each of the 

criteria and ratings categories.186

Conclusions are then aggregated to 

reach lending test ratings at each of the 

rated areas—state and multistate MSA 

levels. Examiners aggregate conclusions 

considering the significance of the 

bank’s lending in the area compared to 

the bank’s overall activities as well as 

information about the number and 

activities of other banks, lending 

opportunities, and demographic and 

economic conditions in the rated areas. 

B. Overview 

The agencies propose to assign 

conclusions on the Retail Lending Test 

at the state and multistate MSA levels 

based on the conclusions reached at 

individual facility-based and retail 

lending assessment areas, as applicable. 

The weight assigned to each assessment 

area level conclusion in determining the 

state or multistate MSA rating would be 

measured as a combination of the 

percentage of the banks’ retail loans 

made in that assessment area, and the 

percentage of the banks’ deposits 

sourced from that assessment area. The 

use of the combination of retail lending 

and deposits is intended to ensure that 

a bank’s ratings reflect its performance 

in the communities where most of its 

borrowers and depositors live. 

The agencies also propose to assign 

conclusions on the Retail Lending Test 

at the institution level by similarly 

combining conclusions from a bank’s 

facility-based and retail lending 

assessment areas, as applicable. In 

addition, large banks and certain 

intermediate banks would be assigned a 

conclusion on their retail lending 

performance in outside retail lending 

areas, which are the areas outside of a 

bank’s facility-based and retail lending 

assessment areas, as defined in 

proposed § __.12. This conclusion 

would factor into the institution-level 

Retail Lending Test conclusion for these 

banks just as assessment area 

conclusions do, with a weight measured 

as a combination of the percentage of 

the banks’ retail loans made, and the 

percentage of the banks’ deposits 

sourced from, outside any facility-based 

or retail lending assessment area. 

For intermediate banks, the agencies 

propose to perform an evaluation of 

outside-assessment area retail lending 

only if greater than 50 percent of the 

bank’s retail lending, by dollar volume, 

occurred outside its assessment areas 

during the evaluation period. The 

agencies recognize that most 

intermediate banks perform the bulk of 

their lending within their assessment 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33949 

187Using data from the CRA Analytics Data 

Tables, the agencies found that the median bank 

with assets greater than $600 million evaluated 

under the intermediate small bank exam procedures 

conducted almost 80 percent of its retail lending, 

by dollar volume, within its assessment areas. 

Additionally, over 90 percent of the sampled banks 

conducted the majority of their retail lending 

within their assessment areas. 

areas.187 Tailoring the evaluation 

approach for these banks is intended to 

reflect the more limited capacity of 

intermediate banks relative to large 

banks, and to reflect that their business 

models are generally focused on their 

facility-based assessment areas. 

The agencies seek feedback on 

whether all large banks should be 

evaluated on their retail lending outside 

of facility-based and retail lending 

assessment areas, as applicable. An 

alternative option would be to evaluate 

outside-assessment area retail lending 

only for large banks for which outsideassessment area lending met some 

minimum threshold. For example, large 

banks that originated or purchased more 

than 80 percent of their retail loans, by 

dollar amount, within their facilitybased and retail lending assessment 

areas could be exempted from an 

evaluation of their outside-assessment 

area retail lending. 

To develop conclusions for a bank’s 

outside retail lending area performance, 

the agencies propose to use distribution 

metrics to evaluate each of a bank’s 

major product lines. As with the 

procedure for developing a 

recommended conclusion for each 

assessment area, the bank’s outside 

retail lending area metrics would be 

compared to a set of benchmarks. These 

benchmarks, described below in Section 

X.C, would be established as tailored 

combinations of the market and 

community benchmarks from the 

outside retail lending area geographies 

in which the bank was engaged in retail 

lending. As in the bank’s assessment 

areas, focusing on major product lines 

tailors the evaluation to the bank’s 

business model by assessing how it met 

the credit needs of its community in the 

products it specializes in. 

Request for Feedback 

Question 87. Should all large banks 

have their retail lending in their outside 

retail lending areas evaluated? Should 

the agencies exempt banks that make 

more than a certain percentage, such as 

80 percent, of their retail loans within 

facility-based assessment areas and 

retail lending assessment areas? At what 

percentage should this exemption 

threshold be set? 

C. Outside Assessment Area Lending 

For the reasons described in Section 

VIII, the agencies propose using the 

same major product line standards and 

bank geographic and borrower 

distribution metrics to evaluate a bank’s 

retail lending activity in an outside 

retail lending area. In addition, the 

agencies propose only performing this 

evaluation at the institution level. This 

means that retail lending activity 

outside a bank’s assessment areas would 

only be evaluated if that lending meets 

the major product line standard. 

Because this retail lending activity 

would be aggregated nationwide, the 

agencies propose a modified approach 

to setting performance expectations that 

draws on the approach used for 

assessment areas but reflects the larger 

geographic area. 

1. Establishing Performance 

Expectations for Bank Distribution 

Metrics 

Similar to the proposed method for 

reaching recommended conclusions in 

individual assessment areas, the 

agencies propose to set expectations for 

bank performance via a standardized 

methodology as described in Section 

IX.E.1. The bank distribution metrics for 

each income level, distribution test 

(geographic or borrower), and major 

product line would be compared to a set 

of performance ranges that correspond 

to the different conclusion categories. 

a. Tailoring Benchmarks To Match the 

Bank’s Geographic Footprint 

Banks that engage in retail lending 

outside of their assessment areas do not 

all have the same regional distributions 

of lending across the country. As such, 

the lending opportunities in the 

communities served by different banks 

in outside retail lending areas are not 

the same. The agencies propose to tailor 

performance expectations for outside 

retail lending areas to match the 

opportunities in the regions in which 

the bank lends. 

The agencies propose to tailor 

performance expectations by setting 

performance ranges relative to bankspecific tailored benchmarks. These 

tailored benchmarks are calculated as 

the average of local market and 

community benchmarks across the 

country, weighted by the retail lending 

the bank does in each region. 

Specifically: 

• For each major product line, the 

agencies would calculate market 

benchmarks and community 

benchmarks for the geographic and 

borrower distribution tests for every 

MSA, and the non-MSA portion of every 

state, in the country. Calculations of 

these benchmarks would follow the 

method described in Section IX.E.2. 

• Each MSA and the non-MSA 

portion of each state is assigned a 

weight, calculated as the percentage, by 

dollar volume, of the bank’s outside 

retail lending that was in that MSA or 

non-MSA portion of a state. 

• Tailored community benchmarks 

and tailored market benchmarks are 

then calculated as the weighted average 

of the community benchmarks and 

market benchmarks in every MSA and 

the non-MSA portion of every state, 

weighted by the percentage of the bank’s 

outside retail lending in that region. 

For example, suppose that 75 percent 

of a particular bank’s outsideassessment area retail lending, by dollar 

amount, occurred in an MSA that had 

a closed-end home mortgage moderateincome borrower market benchmark of 

10 percent. Suppose that the remaining 

25 percent of the bank’s outsideassessment area retail lending took 

place in the non-MSA portion of a state, 

in which the same market benchmark 

was 8 percent. The bank’s tailored 

market benchmark for closed-end home 

mortgage lending to moderate-income 

borrowers would then be (0.75 × 0.1) + 

(0.25 × 0.08) = 0.095, or 9.5 percent. 

Performance ranges for the bank’s 

outside retail lending area would be 

established following the method 

described in Section IX.E.2, with the 

tailored community benchmark and the 

tailored market benchmark substituted 

for the community benchmark and 

market benchmark. A comparison of the 

outside-assessment area bank metric to 

these performance ranges produces a 

recommended conclusion for each 

major product line, distribution test, 

and income level. 

This proposed tailored benchmark 

approach would set expectations for a 

bank’s outside-assessment area retail 

lending to match the opportunities in 

the markets it lends in. The weighting 

by the volume of the bank’s lending 

ensures that the more of a bank’s 

lending occurs in a particular market, 

the more the agencies’ performance 

expectations for the bank mirror 

opportunities in that market. Markets in 

which the bank did zero lending would 

get zero weight, and hence have no 

influence on the performance ranges. 

The agencies seek feedback on 

whether the tailored benchmarks 

described above appropriately set 

performance standards for outside retail 

lending areas. An alternative proposal 

would be to create nationwide market 

and community benchmarks that apply 

to all banks, regardless of where their 

lending is concentrated. These 


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33950 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

188The agencies propose to also use the same 

weighting methodology discussed above—a simple 

average of a bank’s share of deposits and share of 

lending—to weight facility-based assessment area 

performance, and other geographic areas as 

applicable, when developing state, multistate, and 

institution conclusions for the Retail Services and 

Products Test, Community Development Financing 

Test, and Community Development Services Test. 

The details of how this weighting methodology is 

used for these other performance tests are discussed 

in Sections XI, XII, and XIII. 

nationwide benchmarks could be 

calculated as the benchmarks described 

in Section IX.E.2, using all census tracts 

in the nation as the geographic base. 

Another alternative would be to tailor 

benchmarks using weights that are 

individualized by the dollar amount of 

lending specific to each major product 

line, rather than the sum of all of a 

bank’s outside-assessment area retail 

lending. For example, if a bank did a 

majority of its outside-assessment area 

closed-end home mortgage lending in 

MSA A, and a majority of its outsideassessment area small business lending 

in MSA B, the closed-end home 

mortgage tailored benchmarks would be 

weighted towards the benchmarks from 

MSA A, while the small business 

tailored benchmarks would be weighted 

toward MSA B. These alternatives trade 

off the degree of tailoring performance 

expectations to the bank’s opportunities 

against their level of complexity, with 

the agencies’ proposed approach 

striking a balance between the two. 

2. Creating Recommended Retail 

Lending Test Conclusions 

Similar to individual assessment 

areas, the agencies propose to calculate 

a metrics-based recommended 

conclusion for overall outsideassessment area retail lending by 

developing and averaging product line 

scores, following the method described 

in Sections IX.F and IX.G. 

Request for Feedback 

Question 88. Does the tailored 

benchmark method proposed above for 

setting performance ranges for outside 

retail lending areas achieve a balance 

between matching expectations to a 

bank’s lending opportunities, limiting 

complexity, and setting appropriate 

performance standards? Should the 

agencies instead use less tailored 

benchmarks by setting a uniform 

outside retail lending areas benchmarks 

for every bank? Or should the agencies 

use a more tailored benchmarks by 

setting weights on geographies by 

individual product line? 

D. Calculating Retail Lending Test 

Conclusions at the State, Multistate 

MSA, and Institution Level 

1. Scoring Performance in FacilityBased Assessment Areas, Retail Lending 

Assessment Areas, and Outside Lending 

Each facility-based assessment area, 

retail lending assessment area, and the 

outside retail lending area, if applicable, 

would be assigned a Retail Lending Test 

conclusion. The agencies propose to 

assign a numerical performance score to 

the bank’s performance in each of these 

areas using the following mapping: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); or ‘‘Substantial 

Noncompliance’’ (0 points). As 

described in Section IX.F.1, this 

mapping would provide a distinction 

between all conclusion categories, while 

recognizing that ‘‘Low Satisfactory’’ and 

‘‘High Satisfactory’’ reflect degrees of 

difference within a more comprehensive 

‘‘Satisfactory’’ category. 

To produce Retail Lending Test 

conclusions at the state, multistate 

MSA, and institution level, the agencies 

propose to combine the performance 

scores for facility-based assessment 

areas, retail lending assessment areas, 

and outside retail lending areas, as 

applicable, using a standardized 

weighted average approach, as 

described in the following sections. The 

proposed approach would ensure that 

the bank’s retail lending performance in 

every one of its markets would 

influence Retail Lending Test 

conclusions at the state, multistate 

MSA, and institution level conclusions. 

2. State and Multistate MSA Retail 

Lending Test Conclusions 

The agencies propose to assign Retail 

Lending Test conclusions for states and 

multistate MSAs based on a weighted 

average of conclusions from facilitybased assessment areas and retail 

lending assessment areas within each 

respective state and multistate MSA. 

The agencies propose that the weights 

would be calculated as the simple 

average of: 

• The dollars of deposits the bank 

sourced from an assessment area, as a 

percentage of all the bank’s deposits 

sourced from facility-based assessment 

areas or retail lending assessment areas 

in the state or multistate MSA; and 

• The dollars of retail lending the 

bank made in an assessment area, as a 

percentage of all the bank’s retail loans 

in facility-based assessment areas or 

retail lending assessment areas in the 

state or multistate MSA. 

The agencies believe that a bank’s 

presence in a particular community, and 

hence the importance of its performance 

there in an overall evaluation of its 

retail lending, depends on its customer 

bases for both deposits and loans. 

Basing weights purely on deposits, for 

example, would mean that if a bank did 

a very large amount of its lending in a 

market from which it drew few deposits, 

its lending performance there would 

have only a small influence on its 

overall conclusion. In an extreme case, 

most of a bank’s lending might 

effectively get ignored under such a 

weighting approach. Alternatively, 

basing weights purely on lending would 

mean that a bank’s record of serving the 

credit needs of the communities from 

which it draws deposits would have 

little bearing on its overall conclusion. 

For example, if a bank failed the retail 

lending volume screen in a facilitybased assessment area due to making 

very few loans there, its low level of 

retail lending would mean that the 

resulting assessment area conclusion 

carries little weight in its institutionlevel conclusion for the Retail Lending 

Test. Therefore, the agencies believe 

weighting performance based on a 

combination of loans and deposits is 

more appropriate.188

For deposits data, the agencies 

propose to use the annual average 

amount of a bank’s deposits collected 

from each assessment area averaged 

over the years of the relevant evaluation 

period, if the bank collects and 

maintains this data. As proposed in § _

_.42, collecting and maintaining 

deposits data would be required for 

large banks with assets of over $10 

billion. Collecting and maintaining 

deposits data would be optional for 

small banks that elect evaluation under 

the Retail Lending Test, for intermediate 

banks, and for large banks with assets of 

$10 billion or less. For any banks 

evaluated under the Retail Lending Test 

that do not collect deposits data, the 

agencies propose to use the deposits 

assigned to the banks’ branches in each 

assessment area, as reported in the 

FDIC’s Summary of Deposits, averaged 

over the years of the relevant evaluation 

period. 

Because the FDIC’s Summary of 

Deposits data assigns all deposits to 

branch locations, and all branches 

would be located in a facility-based 

assessment area, the deposits assigned 

to retail lending assessment area 

performance scores for banks that do not 

collect and maintain deposits data 

would always be zero. The weight on 

the retail lending assessment area 

performance score for such a bank 

would, therefore, be one half of the 

percentage of dollars of retail lending 

the bank made outside its facility-based 

assessment areas. For example, if a bank 

conducted 50 percent of the dollar 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33951 

amount of its retail lending in a single 

retail lending assessment area and did 

not collect and maintain deposits data 

under § __.42 of the proposal, then the 

weight for that retail lending assessment 

area would be 25 percent. As a result, 

for a large bank with assets of $10 

billion or less or an intermediate bank 

that obtains deposits from outside of its 

facility-based assessment areas, electing 

to collect and maintain deposits data 

could meaningfully increase the weight 

placed on the bank’s performance in its 

retail lending assessment areas and 

outside retail lending area, as 

applicable, and decrease the weight 

placed on its facility-based assessment 

areas. As noted earlier, the agencies 

believe that using an average of a bank’s 

share of lending and share of deposits 

remains a preferable weighting 

approach to only using a bank’s share of 

lending to weight performance across 

different geographic areas, which could 

result in areas with high amounts of 

deposits but low levels of lending being 

overlooked in a bank’s Retail Lending 

Test conclusion. The agencies seek 

feedback on the tradeoffs involved with 

tailoring deposits data requirements, 

particularly regarding the impact of 

using the FDIC’s Summary of Deposits 

data, on the proposed weighting 

methodology and other aspects of the 

proposal. 

Using the weights described above, a 

weighted average of the performance 

scores from each assessment area in the 

state or multistate MSA would be 

calculated, and a corresponding 

conclusion would be assigned by 

rounding to the nearest point value of a 

conclusion category. For example, a 

bank with an averaged performance 

score in a particular state of 4.7 would 

fall between a ‘‘Needs to Improve’’ (3) 

and ‘‘Low Satisfactory’’ (6). Because the 

averaged performance score is closer to 

6 than to 3, the bank would fall into the 

‘‘Low Satisfactory’’ conclusion category. 

Along with the conclusion category, 

the agencies are proposing to report the 

averaged performance score in the 

bank’s performance evaluation. This 

score would provide more information 

as to which end of the performance 

range a bank receiving a particular 

conclusion fell. In the example above, 

the bank with a 4.7 averaged 

performance score is toward the lower 

end of the ‘‘Low Satisfactory’’ range. In 

contrast, a bank with, for example, a 6.3 

averaged performance score would be 

on the higher end of the ‘‘Low 

Satisfactory’’ range. Both banks would 

receive the same conclusion, but the 

second bank’s performance was 

stronger. By publishing the averaged 

performance score, the agencies would 

provide the public with more detailed 

information about how well the bank 

performed on the Retail Lending Test in 

each of its states and multistate MSAs. 

In the following example of the 

proposed approach to assigning 

conclusions, suppose a bank had one 

facility-based assessment area and one 

retail lending assessment area in a state. 

• In the facility-based assessment 

area, the bank made $10 million in retail 

loans and collected $90 million in 

deposits, and 

• In the retail lending assessment 

area, the bank made $10 million in retail 

loans and collected $10 million in 

deposits. 

• The bank receives an 

‘‘Outstanding’’ conclusion (10 points) in 

its facility-based assessment area, and 

• The bank receives a ‘‘Needs to 

Improve’’ conclusion (3 points) in its 

retail lending assessment area. 

Calculating Weights 

Retail Lending Test conclusion for the 

state: The state average performance 

score would then be (0.7 × 10) + (0.3 × 

3) = 7.9. This score is closer to the ‘‘High 

Satisfactory’’ value (7 points) than the 

‘‘Outstanding’’ value (10) points, so the 

bank would be within the ‘‘High 

Satisfactory’’ conclusion category for its 

Retail Lending Test conclusion in the 

state. 

3. Institution Retail Lending Test 

Conclusions 

The agencies propose to assign 

institution-level conclusions similarly 

to state and multistate MSA level ratings 

by taking a weighted average of the 

conclusions from individual assessment 

areas. In addition, the agencies propose 

that the institution-level weighted 

average for large banks and certain 

intermediate banks would incorporate 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.003</GPH>

• Facility-based assessment area: the bank collects 90 percent of its assessment area 

deposits ($ $90: ) and makes 50 percent of its assessment area retail loans 

90M+ l0M 

($10:~:oM) in the facility-based assessment area, so the weight on that assessment area's 

. 90+50 conclus10n would be-2

- = 70 percent. 

• Retail lending assessment area: the bank collects 10 percent of its assessment area 

deposits ($90:~:oM) and makes 50 percent of its assessment area retail loans 

($10:~:oM) in the retail lending assessment area, so the weight on that assessment area's 

. 10+50 conclus10n would be-2

- = 30 percent. 
33952 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

the Retail Lending Test conclusion for 

outside assessment area lending. 

As described above in Section X.D.1, 

the agencies propose to assign 

performance scores to each facilitybased assessment area and retail lending 

assessment area according to the Retail 

Lending Test conclusion reached in 

each specific assessment area. The same 

mapping would be used to assign a 

performance score in an outside retail 

lending area, depending on the 

conclusion this lending received: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); or ‘‘Substantial 

Noncompliance’’ (0 points). 

To develop the Retail Lending Test 

conclusion for the institution, the 

agencies propose calculating a weighted 

average of a bank’s facility-based 

assessment area, retail lending 

assessment area, and outside retail 

lending area performance scores. The 

weights for assessment areas and the 

outside assessment area lending would 

be calculated analogously to the 

assessment area weights for the state 

and multistate MSA conclusions. 

Accordingly, the agencies propose to 

weight each assessment area and 

outside retail lending area performance 

score calculated as the simple average 

of: 

• The dollars of deposits the bank 

sourced from an assessment area, or 

outside retail lending area, as 

applicable, as a percentage of all the 

bank’s deposits; and 

• The dollars of retail lending the 

bank made in an assessment area, or 

outside retail lending area, as 

applicable, as a percentage of all the 

bank’s retail loans. 

As under the proposed approach for 

developing state and multistate MSA 

Retail Lending Test conclusions, the 

share of deposits used to calculate these 

weights would be assigned to 

geographies according to the reported 

deposits data for large banks with assets 

of over $10 billion, and according to 

collected deposits data for other banks 

evaluated under the Retail Lending Test 

that elect to collect and maintain the 

data. For banks that are evaluated under 

the Retail Lending Test that do not 

collect and maintain deposits data, the 

FDIC’s Summary of Deposits data would 

be used to measure dollars of deposits 

by location. Because the Summary of 

Deposits data assigns all deposits to 

branch locations, and all branches 

would be located in a facility-based 

assessment area by rule, the deposits 

assigned to a retail lending assessment 

area and outside retail lending area 

performance scores for banks that do not 

collect and maintain deposits data 

would always be zero. The weight on 

the retail lending assessment area and 

outside retail lending area performance 

scores for such a bank would therefore 

be one half of the percentage of dollars 

of retail lending the bank made outside 

its facility-based assessment areas. The 

agencies seek feedback on the tradeoffs 

involved with tailoring deposits data 

requirements, particularly regarding the 

impact of using the FDIC’s Summary of 

Deposits data, on the proposed 

weighting methodology and other 

aspects of the proposal. 

Using the above weights, a weighted 

average of the performance scores from 

each assessment area and outside retail 

lending area, as applicable, would be 

calculated. This averaged performance 

score would also be paired with the 

appropriate conclusion category (e.g., 

‘‘Low Satisfactory’’) by rounding the 

performance score to the nearest point 

value of a conclusion category. Just as 

for Retail Lending Test conclusions at 

the state and multistate MSA level, the 

agencies are proposing to report the 

average performance score at the 

institution level. This would provide 

more detailed information about how 

well the bank performed on the Retail 

Lending Test overall. 

For example, consider the same 

example bank described above in 

Section X.D.2 with the following 

performance: 

• The bank made $5 million in retail 

loans in its outside retail lending area 

but drew no additional deposits. 

• The bank received an 

‘‘Outstanding’’ conclusion (10 points) 

for its outside retail lending area. 

As before, under this example, the 

bank did $10 million in retail lending, 

and collected $90 million in deposits 

from its facility-based assessment area, 

which received an ‘‘Outstanding’’ 

conclusion (10 points). The bank also 

made $10 million in retail loans and 

collected $10 million in deposits from 

its retail lending assessment area, which 

received a ‘‘Needs to Improve’’ (3 

points) conclusion. 

Calculating Weights 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33953 

Retail Lending Test conclusion for the 

bank: The bank’s average performance 

score would then be (0.65 × 10) + (0.25 

× 3) + (0.1 × 10) = 8.25. This score is 

closer to the ‘‘High Satisfactory’’ value 

(7 points) than the ‘‘Outstanding’’ value 

(10) points, so the bank falls into the 

‘‘High Satisfactory’’ conclusion category 

for its institution-level Retail Lending 

Test conclusion. 

The agencies seek feedback on 

whether weighting facility-based 

assessment area, retail lending 

assessment area, and outside retail 

lending area performance scores by the 

average of the percentage of a bank’s 

retail lending and deposit dollars from 

each of those geographies is the best 

way to combine local-level retail 

lending performance conclusions to the 

state, multistate MSA, and institution 

levels. 

Request for Feedback 

Question 89. Should assessment area 

and outside retail lending area 

conclusions be weighted by the average 

of a bank’s percentage of loans and 

deposits there? Is the proposed 

approach for using FDIC’s Summary of 

Deposits data for banks that do not 

collect and maintain deposits data 

appropriate? Should the agencies use 

another method for choosing weights? 

E. Analysis of Proposed Approach Using 

Historical CRA Performance Evaluation 

Data 

To help inform certain aspects of the 

proposed Retail Lending Test approach, 

the agencies have analyzed historical 

bank lending performance under the 

proposed retail lending volume screen 

and metric-based performance ranges, 

using historical CRA performance 

evaluation data in the CRA Analytics 

Data Tables as well as other historical 

data. Where possible, this analysis 

approximates the recommended retail 

lending conclusion each assessment 

area would have received and the 

weights each assessment area would be 

assigned in computing the institutionlevel Retail Lending Test conclusion. 

This approximation does not take into 

account aspects of the proposal that 

would involve examiner judgment, such 

as the additional factors listed in 

proposed § __.22(e). The agencies also 

compared historical performance under 

the retail lending metrics across 

categories of bank asset size, assessment 

area location and type, and time period 

to evaluate how the proposal may affect 

banks or communities in particular 

circumstances. 

While the agencies believe this 

analysis is informative, the agencies also 

recognize its limitations, including the 

fact that the analysis is backwards 

looking and, therefore, is not a 

prediction of future evaluation results. 

In addition, there are a number of data 

limitations that impact the analysis and, 

therefore, should be taken into 

consideration when interpreting the 

results. These include a number of 

differences between the proposed 

metrics and the historical lending 

analysis run by the agencies, due largely 

to data availability. For example, small 

business loans were identified in the 

analysis based on loan amount, as 

occurs under the status quo, rather than 

borrower revenue size, as is proposed by 

the agencies. In addition, no data on 

small business lending specifically to 

borrowers with gross annual revenues of 

$250,000 or less is available. On 

deposits data, deposit locations were 

approximated by the county of the bank 

branch they were assigned to in the 

FDIC’s Summary of Deposits rather than 

based on the address of the depositor. In 

addition, the analysis combines all 

home mortgage loans together in a 

single category as distinctions between 

closed-end and open-end home 

mortgages were not available until the 

2018 HMDA data. Finally, the analysis 

is based solely on mortgage and small 

business lending. The estimates shown 

here, therefore, should be understood 

only as approximations of how banks 

actually would have performed under 

the proposed retail lending metrics. 

Bank Asset Size. The agencies 

propose using metrics and performance 

ranges to evaluate large and 

intermediate banks, with the 

denominators of the bank volume metric 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.004</GPH>

• Facility-based assessment area: this assessment area accounts for 90 percent of 

institution-level deposits and 40 percent of institution-level retail loans ($ $$lOM $ ), l0M+ l0M+ SM 

so the weight on that assessment area's conclusion would be 90;4° = 65%. 

• Retail lending assessment area: this assessment accounts for 10 percent of institutionlevel deposits and 40 percent of institution-level retail loans ($lOM:$1

1°t~H$SM), so the 

weight on that assessment area's conclusion would be io+4 o = 25 percent. 2 

• Outside retail lending area: the bank made 20 percent of institution-level retail loans 

( $ :sM $S ) outside of its assessment areas and collected O percent of its deposits l0M+ l0M+ M 

there, so the weight on the outside retail lending area would be o+zo = 10 percent 2 
33954 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

189Some banks voluntarily report CRA data, 

despite not reaching the asset size threshold to be 

designated a large bank under current regulations. These banks were included in the analysis of CRA 

and HMDA reporter banks. 

and distributional bank metrics tailoring 

the metrics to account for institutional 

size and capacity. 

Table 9 provides an analysis of mostly 

large bank performance under the 

proposed retail lending volume screen 

and performance ranges approach using 

existing and available data. The results 

reflect aggregated performance at the 

institution level, reflecting performance 

across facility-based assessment areas, 

retail lending assessment areas, and 

outside retail lending areas, as 

appropriate. The agencies used lending, 

deposits, and demographic data from 

2017 through 2019 to estimate the 

percentage of banks whose historical 

performance in those years would have 

been associated with each Retail 

Lending Test conclusion category from 

‘‘Substantial Noncompliance’’ to 

‘‘Outstanding.’’ For data availability 

reasons, this analysis is restricted to 

banks that were both CRA and HMDA 

reporters and is thus primarily an 

analysis of large banks.189 Wholesale, 

limited purpose, and strategic plan 

banks were also excluded from this 

analysis. 

For purposes of this analysis, these 

banks, which were primarily large 

banks, were divided into three asset size 

categories: Assets less than $10 billion, 

assets between $10 billion and $50 

billion, and assets above $50 billion. 

The various asset size groupings of 

banks appear to have roughly similar 

performance under the metrics, with the 

majority of banks falling into a 

‘‘Satisfactory’’ category, and ‘‘Low 

Satisfactory’’ being somewhat more 

common than ‘‘High Satisfactory.’’ As 

shown in Table 9, those banks with 

assets under $10 billion had higher 

frequencies of both ‘‘Outstanding’’ and 

‘‘Needs to Improve’’ Retail Lending Test 

conclusions. This result is due, in part, 

to these banks having fewer assessment 

areas, so a ‘‘Needs to Improve’’ or 

‘‘Outstanding’’ performance conclusion 

in an individual assessment area tends 

to have a greater impact when averaging 

performances across all assessment 

areas. Larger banks typically have many 

more assessment areas, so very good or 

very poor performances in a few 

assessment areas can have less impact 

overall when averaged with stronger 

performance in other assessment areas, 

leading to more conclusions in the 

‘‘Low Satisfactory’’ or ‘‘High 

Satisfactory’’ categories. 

TABLE 9 TO SECTION __.22—DISTRIBUTION OF REPORTER BANKS ESTIMATED RETAIL LENDING TEST CONCLUSIONS, BY

BANK ASSETS

Bank assets 

<$10B $10B–$50B >$50B 

Freq. Percent Freq. Percent Freq. Percent 

‘‘Substantial Noncompliance’’ .................................................................. 0 0 0 0 0 0 

‘‘Needs to Improve’’ ................................................................................. 52 10 6 9 1 4 

‘‘Low Satisfactory’’ ................................................................................... 235 46 31 48 15 58 

‘‘High Satisfactory’’ ................................................................................... 189 37 24 37 10 38 

‘‘Outstanding’’ ........................................................................................... 39 8 4 6 0 0 

Notes: Table 9 shows the estimated distribution of Retail Lending Test conclusions based on agency analysis of home mortgage and small

business lending, deposits, and demographic data from the CRA Analytics Data Tables, over the years 2017–2019. Institution-level conclusions 

were derived from the weighted average of assessment area level recommended conclusions. The boundaries of facility-based assessment 

areas were estimated using reported assessment areas, along with the restrictions that assessment areas must generally lie entirely within a single MSA or the non-MSA portion of a single state, and generally consist of (at least portions of) a contiguous set of counties. Analysis included 

banks that were both CRA and HMDA reporters, and excluded wholesale, limited purpose, and strategic plan banks. Bank asset categories were 

assigned using the annual average of the prior two years of quarterly assets relative to the exam year. Percentages were rounded to the nearest 

whole number. 

Table 10 reflects performance for 

small, intermediate, and large banks, as 

defined in the proposal, on aspects of 

the proposed Retail Lending Test 

approach. The agencies propose to 

evaluate intermediate banks under the 

same retail lending volume screen, as 

well as retail lending distribution 

metrics and performance ranges as large 

banks (although with different rules for 

evaluating lending volume and lending 

outside of facility-based assessment 

areas). However, the agencies propose to 

continue evaluating small banks under 

current procedures unless they opt into 

the proposed Retail Lending Test. 

Table 10 provides an analysis of 

small, intermediate, and large bank 

performance at the institution level 

under the performance ranges portion of 

the proposed Retail Lending Test. 

Because the bank volume metric could 

not be calculated for some banks 

included in this analysis, the analysis in 

Table 10 omits the retail lending volume 

screen for every bank, and simulated 

conclusions are based solely on the 

geographic and borrower distributions 

of their retail lending. As shown in 

Table 10, intermediate bank 

performance under the performance 

ranges appears similar to large bank 

performance. Small banks were notably 

more likely to end up with either a 

‘‘Needs to Improve’’ or ‘‘Outstanding’’ 

conclusion. However, as noted earlier, 

small banks would only be evaluated 

under the proposed Retail Lending Test 

at their option and could otherwise 

remain under the status quo small bank 

lending test. 

TABLE 10 TO SECTION __.22—DISTRIBUTION OF ESTIMATED RETAIL LENDING CONCLUSIONS AMONG BANKS BY ASSET

SIZE, WITHOUT APPLYING THE RETAIL LENDING VOLUME SCREEN

Assets <$600m Assets $600M–$2B Assets >$2B 

Freq. Percent Freq. Percent Freq. Percent 

‘‘Substantial Noncompliance’’ .................................................................. 1 1 0 0 0 0 

‘‘Needs to Improve’’ ................................................................................. 27 14 5 7 3 7 

‘‘Low Satisfactory’’ ................................................................................... 48 24 28 38 17 40 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33955 

TABLE 10 TO SECTION __.22—DISTRIBUTION OF ESTIMATED RETAIL LENDING CONCLUSIONS AMONG BANKS BY ASSET

SIZE, WITHOUT APPLYING THE RETAIL LENDING VOLUME SCREEN—Continued 

Assets <$600m Assets $600M–$2B Assets >$2B 

Freq. Percent Freq. Percent Freq. Percent 

‘‘High Satisfactory’’ ................................................................................... 61 31 32 43 18 43 

‘‘Outstanding’’ ........................................................................................... 61 31 9 12 4 10 

Notes: Table 10 shows the estimated distribution of Retail Lending Test conclusions based on agency analysis of home mortgage and small 

business lending, deposits, and demographic data from the CRA Analytics Data Tables. Institution-level conclusions were derived from the 

weighted average of assessment area level recommended conclusions. The boundaries of facility-based assessment areas for small and intermediate-small banks were derived from data collected from the bank’s performance evaluation. The boundaries of facility-based assessment 

area for large banks were derived from a combination of the data collected from the bank’s performance evaluation and its reported assessment 

area data. Analysis included banks that had a CRA examination begin in 2018 or 2019, and excluded wholesale, limited purpose, and strategic 

plan banks. Bank asset categories were assigned using the annual average of the prior two years of quarterly assets relative to the examination 

year. Percentages were rounded to the nearest whole number. 

Assessment Area Location. The 

agencies propose to use the same 

metrics and performance ranges in 

different geographic markets, as the 

benchmarks are intended to adjust for 

differences in lending opportunities in 

different areas. Table 11 reflects an 

estimate of the percentage of bank 

facility-based assessment area 

performance broken out between 

assessment areas located in MSAs and 

assessment areas located in non-MSAs. 

This analysis uses 2017–2019 data for 

CRA and HMDA reporter banks, 

primarily reflecting large banks. As 

shown in Table 11, bank performance is 

fairly similar in MSA and non-MSA 

assessment areas. 

TABLE 11 TO SECTION __.22—DISTRIBUTION OF REPORTER BANK ASSESSMENT AREA ESTIMATED RETAIL LENDING

CONCLUSIONS, BY LOCATION

MSA Non-MSA 

Freq. Percent Freq. Percent 

‘‘Substantial Noncompliance’’ .......................................................................................................... 46 1 33 2 

‘‘Needs to Improve’’ ......................................................................................................................... 796 16 284 16 

‘‘Low Satisfactory’’ ........................................................................................................................... 1669 33 484 27 

‘‘High Satisfactory’’ .......................................................................................................................... 1803 35 638 35 

‘‘Outstanding’’ .................................................................................................................................. 760 15 359 20 

Notes: Table 11 shows the estimated distribution of Retail Lending Test conclusions based on agency analysis of home mortgage and small 

business lending, deposits, and demographic data from the CRA Analytics Data Tables, over the years 2017–2019. Assessment area-level recommended conclusions are shown. The boundaries of assessment areas were estimated using reported assessment areas, along with the restrictions that assessment areas must generally lie entirely within a single MSA or the non-MSA portion of a single state, and generally consist of 

(at least portions of) a contiguous set of counties. Analysis included 606 banks that were both CRA and HMDA reporters, and excluded wholesale, limited purpose, and strategic plan banks. Percentages were rounded to the nearest whole number. 

Retail Lending Assessment Areas and 

Outside Retail Lending Areas. The 

agencies propose to evaluate the retail 

lending performance of large banks 

outside of facility-based assessment 

areas in retail lending assessment areas. 

The agencies also propose to evaluate 

the retail lending of large banks outside 

of any assessment area (as well as that 

of certain intermediate banks) in the 

overall outside retail lending area. To 

understand how banks may have 

performed, historically, in these areas, 

the agencies estimated the distribution 

of recommended Retail Lending Test 

conclusions that banks reporting both 

HMDA and CRA data would have 

received in areas they would have been 

required to designate as retail lending 

assessment areas, as well as in the 

outside retail lending areas. Results 

using 2017–2019 data are shown in 

Table 12. Compared to the facility-based 

assessment area results shown above, 

these mostly large banks were more 

likely to receive a ‘‘Needs to Improve’’ 

conclusion in retail lending assessment 

areas and outside retail lending areas. 

Under the proposal, intermediate banks 

would not be required to designate retail 

lending assessment areas. Additionally, 

an intermediate bank with more than 50 

percent of lending outside of its facilitybased assessment areas would be 

evaluated on outside retail lending area 

performance under the proposal, while 

other intermediate banks would only be 

evaluated on facility-based assessment 

area performance. 

TABLE 12 TO SECTION __.22—DISTRIBUTION OF ESTIMATED REPORTER BANK RETAIL LENDING CONCLUSIONS, IN RETAIL

LENDING ASSESSMENT AREAS AND OUTSIDE RETAIL LENDING AREAS

Retail lending AA Outside retail 

lending area 

Freq. Percent Freq. Percent 

‘‘Substantial Noncompliance’’ .......................................................................................................... 37 2 11 2 

‘‘Needs to Improve’’ ......................................................................................................................... 531 32 175 29 

‘‘Low Satisfactory’’ ........................................................................................................................... 646 39 268 45 

‘‘High Satisfactory’’ .......................................................................................................................... 360 22 129 21 


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33956 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

TABLE 12 TO SECTION __.22—DISTRIBUTION OF ESTIMATED REPORTER BANK RETAIL LENDING CONCLUSIONS, IN RETAIL

LENDING ASSESSMENT AREAS AND OUTSIDE RETAIL LENDING AREAS—Continued 

Retail lending AA Outside retail 

lending area 

Freq. Percent Freq. Percent 

‘‘Outstanding’’ .................................................................................................................................. 96 6 21 3 

Notes: Table 12 shows the estimated distribution of Retail Lending Test conclusions based on agency analysis of home mortgage and small 

business lending, deposits, and demographic data from the CRA Analytics Data Tables, over the years 2017–2019. Assessment area-level and 

outside retail lending area recommended conclusions are shown. The boundaries of facility-based assessment areas were estimated using reported assessment areas, along with the restrictions that assessment areas must generally lie entirely within a single MSA or the non-MSA portion of a single state, and generally consist of at least a portion of a contiguous set of counties. Analysis included 604 banks engaged in retail 

lending outside any assessment area, and 147 that would have been designated based on the proposed retail lending assessment areas definition. Sample was limited to banks that were both CRA and HMDA reporters, and excluded wholesale, limited purpose, and strategic plan banks. 

Percentages were rounded to the nearest whole number. 

Time Period. The agencies propose 

using a consistent set of retail lending 

metrics and multipliers over time, 

although the proposed approach is 

intended to be dynamic and set 

thresholds that adjust for changes in 

lending opportunities over time. 

Specifically, by using the market 

volume benchmark and distributional 

market benchmarks as the foundation 

for setting performance expectations, 

the agencies intend the resulting 

thresholds to adjust across communities 

and over time. Using further historical 

data from banks that report both HMDA 

and CRA data, Table 13 reflects an 

analysis of the percentage of banks that 

would have received a recommended 

Retail Lending Test conclusion in three 

different time periods: 2005–2007, 

2009–2011, and 2017–2019. The 

percentage of banks that would have 

fallen below a ‘‘Low Satisfactory’’ is 

fairly stable over time, suggesting that 

the metrics are appropriately correcting 

for variation in loan demand over the 

business cycle. Notably, however, there 

is a clear trend of declining rates of 

‘‘Outstanding’’ conclusions, and rising 

‘‘Low Satisfactory’’ conclusions, in a 

way that does not align with the 

business cycle. Factors that shift the 

benchmarks relative to the lending by a 

typical bank—for example, if nonbank 

lenders capture a larger share of home 

mortgage lending to low-income 

borrowers—can lead to overall shifts in 

measured bank performance over time 

for reasons other than market 

downturns or changes in the business 

cycle. 

TABLE 13 TO SECTION __.22—DISTRIBUTION OF REPORTER BANK ESTIMATED RETAIL LENDING CONCLUSIONS, BY TIME

PERIOD

2005–2007 2009–2011 2017–2019 

Freq. Percent Freq. Percent Freq. Percent 

‘‘Substantial Noncompliance’’ .................................................................. 5 1 0 0 0 0 

‘‘Needs to Improve’’ ................................................................................. 68 8 93 12 59 10 

‘‘Low Satisfactory’’ ................................................................................... 207 24 238 31 281 46 

‘‘High Satisfactory’’ ................................................................................... 368 42 289 38 223 37 

‘‘Outstanding‘‘ ........................................................................................... 222 26 138 18 43 7 

Notes: Table 13 shows the estimated distribution of Retail Lending Test conclusions based on agency analysis of home mortgage and small 

business lending, deposits, and demographic data from the CRA Analytics Data Tables, over the years 2005–2007, 2009–2011, and 2017–2019. 

Institution-level conclusions shown were derived from the weighted average of assessment area level recommended conclusions. The boundaries of facility-based assessment areas were estimated using reported assessment areas, along with the restrictions that assessment areas 

must generally lie entirely within a single MSA or the non-MSA portion of a single state, and generally consist of (at least portions of) a contiguous set of counties. Analysis included banks that were both CRA and HMDA reporters, and excluded wholesale, limited purpose, and strategic 

plan banks. Percentages were rounded to the nearest whole number. 

XI. Retail Services and Products Test 

In § __.23, the agencies propose a 

Retail Services and Products Test that 

would evaluate the following for large 

banks: (i) Delivery systems; and (ii) 

credit and deposit products responsive 

to low- and moderate-income 

communities’ needs. The proposed 

Retail Services and Products Test would 

use a predominately qualitative 

approach while incorporating 

quantitative measures as guidelines. The 

delivery systems part of the proposal 

seeks to achieve a balanced evaluation 

framework that considers a bank’s 

branch availability and services, remote 

service facility availability, and its 

digital and other delivery systems. The 

credit and deposit products part of the 

proposal aims to evaluate banks’ efforts 

to offer products that are responsive to 

low- and moderate-income 

communities’ needs. Overall, the 

agencies seek to draw on the existing 

approach to evaluate a bank’s retail 

services, while also updating and 

standardizing the evaluation criteria and 

reflecting the now widespread use of 

mobile and online banking. 

The agencies propose a tailored 

approach to the Retail Services and 

Products Test based on a large bank’s 

asset size. For large banks with assets of 

$10 billion or less, the agencies propose 

making certain components optional in 

order to reduce the data burden of new 

data collection requirements for banks 

within this asset category. For large 

banks with assets of over $10 billion, 

the agencies propose requiring the full 

evaluation under the proposed Retail 

Services and Products Test. 

A. Overview 

1. Current Approach to Retail Services 

The current service test, which only 

applies to large banks (currently defined 

as having assets of at least $1.384 billion 

as of December 31 of both of the prior 

two calendar years), establishes four 

criteria for evaluating retail services: (i) 


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190The agencies’ current CRA regulations provide 

a non-exhaustive list of alternative systems for 

delivering retail banking services which include: 

‘‘ATMs, ATMs not owned or operated by or 

exclusively for the bank, banking by telephone or 

computer, loan production offices, and bank-atwork or bank-by-mail programs.’’ See 12 CFR __

.24(d)(3). 191See 12 CFR __.24(d). 192See 12 CFR __.24(d)(2); Q&A § __.24(d)–1. 193See Q&A § __.24(d)(3)–1. 194 Id. 

195See Q&A § __.24(d)(3)–1. 

196See Q&A § __.24(a)–1. 

197See Q&A § __.24(d)(4)–1. 

The distribution of branches among 

low-, moderate-, middle-, and upperincome census tracts; (ii) a bank’s record 

of opening and closing branches and its 

effects, particularly on low- and 

moderate-income census tracts or lowand moderate-income individuals; (iii) 

the availability and effectiveness of 

alternative systems for delivering retail 

banking services (or non-branch 

delivery systems) in low- and moderateincome census tracts and to low- and 

moderate-income individuals; 190 and 

(iv) the range of services provided in 

low-, moderate-, middle-, and upperincome census tracts and the degree to 

which the services are tailored to meet 

the needs of those census tracts, 

including the reasonableness of 

business hours and services offered at 

branches.191

The first two of these evaluation 

criteria involve reviewing a bank’s 

branch locations, primarily from 

information gathered from a bank’s 

public file. First, using varying methods, 

the agencies evaluate the distribution of 

branches across census tracts of 

different income levels relative to the 

percentages of census tracts by income 

level, households (or families), 

businesses and population in the census 

tracts. Next, the agencies evaluate a 

bank’s branch openings and closings 

during the evaluation period relative to 

its current branch distribution and 

consider if any changes impacted lowor moderate-income census tracts and 

accessibility for low- or moderateincome individuals.192

For the third evaluation criterion, 

guidance includes a variety of factors to 

aid examiners in determining whether a 

bank’s non-branch delivery systems, 

which includes ATMs, are available and 

effective in providing retail banking 

services in low- and moderate-income 

areas and to low- and moderate-income 

individuals.193 This includes, for 

example, the ease of access and use, 

reliability of the system, range of 

services delivered, cost to consumers as 

compared with the bank’s other delivery 

systems, and rate of adoption and 

use.194 Guidance also advises examiners 

to consider any information a bank 

maintains and provides to examiners 

demonstrating that the bank’s 

alternative delivery systems are 

available to, and used by, low- or 

moderate-income individuals, such as 

data on customer usage or 

transactions.195 Although examiners 

may consider several factors, 

evaluations of non-branch delivery 

systems generally focus on the 

distribution of the bank’s ATMs across 

low-, moderate-, middle-, and upperincome census tracts, and a comparison 

of that distribution to the percentage of 

census tracts by income level, 

households (or families), businesses or 

populations across these census tracts, 

particularly low- and moderate-income 

census tracts. Examiners also review the 

types of services offered by a bank’s 

ATMs (i.e., deposit-taking and cashonly) and consider other qualitative 

factors that improve access to ATMs in 

low- and moderate-income census 

tracts. 

The fourth criterion—the range of 

services and degree to which the 

services are tailored to meet the needs 

of those geographies—is the primary 

consideration given to deposit products 

in the current retail service test. 

Examiners consider information from 

the bank’s public file and other 

information provided by the bank 

related to the range of services generally 

offered at their branches, such as loan 

and deposit products, and the degree to 

which services are tailored to meet the 

needs of particular geographies. Current 

guidance explains that examiners will 

consider retail banking services that 

improve access to financial services or 

decrease costs for low- or moderateincome individuals.196 Examiners also 

review data regarding the costs and 

features of deposit products, account 

usage and retention, geographic location 

of accountholders, and any other 

relevant information available 

demonstrating that a bank’s services are 

tailored to meet the convenience and 

needs of its assessment areas, 

particularly low- and moderate-income 

geographies or low- and moderateincome individuals.197

2. Stakeholder Feedback 

Delivery Systems. Community and 

consumer organizations generally 

favored the current evaluation approach 

to evaluating branch delivery systems 

but have suggested that the agencies 

place more focus on assessing branch 

closures in low- and moderate-income 

and other underserved areas, and 

enhanced branch-based services 

supporting financial inclusion. Industry 

stakeholders expressed support for 

greater flexibility in the analysis (e.g., 

receiving credit for a branch outside of 

a low- and moderate-income census 

tract that is routinely accessed by lowand moderate-income individuals from 

outside of that tract). While there was 

divergence among the stakeholders 

regarding whether CRA examinations 

should credit branch presence and 

activities in middle- and upper-income 

census tracts, there was widespread 

support that areas without branches 

should also be defined and better 

reflected in the evaluation, including 

greater identification of how banks are 

serving these areas. 

Stakeholders generally supported the 

evaluation of non-branch delivery 

systems but encouraged flexibility and 

the continued development of standards 

for evaluating and reporting. Industry 

stakeholders opposed the use of 

quantitative benchmarks to evaluate 

non-branch delivery systems, noting 

that these services are difficult to 

quantify and that there is lack of 

consistent available data. They instead 

favor the adoption of a flexible approach 

with optional data reporting and a 

qualitative review for CRA evaluations. 

In contrast, community and consumer 

group stakeholders suggested that the 

framework should provide standards for 

what banks may report to demonstrate 

the effectiveness of their non-branch 

delivery channels in reaching low- and 

moderate-income consumers. For 

example, these stakeholders suggested 

using rates of usage of online and 

mobile services by customers grouped 

by census tract. Overall, stakeholders 

noted that banks would need to provide 

more data for agencies and the public to 

adequately assess performance of banks’ 

non-branch delivery systems. 

Deposit Products. Stakeholders have 

broadly acknowledged the importance 

of banks offering low-cost transaction 

accounts that are responsive to the 

needs of the low- and moderate-income 

population but have had diverging 

opinions on whether available data 

could determine impact for low- and 

moderate-income customers. 

Community and consumer groups have 

supported a separate evaluation of 

deposit products at the assessment area 

level to ensure banks meet the needs of 

low- and moderate-income consumers. 

Some industry groups have supported 

the evaluation of deposit products as its 

own evaluation component. Other 

industry groups have not supported 

including a component to evaluate a 

bank’s deposit products or have 

indicated support if the evaluation 

component were optional or used as 

performance context. Industry 


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198Safe account features are generally understood 

to mean features that conform to the Cities for 

Financial Empowerment Fund’s Bank On National 

Account Standards or the FDIC’s Model Safe 

Accounts Template. See Bank On National Account 

Standards at https://cfefund.org/bank-on-nationalaccount-standards-2021-2022/ and the FDIC Model 

Safe Accounts Template at https://www.fdic.gov/ 

consumers/template/. 

199See Cities for Financial Empowerment Fund, 

Bank on National Account Standards (2021–2022), 

https://cfefund.org/bank-on-national-accountstandards-2021-2022/. 

200See, e.g., Hoai-Luu Q. Nguyen, ‘‘Are Credit 

Markets Still Local? Evidence from Bank Branch 

Closings,’’ American Economic Journal: Applied 

Economics, 11(1): 1–32 (2019), http://faculty.haas.

berkeley.edu/hqn/nguyen_aej_201901.pdf; O. 

Ergungor, ‘‘Bank Branch Presence and Access to 

Credit in Low- to Moderate-Income 

Neighborhoods,’’ Journal of Money, Credit and 

Banking, 42(7), 1321–1349 (2010), https://

www.jstor.org/stable/40925690; Robert M. Adams, 

Kenneth P. Brevoort, and John C. Driscoll, ‘‘Is 

Lending Distance Really Changing? Distance 

Dynamics and Loan Composition in Small Business 

Lending,’’ Board, Finance and Economics 

Discussion Series 2021–011 (Feb. 2021), https://

doi.org/10.17016/FEDS.2021.011; Elliot Anenberg, 

Andrew C. Chang, Serafin Grundl, Kevin B. Moore, 

and Richard Windle, ‘‘The Branch Puzzle: Why Are 

there Still Bank Branches?,’’ Board, FEDS Notes 

(Aug. 20, 2018), https://doi.org/10.17016/2380- 

7172.2206. 

stakeholders were also divided on what 

level to evaluate deposit products with 

some favoring at the institution-level 

and others at the assessment area level 

provided it is at the bank’s option. 

Stakeholders offered several 

suggestions concerning the types of data 

that would be beneficial and readily 

available for determining whether 

deposit products are responsive to the 

needs of low- and moderate-income 

consumers and used by low- and 

moderate-income consumers. Many 

stakeholders suggested incorporating 

data on usage by low- and moderateincome customers, such as the number 

of accounts with safe account features 

opened for low- and moderate-income 

consumers and comparing these 

numbers to a bank’s other offerings.198

This approach would involve an 

assessment of the types of products 

offered, including an assessment of the 

features and the costs. Stakeholders 

indicated that this approach could be 

accomplished by inquiring whether the 

bank has an account that meets the Bank 

On National Account Standards from 

the Cities for Financial Empowerment 

Fund and reviewing that data.199

Greater consideration for impact of a 

deposit product on consumers was also 

suggested as measured by whether a 

consumer graduated from an entry-level 

product or eventually acquired credit or 

a wealth-building product. Lastly, many 

banks acknowledged the difficulty of 

measuring impact on low- and 

moderate-income deposit customers 

because stated income data, which 

would be necessary to determine lowand moderate-income status, is 

currently unavailable. Further, while 

some banks indicated such data would 

be difficult to collect, adding greater 

administrative burden in their view, 

other banks acknowledged that there are 

existing options to approximate lowand moderate-income status, such as 

using the census tract income level 

associated with an accountholder’s 

address. 

B. Delivery Systems Evaluation 

For large banks with assets of over 

$10 billion, the agencies propose 

evaluating the full breadth of bank 

delivery systems by maintaining an 

emphasis on branches and increasing 

the focus on digital and other delivery 

channels. Specifically, the proposed 

approach for delivery systems would 

evaluate three components of the bank’s 

performance: (i) Branch availability and 

services, (ii) remote service facility 

availability, and (iii) digital and other 

delivery systems. For large banks with 

assets of $10 billion or less, only the 

first two components would be 

evaluated, unless the bank requests 

additional consideration of its digital 

and other delivery systems and collects 

the requisite data. The proposed 

approach for evaluating a large bank’s 

delivery systems would leverage 

quantitative benchmarks to inform the 

branch and remote service facility 

availability analysis and provide 

favorable qualitative consideration for 

branch locations in certain geographies. 

The agencies also propose more fully 

evaluating digital and other delivery 

systems, as applicable, in recognition of 

the trend toward greater use of online 

and mobile banking. 

1. Branch Availability and Services 

For the branch availability and 

services component, the agencies 

propose evaluating three factors: Branch 

distribution, branch openings and 

closings, and banking hours of operation 

and services responsive to low- or 

moderate-income individuals and in 

low- or moderate-income communities. 

Local branches remain important to 

communities for accessing credit,200 and 

as such the availability of branches and 

services provided is important for the 

evaluation of retail services. 

a. Branch Distribution and Use of 

Benchmarks 

Building on current practice, the 

agencies propose to evaluate a bank’s 

distribution of branches among low-, 

moderate-, middle-, and upper-income 

census tracts, compared to a series of 

quantitative benchmarks that reflect 

community and market characteristics. 

This approach would provide a more 

transparent, comprehensive assessment 

of the physical distribution of branches 

in facility-based assessment areas while 

maintaining the importance of branch 

locations in the assessment of retail 

services. 

Building on a practice used currently 

in some evaluations, the agencies 

propose using data specific to 

individual, facility-based assessment 

areas, referred to as benchmarks, as 

points of comparison when evaluating a 

bank’s branch distribution among low-, 

moderate-, middle-, and upper income 

geographies. The benchmarks would be 

based on the distribution of census 

tracts, households, businesses, and total 

bank branches by census tract income 

level. Each income level and data point 

(census tracts, households, businesses, 

and branches) would have a benchmark, 

specific to each assessment area. The 

benchmarks would be used in 

conjunction with examiner judgment 

and are intended to promote more 

transparency and consistency in the 

evaluation process. 

Table 14 describes the proposed 

community benchmarks and their 

respective data sources. These 

benchmarks would allow examiners to 

compare a bank’s branch distribution to 

local data to help determine whether 

branches are accessible in low- or 

moderate-income communities, to 

individuals of different income levels, 

and to businesses in the assessment 

area. The agencies considered it 

important to include three community 

benchmarks in order to provide 

additional context for each assessment 

area. The first proposed benchmark is 

the percentage of census tracts in a 

facility-based assessment area by 

income level. This benchmark enables 

the agencies to compare a bank’s 

distribution of branches in census tracts 

of each income level, to the overall 

percentage of those census tracts in the 

assessment area. For example, if 20 

percent of a bank’s branches are located 

in low-income census tracts in an 

assessment area, and 10 percent of 

census tracts in the assessment area are 

low-income, the agencies may consider 

the bank to have a relatively high 

concentration of branches in lowincome census tracts. 

The second and third proposed 

community benchmarks are the 

percentage of households, as well as the 

percentage of total businesses and 

farms, in the facility-based assessment 

area by census tract income level. The 

agencies considered these benchmarks 

to be important complements to the first 


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201The aggregate number of branches in an 

assessment area figure is comprised of full-service 

and limited-service branch types as defined in the 

FDIC’s Summary of Deposits. 

benchmark, because households, 

businesses, and farms reflect a bank’s 

potential customer base, and may not be 

distributed evenly across census tracts. 

For example, an assessment area with a 

relatively large concentration of 

households and businesses in lowincome census tracts may have a higher 

low-income benchmark for households 

and businesses, and a relatively low 

low-income benchmark for census 

tracts. The agencies would thus 

consider the levels of all the 

benchmarks to inform a judgment about 

the bank’s branch distribution in the 

market. 

TABLE 14 TO SECTION __.23—COMMUNITY BENCHMARKS FOR RETAIL SERVICES—BRANCH DISTRIBUTION

Benchmark(s) Data source 

Percentage of census tracts in a facility-based assessment area by census tract income level .... American Community Survey (Census). 

Percentage of households in a facility-based assessment area by census tract income level ....... American Community Survey (Census). 

Percentage of total businesses and farms in a facility-based assessment area by census tract 

income level.

Third-party data provider. 

The agencies are also proposing a new 

aggregate measurement of branch 

distribution—referred to as a market 

benchmark—that would measure the 

distribution of all bank branches in the 

same facility-based assessment area by 

census tract income. Table 15 provides 

an overview of the proposed market 

benchmark and the associated data 

source. 

TABLE 15 TO SECTION __.23—MARKET BENCHMARK FOR RETAIL SERVICES—BRANCH DISTRIBUTION

Benchmark(s) Data source 

Percentage of all bank branches 201 in a facility-based assessment area by census tract income level FDIC Summary of Deposits Survey. 

The use of a market benchmark would 

improve the branch distribution 

analysis in several ways. First, having 

such data would give examiners more 

information for determining how much 

opportunity or competition exists for 

providing retail services in census tracts 

of different income levels. Second, 

examiners would have market data on 

branch dispersion within facility-based 

assessment areas to identify areas with 

high or low branch concentration 

relative to community benchmarks. For 

example, if a bank has a branch in a 

low-income or moderate-income census 

tract where few other lenders have 

branches, this could indicate 

particularly responsive or meaningful 

branch activity for the bank. 

Table 16 provides an example of the 

community and market benchmarks that 

could be used in evaluating a bank’s 

branch distribution. 

TABLE 16 TO SECTION __.23—GEOGRAPHIC BRANCH DISTRIBUTION

Tract income levels 

Branches Community benchmarks Market benchmark 

Total branches Census tracts Households Businesses Total branches from FDIC 

summary of 

deposits as of 6/30/2018 

Number Percent Number Percent Percent Percent 

Number Percent 

Low ................................... 0 0.0 11 8.5 7.9 5.4 9 4.9 

Moderate .......................... 2 25.0 30 23.3 25.7 20.1 40 22.0 

Middle ............................... 4 50.0 53 41.1 40.0 43.1 91 50.0 

Upper ............................... 2 25.0 35 27.1 26.3 31.4 42 23.1 

Unknown .......................... 0 0.0 0 0.0 0.0 0.0 0 0.0 

Totals ........................ 8 100.0 129 100.0 100.0 100 182 100.0 

Along with performance context, 

examiners would use the bank’s branch 

distribution and community 

benchmarks to draw conclusions on 

whether the bank’s branches are 

accessible in low- and moderate-income 

communities, to individuals of different 

income levels, and to businesses in the 

assessment area. 

In the example above, the bank has 

eight total branches in an assessment 

area with none of those branches in lowincome census tracts and two in 

moderate-income census tracts. An 

examiner would compare the 

community benchmarks with the bank’s 

lack of branches in low-income census 

tracts. Specifically, in the example 

above, 8.5 percent of all census tracts 

are low-income, and 7.9 percent of all 

households in the assessment area are in 

low-income census tracts. The examiner 

would also compare the bank’s lack of 

branches in low-income census tracts 

with the market benchmark showing 

that 4.9 percent of branches for all banks 

in the assessment area are in lowincome census tracts. These benchmarks 

would highlight that the bank’s lack of 

branches in low-income census tracts 

lags the corresponding benchmarks, 

though the low-income benchmarks 

themselves are also low in this example. 


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202FDIC, ‘‘How America Banks,’’ supra note 145. 

203As used by the U.S. Census Bureau, ‘‘The 

concept of the center of population . . . is that of 

a balance point. The center of population is the 

point at which an imaginary, weightless, rigid, and 

flat (no elevation effects) surface . . . would 

balance if weights of identical size were placed on 

it so that each weight represented the location of 

one person’’; centers of population are periodically 

calculated for each census tract. See https://

www.census.gov/geographies/reference-files/timeseries/geo/centers-population.2010.html. Using 

centers of population, rather than geographic 

centers of census tracts, captures the average 

distance between bank branches and the people at 

the census-tract level as accurately as possible. 

204The agencies are proposing that ‘‘urban areas’’ 

would refer to census tracts located primarily 

within the principal city components of MSAs. 

Under the proposal, ‘‘suburban areas’’ would refer 

to census tracts located primarily outside of the 

principal city components of MSAs and ‘‘rural 

areas’’ would refer to census tracts located in nonMSAs. Principal cities are defined by the U.S. 

Office of Management and Budget, ‘‘2020 Standards 

for Delineating Core Based Statistical Areas’’: ‘‘The 

principal city (or cities) of a CBSA will include: (a) 

The largest incorporated place with a 2020 Census 

population of at least 10,000 in the CBSA or, if no 

incorporated place of at least 10,000 population is 

present in the CBSA, the largest incorporated place 

or census designated place in the CBSA; and (b) 

Any additional incorporated place or census 

designated place with a 2020 Census population of 

at least 250,000 or in which 100,000 or more 

persons work; and (c) Any additional incorporated 

place or census designated place with a 2020 

Census population of at least 50,000, but less than 

250,000, and in which the number of workers 

working in the place meets or exceeds the number 

of workers living in the place; and (d) Any 

additional incorporated place or census designated 

place with a 2020 Census population of at least 

10,000, but less than 50,000, and at least one-third 

the population size of the largest place, and in 

which the number of workers working in the place 

meets or exceeds the number of workers living in 

the place.’’ 86 FR 37770, 37776 (July 16, 2021). 

Similarly, the examiner would also 

compare the percentage of the bank’s 

branches located in moderate-income 

census tracts in the assessment area (25 

percent) with the above community 

benchmarks. For example, 25.7 percent 

of all households are located in 

moderate-income census tracts, and 23.3 

percent of all census tracts in the 

assessment area are moderate-income 

census tracts. The examiner would also 

compare the bank’s distribution of 

branches in moderate-income census 

tracts with the market benchmark 

showing that 22.0 percent of branches 

for all banks in the assessment area are 

in moderate-income census tracts. From 

comparing the bank’s share of branches 

in moderate-income census tracts to the 

moderate-income benchmarks, the 

benchmarks could help inform a 

conclusion that the bank’s distribution 

of branches in moderate-income census 

tracts was strong. 

An examiner could evaluate these 

data in different ways depending on 

performance context. For example, an 

examiner could consider performance 

context and the market benchmark in 

low-income census tracts indicating that 

existing bank branches are adequately 

serving the needs of low-income 

households. As part of this performance 

context, an examiner might also 

consider the proximity of the bank’s 

branches in moderate-income census 

tracts to the low-income census tracts in 

the assessment area. 

b. Considerations for Branch 

Availability: Approaches To Designating 

Low Branch Access and Very Low 

Branch Access Census Tracts 

Delivery Systems in Low and Very 

Low Branch Access Geographies. The 

agencies propose providing favorable 

consideration for banks that operate 

branches within or nearby census tracts 

defined as having low or very low 

branch access. As branches continue to 

play a critical role in meeting the credit 

needs of low- and moderate-income 

individuals and communities, the 

agencies consider it important to 

evaluate the accessibility of banking 

services in a bank’s assessment area.202

The agencies propose defining two 

categories for census tracts with limited 

access to bank branches: Low branch 

access and very low branch access. A 

census tract would qualify as low 

branch access or very low branch access 

based on the number of bank branches, 

including branches of commercial 

banks, savings and loan associations, 

and credit unions, found within a 

certain distance of the census tract’s 

center of population.203 Low branch 

access census tracts would be those in 

which there is only one branch within 

this distance or within the census tract 

itself, and very low branch access 

census tracts would be those in which 

there are zero branches within this 

distance or within the census tract itself. 

The agencies considered two 

approaches, one proposed (referred to in 

the SUPPLEMENTARY INFORMATION as the 

‘‘fixed distance approach’’) and one 

alternative (referred to in the 

SUPPLEMENTARY INFORMATION as the 

‘‘local approach’’), to determine the 

relevant distance threshold for each 

census tract. The agencies also 

considered a second alternative which 

does not set specific geographic 

distances in the identification of areas 

which may experience limited access to 

branches. 

Proposed Approach to Low and Very 

Low Branch Access (Fixed Distance 

Approach). In the proposed approach, a 

fixed distance threshold would be 

established based on whether the census 

tract is in an urban, suburban, or rural 

area.204 This approach reflects 

stakeholder feedback that distance 

thresholds for measuring branch access 

should account for variation in spatial 

density and transit modes across 

different geographies. Recognizing these 

differences, the agencies selected 

distance thresholds to reflect reasonably 

expected travel distances for urban, 

suburban, and rural geographies. Urban 

areas would have a distance threshold 

of two miles, suburban areas would 

have a distance threshold of five miles, 

and rural areas would have a distance 

threshold of 10 miles. 

Alternative Approach to Low and 

Very Low Branch Access (Local 

Approach). In the alternative approach, 

a separate local area would be identified 

for each set of central counties of a 

metropolitan area and metropolitan 

division, the outlying counties of each 

metropolitan area and metropolitan 

division, and the nonmetropolitan 

counties of each state. Each of these 

areas are defined by the Office of 

Management and Budget through its 

delineations of metropolitan areas. This 

would result in the identification of 

over 650 distinct local areas. For each 

area, a locally-determined distance 

threshold would be computed based on 

the distance at which 90 percent of the 

local area’s population encounters the 

nearest bank branch, traveling from the 

population center of their census tract. 

As a result, this alternative approach 

would determine the distance 

thresholds for defining low and very 

low branch access census tracts relative 

to local variation in population density 

and land-use patterns. The distance 

thresholds in this approach would also 

adjust over time as branches open and 

close. For example, a new branch 

opening in an area, and existing 

branches remaining open, may result in 

the distance thresholds that apply to all 

census tracts in the area becoming 

smaller. The agencies could update the 

local distances and identification of low 

branch access and very low branch 

access census tracts on a regular basis, 

such as annually, or every five years 

(along with the updates to low- and 

moderate-income census tract 

designations). 

Using the current distribution of 

branches, the locally-determined 

distances identified using this approach 

vary from under one mile for a number 

of local areas with more dense 

concentrations of residents and bank 

branches to over ten miles for areas with 

more sparse distributions of residents 

and bank branches. Around two-thirds 

of local areas have locally-determined 

distances between one and five miles, 

which includes several of the 

nonmetropolitan areas of states. Over 

four-fifths of the metropolitan areas of 


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states have distances between five and 

ten miles. 

While the proposed (fixed distance) 

and alternative (local) approaches 

would determine distance thresholds in 

different ways, both approaches would 

determine whether a census tract is a 

low or very low branch access census 

tract by assessing whether the census 

tract has either one or zero branches 

within the applicable distance 

threshold. 

Illustration of Proposed and 

Alternative Approaches. In Figure 2, a 

case study of the Atlanta-Sandy SpringsAlpharetta, GA MSA highlights the 

areas of low and very low branch access 

identified by the proposed (fixed 

distance) approach on the left, and the 

areas identified by the alternative (local) 

approach on the right. There are distinct 

differences between the two approaches. 

First, the fixed distance approach 

would encompass a varying portion of 

each region’s population because branch 

and population densities vary across the 

country. In the case study above, 3.9 

percent of the population lives in very 

low branch access census tracts, and an 

additional 2.6 percent live in low 

branch access census tracts. These areas 

are determined by two different distance 

thresholds: Two miles for census tracts 

primarily located in the principal cities 

of the MSA and five miles for census 

tracts outside of the principal cities in 

the MSA. For principal-city census 

tracts, 2.9 percent of the population 

lives in very low branch access census 

tracts and 3.0 percent lives in low 

branch access tracts. For census tracts 

outside the principal cities, 4.0 percent 

of the population lives in very low 

branch access census tracts and 2.5 

percent lives in low branch access 

census tracts. These values vary across 

metropolitan areas and rural regions. 

The alternative (local) approach 

would encompass a similar portion of 

each local area’s population in very low 

branch access census tracts by design. In 

the illustrated case, the distance 

threshold for the central counties of the 

MSA is 2.77 miles, and the distance 

threshold for the outlying counties of 

the MSA is 6.1 miles. For census tracts 

in the central counties, 8.0 percent of 

the population lives in very low branch 

access census tracts and 5.9 percent 

lives in low branch access census tracts. 

For census tracts in outlying counties, 

9.3 percent of the population lives in 

very low branch access census tracts 

and 11.8 percent lives in low branch 

access census tracts. By using the local 

distribution of bank branches to 

construct the distance threshold, nearly 

one tenth of each area’s population 

would be considered to live in very low 

branch access census tracts using this 

approach. 

Second, the geographic areas over 

which thresholds are applied differ 

between the two approaches. In the 

illustrated case, the fixed distance 

approach applies the urban threshold of 

2 miles in principal-city census tracts, 

which encompass 12.3 percent of the 

MSA population, and the suburban 

threshold of 5 miles in non-principalcity census tracts, which encompass 

87.7 percent of the MSA population. 

The local area approach applies a 

locally-determined threshold of 2.77 

miles to the central counties of the 

MSA, which encompass 91.3 percent of 

the MSA population, and 6.1 miles in 

outlying counties, which encompass 8.7 

percent of the MSA population in the 

case study. These patterns differ across 

MSAs and metropolitan divisions. 

Table 17 below highlights information 

about areas across the United States 

identified as low and very low branch 

access under the proposed and 

alternative definitions. 


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Figure 2 to Section_. 23: Case study of low and very low branch access approaches in the 

Atlanta-Sandy Springs-Alpharetta, GA MSA 

Panel A. Proposed (fixed distance) approach 

1==..~ 

ix~Ol!il!r 

-~'Clly· 

Panel B. Alternative (local) approach 

I \kry I.ow Al>:ess .. tOIYAccess 

i13⁄40ther 

-eentraJCilunties 
33962 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

TABLE 17 TO SECTION __.23—COVERAGE OF LOW AND VERY LOW BRANCH ACCESS CENSUS TRACTS

Description 

Fixed distance 

approach 

Local approach 

Very low 

branch 

access 

Low 

branch 

access 

Very low 

branch 

access 

Low 

branch 

access 

Percentage of U.S. population ........................................................................................................ 3.1 3.2 8.0 8.6 

By census tract geography type—nationwide 

Percentage of urban/central county census tract population .......................................................... 1.8 2.1 8.0 7.9 

Percentage of suburban/outlying county census tract population .................................................. 4.1 3.7 8.6 12.7 

Percentage of rural nonmetropolitan census tract population ........................................................ 2.6 3.7 7.7 10.1 

By census tract income level—nationwide 

Percentage of low-income census tract population ........................................................................ 3.2 3.3 7.1 8.1 

Percentage of moderate-income census tract population ............................................................... 3.5 3.6 8.2 8.9 

Percentage of middle-income census tract population ................................................................... 3.5 3.6 8.7 9.3 

Percentage of upper-income census tract population ..................................................................... 3.2 3.2 9.1 9.3 

Source: Agencies’ calculations using S&P Global Intelligence, SNL Banking Analytics; U.S. Census Bureau American Community Survey 5- 

year estimates (2015–2019); OMB Files (Sept. 2018). 

Notes: (1) Census tracts are defined as either having low or very low branch access. 

(2) Percentages indicate the share of the population meeting the condition indicated in the column. 

(3) The Fixed Distance Approach and Local Approach use different strategies to divide metropolitan census tracts into categories: The Fixed 

Distance Approach identifies urban and suburban census tracts based on whether they are primarily inside or outside of principal cities; the Local 

Approach divides census tracts on the basis of whether they are in central or outlying counties of the metropolitan area. 

Under the proposed (fixed distance) 

approach, 3.1 percent of the U.S. 

population lives in census tracts that are 

found to have very low branch access; 

another 3.2 percent of the population 

lives in census tracts that are found to 

have low branch access. Across 

geography types, concentrations of very 

low branch access census tracts are 

heaviest in suburban areas, in which 4.1 

percent of the population lives in a very 

low branch access census tract, and are 

lowest in urban areas, where 1.8 percent 

of the population lives in a very low 

branch access census tract. 

Under the alternative (local) 

approach, geographic and population 

coverage is broader: 8.0 percent of the 

U.S. population lives in census tracts 

that are found to have very low branch 

access, while another 8.6 percent of the 

population lives in census tracts that are 

found to have low branch access. Across 

geography types, concentrations of low 

branch access census tracts are heaviest 

in outlying counties of metropolitan 

areas, where 12.7 percent of the 

population lives in a low branch access 

census tract, and lowest in central 

counties of metropolitan areas, where 

7.9 percent of the population lives in a 

low branch access census tract. Table 17 

also shows the percentage of the 

population, by census tract income 

level, living in a low or very low branch 

access census tract under fixed distance 

and local approaches, respectively. 

In general, defining a broader set of 

areas as low and very low branch access 

creates more opportunities for banks to 

receive qualitative consideration for 

branching activities. On the other hand, 

tailoring the areas considered low and 

very low branch access directs banks to 

focus more closely on the areas in 

greatest need of branch access. 

Both the proposed and the alternative 

approaches are intended to address 

challenges that low- and moderateincome individuals and businesses can 

face in accessing retail products and 

services in communities that have few 

or no bank branches. The agencies 

propose providing the following 

scenarios with favorable consideration: 

(i) A bank opens a branch that alleviates 

one or more census tracts’ very low 

branch access status; or (ii) a bank 

maintains a branch in one or more 

census tracts’ low branch access status. 

In addition, the agencies propose 

assessing whether a bank provides 

effective alternatives for reaching lowand moderate-income individuals, 

communities and businesses when 

closing a branch that would lead to one 

or more census tracts being designated 

low or very low branch access. 

Qualitative Approach to Evaluating 

Areas with Few or No Branches. Under 

a second, more qualitative alternative 

approach, the agencies would not define 

‘‘low branch access census tract,’’ ‘‘very 

low branch access census tract,’’ or any 

similar term. Instead, in addition to 

considering the bank’s branch 

distribution metrics compared to 

benchmarks and record of opening and 

closing branches for each facility-based 

assessment area, the agencies would 

undertake a qualitative consideration of 

certain factors related to low- and 

moderate-income census tracts with few 

or no branches. These factors may 

include considering the availability of a 

bank’s branches; the bank’s actions to 

maintain branches; the bank’s actions to 

otherwise deliver banking services; and 

specific and concrete action by a bank 

to open branches in these areas. The 

agencies could also consider these 

factors, as appropriate, in: (i) Middleand upper-income census tracts in 

which branches deliver services to lowor moderate-income individuals; (ii) 

distressed or underserved 

nonmetropolitan middle-income census 

tracts; (iii) distressed or underserved 

nonmetropolitan middle-income census 

tracts with few or no branches; and (iv) 

Native Land Areas. These additional 

geographic designations are further 

discussed below in Section XI.B.1.c. 

The qualitative alternative is intended 

to address the same challenges as the 

proposed approach and the first 

alternative presented, without invoking 

specific distance thresholds. One benefit 

of this exclusively qualitative 

alternative is that it would provide the 

agencies with broad flexibility to 

consider a bank’s actions to improve 

access to banking services in areas with 

limited branch access. However, 

because this second alternative does not 

clearly identify where banks would 

receive consideration, it leaves 

considerable discretion with the 

agencies’ examiners. 


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205See Miriam Jorgensen and Randall K.Q. Akee, 

‘‘Access to Capital and Credit in Native 

Communities: A Data Review, Native Nations 

Institute (Feb. 2017), https://www.novoco.com/ 

sites/default/files/atoms/files/nni_find_access_to_

capital_and_credit_in_native_communities_

020117.pdf. 

206See Q&A § __.24(d)(4)–1. 

207 In proposed § __.12 remote service facility 

means an automated, virtually staffed, or unstaffed 

banking facility owned or operated by, or operated 

exclusively for, the bank, such as an ATM, 

interactive teller machine, cash dispensing 

machine, or other remote electronic facility at 

which deposits are received, cash dispersed, or 

money lent. 

208See Q&A § __.24(d)(3)–1. 

c. Considerations for Branch 

Availability: Other Geographic 

Designations 

In addition to designating low branch 

access census tracts and very low 

branch access census tracts, the agencies 

propose providing qualitative 

consideration for operating branches in 

other geographic areas as well. These 

areas would be favorably considered 

when evaluating overall accessibility of 

delivery systems, including to low- and 

moderate-income populations. 

The agencies propose qualitatively 

considering retail branching in middleand upper income census tracts if a 

bank can demonstrate that branch 

locations in these geographies deliver 

services to low- or moderate-income 

individuals. Low- and moderate-income 

families having access to retail services 

wherever they reside is integral to their 

financial well-being. While stakeholder 

feedback has varied on whether to 

provide qualitative consideration for 

branch presence and activities in 

middle- and upper-income census 

tracts, stakeholders generally suggested 

that the agencies should consider factors 

such as the geographic location of the 

branches and data provided by the bank 

to demonstrate low- or moderate-income 

usage of these branches. 

In addition, the agencies are 

proposing to provide qualitative 

consideration for banks that operate 

branches in distressed or underserved 

nonmetropolitan middle-income 

geographies. The agencies have 

previously used the distressed and 

underserved definitions to qualify 

certain community development 

activities and have not used these 

definitions for purposes of evaluating a 

bank’s retail services. As proposed, a 

geography is defined as a distressed 

nonmetropolitan middle-income area 

geography if it exhibits certain 

economic conditions such as high 

unemployment, excessive poverty rates, 

or severe population loss. Similarly, as 

proposed, a geography is defined as an 

underserved nonmetropolitan area if, 

due to its population size and density, 

securing financing for community needs 

is challenging. Residents, businesses, 

and farms in these geographies may 

have limited access to financial services 

given the economic characteristics of 

these areas. Additionally, in some of 

these areas there are few or no low- and 

moderate-income census tracts, and 

considering branch availability in 

distressed or underserved census tracts 

could provide examiners with 

additional insight into the bank’s branch 

availability. 

Lastly, the agencies propose providing 

positive qualitative consideration if 

banks operate branches in Native Land 

Areas as defined in proposed § __.12. 

The agencies recognize that branch 

access is limited for many Native 

communities,205 and consider it 

appropriate to emphasize bank 

placement of branches and remote 

service facilities in Native Land Areas. 

d. Branch Openings and Closings 

In reviewing a bank’s branch 

availability, the agencies propose 

reviewing a bank’s record of opening 

and closing branch offices in facilitybased assessment areas since the 

previous examination. This would build 

on current practice in which the 

evaluation includes an assessment of 

whether branch openings and closings 

improved or adversely affected the 

accessibility of its delivery systems, 

particularly to low- and moderateincome census tracts and low- and 

moderate-income individuals or 

whether alternative delivery systems are 

effective in providing needed services to 

low- and moderate-income census tracts 

and individuals. 

e. Branch Hours of Operation and 

Services 

As part of the third factor of branch 

availability and services, the agencies 

propose evaluating the reasonableness 

of branch hours in low- and moderateincome census tracts compared to 

middle- and upper-income census 

tracts, including whether branches offer 

extended and weekend hours; and the 

range of services provided at branches 

in low-, moderate-, middle-, and upperincome census tracts. Regarding the 

range of services, this includes services 

provided at branch locations discrete 

from the credit and deposit products 

discussed below in Section XI.C. that 

improve access to financial services or 

decrease costs for low- or moderateincome individuals. Examples of such 

services include, but are not limited to: 

• Extended business hours, including 

weekends, evenings, or by appointment; 

• Providing bilingual/translation 

services; 

• Free or low-cost check cashing 

services, including government and 

payroll check cashing services; 

• Reasonably priced international 

remittance services; and 

• Electronic benefit transfer accounts 

This part of the proposal would focus 

on the range of services exclusively 

offered in branch settings and represents 

a change in current practice for two 

reasons. First, current guidance looks at 

the range of services in its totality by the 

bank and does not distinguish between 

services offered in branches or via an 

alternative delivery system.206 Second, 

the agencies propose separately 

evaluating the availability of deposit 

accounts, whereas in current practice 

the availability of low-cost deposit 

products is considered as part of the 

evaluation of a bank’s range of services. 

The proposed approach focuses on the 

importance of branch-based services by 

directing examiners to conduct a more 

focused examination of whether 

services offered in branches are tailored 

to meet the particular needs of low- and 

moderate-income individuals in a 

bank’s facility-based assessment areas. 

In addition to the examples listed, the 

agencies seek feedback on whether there 

are other branch-based services that 

could be considered as responsive to 

low- and moderate-income needs. 

2. Remote Service Facility Availability 

The agencies propose evaluating 

remote service facility 207 availability as 

the second component of the delivery 

system evaluation. Under current 

guidance,208 remote service facility 

availability is qualitatively evaluated as 

one of several non-branch delivery 

systems, so it can be unclear how much 

consideration and weight is given to a 

bank’s remote service facility 

availability, its placement of various 

types of remote service facilities or its 

partnerships to improve access to 

remote service facilities in low- and 

moderate-income census tracts. The 

agencies’ proposal would evaluate 

remote service facilities separately from 

digital and other delivery systems in 

order to focus on the availability of 

these facilities and leverage community 

benchmarks in the evaluation. 

The agencies propose introducing 

three data points in the remote service 

facility availability analysis that would 

complement a qualitative evaluation. 

Like the branch distribution analysis, 

these data points, referred to as 

benchmarks, would be specific to 

individual, facility-based assessment 


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209See FDIC, ‘‘How America Banks,’’ supra note 

145. 

210See Q&A § __.24(d)(3)–1. 

areas and used as points of comparison 

when evaluating a bank’s remote service 

facility availability among low-, 

moderate-, middle-, and upper income 

census tracts. The evaluation would also 

include an assessment of remote service 

facilities in low- and moderate-income 

census tracts and changes to the 

placement of remote service facilities 

since the previous examination. 

Table 18 below describes the three 

proposed community benchmarks and 

their respective data sources. The use of 

benchmarks would allow for 

comparison of a bank’s remote service 

facility availability to local data (i.e., 

percentage of census tracts, households, 

and total businesses) to help determine 

whether remote service facilities are 

accessible in low- or moderate-income 

communities, to individuals of different 

income levels, and to businesses or 

farms in the assessment area. 

TABLE 18 TO SECTION __.23—COMMUNITY BENCHMARKS FOR RETAIL SERVICES—REMOTE SERVICE FACILITY

AVAILABILITY

Benchmark(s) Data source 

Percentage of census tracts in a facility-based assessment area by census tract income level ............. American Community Survey (Census). 

Percentage of households in a facility-based assessment area by census tract income level ................ American Community Survey (Census). 

Percentage of total businesses and farms in a facility-based assessment area by census tract income 

level.

Third-party data provider. 

In addition to using the community 

benchmarks, the agencies propose 

evaluating bank remote service facility 

partnerships with retailers for expanded 

remote service facility access and 

participation in remote service facility 

fee-waiver alliances for out-of-network 

usage. These types of partnerships may 

contribute to expanded access to 

financial services and may assist with 

lowering access costs, which can be 

particularly important for a bank’s lowand moderate-income individuals. 

3. Digital and Other Delivery Systems 

The agencies propose to evaluate the 

availability and responsiveness of a 

bank’s digital delivery systems (e.g., 

mobile and online banking services) and 

other delivery systems (e.g., telephone 

banking, bank-by-mail, bank-at-work 

programs), including to low- and 

moderate-income individuals. This 

component of the delivery system 

evaluation would be required for large 

banks with assets of over $10 billion, 

and would be optional for large banks 

with assets of $10 billion or less in order 

to tailor the approach for banks that may 

have less capacity to meet new data 

collection requirements. The agencies 

seek feedback on whether the proposed 

approach appropriately tailors the 

evaluation for large banks with assets of 

$10 billion or less. 

The agencies believe that it is 

important to evaluate a bank’s retail 

banking services and products 

comprehensively and recognize that 

banks deliver services beyond branch 

and remote service facilities. According 

to the 2019 FDIC Survey of Household 

Use of Banking and Financial Services, 

the primary method that banked 

households used to access their 

accounts was through digital delivery 

systems, representing 34.0 percent and 

22.8 percent for mobile banking and 

online banking, respectively.209 The 

usage of online and mobile banking 

delivery systems is expected to continue 

to grow. These trends support renewed 

focus on the evaluation of digital and 

other delivery systems while also 

recognizing that many consumers 

continue to rely on branches. 

Current guidance states that the 

agencies evaluate the availability and 

effectiveness of alternative systems for 

delivering retail banking services, which 

is defined to include the use of 

ATMs.210 The agencies propose using 

the word ‘‘responsiveness’’ instead of 

‘‘effectiveness’’ in order to use more 

consistent terminology throughout the 

regulation, and the agencies believe the 

meaning of both terms are comparable. 

To reflect more updated terminology, 

the agencies propose using the term 

‘‘digital and other delivery systems’’ 

instead of ‘‘alternative systems’’ or 

‘‘non-branch delivery systems.’’ 

Additionally, under the proposal, the 

digital and other delivery systems 

component would not include an 

evaluation of ATMs or other remote 

service facilities, since the agencies 

propose a separate review of remote 

service facilities for all large banks. 

The agencies propose using three 

factors to evaluate the availability and 

responsiveness of a bank’s digital and 

other delivery systems: (i) Digital 

activity by individuals in low-, 

moderate-, middle-, and upper-income 

census tracts, (ii) the range of digital and 

other delivery systems, and (iii) the 

bank’s strategy and initiatives to serve 

low- and moderate-income individuals 

with digital and other delivery systems. 

The proposed factors would promote 

improved clarity and consistency in 

evaluating whether a bank’s digital and 

other delivery systems are available and 

responsive in providing financial 

services to low- and moderate-income 

geographies and individuals. 

With respect to the first factor, the 

agencies would measure digital activity 

by individuals in low-, moderate-, 

middle-, and upper-income census 

tracts, and proposed § __.23 provides 

examples of data that could be used to 

inform this analysis. Specifically, the 

examples in proposed § __.23 include 

the number of checking and savings 

accounts opened digitally, and 

accountholder usage data by type of 

digital and other delivery system. The 

agencies propose evaluating this data 

using census tract income level, which 

is an approach sometimes used in 

current practice, since banks have stated 

that they do not routinely collect 

customer income data at account 

opening. These data points would help 

the agencies better understand how 

banks continue to serve their 

communities as technology and bank 

business models evolve. 

With respect to the second and third 

factors, the agencies would qualitatively 

consider the range of a bank’s digital 

and other delivery systems, including 

but not limited to online banking, 

mobile banking, and telephone banking. 

In addition, the agencies would 

consider a bank’s strategies and 

initiatives to meet low- and moderateincome consumer needs through digital 

and other delivery systems, such as 

marketing and outreach activities to 

increase uptake of these channels by 

low- and moderate-income individuals 

or partnerships with community-based 

organizations serving targeted 

populations. 

The agencies are also considering 

appropriate comparators to help 

examiners assess the degree to which a 

bank is reaching consumers in low- or 

moderate-income census tracts through 


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211 12 U.S.C. 2903(d). 

212This is consistent with 12 U.S.C. 2903(b). 

digital and other delivery systems. For 

example, the agencies are considering a 

comparator evaluating the proportion of 

a bank’s deposit accounts opened 

through online and mobile banking 

channels in low- or moderate-income 

census tracts. The agencies also seek 

feedback on whether a standardized 

template with defined data fields would 

capture alternative delivery systems 

more consistently. 

Request for Feedback 

Question 90. Should the agencies use 

the percentage of families and total 

population in an assessment area by 

census tract income level in addition to 

the other comparators listed (i.e., census 

tracts, households, and businesses) for 

the assessment of branches and remote 

service facilities? 

Question 91. Are there other 

alternative approaches or definitions the 

agencies should consider in designating 

places with limited branch access for 

communities, such as branch distance 

thresholds determined by census tract 

population densities, commuting 

patterns or some other metric? For 

example, should the agencies not divide 

geographies and use the more flexible, 

second alternative approach? 

Question 92. How should geographies 

be divided to appropriately identify 

different distance thresholds? Should 

they be divided according to those in 

the proposed approach of urban, 

suburban, and rural areas; those in the 

alternative approach of central counties, 

outlying counties, and nonmetropolitan 

counties; or some other delineation? 

Question 93. How narrowly should 

designations of low branch access and 

very low branch access be tailored so 

that banks may target additional retail 

services appropriately? 

Question 94. Is a fixed distance 

standard that allows the concentration 

of low and very low branch access areas 

to vary across regions, such as that in 

the proposed approach, or a locallydetermined distance threshold that 

identifies a similar concentration of low 

and very low branch access areas within 

each local area, such as that in the 

alternative approach, most appropriate 

when identifying areas with limited 

branch access? 

Question 95. Should the agencies take 

into consideration credit union 

locations in any of the proposed 

approaches, or should the analysis be 

based solely on the distribution of bank 

branches? For example, in the proposed 

or local approach, having a credit union 

within the relevant distance of a census 

tract population center would mean that 

the census tract would not be a very low 

branch access census tract (if there were 

no bank branch present). 

Question 96. If the local approach 

were adopted, how frequently should 

the local distances be updated? 

Question 97. What other branch-based 

services could be considered as 

responsive to low- and moderateincome needs? 

Question 98. Should branches in 

distressed or underserved middleincome nonmetropolitan census tracts 

receive qualitative consideration, 

without documenting that the branch 

provides services to low- or moderateincome individuals? 

Question 99. Should the agencies 

provide favorable qualitative 

consideration for retail branching in 

middle-income and upper-income 

census tracts if a bank can demonstrate 

that branch locations in these 

geographies deliver services to low- or 

moderate-income individuals? What 

information should banks provide to 

demonstrate such service to low- or 

moderate-income individuals? 

Question 100. How could the agencies 

further define ways to evaluate the 

digital activity by individuals in low-, 

moderate-, middle-, and upper-income 

census tracts, as part of a bank’s digital 

and other delivery systems evaluation? 

Question 101. Should affordability be 

one of the factors in evaluating digital 

and other delivery systems? If so, what 

data should the agencies consider? 

Question 102. Are there comparators 

that the agencies should consider to 

assess the degree to which a bank is 

reaching individuals in low- or 

moderate-income census tracts through 

digital and other delivery systems? 

Question 103. Should the evaluation 

of digital and other delivery systems be 

optional for banks with assets of $10 

billion or less as proposed, or should 

this component be required for these 

banks? Alternatively, should the 

agencies maintain current evaluation 

standards for alternative delivery 

systems for banks within this tier? 

D. Credit and Deposit Products 

Evaluation 

The agencies propose a second part of 

the Retail Services and Products Test 

that would focus on the availability of 

credit and deposit products and the 

extent to which these products are 

responsive to the needs of low- and 

moderate-income individuals, small 

businesses, and small farms, as 

applicable. Evaluating credit and 

deposit products would incorporate 

important qualitative factors that 

capture a bank’s commitment to serving 

low- and moderate-income individuals, 

small businesses, and small farms. 

Under the proposal, the agencies 

would separately evaluate: (i) The 

responsiveness of credit products and 

programs to the needs of low- and 

moderate-income individuals, small 

businesses, and small farms; and (ii) 

deposit products responsive to the 

needs of low- and moderate-income 

individuals. Both the credit product and 

deposit product components would be 

assessed at the institution level and 

would be required for large banks with 

assets of over $10 billion. For banks 

with assets of $10 billion or less, only 

the first component—the responsiveness 

of credit products and programs—would 

be required. For large banks with assets 

of $10 billion or less, the deposit 

product component would not be 

required. 

1. Responsiveness of Credit Products 

and Programs to the Needs of Low- and 

Moderate-Income Individuals, Small 

Businesses, and Small Farms 

The agencies propose evaluating the 

responsiveness of a large bank’s credit 

products and programs to the needs of 

low- and moderate-income individuals 

(including through low-cost education 

loans),211 small businesses, and small 

farms under the Retail Services and 

Products Test. The agencies recognize 

that credit needs vary from community 

to community and that bank retail 

lending products and programs, as a 

result, can vary to meet these different 

needs. To that end, the proposal does 

not provide a specific list of retail 

lending products and programs that 

qualify under this provision. The 

agencies believe that such an approach 

could have the unintended consequence 

of constraining bank efforts to meet the 

credit needs of its communities. 

Instead, the proposal states that 

responsive credit products and 

programs provided in a safe and sound 

manner may include, but are not limited 

to, the following three categories: (i) 

Credit products and programs that 

facilitate mortgage and consumer 

lending for low- or moderate-income 

borrowers in a safe and sound manner; 

(ii) Credit products and programs that 

meet the needs of small businesses and 

small farms, including to the smallest 

businesses and smallest farms, in a safe 

and sound manner; and (iii) Credit 

products and programs that are 

conducted in cooperation with MDIs, 

WDIs, LICUs,212 or Treasury 

Department-certified CDFIs in a safe and 

sound manner. 

The proposal focuses on evaluating 

the responsiveness of a bank’s retail 


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213 12 CFR __.22(b)(5). 

214See, e.g., Alanna McCargo, Bing Bai, Taz 

George, and Sarah Strochak, ‘‘Small-Dollar 

Mortgages for Single-Family Residential 

Properties,’’ Research Report, Urban Institute (April 

2018), https://www.urban.org/sites/default/files/ 

publication/98261/small_dollar_mortgages_for_

single_family_residential_properties_2.pdf. 

215See Q&A § __.22(b)(5)–1. 

216 15 U.S.C. 1691(c). 

217This is consistent with 12 U.S.C. 2903(b). 

218See Investing in the Future of Mission-Driven 

Banks: A Guide to Facilitating New Partnerships, 

FDIC, Washington, DC (Oct. 2020), https://

www.fdic.gov/mdi. For printable version, https://

www.fdic.gov/regulations/resources/minority/ 

mission-driven/guide.pdf. 

lending products and programs. The 

agencies intend for this evaluation to 

emphasize the impact of the product or 

program in helping to meet the credit 

needs of low- and moderate-income 

individuals, small businesses, and small 

farms. The current regulation provides 

consideration for a bank’s use of 

innovative or flexible lending practices 

in a safe and sound manner to address 

the credit needs of low- and moderateincome individuals or geographies.213

The agencies believe that using 

responsiveness as part of the proposed 

evaluation standard instead of 

innovative and flexible would better 

capture the focus on community credit 

needs, though these terms are often used 

interchangeably. The agencies also 

believe that using the term 

responsiveness would also help improve 

consistency of terminology throughout 

the proposed regulation. In addition, the 

agencies recognize that examples of 

innovative and flexible retail lending 

products under existing guidance may 

also meet the responsiveness standard 

under this proposal. 

The agencies propose considering 

responsive retail lending products and 

programs under the Retail Services and 

Products Test, rather than the Retail 

Lending Test, for several reasons. First, 

the proposed approach combines the 

review of responsive credit products 

and responsive deposit products into 

the same test. This is a change from the 

current regulations, which consider 

innovative and flexible retail lending 

practices under the lending test and 

deposit products under the service test. 

The agencies’ proposal intends to 

provide a more holistic evaluation of 

credit and deposit products, which 

work in tandem to facilitate credit 

access for low- and moderate-income 

individuals. Second, the agencies 

considered that it may be preferable to 

pair a qualitative evaluation of the 

responsiveness of a bank’s retail lending 

products and programs with other 

qualitative criteria under the Retail 

Services and Products Test rather than 

include it as part of the more metricsbased Retail Lending Test. The agencies 

seek feedback on whether decoupling 

qualitative consideration of retail 

lending credit products and programs 

from the Retail Lending Test is 

appropriate, and if not, how should the 

agencies incorporate qualitative 

performance into a metrics-driven 

approach for retail lending. 

To qualify for qualitative 

consideration under the proposal, the 

agencies would consider relevant 

information about the retail lending 

products and programs, including 

information provided by the bank and 

from the public. Additionally, banks 

would have to demonstrate that their 

products or programs are provided in a 

safe and sound manner. 

Credit Products and Programs that 

Facilitate Home Mortgage and 

Consumer Lending for Low- and 

Moderate-Income Borrowers. The 

proposal includes credit products and 

programs that facilitate mortgage and 

consumer lending targeted to low- or 

moderate-income borrowers as one 

category of responsive credit products 

or programs. Specific examples of 

responsive credit products or programs 

that could be considered under this 

category are described below. 

First, small-dollar mortgages could be 

an example of a responsive home 

mortgage product in this category. 

Small-dollar mortgages are generally 

considered to be in the amount of 

$100,000 or less, although the agencies 

recognize that home prices can vary 

across different communities.214 The 

agencies believe that small-dollar 

mortgages for lower-value properties 

can often be challenging for consumers 

to obtain, in part because originating 

these loans generally generates less 

revenue for a bank than originating 

larger loans. At the same time, smalldollar mortgages are especially 

important for low- and moderateincome first-time homebuyers, who may 

not be able to afford a down payment or 

monthly payments for a more expensive 

home. In addition, access to small-dollar 

mortgages is vital for individuals in 

areas where housing prices are generally 

lower, including many rural 

communities. 

Second, consumer lending programs 

that utilize alternative credit histories in 

a manner that would benefit low- or 

moderate-income individuals, 

consistent with safe and sound 

underwriting practices, could be an 

example of a responsive credit product 

or program in this category. The 

agencies understand that low- or 

moderate-income individuals with 

limited conventional credit histories can 

face challenges in obtaining access to 

credit. For individuals who do not 

qualify for credit based on the use of 

conventional credit reports, alternative 

credit history with rent and utility 

payments, for example, may supplement 

an assessment of their credit profile. 

Under current guidance, the use of 

alternative credit histories, consistent 

with safe and sound lending practices, 

may be considered as an innovative or 

flexible lending practice.215

The agencies seek feedback on 

whether the regulation should list 

special purpose credit programs as an 

example of a responsive credit product 

or program that facilitates mortgage and 

consumer lending targeted to low- or 

moderate-income borrowers. Under 

ECOA and Regulation B, financial 

institutions can establish special 

purpose credit programs to meet special 

social needs.216

Credit Products and Programs that 

Meet Credit Needs of Small Businesses 

and Small Farms. The proposal 

includes credit products and programs 

that meet the needs of small businesses 

and small farms, including the smallest 

businesses and smallest farms, as 

another category of responsive credit 

products or programs. These credit 

product and programs might include 

microloans (such as loans of $50,000 or 

less), loans to businesses with gross 

annual revenues of $250,000 or less, and 

patient capital to entrepreneurs through 

longer-term loans. 

Currently, the agencies consider 

lending practices in a safe and sound 

manner to address the credit needs of 

low- and moderate-income individuals 

or geographies, but the current 

regulation does not specifically mention 

the credit needs of small businesses and 

small farms. To recognize the unique 

credit needs of small businesses, 

including smaller businesses and 

smaller farms, and to align with the 

consideration of small business lending 

in other parts of the regulation, the 

agencies propose to specifically create 

this category focused on products and 

practices meeting the credit needs of 

small businesses and small farms. 

Credit Products and Programs that are 

Conducted in Cooperation with MDIs, 

WDIs, LICUs, and Treasury Departmentcertified CDFIs. Finally, the proposal 

includes credit products and programs 

that are conducted in cooperation with 

MDIs, WDIs, LICUs, and Treasury 

Department-certified CDFIs as category 

of responsive credit products and 

programs.217 218 Under this category, the 

agencies would consider, for example, 

home mortgage loans and small 


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219See FDIC, ‘‘2019 Minority Depository 

Institutions: Structure, Performance, and Social 

Impact’’ (2019), https://www.fdic.gov/regulations/

resources/minority/2019-mdi-study/full.pdf. 

220See, e.g., Ryan M. Goodstein, FDIC, Alicia 

Lloro, Board, Sherrie L. Rhine, FDIC, and Jeffrey M. 

Weinstein, FDIC, Journal of Consumer Affairs 55, 

‘‘What accounts for racial and ethnic differences in 

credit use?’’ (2021); National Survey of Unbanked 

and Underbanked Households, 2017 FDIC Survey 

(October 2018); Michael Barr, University of 

Michigan Law School, Jane K. Dokko, Board, and 

Benjamin J. Keys, University of Michigan, ‘‘And 

Banking for All?,’’ Board, FEDS Series, Working 

Paper No. 2009–34 (2009), https://

www.federalreserve.gov/pubs/feds/2009/200934/ 

200934pap.pdf. 

221See, e.g., Kelly Thompson Cochran, Federal 

Reserve Bank of San Francisco, ‘‘The Next Frontier: 

Expanding Credit Inclusion with New Data and 

Analytical Techniques,’’ Federal Reserve Bank of 

San Francisco, Community Development 

Publications (Aug. 19, 2021), https://www.frbsf.org/ 

community-development/publications/communitydevelopment-investment-review/2021/august/thenext-frontier-expanding-credit-inclusion-with-newdata-and-analytical-techniques/; CFPB, ‘‘CFPB Data 

Point: Becoming Credit Visible,’’ The CFPB Office 

of Research (June 2017), https://

files.consumerfinance.gov/f/documents/

BecomingCreditVisible_Data_Point_Final.pdf. 

222See Q&A § __.24(a)–1. 

223See FDIC, ‘‘How America Banks,’’ supra note 

145. 

224See id. 

225Product examples that meet the 

responsiveness standard include accounts certified 

by the Cities for Financial Empowerment as 

meeting the Bank On National Account standard, 

and ‘‘second-chance accounts.’’ Savings accounts 

targeted towards low- or moderate-income 

individuals such as Individual Development 

Accounts, are another example of a product that 

would be considered responsive. 

business loans that banks purchase from 

MDIs, WDIs, LICUs, and Treasury 

Department-certified CDFIs. Bank 

purchases can provide necessary 

liquidity to these lenders and extend 

their capability to originate loans to 

low- and moderate-income individuals, 

low- and moderate-income areas, and to 

small businesses and farms. The 

agencies recognize the importance of 

supporting these institutions in their 

efforts to provide access to credit and 

other financial services in traditionally 

underserved communities.219

The agencies seek feedback on 

whether there are other categories of 

responsive credit products and 

programs, offered in a safe and sound 

manner, that the agencies should take 

into consideration when deciding 

whether to give qualitative 

consideration to credit products and 

programs. 

2. Deposit Products Responsive to the 

Needs of Low- and Moderate-Income 

Individuals 

The agencies considered several 

factors that suggest an emphasis on 

deposit products would be appropriate. 

Deposit products play a critical role in 

providing an entry point to the banking 

system for low- and moderate-income 

individuals.220 Having a bank account 

provides the means to receive, transact, 

and safely save funds; it is also a 

pathway for a bank customer to 

establish an ongoing relationship with a 

bank. Moreover, a bank account 

provides the cash flow data that some 

financial companies use to underwrite 

credit.221 For these reasons, the agencies 

propose modernizing the existing 

evaluation of a bank’s products and 

services by adding a more explicit focus 

on the financial inclusion potential of 

these products and by adding specific 

measures for evaluation, such as 

availability and usage. 

For large banks with assets of over 

$10 billion, the agencies would evaluate 

the availability and usage of a bank’s 

deposit products responsive to the 

needs of low- and moderate-income 

individuals. This evaluation would be 

optional for large banks with assets of 

$10 billion or less. 

a. Availability of Deposit Products 

Responsive to the Needs of Low- and 

Moderate-Income Individuals 

In evaluating the availability of 

deposit products responsive to the 

needs of low- and moderate-income 

individuals, the agencies would 

evaluate whether the bank offers deposit 

products that have features and cost 

characteristics including but not limited 

to deposit products with the following 

types of features, consistent with safe 

and sound operations: (i) Low-cost 

features, (ii) features facilitating broad 

functionality and accessibility, and (iii) 

features facilitating inclusivity of access. 

First, deposit products with low-cost 

features would be considered 

responsive deposit products. Examples 

of deposit products with low-cost 

features include but are not limited to: 

(i) Accounts with no overdraft or 

insufficient fund fees, (ii) accounts with 

no or low minimum opening balance, 

(iii) accounts with no or low monthly 

maintenance fees, and (iv) free or lowcost checking and bill payment services. 

These examples are consistent with 

current guidance, which includes lowcost transaction accounts among the 

examples of services that improve 

access to financial services and decrease 

costs for low- and moderate-income 

individuals.222 Moreover, cost issues 

remain a prevalent reason cited by 

unbanked individuals as to why they do 

not have a bank account.223

Second, deposit products with 

features facilitating broad functionality 

and accessibility would be considered 

responsive deposit products. Examples 

of deposit products with such features 

could include deposit products with innetwork ATM access, debit cards for 

point-of-sale and bill payments, and 

immediate access to funds for customers 

cashing government, payroll, or bankissued checks. The ability to conduct 

transactions and access funds in a 

timely manner is highly relevant for 

lower-income individuals or unbanked 

and underserved individuals, who 

otherwise might acquire financial 

services at a higher cost from non-bank 

sources. 

Third, deposit products with features 

facilitating inclusive access by persons 

without banking or credit histories, or 

with adverse banking histories, would 

be considered responsive deposit 

products. Regarding this proposal, the 

agencies have considered research 

indicating that former bank account 

problems remain barriers for consumers 

who are unbanked.224

The agencies propose taking these 

three types of features into 

consideration when evaluating whether 

a particular deposit product has met the 

‘‘responsiveness to low- and moderateincome needs’’ standard.225 The 

agencies seek feedback on the 

appropriateness of the features proposed 

to describe whether a deposit product is 

responsive to low- and moderateincome individuals. Additionally, to 

inform the assessment of the availability 

of responsive deposit products, the 

agencies are considering reviewing the 

locations where the responsive account 

can be acquired and assessing whether 

there is variation in the terms or features 

across facility-based assessment areas 

that would disadvantage low- and 

moderate-income individuals. The 

agencies seek feedback on whether to 

include in the evaluation a review of the 

locations where the responsive deposit 

product is made available. 

b. Usage of Deposit Products Responsive 

to the Needs of Low- and ModerateIncome Individuals 

The agencies also propose evaluating 

usage of responsive deposit products by 

considering, for example: (i) The 

number of responsive accounts opened 

and closed during each year of the 

evaluation period in low-, moderate-, 

middle-, and upper-income census 

tracts, respectively; (ii) the percentage of 

total responsive deposit accounts 

compared to total deposit accounts for 

each year of the evaluation period; and 

(iii) marketing, partnerships, and other 

activities that the bank has undertaken 

to promote awareness and use of 

responsive deposit accounts by low- and 

moderate-income individuals. 


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226See Section IX.F for discussion of the 

proposed point scale. 

In evaluating the usage of responsive 

deposit accounts, proposed § __.23 

provides as an example the number of 

responsive deposit accounts opened and 

closed, which would involve a bank 

providing the total number of 

responsive accounts opened and closed 

during each year of the evaluation 

period, aggregated by census tract 

income level (e.g., all low-income 

census tracts in the bank’s facility-based 

assessment areas). This information 

would be an approximate indicator of 

the extent to which the needs in low- or 

moderate-income areas are being met. 

Data on number of account openings 

could be used to measure the 

penetration of the responsive product in 

low- or moderate-income areas. The 

number of account closings, on the 

other hand, could reveal whether the 

product is actually meeting the needs of 

consumers. Account openings and 

closings data, when paired together, 

would better indicate the 

responsiveness of these accounts to 

consumers’ needs, and the bank’s 

effectiveness in meeting consumers’ 

needs, than either of those numbers 

would indicate on their own. 

Relatedly, the agencies also propose 

to consider the share of a bank’s total 

account activity represented by 

responsive deposit products. This 

would be accomplished by comparing at 

the end of each year of the evaluation 

period, the total number of active 

responsive deposit accounts to all active 

consumer deposit accounts offered by 

the bank. The comparison is intended to 

give a sense of the magnitude of the 

commitment to broadening the customer 

base to include low- and moderateincome individuals. 

The agencies also propose considering 

outreach activity undertaken to promote 

awareness and use of responsive deposit 

accounts by low- and moderate-income 

individuals. Bank outreach may 

contribute to the successful take-up of a 

deposit product targeted to low- and 

moderate-income individuals. 

Therefore, the agencies propose giving 

qualitative consideration to marketing, 

partnerships, and other activities to 

attract low- and moderate-income 

individuals. 

Request for Feedback 

Question 104. Are there additional 

categories of responsive credit products 

and programs that should be included 

in the regulation for qualitative 

consideration? 

Question 105. Should the agencies 

provide more specific guidance 

regarding what credit products and 

programs may be considered especially 

responsive, or is it preferable to provide 

general criteria so as not to discourage 

a bank from pursuing impactful and 

responsive activities that may deviate 

from the specific examples? 

Question 106. Should special purpose 

credit programs meeting the credit 

needs of a bank’s assessment areas be 

included in the regulation as an 

example of loan product or program that 

facilitates home mortgage and consumer 

lending for low- and moderate-income 

individuals? 

Question 107. Are the features of cost, 

functionality, and inclusion of access 

appropriate for establishing whether a 

deposit product is responsive to the 

needs of low- and moderate-income 

individuals? What other features or 

characteristics should be considered? 

Should a minimum number of features 

be met in order to be considered 

‘responsive’? 

Question 108. The agencies wish to 

encourage retail banking activities that 

may increase access to credit. Aside 

from deposit accounts, are there other 

products or services that may increase 

credit access? 

Question 109. Are the proposed usage 

factors appropriate for an evaluation of 

responsive deposit products? Should 

the agencies consider the total number 

of active responsive deposit products 

relative to all active consumer deposit 

accounts offered by the bank? 

Question 110. Should the agencies 

take other information into 

consideration when evaluating the 

responsiveness of a bank’s deposit 

products, such as the location where the 

responsive deposit products are made 

available? 

Question 111. Should large banks 

with assets of $10 billion or less have 

the option of a responsive deposit 

products evaluation, as proposed, or 

should this component be required, as 

it is for large banks with assets of over 

$10 billion? 

E. Retail Services and Products Test 

Performance Conclusions and Ratings 

1. Facility-Based Assessment Area 

Retail Services and Products Test 

Conclusion 

The agencies propose reaching a 

single Retail Services and Products Test 

conclusion for large banks in each of 

their facility-based assessment areas. 

For all large banks, the facility-based 

assessment area conclusions would be 

based on two of the three delivery 

systems components: (i) Branch 

availability and services, and (ii) remote 

services facilities availability. The 

agencies believe an assessment area 

level evaluation would be appropriate 

for branches and remote service 

facilities because their physical 

presence would have an impact on the 

availability of retail banking services to 

low- and moderate-income individuals. 

For large banks with assets of over 

$10 billion, the agencies propose 

evaluating at the institution level a 

bank’s digital and other delivery 

systems, and then integrating this into 

the delivery systems conclusion, as 

explained below. The agencies also 

propose evaluating a bank’s credit and 

deposit products at the institution level 

and would be considered alongside the 

delivery systems conclusion when 

deriving an overall institution 

conclusion on the Retail Services and 

Products Test, as described further 

below. Large banks with assets of $10 

billion or less would be evaluated only 

on credit products at the institution 

level unless they elect to have digital 

and other delivery systems and deposit 

products considered. 

The evaluation of branch and remote 

service facility availability as proposed 

would remain qualitative with 

community and market benchmarks (as 

described in Section XI.C.) used to 

inform the conclusions along with 

performance context for each facilitybased assessment area. Based on an 

assessment of the evaluation criteria 

associated with branch availability, 

branch-based services, and remote 

services facility availability, the bank 

would receive a conclusion with 

assigned point values as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points) or ‘‘Substantial 

Noncompliance’’ (0 points).226

2. State and Multistate MSA Retail 

Services and Products Test Conclusions 

State and multistate MSA level 

conclusions for the Retail Services and 

Products Test would be based 

exclusively on the bank’s performance 

in its facility-based assessment areas 

and would involve averaging a bank’s 

conclusions across its facility-based 

assessment areas in each state and 

multistate MSA. The point value 

assigned to each assessment area 

conclusion would be weighted by its 

average share of loans and share of 

deposits of the bank within the 

assessment area, out of all the bank’s 

retail loans and deposits in facilitybased assessment areas in the state or 

multistate MSA area, as applicable, to 

derive a state level score. Similar to the 

proposed weighting approach for 

assigning Retail Lending Test 


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conclusions, deposits would be based 

on collected and maintained deposits 

data for banks that collect this data, and 

on the FDIC’s Summary of Deposits for 

banks that do not collect deposits data. 

The state level score is then rounded to 

the nearest conclusion category point 

value to determine the Retail Services 

and Products Test conclusion for the 

state or multistate MSA. 

3. Retail Services and Products Test 

Institution Conclusion 

The agencies propose assigning a 

Retail Services and Products Test 

conclusion for the institution based on 

the conclusions reached for both parts 

of the test: Delivery systems and credit 

and deposit products. 

Delivery Systems Conclusion. A 

bank’s delivery systems conclusion 

would be based on the conclusions for 

each of the three proposed parts of the 

delivery systems evaluation, as 

applicable: Branch availability and 

services, remote services facilities 

availability, and digital and other 

delivery systems. As noted earlier, the 

first two parts of the evaluation would 

apply for all large banks at the facilitybased assessment area and aggregated to 

form a branch and remote service 

facilities subcomponent conclusion at 

the institution level. For large banks 

with assets of over $10 billion and large 

banks with assets of $10 billion or less 

electing to have digital and other 

delivery systems considered, the 

agencies propose evaluating digital and 

other delivery systems at the institution 

level, as the features of this component 

are not place-based and extend beyond 

facility-based assessment areas. For 

large banks with assets of $10 billion or 

less that do not elect to have their 

digital and other delivery systems 

considered, the institution-level 

delivery systems conclusion would be 

based exclusively on the evaluation of 

such bank’s branch availability and 

services and remote services facility 

availability. 

The agencies however seek feedback 

on whether the evaluation of digital and 

other delivery systems should occur at 

the assessment area level, rather than as 

proposed, and what approach the 

agencies should employ to determine 

how much weight this part of delivery 

systems represent given the various 

bank business models. 

The agencies propose to derive the 

institution delivery systems conclusion 

by considering the conclusions on each 

of the three parts of the delivery system 

evaluation and allowing for examiner 

discretion to determine the appropriate 

weight that should be given to each part. 

This proposed approach for deriving 

delivery system conclusions is intended 

to allow for the agencies to take into 

account the unique business models and 

strategies of different institutions. For 

example, if a majority of the bank’s new 

deposit accounts are opened via digital 

channels during the evaluation period, 

then the agencies may give more weight 

to the digital and other delivery systems 

conclusion. The agencies also seek 

feedback on more quantitative and 

standardized approaches to weighting 

the three parts of the delivery systems 

evaluation. 

Credit and Deposit Products 

Conclusion. A bank’s credit and deposit 

products conclusion would be based on 

the conclusions for the applicable parts 

of the credit and deposit products 

evaluation: (i) The responsiveness of 

credit products and programs, and (ii) 

deposit products responsive to the 

needs of low- and moderate-income 

individuals. As noted earlier, the first 

part of the evaluation applies for all 

large banks at the institution level. For 

large banks with assets of over $10 

billion and for large banks with assets 

of $10 billion or less electing to have 

their responsive deposit products 

considered, the agencies propose 

evaluating the bank’s deposit products 

at the institution level. For large banks 

with assets of $10 billion or less that do 

not elect to have their responsive 

deposit products considered, the 

institution-level credit and deposit 

products conclusion would be based 

exclusively on a bank’s responsiveness 

of credit products and programs to the 

needs of low- and moderate-income 

individuals, small businesses, and small 

farms. 

The agencies consider it appropriate 

to conduct an overall assessment of 

credit and deposit product offerings at 

the institution level, since products are 

often available across a wide range of a 

bank’s footprint. Considering 

performance context, examiners would 

reach a conclusion at the institution 

level for the credit and deposit products 

evaluation of: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points) or ‘‘Substantial 

Noncompliance’’ (0 points). 

The agencies propose to allow for 

examiner judgment to determine the 

appropriate weighting of credit products 

and deposit products for purposes of 

assigning the institution credit and 

deposit products conclusion. The 

agencies considered that a flexible 

approach would allow for tailoring 

based on local community credit needs, 

and on bank business model and 

strategy. For example, if the bank had 

several assessment areas with relatively 

high unbanked populations, and in 

these markets the bank offered several 

responsive deposit products, the 

agencies may apply a greater weight to 

the bank’s deposit product conclusion. 

The agencies seek feedback on 

alternative approaches, such as 

assigning equal weights to both 

components. 

Combined Conclusion. The agencies 

propose to derive the combined 

conclusion for the Retail Services and 

Products Test based on consideration of 

the bank’s conclusions under the 

delivery systems evaluation and the 

credit and deposit products evaluation, 

as applicable. The agencies propose that 

examiner judgment would be used to 

determine the appropriate weight 

between these two parts of the Retail 

Services and Products Test, in 

recognition of the importance of local 

community credit needs and bank 

business model and strategy in 

determining the amount of emphasis to 

give delivery systems and credit and 

deposit products, respectively. Based on 

this consideration, the agencies would 

arrive at an institution-level conclusion 

on the Retail Services and Products 

Test. This conclusion would be 

translated into a performance score 

using the following mapping: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); or ‘‘Substantial 

Noncompliance’’ (0 points). 

For example, assume at the institution 

level a bank receives a conclusion of 

‘‘Low-Satisfactory’’ for its delivery 

systems conclusion and a conclusion of 

‘‘High Satisfactory’’ for its credit and 

deposit products conclusion. If due to, 

for example, the bank’s branch 

expansion during the evaluation period, 

the agencies weight delivery systems 

more heavily, then the agencies may 

assign an overall conclusion of ‘‘Low 

Satisfactory’’ on the Retail Services and 

Products Test, which would correspond 

to an institution performance score of 6. 

The agencies seek feedback on 

whether the two parts of the Retail 

Services and Products Test should 

receive a fixed equal weighting, or 

should the weighting vary by 

community credit needs and bank 

business model and strategy. The 

agencies also seek feedback on whether 

to assign a conclusion for the credit and 

deposit products evaluation, or whether 

to consider the performance solely to 

upgrade the delivery systems 

conclusion. 

Request for Feedback 

Question 112. For all large banks, the 

agencies propose to evaluate the bank’s 


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227See proposed § __.12. 

228 Id. 

229See Appendix A to part __—Ratings; Q&A § __

.26(d)–1. 

230 12 CFR __.25(c) and 12 CFR __.26(c). 

231 12 CFR __.22 and 12 CFR __.23. 

232 12 CFR __.12(h)(2)(ii); see also Q&A § __

.12(h)–6. 

233Q&A § __.23(a)–2. 

234Q&A § __.12(h)–6. 

delivery systems (branches and remote 

service facilities) at the assessment area 

level, and the digital and other delivery 

systems at the institution level. Is this 

appropriate, or should both 

subcomponents be evaluated at the 

same level, and if so, which level? 

Question 113. The agencies propose 

weighting the digital and other delivery 

systems component relative to the 

physical delivery systems according to 

the bank’s business model, as 

demonstrated by the share of consumer 

accounts opened digitally. Is this an 

appropriate approach, or is there an 

alternative that could be implemented 

consistently? Or, should the weighting 

be determined based on performance 

context? 

Question 114. How should the 

agencies weight the two subcomponents 

of the credit and deposit products 

evaluation? Should the two 

subcomponents receive equal weighting, 

or should examiner judgment and 

performance context determine the 

relative weighting? 

Question 115. Should the credit and 

deposit products evaluation receive its 

own conclusion that is combined with 

the delivery systems evaluation for an 

overall institution conclusion? Or 

should favorable performance on the 

credit and deposit products evaluation 

be used solely to upgrade the delivery 

systems conclusion? For large banks 

with assets of $10 billion or less that 

elect to be evaluated on their digital 

delivery systems and deposit products, 

how should their performance in these 

areas be considered when determining 

the bank’s overall Retail Services and 

Products Test conclusion? 

Question 116. Should each part of the 

Retail Services and Products Test 

receive equal weighting to derive the 

institution conclusion, or should the 

weighting vary by a bank’s business 

model and other performance context? 

XII. Community Development 

Financing Test 

In § __.24, the agencies propose a new 

Community Development Financing 

Test that would apply to large banks 

and any intermediate bank that opts to 

be evaluated under this test. The 

agencies would evaluate wholesale and 

limited purpose banks under a modified 

version of this test, as discussed in § _

_.26. 

The Community Development 

Financing Test would consist of a 

community development financing 

metric and benchmarks and an impact 

review. These components would be 

assessed at the facility-based assessment 

area, state, multistate MSA, and 

institution levels, and would inform 

conclusions at each of those levels. The 

Community Development Financing 

Test would not be assessed for retail 

lending assessment areas. 

The bank community development 

financing metrics would measure the 

dollar value of a bank’s community 

development loans 227 and community 

development investments 228 together, 

relative to the bank’s capacity, as 

reflected by the dollar value of deposits. 

The agencies are proposing to use the 

term ‘‘community development 

investment’’ in place of the current term 

‘‘qualifying investment’’ for clarity and 

consistency purposes. The proposed 

benchmarks would reflect local context, 

including the amount of community 

development financing activities by 

other banks in the assessment area, and 

would be used in conjunction with the 

metrics to assess the bank’s 

performance. The metrics and 

benchmarks would be consistent across 

banks and agencies and would provide 

additional clarity about the evaluation 

approach. 

The impact review would evaluate the 

impact and responsiveness of a bank’s 

community development loan and 

community development investment 

activities through the application of a 

series of specific qualitative factors 

described in more detail in Section V. 

The impact review would provide 

appropriate recognition under the 

Community Development Financing 

Test of activities that are considered to 

be especially impactful and responsive 

to community needs, including 

activities that may be relatively small in 

dollar amounts. 

A. Background 

1. Current Approach To Evaluating 

Community Development Financing 

Under current CRA regulations and 

examination procedures, community 

development financing activities are 

assessed differently based on the asset 

size and business model of a bank. For 

small banks, community development 

investment activities are reviewed only 

at a bank’s option for consideration for 

an ‘‘Outstanding’’ rating for the 

institution overall.229 For intermediate 

small banks and wholesale and limited 

purpose banks, community 

development loans, qualified 

investments, and community 

development services are considered 

together under one community 

development test.230

For large banks, community 

development loans are considered as 

part of the lending test together with 

retail loans, while qualified investments 

are considered separately in the 

investment test.231 A large bank receives 

consideration for both the number and 

dollar amount of community 

development loans originated and 

qualified investments made during the 

evaluation period, as well as the 

remaining book value of qualified 

investments made during a prior 

evaluation period. Banks do not receive 

consideration for community 

development loans that remain on a 

bank’s balance sheet from a prior review 

period. The agencies also consider 

qualitative factors including the 

innovativeness and complexity of 

community development loans and the 

innovativeness of qualified investments, 

how responsive the bank has been to 

community needs in its assessment 

areas, and the degree of leadership a 

bank exhibits through its activities. The 

agencies assign conclusions at the 

assessment area level based on both the 

number and dollar amount of activities 

and the qualitative factors. 

The current approach emphasizes 

qualifying activities that have a purpose, 

mandate, or function of serving one or 

more of a bank’s assessment areas, but 

also allows for flexibility in the 

geographic scope and focus of activities, 

subject to certain conditions. A 

qualifying activity that specifically 

serves an assessment area receives 

consideration, as does a qualifying 

activity that serves a broader statewide 

or regional area containing one or more 

of a bank’s assessment areas.232 For a 

bank with a nationwide footprint, this 

could include qualifying activities that 

are nationwide in scope.233 In addition, 

if a bank has met the community 

development needs of an assessment 

area, it may also receive consideration 

for a qualifying activity within a broader 

statewide or regional area that does not 

benefit its assessment area.234

2. Stakeholder Feedback on Evaluation 

of Community Development Loans and 

Investments 

Many stakeholders have suggested 

using standard metrics to assess 

community development financing 

activities in order to establish consistent 

treatment of community development 

loans and qualifying investments and to 

achieve an appropriate balance between 


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emphasizing activities that serve 

assessment areas while also allowing 

banks the option to pursue activities 

beyond their assessment areas. 

Stakeholders have noted that the 

largely qualitative nature of the current 

approach to evaluating community 

development financing results in 

uncertainty and inconsistency in the 

application of performance standards 

and procedures. For example, the 

agencies do not currently provide 

guidance on how the volume of a bank’s 

community development financing 

activity will be measured, and what 

benchmarks may be used to compare 

bank performance. In response, 

stakeholders have expressed support for 

using standard metrics to measure the 

amount of activities a bank has 

conducted, and to measure the level of 

impact and responsiveness of those 

activities. 

Stakeholders have also emphasized 

the importance of maintaining a degree 

of examiner judgment in evaluating 

community development financing 

activities to appropriately consider the 

impact of the activities and their 

responsiveness to community needs. 

Moreover, some stakeholders shared 

that any new metrics to evaluate 

performance should be introduced 

gradually and informed by data and 

analysis. 

Some stakeholders have noted 

concerns with inconsistent treatment of 

community development loans and 

qualified investments under the current 

approach. First, the consideration of 

community development loans and 

qualified investments under separate 

tests for large banks may affect a bank’s 

preference of whether to seek out 

opportunities to lend or invest. For 

example, a bank seeking to improve its 

investment test performance may prefer 

to invest in a qualifying community 

development fund for the purpose of 

receiving CRA credit instead of seeking 

out opportunities to lend a comparable 

dollar amount. Stakeholders have noted 

that the current practice of counting 

community development loans 

originated during the evaluation period, 

but not those held on balance sheet from 

prior evaluation periods, is inconsistent 

with the treatment of qualifying 

investments, and can discourage longerterm loans that stakeholders have cited 

as highly responsive. 

Stakeholders have also expressed 

concerns about the current approach to 

considering community development 

activities that are not clearly tied to one 

or more of a bank’s assessment areas. 

Banks indicate that there is 

inconsistency and a lack of clarity 

regarding how these activities are 

considered, particularly those that do 

not have a purpose, mandate, or 

function of serving an assessment area. 

This uncertainty does not encourage 

community development lending and 

investment in areas with few bank 

assessment areas. Stakeholders have 

indicated that reforms to the CRA 

regulations should appropriately 

balance community development in 

broader geographies with a clear 

emphasis on activities within 

assessment areas. 

B. Combined Consideration of 

Community Development Loans and 

Investments 

The agencies propose to evaluate 

community development loans and 

investments together in the community 

development financing metric, in 

contrast to the current approach for 

large banks that evaluates community 

development loans and investments 

separately. The proposed approach 

seeks to simplify the evaluation while 

addressing concerns from some 

stakeholders that the current approach 

favors one form of financing over 

another. Combining consideration of 

community development loans and 

investments into a single test would 

allow banks to engage in the activity 

best suited to their expertise and that is 

most needed for the community 

development project that the bank is 

financing. The agencies recognize that 

some stakeholders have expressed 

concerns that combining loans and 

investments would result in less 

emphasis on investment activities than 

the current approach, which evaluates 

investments separately. However, 

investments would be included in the 

proposed community development 

financing metric, and the agencies 

believe that the proposed metric 

appropriately measures both community 

development loans and community 

development investments. The impact 

and responsiveness of loans and 

investments would also be considered 

as part of a bank’s impact review. 

C. Allocation of Community 

Development Financing Activities 

The agencies propose an approach to 

consistently allocate the dollar value of 

community development financing 

activities for the purpose of calculating 

metrics and benchmarks. The proposed 

approach accounts for the geographies 

served by a bank’s activities and 

provides certainty that qualifying 

activities benefiting geographies outside 

of facility-based assessment areas would 

receive consideration. 

Under the proposed approach, the 

dollar value of activities would be 

allocated to one or more counties, states, 

or to the institution level, depending on 

the geographic scope of the activity. At 

the assessment area level, the dollar 

value of activities assigned to the 

counties within the assessment area 

would count towards the bank 

assessment area community 

development financing metric and 

would inform assessment area 

conclusions. At the state level, the 

dollar value of activities assigned to the 

state and to any counties within the 

state would count towards the bank 

state community development financing 

metric. At the multistate MSA level, the 

dollar value of activities assigned to the 

multistate MSA and to any counties 

within the multistate MSA would count 

towards the bank multistate MSA 

community development financing 

metric. At the institution level, the 

dollar value of all a bank’s qualifying 

activities—those allocated to counties, 

states, and to the institution—would 

count towards the bank nationwide 

community development financing 

metric. 

This approach allows for metrics that 

measure performance at the different 

levels and is intended to support a 

balance between emphasizing facilitybased assessment area performance and 

considering activities that benefit 

geographies outside of those assessment 

areas. The approach emphasizes facilitybased assessment area performance 

because it allows the agencies to 

measure the amount of qualifying 

activities that specifically serve the 

assessment area, distinguished from 

those that serve a broader geography or 

that primarily serve other areas. At the 

same time, all qualifying activities 

would be considered in the nationwide 

metric, providing additional certainty 

and flexibility relative to the current 

approach, and allowing banks the 

opportunity to conduct impactful and 

responsive activities in areas that may 

have few assessment areas. 

The agencies propose two options for 

allocating the dollar value of an activity 

that serves multiple counties, but not an 

entire statewide area. First, a bank may 

provide documentation specifying the 

locations and amounts of funds 

deployed for a qualifying activity, such 

as an affordable housing project funded 

by the bank’s investment in a multicounty housing fund. The dollar value 

of the activity would then be allocated 

based on the proportion of funds 

associated with each location. If the 

bank was unable to identify specific 

locations, and did not provide 

documentation about the specific 

locations and amounts of funds 

deployed, the dollar value of the activity 


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would be allocated across the counties 

served, proportionate to the percentage 

distribution of low- and moderateincome families across those counties. 

The use of demographic data for 

allocating the dollar value of activities 

would provide certainty and 

consistency compared to the current 

approach and would reflect the 

population served by qualifying 

activities. The agencies seek feedback 

on other data points that could be used 

for allocating activities that may more 

appropriately reflect the population 

served by some activities, such as total 

population, or number of small 

businesses. 

For an activity that serves an entire 

statewide area, the activity would be 

allocated to the state level, and not to 

specific counties within the state. If the 

activity serves one or more statewide 

areas or portions of a multistate MSA 

applicable to the bank, it would be 

allocated proportionate to the 

percentage distribution of all low- and 

moderate-income families in the states 

and portions of those states in a bank’s 

multistate MSA, in each relevant state 

and multistate MSA. Alternatively, the 

value of the activity could be allocated 

to specific states or multistate MSAs 

based on documentation provided by 

the bank as described above. For an 

activity that is nationwide in scope, the 

activity would be allocated to the 

institution level and not to specific 

states or counties. 

Request for Feedback 

Question 117. Should activities that 

cannot be allocated to a specific county 

or state be considered at the highest 

level (at the state or institution level, as 

appropriate) instead of allocated to 

multiple counties or states based upon 

the distribution of all low- and 

moderate-income families across the 

counties or states? 

Question 118. What methodology 

should be used to allocate the dollar 

value of activities to specific counties 

for activities that serve multiple 

counties? For example, should the 

agencies use the distribution of all lowand moderate-income families across 

the applicable counties? Or, should the 

agencies use an alternative approach, 

such as the distribution of the total 

population across the applicable 

counties? Should the agencies consider 

other measures that would reflect 

economic development activities that 

benefit small businesses and small 

farms or use a standardized approach to 

allocate activities? 

D. Facility-Based Assessment Area 

Community Development Financing 

Evaluation 

1. Bank Assessment Area Community 

Development Financing Metric 

The agencies propose to measure the 

dollar amount of a bank’s qualifying 

community development financing 

activities compared to its deposits, 

defined in § __.12 and discussed in 

Section XIX, within each facility-based 

assessment area. The agencies also 

propose using benchmarks for the 

community development financing 

metric for the purposes of informing 

assessments of bank performance. While 

the community development financing 

framework would continue to rely on 

examiner judgment to assess the volume 

of activities, the use of uniform metrics 

and benchmarks is intended to improve 

the consistency and clarity of 

evaluations relative to the current 

approach. 

The bank assessment area community 

development financing metric would be 

the ratio of a bank’s community 

development financing dollars (the 

numerator) relative to the dollar value of 

the deposits (the denominator) within a 

facility-based assessment area. For 

example, if a bank has maintained an 

average of $1 million in deposits from 

an assessment area and has conducted 

an average of $20,000 annually in 

qualifying community development 

financing activities in that assessment 

area, its bank assessment area 

community development financing 

metric would be 2.0 percent. 

The numerator of the bank assessment 

area community development financing 

metric would be a bank’s annual average 

of dollars of community development 

financing activity loaned or invested in 

an assessment area. This includes the 

annual average of community 

development loans and community 

development investments originated or 

purchased over the course of the 

evaluation period. It also includes the 

annual quarterly average value of 

community development loans and 

community development investments 

originated or purchased in a prior year 

that remained on a bank’s balance sheet 

on the last day of each quarter of the 

year during the evaluation period. For 

example, a community development 

loan that is originated in the first year 

of an evaluation period, and maintained 

on balance sheet through the end of the 

third year of the evaluation period, 

would count towards the annual average 

that is computed for the numerator three 

times: The origination value in year one, 

and the annual quarterly average value 

remaining on balance sheet in years two 

and three. 

The agencies propose to count both 

new and prior activities remaining on 

the bank’s balance sheet in the 

numerator of the metric in order to 

emphasize the provision of long-term 

capital. Under the current approach, 

community development loans are 

credited based on the origination 

balance value and the remaining 

balance sheet value of longer-term loans 

is not considered, unless the loans are 

renewed or refinanced. However, under 

the proposed approach, the outstanding 

balance of a loan or investment counts 

towards the bank’s metric on an annual 

basis, which makes long-term financing 

beneficial to a bank’s metric. 

Activities that the agencies consider 

to be conducted purely for the purpose 

of artificially increasing a bank’s metric, 

such as purchasing and then 

subsequently reselling a large 

investment in a short time frame near 

the end of an evaluation period, may 

result in quantitative adjustments to the 

bank’s metric to discount activities. The 

agencies believe that the ability of 

examiners to discount such activities 

under specific circumstances supports 

the integrity of the metrics and 

examination process. 

The proposed denominator of the 

metric would be a bank’s annual average 

dollar amount of deposits sourced from 

an assessment area during the 

evaluation period. As proposed in 

§ __.42, collecting and maintaining 


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CD loans+CD investments ($20,000) _ 

deposits ($1,000,000) 

Bank Assessment Area Community Development Financing Metric (2.0 percent) 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33973 

235See 12 U.S.C. 2901; Section I of this 

SUPPLEMENTARY INFORMATION. 

deposits data would be required for 

large banks with assets of over $10 

billion, and would be optional for large 

banks with assets of $10 billion or less 

and for intermediate banks that opt into 

the Community Development Financing 

Test. Banks that collect and maintain 

deposits data under proposed § __.42 

would compute the average deposits 

(calculated based on average daily 

balances as provided in statements such 

as monthly or quarterly statements, as 

applicable) for depositors located in the 

assessment area. An annual average 

would then be computed across the 

years of the evaluation period. For 

banks that do not collect and maintain 

deposits data under proposed § __.42, 

the FDIC’s Summary of Deposits data 

would be used, in order to tailor data 

requirements for these banks. 

The agencies believe that this 

denominator is an indicator of a bank’s 

financial capacity to conduct 

community development financing 

activity since deposits are a major 

source of bank funding for loans and 

investments. The agencies consider that 

the greater a bank’s volume of deposits, 

the greater that bank’s capacity and CRA 

obligation to lend and invest 

becomes.235 Therefore, the proposed 

approach for the bank assessment area 

community development financing 

metric would establish a 

proportionately greater obligation to 

serve an assessment area for banks with 

a greater presence in that market. 

Stakeholders have also noted that 

deposits reflect a bank’s financial 

capacity and align with the intent of 

CRA that encourages banks to help meet 

the credit needs of their communities. 

An alternative considered by the 

agencies is to base the denominator of 

the metric on the share of the bank’s 

depositors residing in the assessment 

area. The denominator would be 

calculated by multiplying the bank’s 

institution level deposits by the 

percentage of the bank’s depositors that 

reside in an assessment area. For 

example, under this alternative, if the 

bank has a total of $100,000,000 in 

deposits, and one percent of the bank’s 

depositors reside in a given assessment 

area, then the denominator for that 

assessment area’s metric would be 

$100,000,000 × .01 = $1,000,000. This 

alternative approach would have the 

objective of more evenly allocating a 

bank’s CRA obligations across markets, 

including those less affluent markets in 

which the bank’s depositors hold 

relatively small amounts of deposits, 

because deposits would be allocated to 

assessment areas proportionate to the 

number of depositors. The agencies 

have considered that this option would 

require all large banks and intermediate 

banks that decide to opt into the 

Community Development Financing 

Test to collect and maintain the number 

of depositors residing in each of their 

assessment areas and in other 

geographies, because existing data, such 

as the FDIC’s Summary of Deposits data, 

does not include this information for 

individual banks. 

2. Benchmarks 

The agencies propose establishing one 

local and one national benchmark for 

each facility-based assessment area. To 

help inform facility-based assessment 

area conclusions, the agencies would 

compare the bank assessment area 

community development financing 

metric to both (i) an assessment area 

community development financing 

benchmark (local benchmark) and, as 

applicable, (ii) a metropolitan or a 

nonmetropolitan nationwide 

community development financing 

benchmark (nationwide benchmark). 

These benchmarks would enable the 

agencies to compare an individual 

bank’s community development 

financing performance to other banks in 

a clear and consistent manner. Both 

benchmarks would be based on the 

aggregate amount of community 

development financing activity and the 

aggregate amounts of deposits in the 

bank’s assessment area or nationwide, 

among all large banks. 

The aggregate amounts of deposits for 

these benchmarks would be based on 

reported deposits data for large banks 

with assets of over $10 billion, and on 

the FDIC’s Summary of Deposits data for 

large banks with assets of $10 billion or 

less, using the deposits assigned to 

branches located in each assessment 

area for which the benchmark is 

calculated. 

As with the proposed market volume 

benchmark used in the proposed Retail 

Lending Test and discussed in Section 

IX, the agencies seek feedback on the 

proposed approach to using the FDIC’s 

Summary of Deposits data for 

calculating community development 

financing benchmarks, the tradeoffs of 

the proposed approach, and on potential 

alternatives to the proposed approach. 

The use of both local and nationwide 

benchmarks would provide the 

agencies, banks, and the public with 

additional context about the local level 

of community development activity that 

can help to interpret and set goals for 

performance. For example, a bank 

whose metric falls short of the local 

benchmark in an assessment area where 

the local benchmark is much lower than 

the nationwide benchmark could be 

considered to have conducted a 

relatively low volume of activities. The 

nationwide benchmarks also provide a 

baseline for evaluating the level of a 

particular bank’s community 

development activity in an assessment 

area with few or no other large banks 

from which to calculate a local 

benchmark. 

The benchmarks would be made 

publicly available (e.g., in dashboards) 

and updated annually in order to 

provide the most transparency and 

clarity to allow banks and the public to 

track these benchmarks. 

Assessment Area Community 

Development Financing Benchmark. As 

proposed, the numerator for the 

assessment area community 

development financing benchmark 

would be the annual average dollar 

amount of all large banks’ qualifying 

community development financing 

activities (including both the annual 

average of originations and the annual 

quarterly average balance sheet 

holdings, as described above) in the 

assessment area during the evaluation 

period. The denominator for the 

assessment area community 

development financing benchmark 

would be the annual average of the total 

dollar amount of all deposits held by 

large banks in the assessment area. 

Under the proposal, the deposits in the 

facility-based assessment area would be 

the sum of: (i) The annual average of 

deposits in counties in the facility-based 

assessment area reported by all large 

banks with assets of over $10 billion 

over the evaluation period, as reported 

under proposed § __.42; and (ii) the 

annual average of deposits assigned to 

branches in the facility-based 

assessment area by all large banks with 

assets of $10 billion or less, according 

to the FDIC’s Summary of Deposits, over 

the evaluation period. 


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236The analysis used a sample of 5,735 

assessment areas from large retail bank performance 

evaluation records from 2005 to 2017 in the Board’s 

CRA Analytics Data Tables, which note the dollar 

amount of current period community development 

loan originations as well as current period and prior 

period qualifying investments in each assessment 

area. The total dollar amount of activities was 

divided by the length in years of each examination 

evaluation period, to produce an annual average for 

each assessment area evaluation. The FDIC 

Summary of Deposits data was used to identify the 

dollar amount of deposits associated with the 

corresponding bank’s branches in the assessment 

area, which is the best available approach for 

estimating the amount of deposits associated with 

each of a bank’s assessment areas. The aggregate 

ratio of annualized dollars of community 

development activities to dollars of deposits was 

computed separately for all metropolitan 

assessment areas and all nonmetropolitan 

assessment areas in the sample, respectively. Under 

this analysis, the metropolitan ratio was 1.4 

percent, and the nonmetropolitan ratio was 0.9 

percent, based on exams from 2014 to 2017. The 

metropolitan ratio remained significantly larger 

than the nonmetropolitan ratio when limiting the 

sample to only full-scope examinations, across 

different periods of the sample, and when 

computing the median ratio of all examinations, 

rather than a mean. 

The assessment area community 

development financing benchmark 

would reflect local conditions that vary 

across assessment areas, such as the 

level of competition from other banks 

and the availability of community 

development opportunities, which may 

contribute to differences in the level of 

community development activity across 

communities and within a community 

across time. The agencies consider that 

using a standard local benchmark would 

improve the consistency of the current 

evaluation approach, which does not 

include consistent data points that 

reflect local levels of qualifying 

activities. 

Metropolitan and Nonmetropolitan 

Nationwide Community Development 

Financing Benchmarks. The agencies 

propose to develop a separate 

nationwide community development 

financing benchmark for all 

metropolitan areas and all 

nonmetropolitan areas, respectively. 

One of these nationwide benchmarks 

would be applied to each assessment 

area, depending on whether the 

assessment area was located in a 

metropolitan area or a nonmetropolitan 

area. Based on the agencies’ analysis, 

the ratio of banks’ community 

development loans and qualifying 

investments to deposits is higher in 

metropolitan assessment areas than in 

nonmetropolitan assessment areas.236

Setting the nationwide benchmark 

separately for metropolitan and 

nonmetropolitan areas is intended to 

help account for differences in the level 

of community development 

opportunities in these areas. 

The numerator for the nationwide 

community development financing 

benchmarks would be the annual 

average of the total dollar amount of all 

large banks’ qualifying community 

development financing activities (in 

either metropolitan or nonmetropolitan 

areas, depending on the assessment 

area), and the denominator would be the 

annual average of the dollar amount of 

deposits (again, either in metropolitan 

or nonmetropolitan areas). Under the 

proposal, the deposits in the 

metropolitan or nonmetropolitan areas 

would be the sum of: (i) The annual 

average of deposits in counties in the 

metropolitan or nonmetropolitan areas 

reported by all large banks with assets 

of over $10 billion over the evaluation 

period (as reported under proposed § _

_.42; and (ii) the annual average of 

deposits assigned to branches in the 

metropolitan or nonmetropolitan areas 

by all large banks with assets of $10 

billion or less, according to the FDIC’s 

Summary of Deposits, over the 

evaluation period. 

Timing of Benchmark Data. In order 

to provide greater clarity to banks and 

communities regarding the benchmarks 

that would be used for each evaluation 

period, the agencies are considering 

whether the benchmarks should be 

calculated and fixed based on 

community development financing and 

deposits data that is available at least 

one year in advance of the end of the 

evaluation period. For example, for an 

evaluation period ending in January of 

2025, the agencies could determine the 

benchmarks for that evaluation period 

using data over a three-year timeframe 

spanning from 2021 to 2023. This 

alternative would provide additional 

certainty that the benchmarks that a 

bank would be compared to would not 

change in the final year of an evaluation 

period. However, the agencies 

considered that under this alternative, 

the benchmarks that a bank is compared 

to may not as fully reflect the credit 

needs and opportunities in the 

assessment area to the same degree, 

especially if there are significant 

changes in community development 

opportunities during the final year of 

the evaluation period. 

3. Impact Review 

To complement the community 

development financing metrics and 

benchmarks, the agencies propose to 

evaluate the impact and responsiveness 

of a bank’s community development 

activities. The qualitative evaluation 

would draw on the impact criteria 

defined in § __.15, and on any other 

information that the agencies consider 

to determine how the bank’s activities 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.007</GPH> EP03JN22.008</GPH>

Annual average oflocal CD loans+CD investments Assessment Area Community Development Financing Benchmark=--------------

Annual average oflocal deposits 

Nationwide Community Development Financing Benchmark-Metropolitan= 

Annual average of nationwide metropolitan CD loans+CD investments 

Annual average of national metropolitan deposits 

Nationwide Community Development Financing Benchmark-Nonmetropolitan = 

Annual average of nationwide nonmetropolitan CD loans+CD investments 

Annual average of national nonmetropolitan deposits 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33975 

responded to community development 

needs and opportunities. This approach 

would advance the CRA’s purpose by 

ensuring a strong emphasis on impact 

and responsiveness in meeting 

community credit needs; would 

increase consistency in the evaluation of 

qualitative factors relative to the current 

approach by creating clear criteria; and 

would foster transparency for banks and 

the public by providing information 

about the type and purpose of activities 

considered to be particularly impactful 

or responsive. 

The consideration of qualitative 

factors as a supplement to the dollarbased metrics aligns with the CRA’s 

purpose of strengthening low- and 

moderate-income communities by more 

fully accounting for factors that may 

reflect the overall impact of an activity. 

First, a qualitative review can consider 

the responsiveness of activities to local 

context, including community 

development needs and opportunities 

that vary from one community to 

another. Banks and their community 

partners may make great effort to design 

an activity to reflect this context, and to 

address specific credit needs of the 

community, which can further the 

activity’s impact. Second, the 

qualitative evaluation is important for 

emphasizing relatively small-dollar 

activities that nonetheless have a 

significant positive impact on the 

communities served. For example, 

qualifying contributions and activities 

that support organizations that provide 

assistance to small businesses tend to 

have small dollar balances relative to 

loans to larger businesses, but are 

critically important for addressing small 

business credit needs. Third, the 

qualitative evaluation can emphasize 

activities that serve low- and moderateincome populations and census tracts 

that have especially high community 

development needs, which often entail 

greater complexity and effort on the part 

of the bank. This emphasis helps to 

encourage community development 

activities that reach a broad range of 

low- and moderate-income 

communities, including those that are 

more challenging to serve. Finally, the 

qualitative review can emphasize 

specific categories of activities aligned 

with the CRA’s purpose of strengthening 

credit access for a bank’s communities, 

including low- and moderate-income 

communities, such as activities that 

support specified mission-driven 

financial institutions. 

To promote greater consistency and 

transparency in the evaluation 

approach, the agencies would examine 

the extent to which a bank’s activities 

meet the impact factors defined in § __

.15 based on information provided by 

the bank, local community data, 

community feedback, and other 

performance context information. 

Given the current lack of data, the 

agencies propose that this process 

would initially be primarily qualitative 

in nature. The agencies would consider 

the percentage of the bank’s qualifying 

activities that meet each impact factor 

but would not use multipliers or 

specific thresholds to directly tie the 

impact review factors to specific 

conclusions. A more significant volume 

of activities that align with the impact 

review factors would positively impact 

conclusions. In the future, when 

additional community development 

data is reported and analyzed, the 

agencies would consider quantitative 

approaches to evaluate impact and 

responsiveness. 

4. Facility-Based Assessment Area 

Conclusions 

The agencies propose to assign a 

Community Development Financing 

Test conclusion in a facility-based 

assessment area by considering the bank 

assessment area community 

development financing metric relative 

to the local and nationwide 

benchmarks, in conjunction with the 

impact review of the bank’s activities. 

Based on an assessment of these factors, 

the bank would receive a conclusion of 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ 

‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ or ‘‘Substantial 

Noncompliance.’’ 

The agencies also considered 

approaches that would automatically 

combine the metric, benchmarks, and 

impact review to assign conclusions in 

a standardized way. However, the CRA 

community development financing data 

that is currently available is not 

sufficient to determine an approach that 

includes specific thresholds and 

weights for different components. 

Instead, the agencies propose that the 

approach for combining these 

standardized factors would initially rely 

on examiners’ judgment. Eventually, 

analysis of community development 

data collected under the new rule may 

allow for developing additional 

quantitative procedures for determining 

conclusions. For example, the agencies 

could use community development 

financing data to determine thresholds 

for the bank assessment area community 

development financing metric and 

impact criteria that correspond to each 

conclusion category. 

Request for Feedback 

Question 119. The agencies are 

seeking feedback on alternatives to 

determining the denominator of the 

bank assessment area community 

development financing metric. What are 

the benefits and drawbacks, including 

data challenges, of implementing an 

alternative approach that bases the 

denominator of the metric on the share 

of bank depositors residing in the 

assessment area (described above) in 

contrast to the proposed approach of 

relying on dollar amounts of deposits? 

Question 120. For large banks with 

assets of $10 billion or less, under the 

proposed Community Development 

Financing Test, is it appropriate to use 

the FDIC’s Summary of Deposits data 

instead of deposits data that is required 

to be collected and maintained by the 

bank to tailor new data requirements, or 

would it be preferable to require 

collected deposits data for all large 

banks? 

Question 121. What is the appropriate 

method to using the local and 

nationwide benchmarks to assess 

performance? Should the agencies rely 

on examiner judgment on how to weigh 

the comparison of the two benchmarks, 

or should there be additional structure, 

such as calculating an average of the 

two benchmarks, or taking the 

minimum, or the maximum, of the two 

benchmarks? 

Question 122. What other 

considerations should the agencies take 

to ensure greater clarity and consistency 

regarding the calculation of 

benchmarks? Should the benchmarks be 

calculated from data that is available 

prior to the end of the evaluation 

period, or is it preferable to align the 

benchmark data with the beginning and 

end of the evaluation period? 

E. State Community Development 

Financing Evaluation 

To evaluate a bank’s state community 

development financing performance, the 

agencies propose to consider a weighted 

average of the bank’s performance in 

facility-based assessment areas within 

the state area, as well as the bank’s 

performance on a statewide basis, via a 

statewide score. The statewide score 

would account for the totality of the 

bank’s activities in the state—combining 

activities that are inside and outside of 

facility-based assessment areas—relative 

to the bank’s total deposits across the 

state. The combination of these two 

components would emphasize facilitybased assessment area performance, 

while still allowing banks the option to 

conduct and receive consideration for 

activities outside of facility-based 

assessment areas in the state. 


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33976 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

237See Section IX.F for discussion of the 

proposed point scale. 

1. Weighted Average of Assessment 

Area Performance 

The agencies propose averaging a 

bank’s Community Development 

Financing Test conclusions across its 

facility-based assessment areas in each 

state, as one component of the bank’s 

Community Development Financing 

Test conclusion at the state level. The 

conclusion assigned to each assessment 

area would be mapped to a point value, 

consistent with the approach explained 

for assigning Retail Lending Test 

conclusions: ‘‘Outstanding’’ (10 points); 

‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points).237 This 

resulting score for each assessment area 

would be assigned a weight, calculated 

as the average of the percentage of retail 

loans, and the percentage of deposits of 

the bank associated with the assessment 

area (both measured in dollars), out of 

all of the bank’s retail loans and 

deposits in facility-based assessment 

areas in the state. Similar to the 

proposed weighting approach for 

assigning Retail Lending Test 

conclusions, deposits would be based 

on collected and maintained deposits 

data for banks that collect this data, and 

on the FDIC’s Summary of Deposits for 

banks that do not collect deposits data. 

Using these weights and scores, the 

weighted average of the assessment area 

scores would then be taken and used as 

one component in determining the statelevel conclusion. 

The proposed approach would ensure 

that performance in all facility-based 

assessment areas is incorporated into 

the state conclusion, proportionate to 

the bank’s amount of business activity 

in each assessment area. Incorporating 

conclusions for all assessment areas into 

the state conclusion creates a clear 

emphasis on assessment area 

performance, including smaller markets. 

2. Statewide Score 

Examiners would also assign a 

statewide score for each state in which 

a bank delineates a facility-based 

assessment area. The statewide score 

would be assigned based on a bank state 

community development financing 

metric and benchmark, and a statewide 

impact review. 

a. Bank State Community Development 

Financing Metric 

The bank state community 

development financing metric would be 

calculated using the same formula as the 

bank assessment area community 

development financing metric and 

would include all of a bank’s 

community development activities and 

deposits in the state area (based on 

either collected deposits data, or 

Summary of Deposits data, as 

applicable), without distinguishing 

between those inside or outside of the 

bank’s assessment areas. 

For example, if a bank has conducted 

an annual average of $200,000 in 

qualifying community development 

financing activities and has an annual 

average of $10 million in deposits 

associated with a state during an 

evaluation period, the bank state 

community development financing 

metric for that evaluation period would 

be 2.0 percent. 

The inclusion of all activities and 

deposits reflects the expectation that a 

bank conduct a volume of activities that 

is commensurate with its total capacity 

in a state. In addition, this metric 

provides the option for, but would not 

require, banks to conduct and receive 

consideration for activities outside of 

assessment areas, but within the states 

that include those facility-based 

assessment areas. The metric would not 

distinguish between activity conducted 

inside and outside the assessment area. 

If a bank conducted sufficient activity 

within its facility-based assessment 

areas in the state compared to the state 

benchmarks, activity outside of the 

bank’s assessment areas would not be 

needed. However, if a bank is unable to 

conduct sufficient activity within the 

assessment areas due to lack of 

opportunity or high competition, the 

metric allows for the bank to conduct 

activity within the state but outside of 

the assessment area and receive 

consideration. 

b. State Community Development 

Financing Benchmarks 

Similar to the assessment area 

approach described above, the agencies 

propose establishing benchmarks that 

would allow examiners to compare a 

bank’s performance to other banks in 

comparable areas. These benchmarks 

would include: (i) A statewide 

benchmark for the state area called the 

state community development financing 

benchmark; and (ii) a benchmark that is 

tailored to each bank’s facility-based 

assessment areas called the state 

weighted assessment area community 

development financing benchmark. The 

use of two benchmarks would provide 

examiners with additional context and 

points of comparison on which to base 

the statewide score. For example, for a 

bank that collects deposits or conducts 

activities outside of its assessment areas 

in a state, the agencies may rely 

primarily on the state community 

development financing benchmark. In 

contrast, for a bank that collects 

deposits and conducts activities 

primarily within its assessment areas, 

the agencies may rely more heavily on 

the state weighted assessment area 

community development financing 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.008</GPH>

Nationwide Community Development Financing Benclunark-Metropolitan = 

Annual average of nationwide metropolitan CD loans+CD investments 

Annual average of national metropolitan deposits 

Nationwide Community Development Financing Benclunark-Nonmetropolitan = 

Annual average of nationwide nonmetropolitan CD loans+CD investments 

Annual average of national nonmetropolitan deposits 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33977 

benchmark, which is tailored to the 

bank’s assessment areas to account for 

the level of competition and amount of 

opportunities in those areas. 

The first benchmark, the state 

community development financing 

benchmark, would be defined similarly 

to the local benchmark used for the 

assessment area evaluation and it would 

include all activities and deposits across 

the entire state area. The numerator 

would include the dollars of community 

development loans and investments by 

all large banks across the state, and the 

denominator would include the dollars 

of deposits held by all large banks 

across the state Under the proposal, the 

deposits in the state would be the sum 

of: (i) The annual average of deposits in 

counties in the state reported by all 

large banks with assets of over $10 

billion over the evaluation period (as 

reported under proposed § __.42); and 

(ii) the annual average of deposits 

assigned to branches in the state by all 

large banks with assets of $10 billion or 

less, according to the FDIC’s Summary 

of Deposits, over the evaluation period. 

The state weighted assessment area 

community development financing 

benchmark would be defined as the 

weighted average of assessment area 

community development financing 

benchmarks across all of the bank’s 

facility-based assessment areas in the 

state. Each local benchmark would be 

weighted based on the assessment area’s 

percentage of retail loans and 

percentage of deposits (both measured 

in dollars) within the facility-based 

assessment areas of the state, the same 

weighting approach as described for the 

weighted average of the bank’s facilitybased assessment area conclusions. 

c. Impact Review 

The agencies propose to evaluate the 

impact and responsiveness of a bank’s 

community development activities for 

each state at a statewide level, using the 

same impact review approach as 

described previously for facility-based 

assessment areas. This impact review 

would encompass all activities in the 

state, including those inside and outside 

of assessment areas. Examiners would 

consider the extent to which the bank’s 

activities met the criteria, based on 

information provided by the bank, local 

community data, community feedback, 

and other performance context 

information. 

d. Statewide Score Assignment 

The agencies would assign a 

statewide score corresponding to the 

conclusion categories described above: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). The 

statewide score would reflect a 

comparison of the bank state 

community development financing 

metric to the state community 

development financing benchmark and 

the state weighted average community 

development financing benchmark, as 

well as the impact review of the bank’s 

activities. 

3. State Community Development 

Financing Test Conclusion 

The bank’s weighted average 

assessment area performance score 

would be averaged with its statewide 

score to achieve a state performance 

score for the state, with weights on both 

components tailored to reflect the 

bank’s business model. The amount of 

weight applied to the facility-based 

assessment area performance and to the 

statewide performance would depend 

on the bank’s percentage of deposits 

(based on collected deposits data and on 

Summary of Deposits data, as 

applicable) and retail loans in the state 

that are within its facility-based 

assessment areas. 

The agencies propose to tailor the 

weighting of the average assessment 

area performance and the statewide 

score to the individual bank’s business 

model, while still preserving the option 

for every bank to be meaningfully 

credited for activities outside of its 

facility-based assessment areas. For a 

bank that does most of its retail lending 

and deposit collection within its 

facility-based assessment areas, for 

example, the agencies view those 

facility-based assessment areas as the 

primary community a bank serves. The 

agencies therefore believe that the 

average assessment area performance 

deserves a higher weight in the 

combined state performance score. 

To ensure that any activities that a 

bank undertakes outside of its facilitybased assessment areas also are 

meaningfully credited as well, the 

agencies propose to give equal weight to 

the average assessment area 

performance and statewide score for 

banks whose business model is strongly 

branch based. Because activities that 

serve facility-based assessment areas 

would contribute both to the statewide 

score as well as in the weighted average 

of facility-based assessment area 

conclusions, weighting these two 

components equally effectively gives a 

higher weight to assessment area 

performance. 

On the other extreme, for banks 

whose retail lending and deposit 

collection occurs almost entirely outside 

of their facility-based assessment areas 

(such as primarily online lenders), those 

assessment areas largely do not 

represent the overall community the 

bank serves. The agencies therefore 

propose to weight the statewide score 

more heavily than the weighted average 

assessment area performance score for 

such a bank. Banks with business 

models in between these two extremes 

would use weights that are 

correspondingly in between. 

Specifically, to determine the relative 

weighting as described in Table 19 

below, the agencies propose to use the 

simple average of: 

• The percentage of a bank’s retail 

loans in a state, by dollar volume, that 

the bank made in its facility-based 

assessment areas in that state, and 

• The percentage of a bank’s deposits 

from a state, by dollar volume, that the 

bank sourced from its facility-based 

assessment areas in that state 

TABLE 19 TO SECTION __.24—PROPOSED WEIGHTS FOR COMBINED COMMUNITY DEVELOPMENT FINANCING TEST STATE

PERFORMANCE SCORE

Average of percentage of retail loans and deposits from facility-based assessment areas 

Weight on 

average 

assessment area 

performance 

score 

(%) 

Weight on 

statewide 

score 

(%) 

80% or greater ................................................................................................................................................... 50 50 

Less than 80%, greater than or equal to 60% .................................................................................................. 40 60 

Less than 60%, greater than or equal to 40% .................................................................................................. 30 70 

Less than 40%, greater than or equal to 20% .................................................................................................. 20 80 


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33978 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

238See proposed §§ __.12, __.28(c)(2). 

TABLE 19 TO SECTION __.24—PROPOSED WEIGHTS FOR COMBINED COMMUNITY DEVELOPMENT FINANCING TEST STATE

PERFORMANCE SCORE—Continued 

Average of percentage of retail loans and deposits from facility-based assessment areas 

Weight on 

average 

assessment area 

performance 

score 

(%) 

Weight on 

statewide 

score 

(%) 

Less than 20% ................................................................................................................................................... 10 90 

Banks that have a low percentage of 

deposits and retail loans within their 

facility-based assessment areas would 

have a stronger emphasis on their 

statewide score than on their weighted 

average of facility-based assessment area 

conclusions. Conversely, banks that 

have a high percentage of deposits and 

retail loans within their facility-based 

assessment areas would have 

approximately equal weight on their 

statewide score and their weighted 

average of facility-based assessment area 

conclusions. The state performance 

score is then rounded to the nearest 

point value corresponding to a 

conclusion category: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points) to derive the 

State Community Development 

Financing Test Conclusion. 

Taking into account both the bank’s 

assessment area performance and its 

statewide performance would build off 

of the current approach to considering 

activities in broader statewide and 

regional areas and aims to achieve a 

balance of objectives. First, considering 

assessment area performance 

encourages banks to serve the 

communities where they have a 

physical presence, and where their 

knowledge of local community 

development needs and opportunities is 

often strongest. Second, considering 

statewide performance allows banks the 

option to also pursue impactful 

community development opportunities 

that may be located partially or entirely 

outside of their facility-based 

assessment areas, without requiring 

them to do so. Third, because 

assessment area activities are 

considered in the statewide score as 

well, the approach gives greater 

emphasis to activities within facilitybased assessment areas than to activities 

outside of assessment areas, but the 

amount of weight is tailored to each 

bank’s business model in the state. As 

a result, banks that are primarily 

branch-based would be encouraged to 

focus on serving their facility-based 

assessment areas, while banks that have 

few loans and deposits in facility-based 

assessment areas, such as banks that 

operate primarily through online 

delivery channels, are evaluated mostly 

on a statewide basis. 

As discussed in Section X, the 

percentage of deposits assigned to 

facility-based assessment areas for banks 

that do not collect and maintain 

deposits data would always be 100 

percent, because Summary of Deposits 

data attributes all deposits to bank 

branches. The average of the percentage 

of retail loans and deposits in facilitybased assessment areas for such a bank 

would therefore not account for the 

bank’s depositors that are located 

outside of its facility-based assessment 

areas. This would generally result in a 

higher weight on the bank’s assessment 

area performance score, and may 

provide less of an incentive for certain 

banks to conduct community 

development financing activities 

outside of their facility-based 

assessment areas. 

F. Multistate MSA Community 

Development Financing Test 

Conclusions 

The agencies propose to assign 

Community Development Financing 

Test conclusions for multistate MSAs in 

which a bank has branches in two or 

more states of the multistate MSA.238 If 

the bank has delineated an entire 

multistate MSA as a single facility-based 

assessment area, the conclusion for the 

assessment area and for the multistate 

MSA would be the same. 

If the bank delineates only part of a 

multistate MSA as a facility-based 

assessment area, or delineates multiple 

facility-based assessment areas within a 

multistate MSA, then the agencies 

would employ the same approach as for 

assigning conclusions for state areas, 

with the same components as the state 

evaluation, applied to the geography of 

the multistate MSA. The multistate 

MSA conclusion would reflect a 

weighted average of facility-based 

assessment area conclusions within the 

multistate MSA, and would also reflect: 

(i) A bank multistate MSA community 

development financing metric; (ii) a 

multistate MSA community 

development financing benchmark; (iii) 

a multistate MSA weighted assessment 

area community development financing 

benchmark; and (iv) an impact review. 

2. Institution Community Development 

Financing Test Evaluation 

The agencies propose to assign 

Community Development Financing 

Test conclusions for the institution level 

using a similar approach to that for 

assigning conclusions for state areas. 

The approach would use a combination 

of a weighted average of facility-based 

assessment area conclusions 

nationwide, and a nationwide score that 

reflects: (i) A bank nationwide 

community development financing 

metric; (ii) a nationwide community 

development financing benchmark; (iii) 

a nationwide weighted assessment area 

community development financing 

benchmark; and (iv) an impact review. 

1. Weighted Average of Assessment 

Area Performance 

The agencies propose averaging a 

bank’s Community Development 

Financing Test conclusions across all of 

its facility-based assessment areas as 

one component of the bank’s 

Community Development Financing 

Test conclusion at the institution level. 

As with the state evaluation approach, 

this is intended to emphasize facilitybased assessment area performance by 

directly linking assessment area 

conclusions to the institution 

conclusion. The conclusion assigned to 

each assessment area would be mapped 

to a point value as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). This 

resulting score for each assessment area 

would be assigned a weight, calculated 

as the average of the percentage of retail 

loans, and the percentage of deposits of 

the bank within the assessment area 

(both measured in dollars), out of all of 

the bank’s retail loans and deposits in 

facility-based assessment areas (based 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33979 

on collected deposits data and on 

Summary of Deposits data, as 

applicable). Using these weights and 

scores, the weighted average of the 

assessment area scores would then be 

taken and used in determining the 

institution-level conclusion. The 

weighted average approach ensures that 

performance in each facility-based 

assessment area is incorporated into the 

institution conclusion, with greater 

emphasis given to areas where the bank 

is most active. 

2. Nationwide Score 

Examiners would assign a nationwide 

score for the institution, based on a bank 

nationwide community development 

financing metric and benchmarks, and a 

nationwide impact review. 

a. Bank Nationwide Community 

Development Financing Metric 

The bank nationwide community 

development financing metric would be 

calculated using the same formula for 

the state metrics, including all of a 

bank’s community development 

activities and deposits in the numerator 

and denominator, respectively. 

b. Nationwide Community Development 

Financing Benchmarks 

The agencies propose establishing 

benchmarks that would allow examiners 

to compare a bank’s performance to 

other banks in comparable areas. These 

benchmarks would include a single 

nationwide benchmark applied to all 

banks called the nationwide community 

development financing benchmark, and 

one benchmark that is tailored to each 

bank’s facility-based assessment areas 

called the nationwide weighted 

assessment area community 

development financing benchmark. The 

use of two benchmarks is intended to 

provide additional context and points of 

comparison in order to develop the 

nationwide score. For example, for a 

bank that primarily collects deposits or 

conducts activities outside of its facilitybased assessment areas, the agencies 

may rely heavily on a comparison of the 

bank nationwide community 

development financing metric to the 

nationwide community development 

financing benchmark. In contrast, for a 

bank that collects deposits and conducts 

activities primarily within its 

assessment areas, the agencies may rely 

more heavily on a comparison of the 

bank nationwide community 

development financing metric to the 

nationwide weighted assessment area 

community development financing 

benchmark, which is tailored to the 

bank’s assessment areas. 

The nationwide benchmarks would be 

defined analogously to the statewide 

benchmarks. The nationwide 

community development financing 

benchmark takes all community 

development financing activities 

reported by large banks in the 

numerator, and all deposits of those 

banks in the denominator. Under the 

proposal, the deposits in the nationwide 

area would be the sum of: (i) The annual 

average of deposits in counties in the 

nationwide area reported by all large 

banks with assets of over $10 billion 

over the evaluation period (as reported 

under proposed § __.42); and (ii) the 

annual average of deposits assigned to 

branches in the nationwide area by all 

large banks with assets of $10 billion or 

less, according to the FDIC’s Summary 

of Deposits, over the evaluation period. 

The nationwide weighted assessment 

area community development financing 

benchmark would be defined as the 

weighted average of the assessment area 

community development financing 

benchmarks across all of the bank’s 

facility-based assessment areas and 

would be weighted based on the 

assessment area’s percentage of retail 

loans and percentage of deposits (both 

measured in dollars) within the facilitybased assessment areas of the state using 

the same weighting approach as 

described for the weighted average of 

the bank’s facility-based assessment area 

conclusions. 

c. Impact Review 

Similar to the proposed statewide 

approach, the agencies propose to 

evaluate the impact and responsiveness 

of a bank’s community development 

activities at an institution level, using 

the same impact review approach as 

described above for facility-based 

assessment areas and states. The 

agencies propose to conduct a bank 

level impact review in order to assess 

the impact and responsiveness of all of 

an institution’s qualifying activities, 

including those inside and outside of 

facility-based assessment areas. The 

agencies consider this to be especially 

important for the evaluation of a bank 

that elects to conduct activities that 

serve areas outside of its facility-based 

assessment areas, so that the impact and 

responsiveness of those activities is 

considered. As described above, the 

agencies would consider the impact and 

responsiveness of the bank’s activities to 

community needs, and would consider 

the impact review factors, among other 

information. 

d. Nationwide Score Assignment 

The agencies would assign a 

nationwide score that reflects the bank’s 

overall volume of qualifying activities 

and overall impact and responsiveness 

of activities, corresponding to the 

conclusion categories as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). The 

nationwide score would reflect a 

comparison of the bank nationwide 

community development financing 

metric to the nationwide and weighted 

assessment area benchmarks, as well as 

the impact review of the bank’s 

activities. 

3. Institution Community Development 

Financing Test Conclusion 

The bank’s weighted average 

assessment area performance score 

would be averaged with its nationwide 

score to produce an institution 

performance score, with weights on 

both components tailored to reflect the 

bank’s business model. As in the 

calculation of the state performance 

score, the amount of weight applied to 

the facility-based assessment area 

performance and to the nationwide 

performance would depend on the 

bank’s percentage of deposits and retail 

loans that are within its facility-based 

assessment areas. Equivalent weights to 

those proposed for calculating the 

combined state performance score 

would be used, to tailor the weighting 

to the bank’s business model while still 

allowing all banks to receive meaningful 

credit for activities outside their facilitybased assessment areas. The proposed 

weights are described in Table 20 

below: 


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TABLE 20 TO SECTION __.24—PROPOSED WEIGHTS FOR COMBINED COMMUNITY DEVELOPMENT FINANCING TEST BANK

PERFORMANCE SCORE

Average of percentage of retail loans and deposits from facility-based assessment areas 

Weight on 

average 

assessment area 

performance score 

(%) 

Weight on 

nationwide 

score 

(%) 

80% or greater ................................................................................................................................................... 50 50 

Less than 80%, greater than or equal to 60% .................................................................................................. 40 60 

Less than 60%, greater than or equal to 40% .................................................................................................. 30 70 

Less than 40%, greater than or equal to 20% .................................................................................................. 20 80 

Less than 20% ................................................................................................................................................... 10 90 

The weighting approach is intended 

to achieve the same balance as the state 

weighting approach by emphasizing 

facility-based assessment area 

performance, allowing flexibility to 

receive consideration for activities 

outside of facility-based assessment 

areas, and tailoring the amount of 

weight on facility-based assessment area 

performance to bank business model. 

Banks that have a low percentage of 

deposits and retail loans within their 

facility-based assessment areas would 

have a stronger emphasis on their 

nationwide score than on their weighted 

average of facility-based assessment area 

conclusions. Conversely, banks that 

have a high percentage of deposits and 

retail loans within their facility-based 

assessment areas would have 

approximately equal weight on their 

nationwide score and on their weighted 

average of facility-based assessment area 

conclusions. The institution 

performance score is then rounded to 

the nearest point value corresponding to 

a conclusion category: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 

points); ‘‘Low Satisfactory’’ (6 points); 

‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points) 

to derive the Institution Community 

Development Financing Test 

conclusion. 

As discussed above, the agencies have 

considered that the FDIC’s Summary of 

Deposits data may not reflect a bank’s 

distribution of depositors inside and 

outside of its facility-based assessment 

areas, and that the use of this data may 

result in a greater weight on the bank’s 

assessment area performance score. As a 

result, this approach may place less 

emphasis on community development 

financing activities outside of a bank’s 

facility-based assessment areas. The 

agencies seek feedback on the tradeoffs 

of the proposed approach. On the one 

hand, the proposed approach seeks to 

limit new data requirements for large 

banks with assets of $10 billion or less. 

On the other hand, the use of the FDIC’s 

Summary of Deposits data impacts the 

proposed weighting methodology and 

other aspects of the proposed approach. 

The agencies seek feedback on an 

alternative approach of requiring large 

banks with assets of $10 billion or less 

to collect and maintain deposits data. 

Request for Feedback 

Question 123. When calculating the 

weighted average of facility-based 

assessment area conclusions and 

assessment area community 

development financing benchmarks, is 

it appropriate to weight assessment area 

metrics and benchmarks by the average 

share of loans and deposits, as 

proposed? 

Question 124. Is the proposed use of 

the FDIC’s Summary of Deposits data for 

banks that do not collect and maintain 

deposits data appropriate, or should all 

large banks be required to collect and 

maintain deposits data, which would 

enable the metrics and benchmarks to 

be based on collected deposits data for 

all large banks? 

Question 125. Considering current 

data limitations, what approaches 

would further enhance the clarity and 

consistency of the proposed approach 

for assigning community development 

financing conclusions, such as assigning 

separate conclusions for the metric and 

benchmarks component and the impact 

review component? To calculate an 

average of the conclusions on the two 

components, what would be the 

appropriate weighting for the metric and 

benchmarks component, and for the 

impact review component? For instance, 

should both components be weighted 

equally, or should the metric and 

benchmarks be weighted more than 

impact review component? 

Question 126. How can the agencies 

encourage greater consistency and 

clarity for the impact review of bank 

activities? Should the agencies consider 

publishing standard metrics in 

performance evaluations, such as the 

percentage of a bank’s activities that 

meet one or more impact criteria? 

XIII. Community Development Services 

Test 

The agencies propose a Community 

Development Services Test that would 

apply to large banks. Separately 

assessing a bank’s community 

development services and assigning a 

Community Development Services Test 

conclusion would underscore the 

importance of these activities for 

fostering partnerships among different 

stakeholders, building capacity, and 

creating the conditions for effective 

community development, including in 

rural areas. 

A. Background 

1. Current Approach for Evaluating 

Community Development Services 

Community development services 

generally include activities such as 

service on boards of directors for 

community development organizations 

or on loan committees for CDFIs, 

financial literacy activities targeting 

low- or moderate-income individuals, 

and technical assistance for small 

businesses. Current guidance advises 

that community development services 

should be tied to either financial 

services or to a bank employee’s 

professional expertise (e.g., human 

resources, legal). Under the current 

regulation, community development 

services are evaluated for large banks as 

part of the service test, along with retail 

services. For intermediate small banks 

and wholesale and limited purpose 

banks, community development 

services are considered along with 

community development loans and 

qualified investments under one 

community development test. 

Community development services are 

generally not considered for small 

banks. 

Examiners consider the extent to 

which a bank provides community 

development services, as well as the 

innovativeness and responsiveness of 

the activities. Examiners may consider a 

variety of measures, such as: (i) The 

number of low- and moderate-income 


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239See Q&A § __.24(e)–2. 

participants; (ii) the number of 

organizations served; (iii) the number of 

sessions sponsored; and (iv) the bank 

staff hours dedicated. Additionally, the 

Interagency Questions and Answers 

provide some guidance on the 

qualitative evaluation of community 

development services, including 

whether the service activity required 

special expertise and effort on the part 

of the bank, the impact of a particular 

activity on community needs, and the 

benefits received by a community.239

2. Stakeholder Feedback 

Currently, community development 

services are qualitatively reviewed, with 

limited use of metrics. Both industry 

and community stakeholders have 

acknowledged the value of community 

development services in establishing the 

partnerships needed to build capacity 

and foster the growth of the community 

development ecosystem. Stakeholders 

generally agree that developing 

quantitative metrics coupled with a 

strong qualitative analysis would 

enhance the community development 

evaluation process but have recognized 

certain tradeoffs. Some stakeholders 

note that the use of a consistent metric, 

such as service hours per employee 

would be beneficial. However, other 

stakeholders have noted that 

quantitative metrics alone cannot 

adequately capture the impact and 

importance of community development 

services, and the impact of these 

services on a community is often more 

than the value of the employee’s time. 

B. Defining Community Development 

Service Activities 

In § __.25, the agencies propose to 

retain the current definition of 

community development services to 

include activities that have a primary 

purpose of community development 

and are related to the provision of 

financial services. In addition, activities 

that reflect other areas of expertise of a 

bank’s employees, such as human 

resources, information technology, and 

legal services would also be considered 

to be related to the provision of 

financial services. Generally, 

community development services 

activities would be considered when 

performed by members of a bank’s board 

or employees of the bank. 

The agencies also propose that in 

nonmetropolitan areas, banks may 

receive community development 

services consideration for volunteer 

activities that meet an identified 

community development need, even if 

unrelated to the provision of financial 

services. The agencies recognize that 

banks operating in nonmetropolitan 

areas may have fewer opportunities to 

provide community development 

services related to the provision of 

financial services than in metropolitan 

areas but may have ample opportunities 

to volunteer for activities that meet a 

community development need not tied 

to the provision of financial services. 

The agencies propose that examples of 

qualifying activities in nonmetropolitan 

areas include, but are not limited to, (i) 

assisting an affordable housing 

organization to construct homes; (ii) 

volunteering to serve food at a soup 

kitchen, at a homeless shelter, or at a 

shelter for victims of domestic violence; 

or (iii) organizing and volunteering at a 

clothing drive or a food drive for a 

community service organization. 

C. Community Development Services 

Test Evaluation 

The agencies propose that the 

evaluation of community development 

services would assess a bank’s record of 

helping to meet the community 

development services needs in the 

bank’s facility-based assessment areas, 

states, multistate MSAs, and nationwide 

areas. The evaluation would include a 

review of the extent to which the bank 

provides community development 

services, as well as the impact and 

responsiveness of these activities to 

community needs. For large banks with 

average assets of over $10 billion, the 

evaluation would also use a standard 

metric based on a bank’s community 

development service hours relative to its 

full-time equivalent employees in each 

facility-based assessment area. 

1. Qualitative Review for the 

Community Development Services Test 

For all large banks, the agencies are 

proposing a qualitative review of (i) the 

extent to which a bank provides 

community development services and 

(ii) the impact and responsiveness of 

these activities. The review would 

include consideration of any relevant 

information provided by the bank, 

including any information required to 

be collected under proposed § __.42, as 

applicable. Under the proposal, this 

review may include consideration of 

one or more of the following types of 

information: (i) The total number of 

community development service hours; 

(ii) the number and type of community 

development service activities; (iii) for 

nonmetropolitan areas, the number of 

activities related to the provision of 

financial services; (iv) the number and 

proportion of community development 

service hours completed by, 

respectively, executive and other 

employees of the bank; (v) the number 

of low- or moderate-income 

participants, organizations served, 

sessions sponsored; or (vi) other 

evidence that the bank’s community 

development services benefit low- or 

moderate-income individuals or are 

otherwise responsive to a community 

development need. In addition, the 

evaluation would include a review of 

the impact and responsiveness of the 

bank’s community development service 

activities, drawing on the applicable 

impact review criteria defined in 

proposed § __.15, and other information 

provided by the bank to help 

demonstrate the responsiveness of these 

activities. 

The agencies’ proposed approach of a 

qualitative assessment that incorporates 

different types of information provided 

by a large bank is responsive to feedback 

from stakeholders that it can be difficult 

to measure the impact of community 

development service activities with a 

quantitative analysis. However, 

integrating the types of information 

currently used to evaluate community 

development services into the 

regulation would help to standardize 

the criteria that inform the qualitative 

review of community development 

services, which would provide more 

consistency and transparency in the 

evaluation compared to the current 

approach. 

2. Bank Assessment Area Community 

Development Service Hours Metric 

For large banks with average assets of 

over $10 billion, the agencies propose to 

include a standard quantitative measure 

to inform the evaluation of a bank’s 

community development services. The 

proposed metric would be used in 

conjunction with the qualitative 

evaluation framework the agencies 

propose to use for all large banks. Under 

the proposal, the bank assessment area 

community development service hours 

metric, would measure a bank’s total 

hours of community development 

services activity in a facility-based 

assessment area during the evaluation 

period, divided by the total full-time 

equivalent employees in the facilitybased assessment area. As a result, this 

metric would calculate the average 

number of community development 

service hours per full-time equivalent 

employee. Large banks with average 

assets of over $10 billion would collect 

community development services data, 

including the hours of community 

development service activities and fulltime equivalent employees for each 

facility-based assessment area. This 

metric would provide a more 

transparent measure to consistently 


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240See Section IX.F for discussion of the 

proposed point scale. 

evaluate the extent to which these banks 

provide community development 

services activities. 

The agencies considered whether the 

bank assessment area community 

development service hours metric 

should be used for all large banks, 

instead of only those with average assets 

of over $10 billion. However, the 

agencies believe that the approach of 

using the metric only for banks with 

average assets of over $10 billion 

appropriately tailors the proposal. These 

banks are more likely to engage in a 

higher volume of community 

development services activities across 

more facility-based assessment areas, 

and the use of a metric will help 

provide greater consistency for these 

evaluations. Additionally, the proposed 

tailoring would not establish 

community development services data 

requirements for large banks with 

average assets of $10 billion or less. The 

agencies believe community 

development services activities for these 

banks can be evaluated effectively with 

a qualitative review of the relevant 

information provided by a bank, in a 

format of the bank’s choosing, as takes 

place under the status quo. 

The agencies seek feedback on 

whether the bank assessment area 

community development service hours 

metric should, instead, be incorporated 

into the evaluation of community 

development services for all large banks, 

and whether the benefit of consistency 

provided by the use of the metric 

outweighs the additional data collection 

requirements for large banks with 

average assets of $10 billion or less. 

3. Facility-Based Assessment Area 

Community Development Services Test 

Conclusion 

The agencies propose that the 

evaluation of community development 

services in facility-based assessment 

areas for all large banks would remain 

qualitative, as described above. For large 

banks with assets of over $10 billion, 

the bank assessment area community 

development service hours metric 

would also be used to inform the 

conclusions for each facility-based 

assessment area. Based on an 

assessment of all applicable factors, the 

bank would receive a conclusion of 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ 

‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ or ‘‘Substantial 

Noncompliance.’’ 

While the bank assessment area 

community development service hours 

metric would be included for large 

banks with average assets of over $10 

billion in each facility-based assessment 

area, the agencies are not proposing the 

use of additional benchmarks to 

standardize the quantitative review for 

these banks. In the future, analysis of 

community development service hours 

data collected under the new rule may 

allow for developing additional 

quantitative procedures for determining 

conclusions. For example, the agencies 

could use community development 

services data to develop appropriate 

benchmarks and thresholds for the bank 

assessment area community 

development service hours metric that 

correspond to each conclusion category. 

4. State Community Development 

Services Test Conclusion 

State level conclusions for the 

Community Development Services Test 

would be based on two components: A 

bank’s performance in its facility-based 

assessment areas, and an evaluation of 

its community development services 

outside its facility-based assessment 

areas, but within the state. As described 

in proposed appendix C, the first 

component would be calculated by 

averaging a bank’s Community 

Development Services Test conclusions 

across its facility-based assessment areas 

in each state. The conclusion assigned 

to each assessment area would be 

assigned a point value as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points).240 To 

derive a state level score, the point 

value assigned for each assessment area 

conclusion would be weighted by a 

bank’s average share of loans and share 

of deposits within the assessment area, 

out of all of the bank’s loans and 

deposits in facility-based assessment 

areas in the state (based on collected 

deposits data and on Summary of 

Deposits data, as applicable). 

The second component of the state 

Community Development Services Test 

conclusion would be the evaluation of 

all community development service 

activities outside the bank’s facilitybased assessment areas and within the 

state. This component of the evaluation 

would include an analysis of 

information including, but not limited 

to, the number and hours of community 

development service activities, as well 

as the impact and responsiveness of 

these activities as previously described. 

To assign a final state conclusion, 

examiners would determine if the score 

derived from the weighted average of 

the facility-based assessment area 

performance should be adjusted upward 

based on an evaluation of the 

significance and impact of outside 

assessment area activities. The inclusion 

of both the facility-based assessment 

area component and the outside facilitybased assessment area component is 

intended to emphasize bank 

performance within facility-based 

assessment areas, while also providing 

certainty that qualifying activities in 

other areas would also be considered to 

inform the conclusions. 

5. Multistate MSA Community 

Development Services Test Conclusion 

The agencies propose to assign 

Community Development Services Test 

conclusions for multistate MSAs in 

which a bank has a facility-based 

assessment area and branches in at least 

two states. The agencies would employ 

the same approach as for assigning 

conclusions for a state, using a 

combination of a weighted average of 

facility-based assessment area 

conclusions, and a qualitative review of 

the bank’s community development 

service activities that occurred outside 

the facility-based assessment area, but 

within the multistate MSA. 

6. Institution Community Development 

Services Test Conclusion 

The agencies propose to assign a 

Community Development Services Test 

conclusion for the institution using the 

same approach as for assigning 

conclusions for a state. The approach 

would use a combination of a weighted 

average of facility-based assessment area 

conclusions nationwide and a 

qualitative review of all community 

development services that occurred 

outside the bank’s facility-based 

assessment areas and within the 

nationwide area, to determine if the 

weighted average of the facility-based 

assessment area performance should be 

adjusted upward based on an evaluation 

of the significance and impact of outside 

assessment area activities. The inclusion 

of these two components is intended to 

achieve a balance of emphasis on 

facility-based assessment area 

performance and certainty that activities 

in other areas would also be considered. 

Request for Feedback 

Question 127. Should volunteer 

activities unrelated to the provision of 

financial services be considered in all 

areas or just in nonmetropolitan areas? 

Question 128. For large banks with 

average assets of over $10 billion, does 

the benefit of using a metric of 

community development service hours 

per full time employee outweigh the 

burden of collecting and reporting 

additional data points? Should the 


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agencies consider other quantitative 

measures? Should the agencies consider 

using this metric for all large banks, 

including those with average assets of 

$10 billion or less, which would require 

that all large banks collect and report 

these data? 

Question 129. How should the 

agencies define a full-time equivalent 

employee? Should this include bank 

executives and staff? For banks with 

average assets of over $10 billion, 

should the agencies consider an 

additional metric of community 

development service hours per 

executive to provide greater clarity in 

the evaluation of community 

development services? 

Question 130. Once community 

development services data is available, 

should benchmarks and thresholds for 

the bank assessment area community 

development services hours metric be 

developed? Under such an approach, 

how should the metric and qualitative 

components be combined to derive 

Community Development Services Test 

conclusions? 

XIV. Wholesale and Limited Purpose 

Banks 

The agencies propose that wholesale 

and limited purpose banks would be 

evaluated under a modified Community 

Development Financing Test, which 

would include an institution level 

metric that measures a bank’s volume of 

activities relative to its capacity. The 

agencies also propose giving wholesale 

and limited purpose banks the option to 

have community development service 

activities that would qualify under the 

Community Development Services Test 

(as described in Section XIII) considered 

qualitatively for a possible adjustment 

of an overall institution rating from 

‘‘Satisfactory’’ to ‘‘Outstanding.’’ 

The proposed Community 

Development Financing Test for 

Wholesale or Limited Purpose Banks is 

intended to account for banks with 

unique business models. Consistent 

with the current CRA regulations, a 

bank would have to apply and be 

approved by its banking regulator to be 

designated as a wholesale or limited 

purpose bank. Under proposed § __.12 a 

wholesale bank would be defined as a 

bank that is not in the business of 

extending home mortgage, small 

business, small farm, or consumer loans 

to retail customers. A limited purpose 

bank would be defined under proposed 

§ __.12 as a bank that offers only a 

narrow retail product line (such as 

credit cards, other revolving consumer 

credit plans, other consumer loans, or 

other non-reported commercial and 

farm loans) to a regional or broader 

market and for which a designation as 

a limited purpose bank is in effect, in 

accordance with § __.26. 

A. Background 

1. Current Evaluation Framework for 

Wholesale and Limited Purpose Banks 

For wholesale and limited purpose 

banks, community development loans, 

qualified investments, and community 

development services are currently 

considered under one community 

development test. Consideration is 

given to the number and dollar amount 

of community development loans, 

qualified investments, and community 

development services, both inside and 

outside assessment areas if the needs of 

the assessment areas are adequately 

addressed. Examiners also consider 

qualitative factors, including the 

innovativeness or complexity of these 

activities, how responsive the bank has 

been to community development needs 

in its assessment areas, and the extent 

to which investments are not routinely 

provided by private investors. The 

evaluation of qualitative factors is 

currently based on information that a 

bank provides on the impact of its 

activities, along with an examiner 

review of performance context, which 

includes community needs and 

opportunities. 

2. Stakeholder Feedback 

Stakeholders have expressed support 

for keeping the wholesale and limited 

purpose bank designations. 

Stakeholders have also supported 

applying a modified Community 

Development Financing Test for these 

types of banks given their unique 

business models. These stakeholders 

have indicated that as an alternative to 

deposits, total assets or Tier 1 Capital 

could be a more appropriate measure of 

the capacity of a wholesale or limited 

purpose bank to engage in community 

development financing because banks 

designated as wholesale or limited 

purpose may have a smaller deposit 

base than banks without such a 

designation. 

B. Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks 

The agencies propose to evaluate 

wholesale and limited purpose banks 

under a Community Development 

Financing Test, with modifications from 

the Community Development Financing 

Test that would apply to other large 

banks, as described in Section XII. The 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks would employ qualitative and 

quantitative factors similar to current 

examination procedures at the 

assessment area, state, and multistate 

MSA levels. At the institution level, the 

evaluation would also employ a 

wholesale and limited purpose bank 

community development financing 

metric as a standard measurement of a 

bank’s volume of activities relative to its 

capacity. 

To compute the wholesale or limited 

purpose bank community development 

financing metric, the agencies would 

divide the annual average of the bank’s 

nationwide community development 

financing activity by the quarterly 

average of the bank’s total assets for the 

same years in which the annual average 

of the bank’s activity is calculated. The 

annual average of community 

development financing activity would 

be calculated identically to the 

proposed metric for large banks, 

including both new activities and 

balance sheet holdings originated in a 

previous year. Because bank assets are 

used in the denominator and cannot be 

easily apportioned to assessment areas, 

multistate MSAs, or states, the proposed 

wholesale or limited purpose bank 

community development financing 

metric would be calculated only at the 

institution level. 

By using assets as the denominator of 

the metric, the proposed metric for 

wholesale and limited purpose banks 

differs from the proposed community 

development financing metrics for large 

banks, which uses deposits as the 

denominator. This difference is 

intended to account for the unique 

business models of wholesale and 

limited purpose banks, which may not 

collect retail deposits. This approach 

was also informed by stakeholder 

feedback that assets are a better measure 

of the capacity of wholesale and limited 

purpose banks to make community 

development loans and investments. 

C. Conclusions for Wholesale and 

Limited Purpose Bank Evaluations 

1. Facility-Based Assessment Area 

Conclusions 

The agencies propose that community 

development financing performance of a 

wholesale or limited purpose bank in a 

facility-based assessment area be based 

on consideration of the dollar value of 

a bank’s community development loans 

and investments that serve the facilitybased assessment area and a review of 

the impact of the bank’s activities in the 

facility-based assessment area under § _

_.15. Examiners would review both to 

establish conclusions. The agencies are 

proposing to evaluate the volume, 

impact, and responsiveness of 


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community development financing 

activities, without a corresponding 

benchmark, given the business model of 

these banks and the proposed 

composition of the wholesale or limited 

purpose bank community development 

financing metric using assets as the 

denominator. 

The agencies acknowledge that the 

proposed approach for evaluating 

community development financing 

activities at the assessment area level for 

wholesale and limited purpose banks 

may not provide the consistent 

standards achieved with the metricsbased approach for large banks. The 

agencies seek feedback on whether there 

are other ways to measure performance 

in facility-based assessment areas in 

order to bring greater consistency to the 

assessment area level evaluation, 

including whether a bank assessment 

area community development financing 

metric and corresponding benchmarks 

would be an appropriate. 

2. State Conclusions 

The agencies propose a similar 

approach for evaluating the community 

development financing performance of a 

wholesale or limited purpose bank at 

the state level. Conclusions would be 

based on consideration of the dollar 

value of a bank’s community 

development loans and investments that 

serve the entire state and a review of the 

impact of the bank’s activities in the 

state under § __.15, and consideration of 

performance in any facility-based 

assessment areas in the state. Examiners 

would review all components to 

establish conclusions. Similar to the 

discussion above, the agencies seek 

feedback on alternative approaches to 

provide more consistency to the state 

level performance evaluation. 

3. Multistate MSA Conclusions 

The agencies propose that 

conclusions would also be assigned for 

the Community Development Financing 

Test in each multistate MSA, as 

applicable. The agencies would employ 

the same approach used for assigning 

conclusions at the state level, using a 

combination of the dollar value of the 

bank’s community development 

financing activities that serve the 

multistate MSA, an impact review of 

these activities, and performance in any 

facility-based assessment areas in the 

multistate MSA. 

4. Institution Conclusions 

The agencies propose that 

conclusions for a wholesale or limited 

purpose bank’s Community 

Development Financing Test would be 

based on consideration of the wholesale 

or limited purpose bank community 

development financing metric, a review 

of the impact of the bank’s nationwide 

activities, and the bank’s performance in 

its facility-based assessment areas. 

This approach is intended to achieve 

a number of objectives. First, the use of 

the metric for the institution evaluation 

would help to ensure that wholesale 

and limited purpose banks are 

conducting a volume of activity that is 

commensurate with their overall 

capacity. Second, the institution level 

impact review would ensure a bank’s 

activities are responsive to community 

needs. Finally, performance in all of a 

bank’s facility-based assessment areas 

would be considered, in order to ensure 

that the bank has met local community 

needs within these areas. 

In addition, as indicated in the 

discussion of § __.21 (Section VII), the 

agencies propose that wholesale and 

limited purpose banks would have the 

option to request consideration for 

community development service 

activities that would qualify under the 

Community Development Services Test 

(as described in Section XIII). These 

activities would be considered 

qualitatively for possible adjustment of 

an overall institution rating from 

‘‘Satisfactory’’ to ‘‘Outstanding.’’ 

The agencies seek feedback on 

whether a benchmark should be 

established for comparing community 

development financing performance of 

wholesale and limited purpose banks to 

other banks at the institution level. 

Specifically, the agencies are 

considering two options for a 

benchmark. First, the agencies could use 

the nationwide community 

development financing benchmark used 

to evaluate performance of large banks. 

This option would promote consistency 

in performance expectations across all 

bank types. Alternatively, the agencies 

could develop a nationwide community 

development financing benchmark 

tailored specifically to wholesale and 

limited purpose banks based on the 

aggregate community development 

financing activity and aggregate assets of 

all wholesale and limited purpose 

banks. 

Request for Feedback 

Question 131. How could the agencies 

provide more certainty in the evaluation 

of community development financing at 

the facility-based assessment area level? 

Should a bank assessment area 

community development financing 

metric be used to measure the amount 

of community development financing 

activities relative to a bank’s capacity? 

If so, what is the appropriate 

denominator? 

Question 132. Should a benchmark be 

established to evaluate community 

development financing performance for 

wholesale and limited purpose banks at 

the institution level? If so, should the 

nationwide community development 

financing benchmark for all large banks 

be used, or should the benchmark be 

tailored specifically to wholesale and 

limited purpose banks? 

Question 133. For wholesale and 

limited purpose banks that wish to 

receive consideration for community 

development services, should these 

banks be required to opt into the 

proposed Community Development 

Services Test, or should they have the 

option to submit services to be reviewed 

on a qualitative basis at the institution 

level, without having to opt into the 

Community Development Services Test? 

XV. Strategic Plans 

The agencies propose to retain the 

strategic plan option as an alternative 

method for evaluation under the CRA. 

Banks that elect to be evaluated under 

a CRA strategic plan would continue to 

be required to request approval for the 

plan from the appropriate Federal 

banking agency. A bank’s election for 

the strategic plan option would not 

affect the bank’ obligation, if any, to 

report data as required by § __.42. The 

agencies also propose to introduce more 

specific criteria to ensure that all banks 

are meeting their CRA obligation to 

serve low- and moderate-income 

individuals and communities. This 

approach is intended to ensure that 

banks have a strong justification for why 

a strategic plan is necessary for their 

business model and strategy, and that 

banks evaluated under a strategic plan 

incorporate how the bank’s retail 

lending and other activities help to meet 

the credit needs of low- and moderateincome individuals and communities 

whenever possible. 

Under the proposal, a bank that elects 

evaluation under a CRA strategic plan 

would be required to include relevant 

activities of its bank subsidiaries and 

may continue to include relevant 

activities of other affiliates. A bank 

would continue to seek input from 

members of the public in its facilitybased assessment areas covered by the 

plan and submit the plan for publication 

on its respective regulatory agency’s 

website as well as publish the draft plan 

on their own website if the bank has a 

website. In addition, the agencies would 

require banks that elect strategic plan 

evaluation to provide a justification for 

why the applicable performance tests 

and standards are not appropriate for 

the bank. 


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241For this purpose, non-traditional banks are 

those that do not extend retail loans (small 

business, small farm, home mortgage loans, and 

consumer loans) as major product lines or deliver 

banking services principally from branches. 

242 12 CFR __.27(d) and (e). 

243 12 CFR __.27(b). 

244 12 CFR __.27(f)(1). 

245 12 CFR __.27(g)(2). 

A. Current Approach to Strategic Plans 

Currently, the strategic plan option is 

available to all types of banks, although 

it has been used mainly by nontraditional banks 241 and banks that 

make a substantial portion of their loans 

beyond their branch-based assessment 

areas. The strategic plan option is 

intended to provide banks flexibility in 

meeting their CRA obligations in a 

manner that is responsive to community 

needs and opportunities and 

appropriate considering their capacities, 

business strategies, and expertise. 

Banks that elect to be examined under 

strategic plans have a great deal of 

latitude in designing their strategic 

plans but are subject to several key 

requirements. Banks must seek approval 

from their regulatory agency and solicit 

community feedback prior to submitting 

a strategic plan for regulatory 

approval.242 In addition, they are 

required to delineate assessment areas 

in the same manner as non-strategic 

plan banks, and large banks that elect to 

be evaluated under an approved 

strategic plan continue to be obligated to 

report relevant lending data.243

Banks must include measurable goals 

for helping to meet the credit needs in 

each assessment area, particularly the 

needs of low- and moderate-income 

census tracts and low- and moderateincome individuals, but they have 

flexibility in setting these goals. The 

current CRA regulations state that a 

bank’s plan shall address all three 

performance categories (lending, 

investment, and services), but the 

regulation also provides flexibility for a 

bank to choose a different emphasis as 

long as the plan is responsive to the 

characteristics and credit needs of its 

assessment areas and takes into 

consideration public comment and the 

bank’s capacity and constraints, product 

offerings, and business strategy.244

When reviewing a strategic plan, the 

agencies consider the public’s 

involvement in formulating the plan, 

any written public comments on the 

plan, and the bank’s response to any 

public comments.245 A bank’s 

engagement with its community is vital 

to the strategic plan process to develop 

the requisite information about 

community needs. 

B. Stakeholder Feedback on Strategic 

Plans 

Stakeholders have expressed that the 

strategic plan option should not be used 

to lower performance expectations for 

any type of bank and that there should 

be parity between strategic plan banks 

and traditional banks. Some 

stakeholders believe the key goal should 

be consistency and that the strategic 

plan option should be reserved for those 

few banks that are not able to 

successfully be evaluated under the 

otherwise applicable performance 

standards because of their business 

model. Other stakeholders have 

expressed that the CRA regulation 

should not force banks to change their 

business model and that the strategic 

plan option should be available for 

banks with business models that would 

not perform well under the otherwise 

applicable performance standards. For 

example, these stakeholders have 

indicated that banks that are not able to 

meet the credit needs of low- and 

moderate-income individuals or very 

small businesses through retail lending 

should have the option to meet those 

needs through other means, such as by 

supporting organizations or programs 

that serve those constituents through 

community development financing or 

community development services. 

Stakeholders have indicated that the 

current assessment area requirements 

for strategic plans are too confining. As 

stated previously, many banks that elect 

the strategic plan option choose this 

option because they operate in larger 

geographic areas than their branchbased assessment areas. For example, 

some banks operate in several states, or 

even nationwide, but have much 

smaller assessment areas that surround 

their single headquarters or their limited 

number of branches. In these situations, 

there has been a disconnect with plans 

that cover geographic areas that are 

much smaller than the broader areas in 

which the bank operates. Stakeholders 

were generally supportive of banks 

sharing their draft strategic plans 

through digital platforms to increase 

public participation. Some commented 

that the role of the public input process 

should be better defined, specifically 

the extent to which a bank is required 

to respond to public comments from 

outside of its community. 

Overall stakeholders were supportive 

of the agencies providing guidelines 

regarding what constitutes a material 

change that would require an 

amendment to a bank’s CRA strategic 

plan. There were differences among 

stakeholders as to what the impact of a 

material change would be and wanted to 

distinguish the impact of a minor 

change versus a major change. For 

example, these stakeholders suggest 

minor changes should only require 

agency approval while a major change 

would require public comment in 

addition to agency approval. 

Stakeholders generally agreed that a 

non-exhaustive list of examples of what 

constitutes a material change would be 

helpful. 

C. Strategic Plan Improvements 

In § __.27, the agencies propose a 

number of provisions to provide more 

clarity about establishing strategic 

plans, the measurable goals established, 

and where performance is evaluated. 

The agencies also propose provisions to 

address concerns about parity expressed 

by some stakeholders as well as how to 

make it easier for the public to engage 

in the development of CRA strategic 

plans. 

Establishing goals. The agencies 

propose that banks would incorporate 

performance standards and metrics 

appropriate for their size in setting their 

goals, to the extent that such 

performance standards are appropriate 

given the bank’s capacity and 

constraints, product offerings, and 

business strategy. Banks would be given 

flexibility to set different metrics from 

those that would otherwise be 

applicable if a bank is substantially 

engaged in activities outside of the 

scope of the standard performance tests. 

For example, banks that do not extend 

home mortgage, small business, small 

farm, or automobile loans would not be 

expected to incorporate performance 

standards and metrics relevant to the 

Retail Lending Test in their plans. If a 

bank presents metrics or goals that are 

different from the otherwise applicable 

standards and metrics, the agencies 

would consider whether those metrics 

or goals are responsive to the 

characteristics and credit needs of its 

assessment areas and consider public 

comment and the bank’s capacity and 

constraints. In addition, if a bank 

specifies goals that are different from 

the otherwise applicable performance 

tests and standards, the bank would be 

required to explain why those goals are 

appropriate. 

Assessment Areas. The agencies 

propose that banks electing to be 

evaluated under a strategic plan should 

be required to delineate assessment 

areas in the same manner as nonstrategic plan banks. The agencies 

believe the proposed approach to 

assessment areas for large banks is 

flexible enough such that no additional 

tailoring is necessary for establishing 

the assessment areas for large banks that 


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33986 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

are evaluated under an approved 

strategic plan. In addition to facilitybased assessment areas, large banks 

electing to be evaluated under a 

strategic plan would be required to 

delineate retail lending assessment 

areas, consistent with the proposed 

approach specified in § __.17. The 

proposed CRA regulation would also 

allow for the consideration of retail 

lending and community development 

financing activities outside of 

assessment areas, which would allow 

banks electing to be evaluated under a 

strategic plan to establish goals for such 

activities. The agencies believe the 

proposal would provide parity among 

banks and address the disconnect 

between plan goals covering geographic 

areas that are much smaller than a 

bank’s actual business footprint. 

Plan Goals. The proposed rules would 

require strategic plans to include goals 

for each retail lending major product 

line, including those of a bank’s 

subsidiaries. Banks currently have great 

latitude in designating plan goals, but it 

is not always clear what type of loans 

should be included in a strategic plan, 

or whether the activities of a bank’s 

subsidiaries must be included in its 

strategic plan. The proposal would 

require evaluation of each major 

product line, including those of a bank’s 

subsidiaries under the proposed Retail 

Lending Test that would be applied to 

non-strategic plan banks. To provide 

greater clarity and to ensure strategic 

plan banks are held to the same level of 

standards as non-strategic plan banks, 

the agencies’ proposed rule would 

require plans to include relevant 

activity of a bank’s subsidiaries as well 

as include goals for each major product 

line. 

Encourage Public Participation. To 

encourage increased public 

participation, the agencies propose 

making CRA strategic plans as widely 

available and as easy to locate as 

possible by requiring banks to post draft 

CRA strategic plans on the appropriate 

Federal banking agency’s website and 

the bank’s website. If the bank does not 

maintain a website, the bank would be 

required to publish notice of the draft 

plan in at least one print newspaper or 

digital publication of general circulation 

in each facility-based assessment area 

covered by the plan (or for military 

banks in at least one print newspaper or 

digital publication of general circulation 

targeted to the members of the military) 

for a period of at least 30 days. The 

agencies also propose that a draft plan 

should include an electronic means by 

which, and a postal address where, 

members of the public can submit 

comments on the bank’s plan. The 

proposal would require that, during the 

period of formal public comment, a 

bank would have to make copies of the 

draft plan available for review at no cost 

at all offices of the bank in any facilitybased assessment area covered by the 

plan and provide copies of the draft 

plan upon request for a reasonable fee 

to cover copying and mailing, if 

applicable. In evaluating CRA strategic 

plans for the appropriateness of a bank’s 

goals, the agencies rely heavily on the 

public input process to ensure plan 

goals align with and are responsive to 

community credit needs, particularly 

those for low- and moderate-income 

individuals and low- and moderateincome communities. Although banks 

are currently required to seek public 

input by publishing their draft plans in 

local newspapers, the plans rarely 

garner public comments through this 

method. The proposal aims to allow for 

greater public input. 

The agencies propose to clarify how 

banks can demonstrate they have 

meaningfully engaged with their 

community in drafting their CRA 

strategic plans by clarifying 

expectations for the information 

submitted with the plan. Specific 

information would include what 

organizations or members of the public 

the bank engaged with in drafting their 

plan and a description of the process 

used to publicize its draft CRA strategic 

plan. In addition, the bank would 

provide information regarding the 

various methods employed to engage 

community stakeholders, including, but 

not limited to, establishing an advisory 

board comprised of local stakeholders, 

convening public meetings, or 

conducting community outreach 

sessions to gather public comments and 

recommendations about the local credit 

needs. The information would also 

include a comprehensive list of the 

comments and recommendations it 

received and the institution’s response 

to this information. 

Strategic Plan Amendments. The 

agencies propose to clarify what 

constitutes a material change in 

circumstance so a bank would know 

when it must amend its strategic plan 

under § __.27. The current CRA 

regulations specify that a bank may 

request an amendment to its plan if the 

plan goals are no longer appropriate due 

to a material change in circumstance. 

The agencies note that in certain 

circumstances, a plan’s goals may no 

longer be appropriate because a bank’s 

capacity has diminished, rendering the 

bank unable to meet the plan’s goals. 

Conversely, a bank’s capacity could 

increase and, therefore, would be 

underperforming compared to peer 

banks if it were to remain operating 

under the original strategic plan. The 

current regulation allows reliance on 

performance context to determine 

whether a bank has substantially met its 

plan goals. 

The agencies propose to revise the 

CRA regulation to be more transparent 

about when plan amendments would be 

required. The agencies propose that 

during the term of a plan, a bank must 

amend its plan goals if a material 

change in circumstances impedes its 

ability to substantially meet approved 

plan goals, such as financial constraints 

caused by significant events that impact 

the local or national economy; or 

significantly increases its financial 

capacity and ability, such as through a 

merger or consolidation, to engage in 

retail lending, retail services, 

community development financing, or 

community development services 

activities referenced in an approved 

plan. A bank that requests an 

amendment to a plan in the absence of 

a material change in circumstances must 

provide an explanation regarding why it 

is necessary and appropriate to amend 

its plan goals. 

Request for Feedback 

Question 134. Should the strategic 

plan option continue to be available to 

all banks, or do changes in the proposed 

regulation’s assessment area provisions 

and the metrics approach reduce the 

need for the strategic plan option for 

banks with specialized business 

strategies? 

Question 135. Large banks electing to 

be evaluated under a strategic plan 

would have activities outside of facilitybased assessment areas considered 

through retail lending assessment areas 

and then outside retail lending 

assessment areas. Should small and 

intermediate banks electing to be 

evaluated under a strategic plan be 

allowed to delineate the same types of 

assessment areas? What criteria should 

there be for choosing additional 

assessment areas? Could such banks 

have the ability to incorporate goals for 

facility-based assessment areas and 

goals for outside of assessment areas? 

Question 136. In assessing 

performance under a strategic plan, the 

agencies determine whether a bank has 

‘‘substantially met’’ its plan goals. 

Should the agencies continue to 

maintain the substantially met criteria? 

If so, should it be defined and how? For 

example, as a percentage (e.g., 95 

percent) of each measurable goal 

included in the plan, the percentage of 

goals met, or a combination of how 

many goals were not met and by how 

much? 


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246 In addition, as stated in proposed appendix D 

and discussed in Section XVI.C, the agencies would 

establish, for large banks only, an overall retail 

lending assessment area conclusion reflecting 

performance on the Retail Lending Test and an 

overall facility-based assessment area conclusion 

reflecting performance on all four performance tests 

applicable to large banks. 

247 12 U.S.C. 2906(b)(2). 

248 12 U.S.C. 2906(b), implemented by 12 CFR _

_.28(a). The narrative descriptions of the ratings for 

performance under each evaluation method are in 

appendix A to the CRA regulations. See Q&A 

appendix A to 12 __—Ratings. 

249 12 U.S.C. 2906(d). 

250Ratings are not required at the assessment area 

level. Therefore, examiners provide conclusions 

about a bank’s performance at the assessment area 

level. If a bank operates in just one assessment area, 

however, the bank’s institution-level rating is 

equivalent to the performance conclusion within 

that assessment area. 

251See Q&A § __.28(a)–3. 

252 Id. 

253See Q&A appendix A to 12 __—Ratings. 

254 12 CFR __.28(c)(2). 

Question 137. The agencies are 

considering announcing pending 

strategic plans using the same means 

used to announce upcoming 

examination schedules or completed 

CRA examinations and CRA ratings. 

What are the potential advantages or 

disadvantages to making the draft plans 

available on the regulators’ websites? 

Question 138. In addition to posting 

draft plans on a bank’s website and the 

appropriate Federal banking agency’s 

website, should approved strategic 

plans also be posted on a bank’s website 

and the appropriate Federal banking 

agency’s website? 

XVI. Assigned Conclusions and Ratings 

The agencies propose updating how 

conclusions and ratings, as described 

below, are assigned at the state, 

multistate MSA, and institution levels 

using a consistent, quantifiable 

approach. This proposed approach is 

intended to increase transparency and 

provide clarity on the assessment of a 

bank’s overall CRA performance. 

As an initial matter, the proposal 

would distinguish between 

conclusions—which generally refers to 

the bank’s performance on a particular 

test at the assessment area, state, 

multistate MSA, or institution 

level 246—and ratings—which refers to a 

bank’s overall CRA performance across 

tests at the state, multistate MSA, and 

institution levels. With respect to 

conclusions, the agencies propose 

maintaining five categories of 

performance test conclusions, as 

described in § __.28, that splits the 

category of ‘‘Satisfactory’’ into ‘‘High 

Satisfactory’’ and ‘‘Low Satisfactory’’ to 

better differentiate between very good 

performance and performance on the 

lower end of the satisfactory range for 

each test-specific conclusion. With 

respect to ratings, the agencies would 

continue to use the four categories— 

‘‘Outstanding,’’ ‘‘Satisfactory,’’ ‘‘Needs 

to Improve,’’ and ‘‘Substantial 

Noncompliance’’—as prescribed in the 

statute.247

The proposed ratings approach would 

combine a bank’s conclusions, as 

described in proposed appendix C, for 

each applicable test according to a 

specified set of weights tailored to large 

banks, intermediate banks, and 

wholesale and limited purpose banks. 

The proposal would apply this 

weighting approach for ratings at the 

state, multistate MSA, and institution 

level as described in proposed appendix 

D. In addition, the agencies propose 

additional provisions intended to 

emphasize a bank’s retail lending 

performance and the importance of 

assessing how a bank meets the credit 

needs of all the communities it serves 

without overlooking smaller or less 

populated assessment areas as specified 

in proposed appendix D. 

For small banks evaluated under the 

small bank performance standards, the 

agencies would assign lending 

evaluation conclusions of 

‘‘Outstanding,’’ ‘‘Satisfactory,’’ ‘‘Needs 

to Improve,’’ or ‘‘Substantial 

Noncompliance’’ based on the bank’s 

lending performance in each facilitybased assessment area to arrive at the 

bank’s overall rating assigned by the 

agencies as explained in Section XVII 

and in § __.29. 

The agencies also propose updating 

the criteria on discriminatory and 

certain other illegal practices that could 

adversely affect a bank’s CRA rating, as 

well as what rating level (state, 

multistate MSA, and institution) would 

be affected in § __.28(d)(1). Further, the 

agencies propose adding additional laws 

and regulations to the illustrative list of 

examples of practices that could impact 

a bank’s CRA rating in § __.28(d)(2). 

A. Background 

1. Current Method for Assigning 

Conclusions and Ratings 

Consistent with the CRA statute, the 

current CRA regulations provide that a 

bank is assigned an institution rating of 

‘‘Outstanding,’’ ‘‘Satisfactory,’’ ‘‘Needs 

to Improve,’’ and ‘‘Substantial 

Noncompliance’’ in connection with a 

CRA examination.248 Ratings are also 

assigned for a bank’s performance 

within each state in which the bank 

maintains one or more branches, and for 

each multistate MSA for those banks 

that have branches in two or more states 

within a multistate MSA.249 In addition 

to assigning an overall institution rating, 

examiners also assign state and 

multistate MSA ratings for each 

applicable performance test (lending, 

investment, and service tests) primarily 

based on the institution’s performance 

in each assessment area within the state 

or multistate MSA examined using fullscope procedures.250 Performance 

conclusions in assessment areas not 

examined using the full-scope 

procedures are expressed as exceeds, is 

consistent with, or is below 

performance (overall or in the state). 

With one exception, the rating scale 

used for performance test ratings 

mirrors that of the aforementioned four 

statutory institution-level ratings. For 

large banks, however, the ‘‘Satisfactory’’ 

rating for each of the three performance 

tests is split into ‘‘High Satisfactory’’ 

and ‘‘Low Satisfactory.’’ 251 Under 

existing procedures for large banks, 

examiners use a rating scale in the 

Interagency Questions and Answers to 

convert ratings assigned for each test 

into point values; examiners then add 

those point values together to determine 

the overall institution rating.252 The 

conclusions assigned by the examiner 

are presented in the bank’s CRA 

performance evaluation. However, the 

points assigned to each test and the 

bank’s overall points that correspond to 

the institution’s overall rating are not 

included in the performance evaluation. 

With the exception of the rating scale, 

the process of combining performance 

test ratings to determine the state, 

multistate MSA, or institution ratings 

relies primarily on examiner judgment, 

guided by quantitative and qualitative 

factors outlined in the current 

regulation. The current rating system 

allows flexibility. For example, 

exceptionally strong performance in 

some aspects of a particular rating 

profile may compensate for weak 

performance in others.253

Current examination procedures also 

allow for assessment areas to be 

reviewed either for full-scope or 

limited-scope review. Full-scope 

reviews employ both quantitative and 

qualitative factors, while limited-scope 

reviews are assessed only quantitatively 

and, as noted previously, generally carry 

less weight in determining the overall 

state, multistate MSA, or institution 

rating. 

Under current examination 

procedures, the agencies use a factspecific review to determine whether an 

overall institution CRA rating should be 

downgraded due to discriminatory or 

other illegal credit practices.254


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255 Id. 

Currently, the agencies consider the 

nature, extent, and strength of the 

evidence of any discriminatory or other 

illegal credit practices, as well as any 

policies and procedures in place, or lack 

thereof, to prevent these kinds of 

practices, and any corrective action that 

the bank has taken or has committed to 

take.255

1. Stakeholder Feedback on Conclusions 

and Ratings 

Stakeholders generally agree that CRA 

ratings should reflect a bank’s 

performance in the local communities 

they serve. Some stakeholders have 

expressed that the current process is 

overly subjective and relies too much on 

examiner judgment. Stakeholders have 

generally expressed support for more 

transparency about the levels of 

performance associated with different 

ratings and supported retaining the 

‘‘High Satisfactory’’ and ‘‘Low 

Satisfactory’’ component ratings for 

large banks. Some stakeholders have 

expressed that the ratings process 

should be reformed to add more rigor 

and stricter standards. 

B. Combining Test Performance Scores 

To Determine Overall Ratings 

As reflected in § __.28, the agencies 

propose updating the rating system to 

reflect a bank’s performance on each 

applicable performance test. For 

example, ratings for a large bank would 

reflect its performance on the Retail 

Lending Test, Retail Services and 

Products Test, Community Development 

Financing Test, and Community 

Development Services Test. 

Appendix C of the proposal describes 

how performance conclusions for each 

applicable test would be developed, 

which reflects the specific proposals for 

each performance test as discussed in 

earlier sections of this SUPPLEMENTARY

INFORMATION. Although there are testspecific nuances and variations, in 

general, the agencies would assign both 

a conclusion (e.g., ‘‘Low Satisfactory’’) 

and performance score (e.g., 5.7) based 

on the bank’s performance under a 

particular test. As a result, the bank 

would have both a conclusion and a 

performance score for each test, as 

applicable, at the assessment area, state, 

multistate MSA, and institution level. 

Appendix D of the proposal describes 

how overall performance ratings would 

be assigned. In general, to determine a 

bank’s CRA rating at the state, multistate 

MSA, and institution levels, the 

agencies would aggregate a bank’s 

performance scores for each applicable 

test, with specific weights assigned to 

the performance score of each test. The 

proposal would follow the same 

weighting approach to derive ratings at 

the state, multistate MSA, and 

institution level. 

For large banks, the agencies propose 

to determine a bank’s state, multistate 

MSA, and institution rating by 

combining the bank’s performance 

scores across all four performance tests 

for the state, multistate MSA, or 

institution overall. In combining these 

raw performance scores, the Retail 

Lending Test would be given a weight 

of 45 percent, the Community 

Development Financing Test a weight of 

30 percent, the Retail Service and 

Products Test a weight of 15 percent 

and the Community Development 

Services Test a weight of 10 percent as 

described in proposed appendix D. 

The agencies propose to assign the 

largest weight to the Retail Lending 

Test, similar to the current approach, 

which assigns the lending test a weight 

of 50 percent. The agencies believe that 

it would be appropriate to somewhat 

reduce this weight, because the current 

Lending Test includes both retail 

lending and community development 

lending, while the proposed Retail 

Lending Test would include only retail 

lending. Further, the agencies believe 

that a weight of less than 45 percent for 

the Retail Lending Test would not be 

appropriate, in keeping with the CRA’s 

longstanding emphasis on retail lending 

to low- and moderate-income 

individuals and communities. 

The agencies propose giving the 

Community Development Financing 

Test a weight of 30 percent to recognize 

the importance of both community 

development loans and community 

development investments in helping to 

meet community development needs. 

This is comparatively higher than the 

current weight given to the investment 

test at 25 percent under the current 

regulation, which excludes community 

development loans. The agencies 

propose a weight of 15 percent for the 

Retail Services and Products Test and a 

weight of 10 percent for the Community 

Development Services Test. These 

weights are comparable to the existing 

service test weight of 25 percent, which 

includes both retail services and 

community development services. The 

agencies propose the four tests rather 

than three tests to more easily tailor 

examinations by bank size as explained 

in Section VII. 

For intermediate banks, the agencies 

propose to weight the Retail Lending 

Test at 50 percent and the intermediate 

bank community development 

evaluation (or if the bank opts in, for the 

Community Development Financing 

Test) at 50 percent as described in 

proposed appendix D. Any optional 

information regarding eligible retail 

services or community development 

services activities, as applicable, that an 

intermediate bank elects to provide 

would be reviewed qualitatively and not 

impact the weighting of the Retail 

Lending Test or the intermediate bank 

community development evaluation. 

The agencies’ proposed weighting 

reflects the CRA’s traditional emphasis 

on retail lending as well as the 

importance of community development 

activities in meeting community credit 

needs as mentioned previously. This 

weighting is also consistent with the 

current practice for intermediate small 

banks which gives equal weight to retail 

lending and community development 

activities for intermediate banks. 

Request for Feedback 

Question 139. The agencies request 

feedback on whether it would be more 

appropriate to weight retail lending 

activity 60 percent and community 

development activity 40 percent in 

deriving the overall rating at the state, 

multistate MSA or institution level for 

an intermediate bank in order to 

maintain the CRA’s focus on meeting 

community credit needs through small 

business loans, small farm loans, and 

home mortgage loans. 

C. Limitations on Overall Ratings 

In addition to the above weighting 

approach, the agencies also propose to 

retain the requirement that, as 

applicable, for each state and multistate 

MSA and at the institution level, an 

intermediate bank’s or a large bank’s 

Retail Lending Test conclusion needs to 

be at least ‘‘Low Satisfactory’’ in order 

for the bank’s overall rating to be 

‘‘Satisfactory’’ or higher as described in 

proposed appendix D. The objective of 

this requirement is to prevent a bank 

from receiving a ‘‘Satisfactory’’ or higher 

rating at the state, multistate MSA, or 

institution level if it failed to meet its 

community’s credit needs for retail 

loans at that level. Consistent with 

current practice, the agencies propose 

this requirement to emphasize the 

importance of retail loans to low- and 

moderate-income communities. 

However, the agencies propose not 

applying the current requirement that 

an intermediate bank must receive a 

‘‘Satisfactory’’ rating in both the Retail 

Lending Test and intermediate bank 

community development evaluation (or 

if the bank opts in, for the Community 

Development Financing Test). The 

agencies believe eliminating this 

requirement for intermediate banks 

would allow intermediate banks to meet 


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256 § __.28(c)(1). 

community credit needs consistent with 

their more limited capacity. An 

intermediate bank would, however, still 

need to receive at least a ‘‘Low 

Satisfactory’’ on the Retail Lending Test 

in order to receive an overall 

‘‘Satisfactory’’ at the institution level as 

noted above. 

The agencies also propose imposing 

additional restrictions on state, 

multistate MSA and institution-level 

ratings for large banks with ten or more 

assessment areas in a state, a multistate 

MSA, or overall, respectively. A large 

bank with ten or more assessment areas 

(facility-based assessment areas and 

retail lending assessment areas 

combined) at the relevant level would 

not be eligible to receive a 

‘‘Satisfactory’’ or higher rating at that 

level unless it achieved an overall 

performance of ‘‘Low Satisfactory’’ or 

better in at least 60 percent of its 

assessment areas there, as described in 

proposed appendix D. 

Overall performance in a facilitybased assessment area would be based 

on the conclusions the large bank 

received on each test in that assessment 

area. For purposes of this restriction 

only, the agencies propose developing a 

combined assessment area conclusion 

and performance score as described in 

proposed appendix D. A weighted 

average of these scores would be 

calculated across tests, using the same 

test-specific weights as the agencies are 

proposing to use to calculate ratings 

scores: The Retail Lending Test would 

be given a weight of 45 percent, the 

Community Development Financing 

Test a weight of 30 percent, the Retail 

Service and Products Test a weight of 15 

percent and the Community 

Development Services Test a weight of 

10 percent. If this weighted average was 

4.5 or greater, the large bank would be 

considered to have an overall 

performance of at least ‘‘Low 

Satisfactory’’ in that facility-based 

assessment area. In retail lending 

assessment areas, the bank’s overall 

performance would be equivalent to its 

Retail Lending Test conclusion there. 

The agencies propose this 

modification to the ratings approach to 

ensure that large banks receiving a 

‘‘Satisfactory’’ rating are meeting the 

credit needs of their entire community, 

and not just densely populated markets 

with high levels of lending and deposits 

that would factor heavily into the 

weighted-average conclusion rollups. In 

this way, overall ratings would 

accurately reflect performance in all 

markets the large bank serves. 

Intermediate Bank Ratings 

Adjustments. The agencies propose that 

an intermediate bank that opts to be 

evaluated under the proposed 

Community Development Financing 

Test may request additional 

consideration for activities that qualify 

for consideration under the Retail 

Services and Products Test or 

Community Development Services Test 

in proposed appendix D. In these cases, 

the agencies may consider, based on the 

additional activities, whether to 

increase the bank’s rating from a 

‘‘Satisfactory’’ to an ‘‘Outstanding’’ at 

the institution level. An adjustment 

would not occur if an intermediate 

bank’s respective rating, without 

consideration of the additional 

activities, is ‘‘Needs to Improve’’ or 

‘‘Substantial Noncompliance.’’ The 

agencies believe that it is appropriate to 

emphasize retail lending performance, 

and that electing to conduct retail or 

community development services does 

not compensate for poor retail lending 

performance. 

Small Bank Ratings Adjustments. The 

agencies propose that a small bank may 

request additional consideration for 

activities that qualify for consideration 

under the Retail Services and Products 

Test, Community Development 

Financing Test, or Community 

Development Services Test in proposed 

appendix D. In these cases, the agencies 

may consider, based on the additional 

activities, whether to increase the bank’s 

rating from a ‘‘Satisfactory’’ to an 

‘‘Outstanding’’ at the institution level. 

An adjustment would not occur if a 

small bank’s respective rating, without 

consideration of the additional 

activities, is ‘‘Needs to Improve’’ or 

‘‘Substantial Noncompliance.’’ The 

agencies believe that it is appropriate to 

emphasize retail lending performance, 

and that electing to conduct other 

activities does not compensate for poor 

retail lending performance. 

Request for Feedback 

Question 140. What are the 

advantages and disadvantages of the 

proposal to limit the state, multistate 

MSA, and institution-level ratings to at 

most a ‘‘Needs to Improve’’ for large 

banks with ten or more assessment areas 

unless 60 percent or more of the bank’s 

assessment areas at that level have an 

overall performance of at least ‘‘Low 

Satisfactory’’? Should this limitation 

apply to all assessment areas, or only 

facility-based assessment areas? Is ten 

assessment areas the right threshold 

number to prompt this limitation, and is 

60 percent the right threshold number to 

pass it? If not, what should that number 

be? Importantly, what impact would 

this proposal have on branch closures? 

D. Discriminatory and Other Illegal 

Practices 

The agencies propose continuing to 

consider discrimination and certain 

other illegal practices as inconsistent 

with a bank’s affirmative obligation to 

meet the credit needs of its entire 

community and counter to the CRA’s 

core purpose of encouraging banks to 

help meet the needs of low- and 

moderate-income communities and 

addressing inequities in credit access. 

1. Clarifying the Scope of Products and 

Entities Considered for Rating 

Downgrades Related to Discriminatory 

or Other Illegal Practices 

The agencies propose to revise the 

language in the existing CRA regulations 

regarding the circumstances under 

which evidence of discriminatory or 

other illegal practices could adversely 

affect the evaluation of a bank’s CRA 

performance. Under the current CRA 

regulations, evidence of discrimination 

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, could 

result in a downgrade to the bank’s CRA 

rating.256

Under the proposal, the practices that 

could adversely affect a bank’s CRA 

performance would no longer be limited 

to discriminatory or other illegal credit 

practices but would include any 

discriminatory or illegal practice. Such 

practices could be credit practices but 

could also be practices related to 

deposit products or other products and 

services offered by the bank. The 

agencies note that the CRA statute 

indicates that banks are required by law 

to meet the convenience and needs of 

their communities, which includes the 

need for credit services as well as 

deposit services. Consistent with this 

statutory focus, the proposed revisions 

would broaden these provisions of the 

current CRA regulations to include 

discriminatory or other illegal practices 

beyond merely credit practices in 

proposed § __.28(d)(1). 

In addition, the agencies propose 

revising the current CRA regulations to 

clarify in § __.28(d)(1)(i) that 

discriminatory or other illegal practices 

by a bank subsidiary could also result in 

a downgrade to the bank’s CRA rating. 

The proposal would further state in § _

_.28(d)(1)(ii) that discriminatory or 

other illegal practices in any facilitybased assessment area, retail lending 

assessment area, or outside retail 

lending area by any affiliate whose retail 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
33990 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

257 10 U.S.C. 987 et seq. 258 50 U.S.C. 3901 et seq. 259 12 U.S.C. 5531. 260 12 CFR __.28(c)(2). 261See FFIEC, Press Release, ‘‘FFIEC Issues 

Uniform Consumer Compliance Rating System’’ 

(Nov. 7, 2016), https://www.ffiec.gov/press/ 

pr110716.htm. 262 12 CFR __.26(b). 

loans are considered as part of the 

bank’s lending performance could 

adversely affect a bank’s CRA 

performance. 

2. Additional Examples of 

Discriminatory or Other Illegal Practices 

For added clarity, the agencies 

propose amending the CRA regulation 

in § __.28(d)(2)(vii), (viii) and (iv), 

respectively to include violations of the 

Military Lending Act,257 the 

Servicemembers Civil Relief Act,258 as 

well as the prohibition against unfair, 

deceptive, or abusive acts or practices 

(UDAAP) 259 as additional examples of 

acts and practices that are inconsistent 

to meeting community credit needs. 

Because the included list of applicable 

laws, rules, and regulations is 

illustrative, and not exhaustive, it is 

important to note that this is not a 

substantive change as compared to 

current examination procedures. 

Nonetheless, the agencies believe 

adding these laws to the list would 

provide greater clarity. 

3. Effect of Evidence of Discriminatory 

or Other Illegal Practices 

Currently, in determining the effect of 

discriminatory or other illegal credit 

practices on a bank’s assigned rating, 

the banking agencies consider: the 

nature, extent, and strength of the 

evidence of the practices; the policies 

and procedures that the bank (or 

affiliate, as applicable) has in place to 

prevent the practices; any corrective 

action that the bank (or affiliate, as 

applicable) has taken or has committed 

to take, including voluntary corrective 

action resulting from self-assessment; 

and any other relevant information.260

The agencies propose updating the 

CRA regulation in § __.28(d)(3) to 

determine the effect of evidence of 

discrimination and other illegal 

practices on a bank’s assigned CRA 

rating based on revised criteria used to 

evaluate a bank’s level of compliance 

with consumer protection laws and 

regulations. The existing criteria were 

put in place when the rating system for 

consumer compliance examinations 

placed greater emphasis on transaction 

testing rather than the adequacy of an 

institution’s consumer compliance 

management system in preventing 

consumer harm. In 2016, the Federal 

Financial Institutions Examination 

Council (FFIEC) revised the Consumer 

Compliance Rating System 261 to focus 

more broadly on an institution’s 

commitment to consumer protection. 

The agencies propose using the 

following updated criteria to determine 

whether there should be a rating 

downgrade: root cause of any violations 

of law, the severity of any consumer 

harm resulting from violations, the 

duration of time over which the 

violations occurred, and the 

pervasiveness of the violations. This 

change would align the criteria to 

determine whether a CRA downgrade is 

warranted with the Uniform Interagency 

Consumer Compliance Ratings System. 

In addition to the root cause, severity, 

duration, and pervasiveness of 

violations, examiners would also 

consider the degree to which the bank, 

a bank subsidiary, or an affiliate, as 

applicable, establishes an effective 

compliance management system across 

the institution to self-identify risks and 

to take the necessary actions to reduce 

the risk of non-compliance and 

consumer harm. All consumer 

compliance violations would be 

considered during a CRA examination, 

although some might not lead to a CRA 

rating downgrade. 

The agencies also propose updating 

the CRA regulation in § __.28(d) to 

enable a rating downgrade at the state 

and multistate MSA level in addition to 

the current ability to downgrade the 

institution level rating to provide greater 

clarity and transparency to the bank and 

public about the geographic level at 

which the violations occurred. 

XVII. Performance Standards for Small 

Banks and Intermediate Banks 

In recognition of their capacity 

constraints, the agencies propose to 

maintain the current evaluation method 

for small banks. The agencies are 

proposing to continue evaluating small 

banks under the small bank 

performance standards in the current 

CRA framework in § __.29(a)(1); 

however, these banks may opt into the 

Retail Lending Test and may continue to 

request additional consideration for 

other qualifying CRA activities in 

§ __.29(a)(2). 

The agencies propose evaluating 

intermediate banks under the proposed 

Retail Lending Test in § __.22 with 

certain provisions tailored to 

intermediate banks. In addition to the 

proposed Retail Lending Test, the 

agencies propose to evaluate an 

intermediate bank’s community 

development activity pursuant to the 

criteria in § __.29(b)(2), which is the 

same criteria as the current intermediate 

small bank community development 

test. In lieu of evaluation under § _

_.29(b)(2), intermediate banks could opt 

into being evaluated under the proposed 

Community Development Financing 

Test. 

All intermediate banks—evaluated 

under either the intermediate bank 

community development evaluation or 

that choose to be evaluated under the 

Community Development Financing 

Test—would have the option to 

designate retail loans (e.g., small 

business, small farm, and home 

mortgage loans) for consideration as 

community development loans if they 

have a primary purpose of community 

development and if the loans are not 

required to be reported. 

A. Small Bank Performance Standards 

1. Background 

Current Approach for Small Bank 

Performance Standards. The current 

category of small banks includes those 

banks with assets of less than $346 

million as of December 31 of the prior 

two calendar years. Under the current 

CRA regulations, a small bank is 

evaluated under the small bank 

performance standards. Specifically, a 

small bank is evaluated under a lending 

test that considers the following criteria: 

(i) The bank’s loan-to-deposit ratio; (ii) 

the percentage of loans located in the 

bank’s assessment areas; (iii) the bank’s 

record of lending to borrowers of 

different income levels and businesses 

and farms of different sizes; (iv) the 

geographic distribution of the bank’s 

loans; and (v) the bank’s record of taking 

action, if warranted, in response to 

written complaints about its 

performance in helping to meet credit 

needs in its assessment areas.262

Stakeholder Feedback. Most 

stakeholders have expressed a 

preference for maintaining the current 

framework for small banks while 

permitting these banks to choose to opt 

into the new approach. These 

stakeholders noted that while a metricsbased approach may provide additional 

transparency regarding performance 

standards, it would be appropriate to 

continue to evaluate small banks under 

the current framework given their more 

limited capacity and resources. Some 

community-based stakeholders, 

however, have stated that all banks, 

including small banks, should be 

evaluated under a metrics-based 

approach. 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33991 

263 12 CFR __.26(b). 

264 12 CFR __.26(c). 

265See Q&A § __.26(c)–1. 

266 Id. 

267 Id. 

2. Proposed Approach for Small Bank 

Performance Standards 

The agencies propose raising the asset 

threshold for small banks from $346 

million to $600 million as described in 

§ __.12. The agencies are not proposing 

changes to the manner in which small 

banks are evaluated or to the small bank 

performance standards. The agencies 

believe that it would be appropriate to 

continue to evaluate small banks under 

the current framework, consistent with 

the objective to tailor the evaluation 

approach according to a bank’s size and 

business model. Instead, under the 

proposal, a small bank may opt into 

being evaluated under the Retail 

Lending Test. 

In addition, a small bank may request 

additional consideration for community 

development activities and for 

providing branches and other services 

and delivery systems that enhance 

credit availability in the bank’s facilitybased assessment areas. The bank could 

submit these activities for consideration 

in determining the bank’s overall 

institution rating, without a requirement 

to opt into any additional performance 

test beyond the current small bank retail 

lending approach. As described above, 

the agencies would consider these 

activities to potentially elevate a bank’s 

rating from ‘‘Satisfactory’’ to 

‘‘Outstanding,’’ and would not consider 

these activities to elevate a ‘‘Needs to 

Improve’’ rating to ‘‘Satisfactory’’ or 

‘‘Outstanding.’’ This limitation is 

intended to maintain a strong emphasis 

on retail lending performance. Under 

the proposed rule, and as in the current 

practice, a small bank could continue to 

achieve any rating, including 

‘‘Outstanding,’’ based on its retail 

lending performance alone, and would 

not be required to be evaluated on other 

activities. 

Request for Feedback 

Question 141. The agencies propose 

to continue to evaluate small banks 

under the current framework in order to 

tailor the evaluation approach according 

to a bank’s size and business model. 

What are other ways of tailoring the 

performance evaluation for small banks? 

Question 142. Should additional 

consideration be provided to small 

banks that conduct activities that would 

be considered under the Retail Services 

and Products Test, Community 

Development Financing Test, or 

Community Development Services Test 

when determining the bank’s overall 

institution rating? 

B. Intermediate Bank Performance 

Standards 

1. Background 

Current Approach for Intermediate 

Small Banks. The current CRA 

regulations include an evaluation 

framework based on three bank size 

categories: Large, intermediate small, 

and small. The current category of 

intermediate small banks includes those 

banks with assets of at least $346 

million as of December 31 of both of the 

prior two calendar years and less than 

$1.384 billion as of December 31 of 

either of the prior two calendar years. 

Intermediate small banks are evaluated 

under a lending test 263 and a 

community development test,264 which 

assesses community development loans, 

qualified investments, and community 

development services together. An 

intermediate small bank has the 

flexibility to allocate its resources 

among community development loans, 

qualified investments, and community 

development services in amounts that it 

reasonably determines are most 

responsive to community development 

needs and opportunities.265 Appropriate 

levels of each of these activities would 

depend on the capacity and business 

strategy of the institution, community 

needs, and number and types of 

opportunities available for community 

development within the bank’s 

assessment areas.266 A bank may not 

simply ignore one or more of these 

categories of community development, 

nor do the regulations prescribe a 

required threshold for community 

development loans, qualified 

investments, and community 

development services.267

Stakeholder Feedback. A number of 

stakeholders have supported 

maintaining three categories of banks 

with performance tests tailored to a 

bank’s capacity and business model. 

Some stakeholders, and including those 

from the trade associations, indicated 

support for an intermediate bank 

category, though at least one state 

banking association preferred the 

proposed two-category approach. 

2. Proposal for Intermediate Bank 

Performance Standards 

The agencies propose creating a new 

intermediate bank category that would 

include banks with assets of at least 

$600 million and not more than $2.0 

billion as described in § __.12. The 

agencies propose that an intermediate 

bank would be evaluated under the 

proposed Retail Lending Test in § __.22 

and the intermediate bank community 

development performance standards as 

described in proposed § __.29(b)(2), 

which includes the same criteria as the 

community development test that 

currently applies to intermediate small 

banks. The agencies also propose that 

intermediate banks be given the option 

to be evaluated under the proposed 

Community Development Financing 

Test in § __.24 in lieu of the 

intermediate bank community 

development performance standards. 

The agencies believe this option 

provides intermediate banks the 

flexibility to determine how their 

community development activities are 

evaluated, recognizing the capacity and 

constraints of these size banks. 

a. Retail Lending Test 

The agencies propose that under the 

Retail Lending Test, an intermediate 

bank’s major product lines would be 

evaluated by applying the proposed 

metrics approach as specified under § _

_.22. This method would provide 

intermediate banks with increased 

clarity and consistency and 

transparency of supervisory 

expectations and standards for 

evaluating their retail lending products. 

The agencies do not propose any data 

reporting requirements for intermediate 

banks under the Retail Lending Test in 

§ __.42. For example, the agencies 

would not require intermediate banks to 

collect deposits data by depositor 

location and would instead rely on the 

FDIC’s Summary of Deposits data for 

use in the Retail Lending Test metrics 

as described in § __.22. 

b. Community Development Evaluation 

Intermediate Bank Community 

Development Evaluation. The agencies 

propose evaluating community 

development activity of intermediate 

banks using the same criteria that is 

included in the current intermediate 

small bank community development 

test in 12 CFR __.26(c) under the 

proposed intermediate bank community 

development performance standards in 

§ __.29(b)(2), retaining the flexibility 

provided to intermediate small banks 

under the current CRA guidance. The 

agencies propose retaining this 

additional flexibility for intermediate 

banks in recognition of their more 

limited capacity for engaging in 

community development activities 

compared to large banks. All 

intermediate banks, including those 

evaluated under the current 

intermediate small bank community 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
33992 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

268See Q&A § __.26(c)–1. 

269 12 CFR __.24; see also CRA Q&A § __.12(i)–3. 

270 12 CFR __.26(c)(3); see also CRA Q&A § __

.26(c)(3)–1. 

development test, would utilize the 

proposed community development 

definitions in § __.13. 

Flexibility for the Types of 

Community Development Activities. The 

agencies propose to retain the current 

flexibility in the array of community 

development activities by which an 

intermediate bank is evaluated. 

Intermediate banks generally conduct a 

combination of community 

development loans, qualified 

investments, and community 

development services. Under the 

current regulation, a bank may not 

ignore one or more of these categories of 

community development activities, and 

the current regulations do not prescribe 

a required threshold for community 

development loans, qualified 

investments, or community 

development services. The agencies 

propose that, consistent with current 

guidance, the appropriate levels of each 

activity would depend on the bank’s 

capacity and business strategy, along 

with community development needs 

and opportunities that are identified by 

the bank.268

Flexibility for Community 

Development Loans. The agencies 

propose that intermediate banks 

continue to have the flexibility to have 

retail loans such as small business, 

small farm, and home mortgage loans be 

considered as community development 

loans. This option would be available to 

an intermediate bank if those loans have 

a primary purpose of community 

development and are not required to be 

reported by the bank. For example, an 

intermediate bank that is not required to 

report small business and small farm 

loans, may choose to report those loans 

for consideration as community 

development loans as provided in § __

.22(a)(5)(iii). Conversely, if an 

intermediate bank is required to report 

home mortgage loans, those loans would 

be required to be evaluated as retail 

loans under the Retail Lending Test and 

the bank would not have the option of 

having them considered as community 

development loans as provided in § __

.22(a)(5)(i). 

The agencies seek feedback on 

whether intermediate banks should 

retain this flexibility for small business 

and small farm loans regardless of the 

reporting status of these loans. 

Intermediate banks are currently not 

required to report small business and 

small farm loans as CRA data. However, 

once the proposed CFPB Section 1071 

Rulemaking is finalized, there is a 

possibility that an intermediate bank 

may be required to report small business 

and small farm loans and would lose the 

flexibility to receive community 

development consideration for those 

retail loans because of their reporting 

status. 

Flexibility for Community 

Development Services. The agencies 

propose retaining the current flexibility 

of providing community development 

consideration for retail banking services 

if they provide benefit to low- or 

moderate-income individuals. Under 

the current regulation, in addition to the 

types of community development 

services associated with large banks,269

an intermediate bank would also receive 

CRA credit for retail banking services as 

community development services if 

they provide benefit to low- or 

moderate-income individuals, including 

low-cost deposit accounts and branches 

located in low- or moderate-income 

geographies, designated disaster, or 

distressed or underserved 

nonmetropolitan middle-income 

areas.270

Option for Evaluation Under the 

Proposed Community Development 

Financing Test. In lieu of evaluation 

under proposed § __.29(b)(2) for 

evaluating community development 

activities of an intermediate bank, the 

agencies propose giving intermediate 

banks the option to be evaluated under 

the proposed Community Development 

Financing Test as specified in § __.24. 

Under this option, an intermediate bank 

also has the option to request additional 

consideration for activities that qualify 

under the Retail Services and Products 

Test in § __.23 and the Community 

Development Services Test in § __.25 for 

possible adjustment of an overall rating 

of ‘‘Satisfactory’’ to ‘‘Outstanding.’’ As 

described above, the agencies would 

consider these activities to potentially 

elevate a bank’s rating from a 

‘‘Satisfactory’’ to an ‘‘Outstanding.’’ 

These activities would not be 

considered to elevate a ‘‘Needs to 

Improve’’ rating to a ‘‘Satisfactory’’ or 

‘‘Outstanding’’ rating. Similar to 

requirements for small banks, this 

limitation is intended to maintain a 

strong emphasis on retail lending 

performance. Under the proposed rule, 

an intermediate bank could continue to 

achieve any rating, including an 

‘‘Outstanding’’ rating, based on its retail 

lending and community development 

performance alone, and would not be 

required to be evaluated on other 

activities. 

The additional consideration for retail 

services and products, and community 

development services would not be 

appropriate for an intermediate bank 

that is evaluated for community 

development activities under § __

.29(b)(2) because that section already 

incorporates those activities. 

As previously noted, all intermediate 

banks, including those that opt for 

evaluation under the proposed 

Community Development Financing 

Test, would continue to have the option 

to designate retail loans (small business, 

small farm, and home mortgage loans) 

for consideration as community 

development loans if they have a 

primary purpose of community 

development and are not required to be 

reported. 

Request for Feedback 

Question 143. The agencies’ proposal 

to require intermediate banks to be 

evaluated under the proposed Retail 

Lending Test is intended to provide 

intermediate banks with increased 

clarity and transparency of supervisory 

expectations and standards for 

evaluating their retail lending products. 

The agencies propose tailoring the 

application of this test by limiting data 

reporting requirements for intermediate 

banks. Are there other ways of tailoring 

the Retail Lending Test for intermediate 

banks that should be considered? 

Question 144. The agencies propose 

to provide continued flexibility for the 

consideration of community 

development activities conducted by 

intermediate banks both under the 

status-quo community development test 

and the proposed Community 

Development Financing Test. 

Specifically, intermediate banks’ retail 

loans such as small business, small 

farm, and home mortgage loans may be 

considered as community development 

loans, provided those loans have a 

primary purpose of community 

development and the bank is not 

required to report those loans. Should 

the agencies provide consideration for 

those loans under the Community 

Development Financing Test? 

Question 145. Should intermediate 

banks be able to choose whether a small 

business or small farm loan is 

considered under the Retail Lending 

Test or, if it has a primary purpose of 

community development, under the 

applicable community development 

evaluation, regardless of the reporting 

status of these loans? Should the same 

approach be applied for the 

intermediate bank community 

development performance standards in 

§ __.29(b) and for intermediate banks 

that decide to opt into the Community 

Development Financing Test in § __.24? 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 33993 

271 12 U.S.C. 2903(a)(2). 

272 12 CFR __.29. For applications under the Bank 

Merger Act or Bank Holding Company Act, a 

convenience and needs analysis is conducted. See 

12 U.S.C. 1828(c) and 12 U.S.C. 1842. 

273See Q&A § __.12(h)–8. 

274 12 CFR __.42(f). 

275 12 CFR __.42. 

276See Q&A § __.42–1. 

XVIII. Effect of CRA Performance on 

Applications 

The agencies are proposing to 

maintain the current regulation’s 

regulatory procedures for considering 

CRA performance on applications 

including, mergers, deposit insurance, 

branch openings and relocations, 

conversions and acquisitions, and other 

applications, as applicable to each 

agency. Consideration of CRA 

performance in bank applications is 

rooted in the CRA statute. The statute 

instructs the agencies to assess a bank’s 

record of meeting the credit needs of its 

entire community, including low- and 

moderate-income neighborhoods, 

consistent with the safe and sound 

operation of such bank, and to take such 

record into account in its evaluation of 

an application for a deposit facility by 

such bank.271

A. Current Approach for CRA 

Consideration in Applications 

Under the current CRA regulations, 

the agencies take into account a bank’s 

CRA performance when considering 

certain applications, including those for: 

A branch opening; merger, 

consolidation, or acquisition; main 

office or branch relocation; deposit 

insurance request; and transactions 

subject to the Bank Merger Act and 

Bank Holding Company Act.272

Basis for Approval or Denial of an 

Application. A bank’s record of 

performance may be the basis for 

denying or conditioning approval of an 

application. Generally, an institution 

with a CRA rating below ‘‘Satisfactory’’ 

may be restricted from certain activities 

until its next CRA examination. 

Interested Parties. The current 

regulation requires that the agencies 

consider public comment when 

determining whether to approve an 

application. In considering CRA 

performance for an application, the 

agencies take into account any views 

and comments expressed by interested 

parties. 

B. Proposed Approach for CRA 

Consideration in Applications 

The agencies are not proposing 

changes to this section of their 

regulations outlining consideration of 

CRA performance for applications, since 

it is prescribed in the CRA statute. 

However, by making the assessment of 

CRA performance more transparent, 

consistent, and predictable, the 

proposed CRA methodology would 

provide greater certainty to a bank 

regarding the level and distribution of 

activity that would achieve a 

‘‘Satisfactory’’ rating when the bank 

contemplates making an application. It 

would also provide clear metrics 

regarding the bank’s record of meeting 

the credit needs of its entire community, 

including low- and moderate-income 

neighborhoods. 

Request for Feedback 

Question 146. Are the agencies’ 

current policies for considering CRA 

performance on applications sufficient? 

If not, what changes would make the 

process more effective? 

XIX. Data Collection, Reporting, and 

Disclosure 

The agencies propose data collection 

and reporting requirements to increase 

the clarity, consistency, and 

transparency of the evaluation process 

through the use of standard metrics and 

benchmarks. The agencies also 

recognize the importance of using 

existing data sources where possible, 

and of tailoring data requirements 

where appropriate. 

Under the proposal, all large banks 

would have the same requirements for 

certain categories of data, including 

community development financing data, 

branch location data, and remote service 

facility location data. As noted in earlier 

sections, the proposal also retains the 

existing large bank data requirements 

for small business and small farm 

lending, although the agencies propose 

replacing this with section 1071 data 

once it is available. The proposal also 

provides updated standards for all large 

banks to report the delineation of their 

assessment areas. 

The agencies propose that some new 

data requirements would only apply to 

large banks with assets of over $10 

billion. Specifically, the agencies 

propose that large banks with assets of 

over $10 billion would have data 

requirements for deposits data, retail 

services data on digital delivery 

systems, retail services data on 

responsive deposit products, and 

community development services data. 

In addition, all banks with assets of over 

$10 billion would have data 

requirements for automobile lending. 

Banks operating under an approved 

wholesale or limited purpose bank 

designation would not be required to 

collect or report deposits data or report 

retail services or community 

development services information. 

Intermediate banks, as defined in 

proposed § __.12, would not be required 

to collect or report any additional data 

compared to current requirements. As 

under current guidance, intermediate 

banks should continue to be prepared to 

demonstrate community development 

activities’ qualifications.273

Intermediate banks would have no 

deposits data requirements, even when 

deciding to opt into the proposed 

Community Development Financing 

Test. 

Small banks, as defined in proposed 

§ __.12, would not be required to collect 

or report any additional data compared 

to current requirements. 

Under the proposal, the data reporting 

deadline would be moved from March 

1 to April 1 of each year. 

A. Background 

1. Current Data Collection and 

Reporting Requirements 

Current Data Used for Deposits. The 

current CRA regulations do not require 

banks to collect or report deposits data. 

Instead, for small banks, total deposits 

and total loans data from the Call Report 

are used to calculate the loan-to-deposit 

ratio for the entire bank. Total deposits 

allocated to each branch from the FDIC’s 

Summary of Deposits are used for 

performance context for banks of any 

size. Deposits data by depositor location 

are not currently collected or reported. 

Current Small Bank and Intermediate 

Small Bank Data Standards for Retail 

Lending. The current CRA regulations 

do not require small banks and 

intermediate small banks to collect, 

maintain, or report loan data, unless 

they opt to be evaluated under the 

lending, investment, and service tests 

that apply to large banks.274 Examiners 

generally use information for a bank’s 

major loan products gathered from 

individual loan files or maintained on 

the bank’s internal operating systems, 

including data reported pursuant to 

HMDA, if applicable. 

Current Large Bank Data Standards 

for Retail Lending and Community 

Development Financing. Under the 

current CRA regulations, large banks 

collect and report certain lending data 

for home mortgages, small business 

loans, small farm loans, and community 

development loans, pursuant to either 

HMDA or the CRA regulation.275 CRA 

data reporting requirements are based 

on bank size, not type of exam.276 If a 

bank, such as a wholesale or limited 

purpose bank, does not engage in 

lending of a particular type, current 

regulations do not require reporting 

such data. Examiners use this lending 


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277 12 CFR __.42(a). 

278 12 CFR __.42(b)(1). 

279 12 CFR __.42(c)(1). 

280 12 CFR __.42(b)(2). 

281See Q&A § __.12(h)–8, which states, in 

relevant part, ‘‘Financial institutions that want 

examiners to consider certain activities should be 

prepared to demonstrate the activities’ 

qualifications.’’ 

282 12 CFR __.43(a)(3). 

283 12 CFR __.43(a)(4). 

284 12 CFR __.43(a)(5). 

285 Id. 

data and other supplemental data to 

evaluate CRA performance. A bank may 

use the software provided by the FFIEC 

for data collection and reporting or 

develop its own programs. Retail 

lending data collection and reporting 

requirements differ based on the 

product line. 

For large banks that do not report 

HMDA data, examiners use home 

mortgage information maintained on the 

bank’s internal operating systems or 

from individual loan files. The data 

elements for home mortgage loans used 

for CRA evaluations include loan 

amount at origination, location, and 

borrower income. For small business 

loans and small farm loans, the CRA 

regulations require large banks to collect 

and maintain the loan amount at 

origination, loan location, and an 

indicator of whether a loan was to a 

business or farm with gross annual 

revenues of $1 million or less.277 Large 

banks report aggregate small business 

and small farm data at the census tract 

level.278

Large banks are not required to collect 

or report data on consumer loans. 

However, if a large bank opts to have 

consumer loans considered as part of its 

CRA evaluation, it must collect and 

maintain this information based on the 

category of consumer loan and include 

it in its public file.279

The current CRA regulations also 

require large banks to report the 

aggregate number and dollar amount of 

their community development loans 

originated or purchased during the 

evaluation period, but not information 

for individual community development 

loans.280 A bank must, however, 

provide examiners with sufficient 

information to demonstrate its 

community development 

performance.281 The CRA regulations do 

not currently require the reporting or 

collection of community development 

loans that remain on the bank’s books or 

the collection and reporting of any 

information about qualified community 

development investments. As a result, 

the total amount (originated and onbalance sheet) of community 

development loans and investments 

nationally, or within specific 

geographies, is not available through 

reported data. Consequently, examiners 

supplement reported community 

development loan data with additional 

information provided by a bank at the 

time of an examination, including the 

amount of investments, the location or 

areas benefited by these activities and 

information describing the community 

development purpose. 

Data Currently Used for CRA Retail 

Services and Community Development 

Services Analyses. There are no specific 

data collection or reporting 

requirements in the CRA regulations for 

retail services or community 

development services. A bank must, 

however, provide examiners with 

sufficient information to demonstrate its 

performance in these areas, as 

applicable. A bank’s CRA public file is 

required to include a list of bank 

branches, with addresses and census 

tracts; 282 a list of branches opened or 

closed; 283 and a list of services, 

including hours of operation, available 

loan and deposit products, transaction 

fees, and descriptions of material 

differences in the availability or cost of 

services at particular branches, if any.284

Banks have the option of including 

information regarding the availability of 

alternative systems for delivering 

services.285 Banks may also provide 

information on community 

development services, such as the 

number of activities, bank staff hours 

dedicated, or the number of financial 

education sessions offered. 

2. Stakeholder Feedback 

Industry group stakeholders have 

asked the agencies to remain mindful 

about minimizing any data collection, 

recordkeeping, and reporting burdens 

potentially associated with revising 

CRA regulations. Industry stakeholders 

have expressed concern that any new 

deposit, lending, investments, and other 

data collection, reporting, and 

recordkeeping requirements could 

potentially be costly and burdensome, 

as well as stating that efforts to develop 

data systems and the need for new 

compliance staff could come at the 

expense of engaging in community 

reinvestment activities. Additionally, 

industry stakeholders have stated that 

new data collection or reporting 

requirements should be assessed 

relative to the corresponding 

improvements to CRA examinations. 

In contrast, community groups have 

generally indicated that the certainty 

and transparency gained from accurate 

community development financing 

measures would be worth any potential 

reporting burden. These stakeholders 

have supported data collection related 

to community development purpose, 

duration of financing provided, and 

partnerships with MDIs and other 

entities. Regarding community 

development services, these 

stakeholders also favored the 

development of a standardized template 

with defined data fields and endorsed 

collection of data relating to bank inputs 

(e.g., community development hours per 

employee in each assessment area) and 

impacts (e.g., number of low- and 

moderate-income attendees at financial 

literacy or homebuyer counseling 

sessions, improvement to attendees’ 

credit scores). Community group 

stakeholders have expressed support for 

bank collection, maintenance, and 

reporting of community development 

data to improve evaluation procedures 

and to increase public transparency. 

Regarding deposits, community group 

stakeholders have generally agreed that 

for small banks and intermediate-small 

banks, the FDIC’s Summary of Deposits 

data could be an appropriate source to 

rely upon for computing metrics, given 

that these banks generally have fewer 

assessment areas and have most of their 

customer base residing within their 

assessment areas. Industry sentiment 

has been that while new depositorrelated data collection and maintenance 

may be necessary for establishing a 

metrics-based approach to evaluating 

retail lending and community 

development financing, it may entail 

substantial costs on impacted banks. 

Overall, stakeholders generally agree 

that small banks should be exempted 

from new deposits data-related 

requirements. 

B. Deposits Data 

1. Deposits Data Collection and 

Maintenance Requirements 

The agencies propose that deposits 

data would be used for several 

evaluation metrics, benchmarks, and 

weights under the applicable 

performance tests. The agencies propose 

an approach for deposits data collection, 

maintenance, and reporting that is 

tailored to different bank sizes. Large 

banks with assets of over $10 billion 

would be required to collect, maintain, 

and report deposits data that is based on 

depositor location, as provided in § .__

42. Large banks with assets of $10 

billion or less, intermediate banks, and 

small banks would not be required to 

collect, maintain or report any deposits 

data. If these banks choose to 

voluntarily collect and maintain this 

data, the agencies would use it for any 

applicable metrics and weights. 


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286See FDIC Summary of Deposits Reporting 

Instructions (June 30, 2021) (‘‘Institutions should 

assign deposits to each office in a manner 

consistent with their existing internal recordkeeping practices. The following are examples of 

procedures for assigning deposits to offices: 

• Deposits assigned to the office in closest 

proximity to the accountholder’s address. 

• Deposits assigned to the office where the account 

is most active. • Deposits assigned to the office 

where the account was opened. • Deposits assigned 

to offices for branch manager compensation or 

similar purposes. Other methods that logically 

reflect the deposit gathering activity of the financial 

institution’s branch offices may also be used. It is 

recognized that certain classes of deposits and 

deposits of certain types of customers may be 

assigned to a single office for reasons of 

convenience or efficiency. However, deposit 

allocations that diverge from the financial 

institution’s internal record-keeping systems and 

grossly misstate or distort the deposit gathering 

activity of an office should not be utilized.’’), 

https://www.fdic.gov/regulations/resources/call/ 

sod/sod-instructions.pdf. 

Otherwise, the agencies propose using 

the FDIC’s Summary of Deposits data for 

any applicable metrics for a bank that 

does not collect and maintain deposits 

data. As discussed further in this 

SUPPLEMENTARY INFORMATION, the 

agencies intend for the proposed 

approach to tailor new deposits data 

requirements only to large banks with 

assets of over $10 billion. 

a. Large Banks With Assets of Over $10 

Billion 

The agencies propose to require large 

banks with assets of over $10 billion to 

collect and maintain county-level 

deposits data based on the county in 

which the depositor’s address is located, 

rather than on the location of the bank 

branch to which the deposits are 

assigned, as is the case with the FDIC’s 

Summary of Deposits data. This 

approach would allow for more precise 

measurement of a bank’s local deposits 

by county. Furthermore, the agencies 

considered that banks generally collect 

and maintain depositor location data to 

comply with Customer Identification 

Program requirements and as part of 

their ordinary course of business. Banks 

would not report depositor addresses, 

but only deposits data that is aggregated 

at a county-, state, multistate MSA, and 

institution level. 

The agencies believe that the current 

approach of associating deposits with 

the location of the branch to which they 

are assigned would raise challenges 

under the proposed evaluation 

framework for large banks with assets of 

over $10 billion. The FDIC’s Summary 

of Deposits data is not always an 

accurate measure of a bank’s deposit 

base within an assessment area. 

Specifically, deposits assigned to a 

branch in the Summary of Deposits may 

be held by a depositor located outside 

of the assessment area where the branch 

is located, such as in a different 

assessment area of the bank, or outside 

of any of the bank’s assessment areas.286

Instead, the agencies propose that 

large banks with assets of over $10 

billion collect and maintain annually, 

until the completion of the bank’s next 

CRA examination, the dollar amount of 

the bank’s deposits at the county level, 

based upon the addresses associated 

with accounts, and calculated based on 

the average daily balances as provided 

in statements, such as monthly or 

quarterly statements. This deposits data 

would not be assigned to branches, but 

would, instead, reflect the county level 

dollar amount of the bank’s deposit 

base. 

The proposed collection and 

maintenance of deposits data at the 

county level for large banks with assets 

of over $10 billion would support 

proposals to more accurately: (i) 

Construct the bank volume metric and 

community development financing 

metric for each bank at the facility-based 

assessment area, state, multistate MSA, 

and institution levels, as applicable; (ii) 

construct the market benchmarks used 

for the retail lending volume screen and 

the community development financing 

metric at the facility-based assessment 

area, state, multistate MSA, and 

institution levels, as applicable; and (iii) 

implement a standardized approach for 

deriving multistate MSA, state, and 

institution conclusions and ratings by 

weighting assessment area conclusions 

(including retail lending assessment 

areas) and outside retail lending area 

conclusions through a combination of 

deposits and lending volumes. 

For each of these purposes, the 

agencies consider it beneficial to use 

deposits data that accurately reflect 

depositor location for all large banks 

with assets of over $10 billion. The 

agencies do not believe the above 

proposals could be implemented using 

the FDIC’s Summary of Deposits data for 

all large banks. Specifically, the FDIC’s 

Summary of Deposits data does not 

contain information distinguishing 

those deposits made by depositors 

located outside of a bank’s facility-based 

assessment areas from those within 

facility-based assessment areas. This 

limitation could introduce imprecision 

when using the Summary of Deposits 

data to weight performance conclusions 

in retail lending assessment areas, 

outside retail lending areas, and 

community development activity areas. 

For large banks with assets of over $10 

billion, the agencies believe that the 

benefits of precision outweigh the 

burden of requiring the collection and 

reporting of deposits data. 

For banks that collect and maintain 

deposits data, the agencies propose a 

definition of deposits, as stated in § __

.12, that is based on two subcategories 

of the Call Report category of Deposits 

in Domestic Offices: (i) Deposits of 

individuals, partnerships, and 

corporations; and (ii) commercial banks 

and other depository institutions in the 

United States. These two subcategories 

of deposits constitute the majority of 

deposit dollars captured overall in the 

Call Report categories of Deposits in 

Domestic Offices and these 

subcategories are proposed because they 

increase a bank’s capacity to lend and 

invest. 

The agencies propose that 

domestically held deposits of foreign 

banks, and of foreign governments and 

institutions would not be included 

because these deposits are not derived 

from a bank’s domestic customer base. 

The proposal would exclude U.S., state, 

and local government deposits because 

these deposits are sometimes subject to 

restrictions and may be periodically 

rotated among different banks causing 

fluctuations in the level of deposits over 

time. 

Further, the agencies seek feedback 

regarding whether to include deposits 

for which the depositor is a commercial 

bank or other depository institution in 

the definition of deposits, as proposed, 

or if these deposits should be excluded 

from the definition. While these 

deposits may augment a bank’s capacity 

to lend and invest, they are primarily 

held in banker’s banks and credit banks, 

many of which are exempt from CRA, or 

operate under the Community 

Development Financing Test tailored for 

limited purpose banks, which does not 

use deposits data. 

For deposit account types for which 

accountholder location information is 

not generally available, the agencies 

propose that the aggregate dollar 

amount of deposits for these accounts 

would be included at the overall 

institution level, and not at other 

geographic levels. For example, the 

agencies would expect the aggregate 

dollar amount of deposits for accounts 

associated with pre-paid debit cards or 

Health Savings Accounts to be included 

at the institution level. The agencies 

seek feedback on additional 

clarifications regarding what deposit 

account types may not be appropriate to 

include at a county level. 

The agencies also seek feedback on 

the appropriate treatment of nonbrokered reciprocal deposits in order to 

appropriately measure an institution’s 

amount of deposits, avoid double 


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counting of deposits, and to ensure that 

accountholder location information for 

deposit accounts is available to the bank 

that is collecting and maintaining the 

data. The agencies are considering that 

a non-brokered reciprocal deposit as 

defined in 12 U.S.C. 1831f(i)(2)(E) for 

the institution sending the non-brokered 

reciprocal deposit would qualify under 

the deposits definition in § __.12. In 

addition, the agencies are considering 

that a non-brokered reciprocal deposit 

as defined in 12 U.S.C. 1831f(i)(2)(E) for 

the institution receiving the nonbrokered reciprocal deposit would not 

qualify under the deposits definition in 

§ __.12. 

In order to reduce burden associated 

with the collection, maintenance, and 

reporting of deposits data, the agencies 

intend to explore the feasibility, 

including costs, of developing a 

certified geocoding and aggregation 

platform that banks could use to 

geocode and aggregate their data in the 

future. 

b. Small Banks, Intermediate Banks, and 

Large Banks With Assets of $10 Billion 

or Less 

The proposal would not require small 

banks, intermediate banks, and large 

banks with assets of $10 billion or less 

to collect deposits data. This approach 

is intended to minimize the data 

collection burden on banks with assets 

of less than $10 billion, in recognition 

that large banks with assets of over $10 

billion have more capacity to collect 

and report new deposits data. 

Instead of using new deposits data, 

the agencies propose that the FDIC’s 

Summary of Deposits data would be 

used for calculating the retail lending 

volume screen, as applicable, for these 

banks, if they do not elect to collect and 

maintain deposits data. The Summary of 

Deposits data would also be used for 

calculating the community development 

financing metric for large banks with 

assets of $10 billion or less and for 

intermediate banks that opt into the 

Community Development Financing 

Test. The Summary of Deposits data 

would also be used for the weights 

assigned to each facility-based 

assessment area when calculating 

performance scores at the state, 

multistate MSA, and institution levels, 

as applicable. 

The agencies propose that small 

banks, intermediate banks, and large 

banks with assets of $10 billion or less 

could choose to collect and maintain 

deposits data on a voluntary basis. Large 

banks with assets of $10 billion or less 

that elect to collect deposits data would 

be required to do so in a machine 

readable form provided by the agencies, 

while small banks and intermediate 

banks would have the option to collect 

deposits data in the bank’s own format. 

The agencies would use collected data 

instead of the FDIC’s Summary of 

Deposits data to calculate the bank’s 

metrics and weights for all applicable 

tests and evaluation areas. The agencies 

considered that a bank with a significant 

percentage of deposits drawn from 

outside of assessment areas in particular 

may prefer to collect and maintain 

deposits data to reflect performance 

more accurately under the retail lending 

volume screen and the community 

development financing metrics, and to 

have weights given to the bank’s 

assessment areas in a way that more 

accurately reflects the bank’s deposits 

base when assigning ratings. 

The agencies seek feedback on the 

proposed approach and the tradeoffs of 

requiring only large banks with assets of 

over $10 billion to collect and maintain 

deposits data. On the one hand, the 

proposed approach would limit this 

requirement to banks with greater 

resources to comply with this proposed 

data requirement. On the other hand, 

the agencies have also considered that 

this approach may result in metrics and 

weights that do not reflect the 

geographic location of a bank’s deposit 

base as accurately as would an approach 

that required the collection and 

maintenance of deposits data for all 

large banks. For example, a large bank 

with assets of $10 billion or less could 

have an internet-based business model 

not focused on branches. If such a bank 

did not elect to collect and maintain 

deposits data, the proposed approach 

would count all of the bank’s deposits 

as being located within the bank’s 

facility-based assessment areas, because 

the FDIC’s Summary of Deposits data 

necessarily assigns all deposits to 

branch locations. The agencies have also 

considered that certain banks, 

particularly those for which the FDIC’s 

Summary of Deposits data does not 

approximate well their actual 

depositors’ locations, may wish to 

voluntarily collect and maintain 

deposits data for the sake of ensuring 

metrics and weights that accurately 

reflect the distribution of their deposits 

base. 

Relatedly, the agencies seek feedback 

on an alternative approach in which 

large banks with assets of $10 billion or 

less are required to collect and maintain 

deposits data, with the standards and 

requirements for this data as proposed 

for large banks with assets of over $10 

billion. The agencies have considered 

that this alternative may improve the 

precision and consistency of the 

metrics, benchmarks, and weights 

applicable to large banks with assets of 

$10 billion or less. In addition, this 

alternative may allow for more 

consistent evaluation standards, rather 

than using a different source of deposits 

data for different categories of large 

banks. However, the agencies have also 

considered that banks with assets of 

over $10 billion have greater capacity to 

collect and maintain deposits data. The 

agencies also seek feedback on whether 

a longer transition period to begin 

collecting and reporting deposits data 

for large banks with assets of $10 billion 

or less to begin to collect and maintain 

deposits data would make this 

alternative more feasible. 

Wholesale Banks and Limited Purpose 

Banks. Wholesale banks and limited 

purpose banks would not be required to 

collect or maintain deposits data under 

the proposal. 

2. Reporting of Deposits Data 

a. Large Banks With Assets of Over $10 

Billion 

The agencies propose that large banks 

with assets of over $10 billion would be 

required to report the aggregate dollar 

amount of deposits drawn from each 

county, state, and multistate MSA, and 

at the institution level based on average 

annual deposits (calculated based on 

average daily balances as provided in 

statements such as monthly or quarterly 

statements, as applicable) from the 

respective geography. The agencies 

intend for this approach to 

appropriately account for deposits that 

vary significantly over short time 

periods or seasonally. As discussed 

above, the reported deposits data would 

inform bank metrics, benchmarks, and 

weighting procedures for the Retail 

Lending Test and Community 

Development Financing Test. 

In addition, the agencies seek 

feedback on requiring large banks to 

report the number of depositors at the 

county level. This data would be used 

to support agency analysis of deposits 

data and could be used to support an 

alternative approach of using the 

proportion of a bank’s depositors in 

each county to calculate the bank’s 

deposit dollars for purposes of the 

community development financing 

metrics and benchmarks, as discussed 

in Section XII. 

The agencies are mindful of limiting 

the use of deposits data that is collected 

and reported under the proposed rule as 

appropriate. For this reason, the 

agencies propose not to make deposits 

data reported under § __.42 publicly 

available in the form of a data set for all 

reporting lenders. The agencies seek 

feedback on this approach, and whether 


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the agencies should instead publish 

county-level deposits data in the form of 

a data set. 

b. Large Banks With Assets of $10 

Billion or Less, Intermediate Banks, 

Small Banks, and Wholesale and 

Limited Purpose Banks 

Large banks with assets of $10 billion 

or less, intermediate banks, small banks, 

and wholesale and limited purpose 

banks would not be required to report 

deposits data under the proposal. 

As discussed in Section IX and 

Section XII, respectively, Summary of 

Deposits data would be used for 

measuring the deposits of large banks 

with assets of $10 billion or less for 

purposes of calculating the proposed 

market volume benchmark and 

community development financing 

benchmarks, even if a bank elected to 

collect and maintain deposits data to be 

used for purposes of calculating its 

metrics and weights. The agencies 

believe that not requiring these banks to 

report this data may reduce new data 

burden for these banks. 

The agencies seek feedback on the 

tradeoffs of the proposed approach of 

not requiring deposits data reporting for 

those banks that elect to voluntarily 

collect and maintain deposits data 

under § __.42. While this approach 

would limit new reporting 

requirements, it would also not support 

the calculation of more precise market 

benchmarks, which requires reported 

deposits data. If a large bank with assets 

of $10 billion or less elects to collect 

and maintain deposits data, the agencies 

seek feedback on the alternative of 

requiring such a bank to also report that 

deposits data, which would help 

support more precise benchmarks. 

The agencies also seek feedback on an 

alternative approach of requiring all 

large banks with assets of $10 billion or 

less to collect, maintain, and report 

deposits data to further ensure accurate 

benchmarks and consistent standards 

for all large banks. In considering this 

alternative, the agencies seek feedback 

on whether a longer transition period 

(such as an additional 12 or 24 months 

beyond the transition period for large 

banks with assets of over $10 billion) 

would help make this alternative more 

feasible. 

Request for Feedback 

Question 147. What are the potential 

benefits and downsides of the proposed 

approach to require deposits data 

collection, maintenance, and reporting 

only for large banks with assets of over 

$10 billion? Does the proposed 

approach create an appropriate balance 

between tailoring data requirements and 

ensuring accuracy of the proposed 

metrics? Should the agencies consider 

an alternative approach of requiring, 

rather than allowing the option for, large 

banks with assets of $10 billion or less 

to collect and maintain deposits data? If 

so, would a longer transition period for 

large banks with assets of $10 billion or 

less to begin to collect and maintain 

deposits data (such as an additional 12 

or 24 months beyond the transition 

period for large banks with assets of 

over $10 billion) make this alternative 

more feasible? 

Question 148. Should large banks 

with assets of $10 billion or less that 

elect to collect and maintain deposits 

data also be required to report deposits 

data? Under an alternative approach in 

which all large banks with assets of $10 

billion or less are required to collect and 

maintain deposits data, should these 

banks also be required to report the 

data, or would it be appropriate to limit 

new data burden for these banks by not 

requiring them to report the data? 

Question 149. What are alternative 

approaches to deposits data collection 

and maintenance that would achieve a 

balance between supporting the 

proposed metrics and minimizing 

additional data burden? Would it be 

preferable to require deposits data 

collected as a year- or quarterly-end 

total, rather than an average annual 

deposit balance calculated based on 

average daily balances from monthly or 

quarterly statements? 

Question 150. Should deposits 

sourced from commercial banks or other 

depository institutions be excluded 

from the deposits data that is reported 

or optionally maintained by banks? 

Should other categories of deposits be 

included in this deposits data? 

Question 151. For what types of 

deposit accounts, such as pre-paid debit 

card accounts, and Health Savings 

Accounts, might depositor location be 

unavailable to the bank? For these 

account types, is it appropriate to 

require the data to be reported at the 

institution level? Should brokered 

deposits be reported at the institution 

level as well? 

Question 152. What is the appropriate 

treatment of non-brokered reciprocal 

deposits? Should a non-brokered 

reciprocal deposit be considered as a 

deposit for the bank sending the nonbrokered reciprocal deposit, but not be 

considered as a deposit for the bank 

receiving the reciprocal deposit? 

Question 153. Do bank operational 

systems permit the collection of deposit 

information at the county-level, based 

on a depositor’s address, or would 

systems need to be modified to capture 

this information? If systems need to be 

modified or upgraded, what would the 

associated costs be? 

Question 154. In order to reduce 

burden associated with the reporting of 

deposits data, what other steps can the 

agencies take or what guidance or 

reporting tools can the agencies develop 

to reduce burden while still ensuring 

adequate data to inform the metrics 

approach? 

Question 155. Should the agencies 

consider an alternative approach of 

publishing a data set containing countylevel deposits data in order to provide 

greater insight into bank performance? 

C. Retail Lending Data 

1. Overview 

The agencies propose requiring large 

banks to collect, maintain, and report 

certain retail lending data, as applicable, 

for small business, small farm, 

automobile, and home mortgage loans 

(including closed-end home mortgages, 

open-end home mortgages, and 

multifamily loans). As discussed above, 

much of the retail lending data needed 

to examine a bank under the proposed 

Retail Lending Test is already currently 

collected and reported by large banks 

under the CRA regulations. The 

agencies propose to reduce burden 

associated with small business and 

small farm loan data by using the 

current requirements and data 

collection and reporting process that 

banks are familiar with in the short 

term, as discussed below. In the longer 

term, the CRA’s data collection and 

reporting requirements for small 

business loans and small farm loans 

would be eliminated and replaced by 

the CFPB’s section 1071 data collection 

and reporting requirements. 

The agencies also propose to tailor the 

data collection and reporting of 

automobile loans by only requiring large 

banks with assets of over $10 billion to 

collect, maintain and report this data. 

The data necessary to analyze CRA 

performance for automobile loans are 

loan amount at origination, loan 

location (state, county, census tract), 

and borrower income. Further, the 

proposal seeks feedback on whether to 

require large banks to collect and report 

one additional field for small business 

and small farm loans before the CFPB’s 

section 1071 data is available. An 

indicator of whether a loan is to a 

business or farm with gross annual 

revenues of more than $250,000 but less 

than or equal to $1 million (using the 

revenues that the bank considered in 

making its credit decision) would allow 

the agencies to distinguish loans made 

to the smallest businesses and farms 


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287As noted above, the CFPB’s Section 1071 

Rulemaking will effect changes directed by section 

1071 of the Dodd-Frank Act requiring financial 

institutions to compile, maintain, and submit to the 

CFPB certain data on applications for credit for 

women-owned, minority-owned, and small 

businesses. See 86 FR 56356 (Oct. 8, 2021), as 

corrected by 86 FR 70771 (Dec. 13, 2021). 

before the CFPB’s section 1071 data is 

available. 

In addition, the agencies propose 

different standards based on bank size 

because a bank’s capacity to collect, 

maintain, and report data increases as a 

bank increases in size and resources, 

regardless of business strategy. The 

agencies propose data collection and 

reporting requirements for large banks 

using prescribed formats. The 

prescribed format requirements would 

not apply to small banks that elect to be 

examined under the metrics-based 

Retail Lending Test or to intermediate 

banks. Instead, examiners would use 

data that small and intermediate banks 

maintained in their own format or 

reported under other regulations, e.g., 

HMDA. 

2. Small Business and Small Farm 

Loans 

Data Collected and Maintained. As 

required under the existing CRA 

regulation, the agencies propose to 

require the collection and maintenance 

of the following data related to small 

business loan and small farm loan 

originations and purchases by the bank: 

(i) A unique number or alpha-numeric 

symbol that can be used to identify the 

relevant loan file; (ii) an indicator for 

the loan type as reported on the bank’s 

Call Report; (iii) the date of the loan 

origination or purchase; (iv) loan 

amount at origination or purchase; (v) 

the loan location (state, county, census 

tract); (vi) an indicator for whether the 

loan was originated or purchased; and 

(vii) an indicator for whether the loan 

was to a business or farm with gross 

annual revenues of $1 million or less. 

In addition, the agencies seek 

feedback on an additional requirement 

for banks to collect and maintain an 

indicator of whether the loan was to a 

business or farm with gross annual 

revenues of $250,000 or less. This 

additional indicator would allow the 

agencies to implement the borrower 

distribution analysis for small 

businesses and small farms with gross 

annual revenues of $250,000 or less 

before the availability of CFPB’s section 

1071 data. The agencies seek feedback 

on the costs and benefits of requiring 

this potential additional indicator. 

Reported Data. The agencies propose 

to require all large banks to report on an 

annual basis the aggregate number and 

amount of small business loans and 

small farm loans for the prior calendar 

year for each census tract in which the 

bank originated or purchased a small 

business or small farm loan by loan 

amounts in the categories of $100,000 or 

less, more than $100,000 but less than 

or equal to $250,000, and more than 

$250,000. A large bank would also 

report the aggregate number and amount 

of small business and small farm loans 

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). This data enables the agencies 

to conduct a borrower distribution 

analysis that shows the level of lending 

to small businesses of different revenue 

sizes. The agencies are also considering 

requiring the reporting of the number 

and amount of small business loans and 

small farm loans for each census tract 

for which the borrower had business 

revenue of $250,000 or less. The 

agencies seek feedback on whether to 

include this additional reporting data 

point. 

The agencies would publish a bank’s 

small business and small farm data 

aggregated at the county-level. The 

agencies propose to use the existing 

small business loan and small farm loan 

data collection and reporting 

requirements. However, the agencies 

propose to use the CFPB’s section 1071 

data once it is available.287

3. Home Mortgage Lending 

Under the proposal, banks would be 

required to collect, maintain, and report 

home mortgage data similar to current 

regulatory requirements. If a bank is a 

HMDA reporter, the bank (other than an 

intermediate bank or a small bank) 

would be required to report the location 

of each home mortgage loan outside of 

the MSAs in which the bank has home 

or branch office. 

Some banks that are not mandatory 

HMDA reporters may do enough 

mortgage lending that the agencies 

would consider one of the mortgage 

loan categories a major product line. 

This could occur, for example, if a bank 

with a largely online lending business 

model operated its headquarters in a 

micropolitan area and had no branches 

in MSAs. The evaluation of such a 

bank’s retail lending performance would 

be less accurate if the bank did not 

collect, maintain, or report its mortgage 

loan data. 

The agencies therefore seek feedback 

on whether certain banks that are not 

mandatory reporters under HMDA 

should be required to collect and 

maintain, or report, mortgage loan data. 

One option would be to require any 

large bank that is not a mandatory 

HMDA reporter due to the locations of 

its branches, but that otherwise meets 

the HMDA size and lending activity 

requirements, to collect, maintain, and 

report the mortgage loan data necessary 

to calculate the retail lending volume 

screen and distribution metrics. This 

requirement would narrowly tailor 

additional data collection requirements 

to affect only banks that do a substantial 

volume of mortgage lending. A bank 

that, for example, specialized in small 

business lending and made only a few 

incidental mortgage loans would not be 

required to collect mortgage data under 

this alternative, as mortgage lending 

would not be a significant contributor to 

the agencies’ evaluation of its retail 

lending performance regardless. 

Furthermore, this alternative approach 

would only be applied to large banks, to 

avoid unduly burdening intermediate 

and small banks in recognition of their 

more limited capacities. 

Under this alternative approach, the 

agencies would consider requiring 

banks as described above to collect and 

maintain the dollar amount of loans at 

origination or purchase, an indicator for 

whether the loan is a closed-end home 

mortgage loan, an open-end home 

mortgage loan, or a multifamily loan, 

the location of each of the bank’s home 

mortgage loan origination or purchase, 

the annual income relied upon when 

making the loan, and an indicator of 

whether the loan was an origination or 

a purchase. These data fields would 

allow the calculation of all the bank’s 

retail lending metrics for mortgage 

lending, clarifying expectations for 

banks and facilitating a more complete 

and accurate analysis by including this 

information in the bank metrics. 

Under this alternative proposal, banks 

would collect, maintain, and report 

home mortgage data on open- and 

closed-end one-to-four-unit home 

mortgages and on multifamily loans. 

Open-end mortgages and multifamily 

loans would be treated as separate 

product lines for determining major 

product lines and for evaluation under 

the metrics tests. A modification of this 

alternative proposal would be to require 

these same banks to report the data, as 

well as collect and maintain it. A 

reporting requirement would allow for 

more accurate benchmarks in the 

markets these banks serve; however, it 

could also be more burdensome for 

those banks. 

The agencies seek comment on the 

appropriateness of this alternative 

approach for new data collection, 

maintenance, and reporting 

requirements for home mortgage loans 

by non-HMDA reporters. 


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4. Automobile Lending 

The agencies propose that automobile 

loans would be the only consumer loan 

category with data collection and 

reporting requirements, and that these 

new requirements would apply only to 

banks with assets of over $10 billion. 

The metrics-based proposal would 

require banks with assets of over $10 

billion to collect and maintain, until the 

completion of the bank’s next CRA 

examination, the following data for 

automobile loans originated or 

purchased by the bank during the 

evaluation period: (i) A unique number 

or alpha-numeric symbol that can be 

used to identify the relevant loan file; 

(ii) the date of loan origination or 

purchase; (iii) the loan amount at 

origination or purchase; (iv) the loan 

location (state, county, census tract); (v) 

an indicator for whether the loan was 

originated or purchased by the bank; 

and (vi) the borrower’s annual income 

the bank relied on when making its 

credit decision. In addition, a bank with 

assets of over $10 billion would also be 

required to report the aggregate number 

and amount of automobile loans for 

each census tract in which the bank 

originated or purchased an automobile 

loan and the number and amount of 

those loans made to low- and moderateincome borrowers. As discussed in 

Section VIII, it is important to collect 

data for automobile loans because other 

market sources lack the 

comprehensiveness required to 

construct the necessary metrics and 

because automobile loans are an 

important credit need in some markets. 

The agencies propose to not publish 

automobile lending data for individual 

banks in the form of a data set for all 

reporting banks. Given that automobile 

lending data is not required under the 

current CRA regulations, the agencies 

are mindful of limiting the use of 

collected and reported automobile 

lending data as appropriate. The 

agencies seek feedback on whether, 

alternatively, it would be useful to 

publicly disclose county-level 

automobile lending data in the form of 

a data set. In order to reduce burden 

associated with reporting automobile 

loans for banks with assets of over $10 

billion, the agencies are also exploring 

the feasibility, including costs, of 

developing a certified geocoding and 

aggregation platform in the future that 

banks could use to geocode and 

aggregate their data. 

A bank that qualifies for evaluation 

under the small bank performance 

standards but elects evaluation under 

the metrics-based Retail Lending Test 

would not be required to collect, 

maintain, and report the data required 

for large banks in a prescribed 

interagency format. Instead, as proposed 

for intermediate banks, examiners 

would use data the bank maintained in 

its own format or reported under other 

regulations. Data for these banks would 

be measured against the benchmarks 

created using data from banks with 

assets over $10 billion. 

Request for Feedback 

Question 156. Should banks collect 

and report an indicator for whether the 

loan was made to a business or farm 

with gross annual revenues of $250,000 

or less or another gross annual revenue 

threshold that better represents lending 

to the smallest businesses or farms 

during the interim period before the 

CFPB Section 1071 Rulemaking is in 

effect? 

Question 157. Would the benefits of 

requiring home mortgage data collection 

by non-HMDA reporter large banks that 

engage in a minimum volume of 

mortgage lending outweigh the burden 

associated with such data collection? 

Does the further benefit of requiring this 

data to be reported outweigh the 

additional burden of reporting? 

Question 158. Should large banks 

with assets of $10 billion or less be 

required to collect, maintain, and report 

automobile lending data? If so, would a 

longer transition period for large banks 

with assets of $10 billion or less to begin 

to collect, maintain, and report 

automobile lending data (such as an 

additional 12 or 24 months beyond the 

transition period for large banks with 

assets of over $10 billion) make this 

alternative more feasible? Does the 

added value from being able to use these 

data in the construction of metrics and 

benchmarks outweigh the burden 

involved in requiring data collection 

and reporting by these banks? 

Question 159. Should the agencies 

streamline any of the proposed data 

fields for collecting and reporting 

automobile data? If so, would it still 

allow for constructing comprehensive 

automobile lending metrics? 

Question 160. Should the agencies 

consider publishing county-level 

automobile lending data in the form of 

a data set? 

D. Community Development Financing 

Activity Data 

The agencies propose to require large 

banks, intermediate banks that opt into 

the Community Development Financing 

Test, and wholesale and limited 

purpose banks to collect and maintain 

community development financing data. 

Under the proposal, large banks and 

wholesale and limited purpose banks 

would be required to collect and 

maintain the information in a format 

prescribed by the agencies, while 

intermediate banks that opt into the 

Community Development Financing 

Test would have the choice to either 

collect and maintain community 

development financing data in the 

prescribed format or a format of the 

bank’s choosing. Large banks and 

wholesale and limited purpose banks 

would be required to report community 

development financing data. Small 

banks would not be subject to regulatory 

data collection and maintenance 

requirements for community 

development financing activities, even 

if they request consideration for 

community development financing 

activities. 

The proposed community 

development financing data would be 

necessary to construct community 

development financing metrics and 

benchmarks for large banks, which 

would be used to consistently evaluate 

the dollar amount of a bank’s 

community development lending and 

investments as discussed in Section XII. 

1. Data Required To Be Collected and 

Maintained 

Under the proposal, large banks and 

wholesale and limited purpose banks 

would be required to collect and 

maintain the information listed in § __

.42(a)(5)(ii). The data fields include 

specific requirements under the 

categories of general information, such 

as the name of organization or entity, 

activity type, community development 

purpose; activity detail, which may 

include, for example, whether the 

activity was a low-income housing tax 

credit investment or a multifamily 

mortgage loan; indicators of the impact 

of the activity; location information; 

other details, such as indicators of 

whether the bank has retained certain 

types of documentation, such as rent 

rolls, to assist with verifying the 

eligibility of the activity; and the 

allocation of the dollar value of the 

activity to specific geographies, if 

available. Collecting and maintaining 

individual activity-level data would 

allow examiners to verify that activities 

qualify. Additionally, this information 

would allow examiners to review the 

impact and responsiveness of 

community development activities. The 

agencies intend to develop a template 

that would help banks to gather 

information in a consistent manner. 

Information provided on the template 

would help the agencies understand the 

impact and responsiveness of activities 

during the Impact Review of community 

development financing activities. 


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288See Q&A § __.12(h)–8. 

Intermediate banks that opt to be 

evaluated under the Community 

Development Financing Test would 

need to collect and maintain the 

information listed in § __.42(a)(5)(ii), but 

would have the choice to either collect 

and maintain this community 

development financing data in a format 

of the bank’s choosing, or in the 

prescribed format, and would not be 

required to report the data. For 

intermediate banks evaluated under the 

status quo intermediate bank 

community development evaluation, 

banks would not be required to collect 

and maintain data. Consistent with the 

current approach, these banks would 

continue to need to demonstrate that 

community development activities 

qualify.288 This approach is intended to 

appropriately tailor data collection and 

reporting requirements to account for 

differences in bank capacity. 

2. Data Reporting 

The agencies propose to require large 

banks and wholesale and limited 

purpose banks to report the community 

development financing data discussed 

above, with the exception of the name 

of organization or entity supported, 

which the agencies believe is sufficient 

to be collected and maintained, and 

does not need to be reported. This data 

would be used to construct metrics and 

benchmarks for evaluating bank 

community development financing 

performance. The benchmarks would 

provide consistent data points to banks, 

the agencies, and the public about the 

level of community development 

activities in an area and would provide 

context for interpreting a bank’s 

community development financing 

metric, as discussed in Section XII. An 

intermediate bank could opt to report 

community development financing data 

but would not be required to do so. 

The agencies propose that community 

development financing data be reported 

to the agencies at the individual activity 

level. The agencies believe this 

information is necessary to construct the 

proposed community development 

financing metrics and benchmarks and 

to inform both the quantitative and 

qualitative analyses. Individual activitylevel data would also allow for the 

agencies to allocate activities that 

benefit multiple counties or states 

through a standard methodology, as 

discussed in Section XII, if a specific 

allocation is not provided by the bank. 

The agencies considered that reported 

data at the individual activity level 

would not require banks to aggregate 

community development data at the 

county level, which may be more 

burdensome. The agencies seek 

feedback on whether, rather than 

reporting data at the individual activity 

level, it would be more appropriate and 

sufficient to report data at the countylevel for each institution. The agencies 

also seek feedback on whether to require 

banks to report the location of each 

activity in one of two ways, at the 

bank’s option: (i) In the form of a 

specific address or addresses; or (ii) in 

the form of a census tract or tracts in 

which the activity was located. This 

would allow banks either to avoid 

disclosing the specific address of an 

activity in reported data if they wish to 

do so, or to avoid having to geocode 

their activities at the census tract level 

if they do not wish to do so. 

Request for Feedback 

Question 161. How might the format 

and level of data required to be reported 

affect the burden on those banks 

required to report community 

development financing activity data, as 

well as the usefulness of the data? For 

example, would it be appropriate to 

require reporting community 

development financing data aggregated 

at the county-level as opposed to the 

individual activity-level? 

Question 162. What other steps can 

the agencies take, or what procedures 

can the agencies develop, to reduce the 

burden of the collection of additional 

community development financing data 

fields while still ensuring adequate data 

to inform the evaluation of 

performance? How could a data 

template be designed to promote 

consistency and reduce burden? 

E. Retail Services and Products Data 

The agencies propose to require large 

banks to collect and maintain 

information to support the analysis of a 

bank’s delivery systems and credit and 

deposit products, as described in 

Section XI, as applicable. Certain data 

collection and maintenance 

requirements would be tailored to only 

apply to large banks with assets of over 

$10 billion. Intermediate and small 

banks, at their option, would provide 

examiners with information on retail 

services and products activities in the 

format used in the bank’s normal course 

of business, if the bank seeks additional 

consideration for these activities. As 

previously discussed, retail services 

performance data is not currently 

collected and reported to the agencies; 

instead, banks provide certain retail 

services information in the bank’s 

public file. 

Required Data Collection. Under the 

proposal, large banks would be required 

to collect and maintain information 

listed in § __.42(a)(4)(ii) to support the 

proposal’s branch analysis, including: 

(i) Number and location of branches; (ii) 

whether branches are full-service 

facilities (by offering both credit and 

deposit services) or limited-service 

facilities; (iii) locations and dates of 

branch openings and closings; (iv) hours 

of operation by location; and (v) services 

offered at each branch that are 

responsive low- and moderate-income 

individuals and census tracts. This 

information is consistent with the 

information currently provided in a 

bank’s public file. 

To support the analysis of remote 

service facilities availability, the 

agencies propose requiring information 

similar to what is being requested for 

branches, including: (i) Number and 

location of remote service facilities; (ii) 

whether remote service facilities are 

deposit-taking, cash-advancing, or both; 

(iii) locations and dates of remote 

service facility openings and closings; 

and (iv) hours of operation of each 

remote service facility. The requirement 

to collect remote service facilities data 

would be a change from the current 

practice, under which banks have the 

option to provide ATM location data in 

a bank’s public file. The agencies 

believe proposing to require data 

collection for branches and remote 

service facilities is appropriate in light 

of the proposed changes (as described in 

Section XI) which make greater use of 

benchmarks in the evaluation of a 

bank’s delivery systems. The agencies 

seek feedback on whether to require the 

collection and maintenance of branch 

and remote service availability data as 

proposed or, alternatively, whether to 

continue with the current practice of 

reviewing the data from the bank’s 

public file (i.e., where branch data is 

required and remote service facility 

availability is optional). 

In addition, the proposal’s data 

collection and maintenance 

requirements would facilitate a review 

of whether digital and other delivery 

systems are responsive to the needs of 

low- and moderate-income individuals. 

Specifically, the proposal would require 

large banks with assets of over $10 

billion to collect and maintain 

information on: (i) The range of services 

and products offered through digital and 

other delivery systems and (ii) digital 

activity by individuals in low-, 

moderate-, middle-, and upper-income 

census tracts, respectively, such as the 

number of savings and checking 

accounts opened through digital and 

other delivery systems and 

accountholder usage of digital and other 

delivery systems. The agencies 


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acknowledge that banks may have 

varying methods and means for 

assessing the responsiveness of their 

digital delivery systems to low- and 

moderate-income individuals. 

Therefore, the agencies seek feedback on 

whether to require that these specific 

data points be used to evaluate a bank’s 

digital and other delivery systems, or 

whether to allow banks the flexibility to 

determine which data points to collect, 

maintain, and provide for evaluation. 

For the proposed review of responsive 

deposit products, the agencies would 

require large banks with assets of over 

$10 billion to collect and maintain: (i) 

The number of responsive deposit 

accounts that were opened and closed 

for each calendar year in low-, 

moderate-, middle-, and upper income 

census tracts, respectively; and (ii) the 

percentage of responsive deposit 

accounts compared to total deposit 

accounts for each year of the evaluation 

period. These data would also be 

required for large banks with assets of 

$10 billion or less that elect to have 

their responsive deposit products 

evaluated. The agencies seek feedback 

on these requirements, and whether any 

other specific data points would support 

the evaluation of responsive deposit 

products. 

Format for Information Collection. 

The agencies are considering whether to 

use a standardized template to facilitate 

the collection and maintenance of data 

for the Retail Services and Products 

Test. A template would potentially offer 

flexibility for providing quantitative and 

qualitative information, which may 

change over time. This flexibility may 

be particularly relevant for aspects of 

retail services that banks have not 

consistently provided to the agencies 

previously, such as for digital and other 

delivery systems and deposit products. 

Request for Feedback 

Question 163. Should the agencies 

require the collection and maintenance 

of branch and remote service 

availability data as proposed, or 

alternatively, should the agencies 

continue with the current practice of 

reviewing this data from the bank’s 

public file? 

Question 164. Should the agencies 

determine which data points a bank 

should collect and maintain to 

demonstrate responsiveness to low- and 

moderate-income individuals via the 

bank’s digital and other delivery 

systems such as usage? Alternatively, 

should the agencies grant banks the 

flexibility to determine which data 

points to collect and maintain for 

evaluation? 

Question 165. Are the proposed data 

collection elements for responsive 

deposit products appropriate, or are 

there alternatives to the proposed 

approach that more efficiently facilitate 

the evaluation of responsive deposit 

products? Should the agencies require 

collection and maintenance of specific 

data elements for the evaluation of 

responsive deposit products? 

Alternatively, should the agencies grant 

banks the flexibility to determine which 

data points to collect and maintain for 

evaluation? 

Question 166. Does the proposed 

retail services data exist in a format that 

is feasibly transferrable to data 

collection, or would a required template 

provided by the agencies be sufficient in 

the collection of retail services and 

products information? 

Question 167. What steps can the 

agencies take to reduce burden of the 

proposed information collection 

requirements while still ensuring 

adequate information to inform the 

evaluation of services? 

Question 168. Should large banks 

with assets of $10 billion or less be 

required to collect and maintain data on 

deposit product responsiveness and/or 

digital and other delivery systems? If so, 

would a longer transition period to 

begin to collect and report such data 

(such as an additional 12 or 24 months 

beyond the transition period for large 

banks with assets of over $10 billion) 

make this alternative more feasible? 

Does the added value from being able to 

use this data outweigh the burden 

involved in requiring data collection by 

these banks? 

F. Community Development Services 

Data 

The agencies propose to require that 

large banks with assets of over $10 

billion collect and maintain the 

community development services 

information listed in § __.42(a)(6), in 

machine readable form, as prescribed by 

the agencies. The data required to be 

collected and maintained would include 

the number of full-time equivalent 

employees at the facility-based 

assessment area, state, multistate MSA, 

and institution levels; total number of 

community development services hours 

performed by the bank in each facilitybased assessment area, state, multistate 

MSA, and in total; date of activity; name 

of organization or entity; community 

development purpose; capacity served; 

whether the activity is related to the 

provision of financial services; and the 

location of the activity. To improve 

consistency in evaluations, the agencies 

intend to develop a standardized 

template for community development 

services data. Large banks with assets of 

$10 billion or less would have the 

option, but would not be required, to 

collect and maintain the community 

development services data in § __

.42(a)(6); if they do so, they would have 

the option to collect and maintain data 

in their own format, or to use the 

prescribed template. This information 

would facilitate the proposed evaluation 

of a bank’s community development 

service activities. 

In addition, the agencies propose that 

large banks with assets of over $10 

billion would report the number of fulltime equivalent employees at the 

facility-based assessment area, state, 

multistate MSA, and institution levels; 

and the total number of community 

development services hours performed 

by the bank in each facility-based 

assessment area, state, multistate MSA, 

and in total. This information is 

necessary to compute the proposed 

community development services 

metric, and the agencies do not believe 

it is necessary to require banks to report 

additional community development 

services information. The reported data 

would be used to develop a standard 

quantitative measure to evaluate 

community development services for 

banks with assets of over $10 billion. 

The agencies seek feedback on 

whether large banks with assets of $10 

billion or less should also be required to 

collect and maintain community 

development service data in a machine 

readable form, as prescribed by the 

agencies, equivalent to the data required 

to be collected and maintained by large 

banks with assets of over $10 billion. 

The agencies consider that this 

alternative may support more 

consistency and clarity in evaluations of 

community development services for all 

large banks. 

Request for Feedback 

Question 169. Should large banks 

with assets of $10 billion or less be 

required to collect community 

development services data in a machine 

readable form, as prescribed by the 

agencies, equivalent to the data required 

to be collected and maintained by large 

banks with assets of over $10 billion? 

Under this alternative, should large 

banks with assets of $10 billion or less 

have the option of using a standardized 

template or collecting and maintaining 

the data in their own format? If large 

banks with assets of $10 billion or less 

are required to collect and maintain 

community development services data, 

would a longer transition period for 

these banks to begin to collect and 

maintain deposits data (such as an 

additional 12 or 24 months beyond the 


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transition period for large banks with 

assets of over $10 billion) make this 

alternative more feasible? Does the 

added value from being able to use this 

data in the construction of a metric 

outweigh the burden involved in 

requiring data collection by these 

banks? 

Question 170. Should large banks 

with assets of over $10 billion be 

required to collect, maintain, and report 

data on the number of full-time 

equivalent employees at the assessment 

area, state, multistate MSA and 

institution level in order to develop a 

standardized metric to evaluate 

community development service 

performance for these banks? 

G. Data Collection and Reporting 

Requirements for Operations 

Subsidiaries, Operating Subsidiaries, 

and Affiliates 

The proposal recognizes that a 

significant amount of bank activity may 

be conducted through a bank’s 

operations subsidiaries, operating 

subsidiaries, and affiliates, necessitating 

appropriate data collection and 

reporting requirements. These data 

collection, maintenance, and reporting 

requirements are consistent with the 

requirements of the bank being 

evaluated. 

1. Operations Subsidiaries and 

Operating Subsidiaries 

The agencies propose to require bank 

operations subsidiaries and operating 

subsidiaries, as applicable, that engaged 

in retail lending, retail services and 

products, community development 

financing and community development 

services activities to collect, maintain, 

and report such activities for purposes 

of evaluating the bank’s performance 

tests, consistent with the requirements 

for the bank being evaluated. This 

would enable the agencies to capture all 

of the activities of operations 

subsidiaries and operating subsidiaries 

in CRA evaluations appropriately, in 

recognition that banks exercise a high 

level of ownership, control, and 

management of their operations 

subsidiaries or operating subsidiaries, as 

applicable. 

2. Other Affiliates 

The agencies propose to require a 

bank that elects to have its affiliate 

activity considered, to also collect, 

maintain, and report the data for these 

activities that the bank would have 

collected, maintained, and reported if it 

engaged in these activities directly. 

Under the proposal, a bank that elects 

to have the agencies consider loans by 

an affiliate, for purposes of the Retail 

Lending Test, and loans or investments 

for purposes of the Community 

Development Financing Test, 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks, or under an approved strategic 

plan, would be required to collect, 

maintain, and report those loans and 

investments data. For home mortgage 

loans, the bank would also be prepared 

to identify the home mortgage loans 

reported by the affiliate under 

Regulation C, if applicable, or as 

required under proposed § __.42(a)(3) 

had the loans been originated or 

purchased by the bank. 

H. Data for Delineating Assessment 

Areas 

Under the proposal, large banks 

would have data collection and 

reporting requirements for assessment 

area delineations. All other banks (small 

and intermediate banks) would be 

required to collect and maintain data as 

required for inclusion in their CRA 

public files, as is currently required. 

These banks would not have to report 

assessment area data. Small and 

intermediate banks could opt to use the 

large bank data collection and reporting 

format for providing data to examiners 

during their evaluation. For all size 

banks, the agencies would include 

assessment area delineations in 

performance evaluations. 

1. Facility-Based Assessment Areas 

The proposal’s requirements for large 

bank reporting of facility-based 

assessment areas would include a list 

for each assessment area showing the 

states, MSAs, metropolitan divisions, 

and nonmetropolitan counties within 

each facility-based assessment area. 

Under the proposal, large banks would 

be required to delineate at least full 

counties for facility-based assessment 

areas. 

2. Retail Lending Assessment Areas 

Under the proposal, large banks 

would be required to collect and report 

annually to the agencies a list showing 

the MSAs and counties within each 

retail lending assessment area. The 

agencies could verify retail lending 

assessment area designations using 

HMDA and CRA small business/small 

farm data, and the agencies could 

explore calculating retail lending 

assessment areas for banks. 

3. Intermediate and Small Bank 

Requirements 

As mentioned earlier, small and 

intermediate banks would not have to 

report assessment area data under the 

proposal. Instead these banks would 

continue to maintain a CRA public file 

with required information, including: (i) 

A list of the bank’s branches, their street 

addresses and census tract numbers; (ii) 

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 census tract 

numbers; and (iii) a map of each 

assessment area showing the boundaries 

of the area and identifying each state, 

county, and census tract contained 

within the area, either on the map or in 

a separate list. 

Request for Feedback 

Question 171. Should small banks 

that opt to be evaluated under the 

metrics-based Retail Lending Test be 

required to collect, maintain, and report 

related data or is it appropriate to use 

data that a small bank maintains in its 

own format or by sampling the bank’s 

loan files? 

Question 172. Would a tool to identify 

retail lending assessment areas based on 

reported data be useful? 

I. Disclosure of HMDA Data by Race and 

Ethnicity 

Currently, CRA performance 

evaluations include significant data on 

mortgage lending to low- and moderateincome borrowers and low- and 

moderate-income census tracts, 

including the number and percentage of 

loans made by the bank being evaluated. 

These data also compare the bank’s 

lending to the aggregate lending in the 

assessment area, distributed by 

borrower income and geography, as well 

as the demographic make-up of the 

assessment area being evaluated. This is 

done on the basis of income only (low, 

moderate, middle, and upper). CRA 

performance evaluations do not 

currently report data on lending by race 

or ethnicity. However, for mortgage 

lending, race and ethnicity data are 

already collected and reported by most 

banks subject to the large bank CRA 

lending test through HMDA. These data 

are not included in any organized, easyto-read format in the CRA performance 

evaluation. 

The agencies propose to disclose in 

the CRA performance evaluation of a 

large bank the distribution of race and 

ethnicity of the bank’s home mortgage 

loan originations and applications in 

each of the bank’s facility-based 

assessment areas, and as applicable, in 

its retail lending assessment areas. 

Under the proposal, disclosure would 

be made for each year of the evaluation 

period using data currently reported 

under HMDA. The agencies would 

disclose the number and percentage of 

the bank’s home mortgage loan 


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289 12 CFR __.43(a)(1). 

290 12 CFR __.43(a)(3). 

291 12 CFR __.43(a)(4). 

292 12 CFR __.43(a)(5). 

293 12 CFR __.43(a)(6). 

294 12 CFR __.43(b)(1)(i). 

295 12 CFR __.43(b)(1)(ii). 

296 12 CFR __.43(b)(2). 

297 12 CFR __.43(b)(3). 

298 12 CFR __.43(b)(5). 

299 12 CFR __.43(a)(7). 

originations and applications by race 

and ethnicity and compare that data 

against the demographic data of the 

assessment area and the aggregate 

mortgage lending of all lenders in such 

area. The disclosure of race and 

ethnicity of the bank’s home mortgage 

loan originations and applications on 

the bank’s CRA performance evaluation 

would have no direct impact on the 

conclusions or ratings of the bank and 

would not constitute a lending analysis 

for the purpose of evaluating redlining 

risk factors as part of a fair lending 

examination. However, separate from 

this proposed disclosure, to the extent 

that analysis of HMDA reportable 

mortgage lending, along with additional 

data or information evaluated during a 

fair lending examination, leads the 

relevant agency to conclude that 

discrimination occurred, a bank’s CRA 

rating may be affected (see proposed 

§ __.28(d)). 

The agencies believe that public 

disclosure of these data in each 

assessment area would increase the 

transparency of a bank’s mortgage 

lending operations. 

Request for Feedback 

Question 173. Should the agencies 

disclose HMDA data by race and 

ethnicity in large bank CRA 

performance evaluations? 

XX. Content and Availability of Public 

File, Public Notice by Banks, 

Publication of Planned Examination 

Schedule, and Public Engagement 

The agencies recognize that 

transparency and public engagement are 

fundamental aspects of the CRA 

evaluation process and aim to reinforce 

these objectives in this rulemaking. In 

order to ensure that a bank’s CRA 

performance evaluation and related 

information are more readily accessible 

to the public, the agencies propose 

allowing any bank with a public website 

to post its CRA public file there. The 

proposal also clarifies the agencies’ 

treatment of public comments in 

connection with CRA examinations. The 

agencies are also proposing to create a 

process whereby the public can provide 

input on community credit needs and 

opportunities in specific geographic 

areas. 

A. Public File 

1. Current Content Required in Public 

File 

Under the current CRA standards, a 

bank is required to maintain a public 

file that includes specific information 

on the bank’s current business model, 

services, and most recent performance 

evaluation. The public file must include 

all written comments received from the 

public for the current year and each of 

the two prior calendar years that 

specifically relate to the bank’s 

performance in helping to meet 

community credit needs, along with any 

responses by the bank.289 The public 

file is also required to contain: A list of 

the bank’s current branches, their street 

addresses, and geographies,290 noting 

branches that have opened or closed 

during the evaluation period; 291 a list of 

retail products and services, and if a 

bank chooses, information regarding 

alternative delivery systems; 292 and a 

map of each of the bank’s assessment 

areas.293

A bank, except a small bank or a bank 

that was a small bank in the prior 

calendar year, must include, when 

applicable, for each of the prior two 

calendar years: (i) The number and 

amount of consumer 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 areas and outside of the 

bank’s assessment areas.294 The bank 

must also include a copy of the CRA 

Disclosure Statement.295 HMDA 

reporting institutions must include a 

statement in the public file that their 

HMDA data may be obtained on the 

CFPB’s website.296

A small bank or a bank that was a 

small bank during the prior calendar 

year must include in its public file, (i) 

the bank’s loan-to-deposit ratio for each 

quarter; and (ii) if it elects to be 

evaluated under other performance 

tests, any additional required 

information.297

A bank that received less than a 

‘‘Satisfactory’’ rating during its most 

recent examination must include a 

description of its current efforts to 

improve its performance in helping to 

meet the credit needs of its entire 

community, in its public file.298 This 

description must be updated quarterly. 

A bank may opt to add any other 

information to the public file.299

2. Proposed Clarification to Specific 

Requirements for Information in Public 

File 

In general, the agencies propose to 

maintain the current requirements 

regarding information that banks are 

required to include in their public file, 

with additional clarification regarding 

specific requirements. The agencies 

propose using the term ‘‘census tracts’’ 

instead of the more general term 

‘‘geographies’’ to specify the level of 

geography for information on current 

branches and branches that have been 

opened or closed during the current 

year and each of the prior two calendar 

years. The agencies also propose 

changes to the information that large 

banks would need to include in their 

public file. 

Large banks would be required to 

include assessment area maps that 

include both their facility-based 

assessment areas and, when applicable, 

retail lending assessment areas that 

identify the census tracts contained 

within those areas. In addition, large 

banks that are subject to data reporting 

requirements described in § __.42 would 

be required to include in their public 

file a written notice that the bank’s CRA 

Disclosure Statement pertaining to the 

bank, its operations subsidiaries, or 

operating subsidiaries, as applicable, 

and its other affiliates, if applicable, 

may be obtained on the FFIEC’s website. 

The bank would be required to include 

the written notice in the public file 

within three business days of its receipt 

from the FFIEC. 

A bank of any size that received less 

than a ‘‘Satisfactory’’ rating during its 

most recent examination would 

continue to be required to include a 

description of its current efforts to 

improve its performance in its public 

file. The agencies propose additional 

clarification specifying that the 

description would be required to be 

updated quarterly by March 31, June 30, 

September 30, and December 31, 

respectively. 

3. Current Requirements for Location of 

Public Information 

Under the current CRA regulations, a 

bank’s entire public file must be 

available at its main office. If a bank 

operates in more than one state, it must 

keep a file at one branch office in each 

of these states. Members of the public 

may ask to inspect this file at any time 

during the bank’s branch operating 

hours. Upon request, a bank branch 

must also provide for inspection, within 

five days, all of the information in the 

public file relating to the branch’s 

assessment area. When requested, a 


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bank must also provide a paper copy of 

its public CRA file, and it is allowed to 

charge a reasonable fee to cover copying 

and mailing costs. 

4. Proposed Approach for Location of 

Public Information 

The agencies propose to make a 

bank’s CRA public file more accessible 

by allowing any bank with a public 

website to include its CRA public file on 

the bank’s public website. Banks would 

be allowed to retain their public file in 

digital form only and make paper copies 

available to the public upon request. 

Consequently, members of the public 

interested in the bank’s performance in 

other communities served by the bank 

would be able to view the entire public 

file. If a bank does not maintain a public 

website, the proposal provides that the 

public file information would be 

required to be maintained at the main 

office and, if an interstate bank, at one 

branch office in each state. Furthermore, 

banks that do not maintain a public 

website would have to maintain, at each 

branch, a copy of the public section of 

the bank’s most recent performance 

evaluation and a list of services 

provided by the branch. 

This proposal would increase the ease 

of accessibility of a bank’s public file for 

interested members of the public. A 

bank would still be required to provide, 

upon request, copies of its public file to 

members of the public, either in paper 

or in digital form, and may continue to 

charge a reasonable fee for copying and 

mailing costs. A bank would also 

continue to be required to ensure that its 

public file includes information from 

each of the three previous years, as is 

the case currently. 

B. Public Notice by Banks 

1. Current Approach for Public Notices 

Currently, a bank must provide the 

appropriate public notice in the public 

lobby of its main office and each of its 

branches, as set forth in appendix B, 

that includes information about the 

availability of a bank’s public file, the 

appropriate Federal banking agency’s 

CRA examination schedule, and how a 

member of the public may provide 

public comment. A branch of a bank 

having more than one assessment area 

shall include certain content in the 

notice for branch offices. Only a bank 

that is an affiliate of a holding company, 

that is not prevented by statute from 

acquiring additional banks, shall 

include in the notice how the public can 

request information about applications 

covered by the CRA filed by the bank’s 

holding company. 

2. Proposed Approach for Public 

Notices 

The agencies propose to continue to 

require a bank to provide in the public 

area of its main office and each of its 

branches the public notice that would 

be set forth in proposed appendix F. 

Only a branch of a bank having more 

than one facility-based assessment area 

would be required to include certain 

content in the notice for branch offices. 

Notices are not required for retail 

lending assessment areas. A bank that is 

an affiliate of a holding company, that 

is not prevented from acquiring 

additional banks, must include the last 

sentence of the notices. 

C. Publication of Planned Examination 

Schedule 

1. Current Approach for Publication of 

Planned Examination Schedule 

Under the current regulations, the 

agencies publish at least 30 days in 

advance of the beginning of each 

calendar quarter a list of banks 

scheduled for CRA examinations in that 

quarter. 

2. Proposed Approach for Publication of 

Planned Examination Schedule 

The agencies propose to codify the 

current practice of publishing at least 60 

days in advance of the beginning of each 

calendar quarter a list of banks 

scheduled for CRA examinations during 

the next two quarters. This additional 

notice to the public provides 

stakeholders more time to comment on 

a bank’s CRA performance in advance of 

the examination. 

Further, the agencies propose to 

codify the practice of forwarding all 

public comments received regarding a 

bank’s CRA performance to the bank 

and may also publish the public 

comments on the appropriate Federal 

banking agency’s public website. These 

public comments would be taken into 

account in connection with the bank’s 

next scheduled CRA examination. 

D. Public Engagement 

1. Current Approach for Public 

Engagement 

Currently, members of the public may 

submit comments to the agencies 

regarding a bank’s CRA performance 

over the relevant evaluation period. 

Members of the public may also submit 

comments in connection with banking 

applications, including in connection 

with bank mergers and acquisitions. 

2. Proposed Approach for Public 

Engagement 

The agencies encourage 

communication between members of the 

public and banks, including through the 

submission of public comments 

regarding community credit needs and 

opportunities as well as a bank’s record 

of helping to meet community credit 

needs. To advance this public 

engagement, the agencies intend to 

establish a way for the public to provide 

feedback on community credit needs 

and opportunities in specific 

geographies, as a complement to, but 

distinct from, feedback on individual 

bank performance. In addition, such an 

approach would be a complement to, 

not a substitute for, examiners seeking 

feedback on bank performance from 

members of a bank’s community as part 

of the CRA evaluation. 

Further, the agencies are considering 

whether it would be feasible, given the 

timing of data availability and data 

verification practices, for the agencies to 

publish certain retail lending and 

community development financing 

metrics and branch distribution 

information in advance of completing 

an examination to provide additional 

information to the public. 

Request for Feedback 

Question 174. Are there other ways 

the agencies could encourage public 

comments related to CRA examinations, 

including any suggested changes to 

proposed § __.46? 

Question 175. Is there additional data 

the agencies should provide the public 

and what would that be? 

Question 176. Should the agencies 

publish bank-related data, such as retail 

lending and community development 

financing metrics, in advance of an 

examination to provide additional 

information to the public? 

Question 177. Should the agencies ask 

for public comment about community 

credit needs and opportunities in 

specific geographies? 

XXI. Transition 

The proposal would establish an 

effective date for the final rule the first 

day of the first calendar quarter that 

begins at least 60 days after publication 

in the Federal Register. The agencies 

also propose applicability dates for 

various provisions of the regulations 

which are applicable on, or over a 

period of time after, the effective date of 

the final rule. 

The agencies believe varying 

applicability dates would provide banks 

with time to transition from the current 

regulations to the proposed regulations 

for: Collecting, maintaining, and 

reporting data; transitioning systems; 

and establishing policies and 

procedures necessary for the orderly 


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300Loans, investments, or services that were 

undertaken prior to the applicability date that were 

eligible for CRA consideration at the time would be 

considered at the subsequent CRA evaluation. 

301As explained elsewhere in this proposal, the 

agencies would continue to maintain the current 

definitions related to small business loans and 

small farm loans until such time as the CFPB 

finalizes and implements its Section 1071 

Rulemaking, and section 1071 data becomes 

available. 

302As set forth in § __.17 of the proposed CRA 

regulation, a large bank would designate retail 

lending assessment areas in any single MSA or in 

all nonmetropolitan counties within a single state 

if it originated over 100 home mortgage loans or 

over 250 small business loans in each of the two 

preceding years in those geographic areas. 

implementation of the proposed 

regulatory framework. 

The agencies intend that, during the 

period between the final rule’s effective 

date and the applicability dates in the 

final rule for certain provisions 

(transition period), the agencies’ current 

CRA regulations will remain in effect for 

these provisions. The agencies would 

retain the authority to ensure an orderly 

transition between the two CRA 

frameworks and expect to issue 

guidance regarding the applicability of 

the relevant CRA framework during this 

time. The agencies also intend to 

include their current CRA regulations in 

agency-specific appendices of a final 

rule and to sunset these appendices as 

of the final applicability date, at which 

point all banks would need to be in 

compliance with all provisions of the 

final rule. 

A. Applicability Dates for Certain 

Amendments 

The agencies propose that the 

following provisions become applicable 

on the effective date of the rule: (i) 

Authority, purposes, and scope; (ii) 

facility-based assessment area 

delineation provisions; (iii) small bank 

performance standards; (iv) 

intermediate bank community 

development performance standards; (v) 

effect of CRA performance on 

applications; (vi) content and 

availability of public file; (vii) public 

notice by banks; (viii) publication of 

planned examination schedule; and (ix) 

public engagement. The agencies 

believe that setting an applicability date 

for these provisions on the rule’s 

effective date is appropriate and would 

not present significant implementation 

burden to banks because only minor 

amendments are proposed to these 

sections of the agencies’ current CRA 

regulations. 

B. Applicability Dates for New 

Requirements 

For other provisions, the agencies 

propose an applicability date of 

approximately 12 months after 

publication of a final rule for bank 

activities conducted on that date and 

forward.300 These provisions include: (i) 

Definitions (except for the revised 

definitions related to small business 

loans and small farms loans); 301 (ii) 

community development definitions; 

(iii) qualifying activities confirmation 

and illustrative list of activities; (iv) 

retail lending assessment areas; 302 (v) 

areas for eligible community 

development activity; (vi) performance 

tests, standards, and ratings, in general 

(Retail Lending Test, Retail Services and 

Products Test, Community Development 

Financing Test, Community 

Development Services Test, Community 

Development Financing Test for 

Wholesale and Limited Purpose Banks, 

and Strategic Plans); (vii) data collection 

and certain data reporting requirements; 

and (viii) Impact Review of Community 

Development Activities. 

Under this approach, banks would 

have a one-year transition period to 

prepare for the above provisions to go 

into effect. The agencies are cognizant 

that banks would need to adjust systems 

and train personnel to prepare for the 

implementation of a final CRA rule. 

Therefore, the agencies would set an 

applicability date that is appropriate 

based on the time of year a final rule is 

issued, including consideration of 

whether the beginning of a quarter or of 

a calendar year is appropriate. 

For example, assume that a final rule 

that includes a 12-month transition 

period is published at the beginning of 

Year 1. Bank activity in Year 2 would 

fall under the new definitions and 

performance tests included in this 

proposal. In this example, a large bank’s 

activities in Year 2 would be evaluated 

under the proposed Retail Lending Test, 

Retail Services and Products Test, 

Community Development Financing 

Test, and Community Development 

Services Test at the bank’s next CRA 

examination (beginning in or after Year 

3, as explained below). Also beginning 

in Year 2, large banks would be required 

to establish retail lending assessment 

areas, and bank activity in these areas 

would be evaluated at the bank’s next 

CRA examination (beginning in or after 

Year 3, as explained below). In addition, 

banks would be expected to begin data 

collection and maintenance 

requirements for activities, as 

applicable, in Year 2. 

C. Transition Date for the Definition of 

Small Business Loans and Small Farm 

Loans 

The agencies propose transitioning 

from the current small business loan 

and small farm loan definitions based 

on the Call Report and instead 

leveraging the CFPB’s proposed data 

collection on loans to businesses, 

including farms, with gross annual 

revenues of $5 million or less. In the 

short term, the small business loan 

definition, small farm loan definition, 

and the current data collection and 

reporting requirements and processes 

that banks are familiar with would 

remain the same. 

The agencies propose an effective date 

for the proposed small business and 

small farm definitions to be on or after 

the CFPB would make effective its final 

rule implementing section 1071. 

Alternatively, the agencies are also 

considering a 12-month period to 

transition their small business and small 

farm definitions to the new CFPB 

definitions, once that rulemaking is 

finalized. 

D. Transition Dates for Data Collection, 

Reporting, and Disclosure Requirements 

Banks that would be required to 

collect new data under the proposal 

starting 12 months after publication of 

a final rule, would be required to report 

such data to the agencies by April 1 of 

the year following the first year of data 

collection. Thereafter, banks would be 

required to report collected data on an 

annual basis by April 1 of the year 

following the calendar year for which 

the data was collected. The agencies 

intend to eliminate the small business 

loan and small farm loan data collection 

and reporting requirements under the 

CRA regulations after the CFPB’s section 

1071 data collection and reporting 

requirements are in place. Likewise, the 

agencies’ data disclosure requirements 

would become applicable the year 

following the first year of data 

collection. 

The agencies believe that the 

applicability dates for these provisions 

would give banks sufficient time from 

the date the final rule would be 

published in the Federal Register to 

revise their systems for data collection 

and develop new procedures for 

implementation of the proposed 

regulatory framework. 

E. Start Date for CRA Examinations 

Under the New Tests 

The agencies propose starting CRA 

examinations pursuant to the proposed 

evaluation framework and new tests, in 

§§ __.22 through 28, beginning two 

years after publication of a final rule. 


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303Based on data accessed using FINDRS on 

February 21, 2022. 

This approach would encompass 

banks evaluated under one or more of 

the following proposed tests: Retail 

Lending Test, Retail Services and 

Products Test, Community Development 

Financing Test, Community 

Development Services Test, and 

Community Development Financing 

Test for Wholesale and Limited Purpose 

Banks. CRA examinations conducted 

after this start date would evaluate the 

bank’s activities conducted during the 

prior year (for which the proposal’s 

requirements related to bank activities 

would already be effective, as described 

above). CRA examinations conducted 

immediately after this start date would 

be conducted using modified 

procedures until peer data and 

applicable benchmarks become 

available. 

Likewise, the agencies’ inclusion of 

HMDA demographic information in 

large banks’ CRA performance 

evaluations would begin two years after 

publication of a final rule. 

As described above in Section IX, 

until the data collected under CFPB’s 

Section 1071 Rulemaking becomes 

available, the agencies propose that 

where small business lending or small 

farm lending qualifies as a major 

product line, the bank would be 

evaluated on its distribution of loans to 

businesses or farms with gross annual 

revenues of $1 million or less, rather 

than separately to those with gross 

annual revenues of $250,000 or less and 

more than $250,000 but less than or 

equal to $1 million. For these product 

lines, the agencies would calculate a 

single bank metric, market benchmark, 

and community benchmark 

corresponding to the percentage of the 

bank’s loans to, the percentage of all 

reporter banks’ loans to, and the 

percentage of local businesses or farms 

with gross annual revenues of less than 

$1 million. 

Because small banks would, under the 

proposal, continue to be evaluated in 

the same manner as under the current 

CRA regulations, no start date is 

proposed in connection with the small 

bank performance standards. The 

agencies believe that this approach 

would be appropriate because no 

adjustments would be needed to the 

bank’s systems, policies, or procedures, 

and no additional burden would be 

imposed, in order to comply with the 

proposed rule. Similarly, because 

intermediate banks would, under the 

proposal, continue to be evaluated 

under the current community 

development test for intermediate 

banks, no transition period is proposed 

in connection with this test. Small 

banks opting into the Retail Lending 

Test and intermediate banks opting into 

the Community Development Financing 

Test would have the same start date for 

CRA examinations as established for 

other banks evaluated under these tests. 

F. Strategic Plans 

The agencies propose that the 

strategic plan provisions in proposed 

§ __.27 would be applicable 12 months 

after publication of a final rule. As a 

result, a bank seeking approval to be 

evaluated under a strategic plan after 

this date would submit its plan to its 

appropriate Federal banking agency for 

approval consistent with the new 

requirements for strategic plans under 

the agencies’ proposed CRA regulations. 

The agencies also propose that the 

strategic plan provisions of the CRA 

regulations in effect one day before 

publication of a final rule (i.e., the 

agencies’ current CRA regulations) 

would apply to any new strategic plan, 

including any plan that replaces an 

expired strategic plan, submitted for 

approval during the transition period 

between the date of publication of a 

final rule and before the applicability 

date of the proposed strategic plan 

provisions. A plan submitted during 

this transition period would remain in 

effect until the expiration date of the 

approved plan. Banks that submit for 

approval a new strategic plan or one 

that replaces an existing plan between 

the date on which a final rule is 

published and the date 12 months after 

that publication date may submit their 

plans consistent with the requirements 

for strategic plans under the agencies’ 

current CRA regulations. Such a plan 

would remain in effect until the 

expiration date of the plan. 

Further, the Board and the FDIC 

propose that a strategic plan in effect as 

of the publication date of a final rule 

would remain in effect until the 

expiration date of that plan. The OCC 

proposes that a strategic plan in effect 

as of the publication date of a final rule 

remains in effect until the expiration 

date of the plan, except for provisions 

that were not permissible under its CRA 

regulations as of January 1, 2022. The 

OCC’s CRA regulations require this 

additional provision because the OCC 

may have approved some existing 

strategic plans under the OCC 2020 CRA 

final rule, which allowed strategic plan 

provisions that differ from the current 

CRA regulations. This additional 

provision is identical to the language 

included in the OCC’s final rule 

rescinding the OCC 2020 CRA final rule. 

Request for Feedback 

Question 178. The agencies ask for 

comment on the proposed effective date 

and the applicability dates for the 

various provisions of the proposed rule, 

including on the proposed start date for 

CRA examinations under the new tests. 

Question 179. Would it be better to tie 

the timing of a change to the proposed 

small business and small farm 

definitions to when the CFPB finalizes 

its Section 1071 Rulemaking or to 

provide an additional 12 months after 

the CFPB finalizes its proposed rule? 

What are the advantages and 

disadvantages of each option? 

Question 180. When should the 

agencies sunset the agencies’ small 

business loan and small farm loan 

definitions? 

XXII. Regulatory Analysis 

Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq. (RFA), requires an 

agency to consider the impact of its 

proposed rules on small entities. In 

connection with a proposed rule, the 

RFA generally requires an agency to 

prepare an Initial Regulatory Flexibility 

Analysis (IRFA) describing the impact 

of the rule on small entities, unless the 

head of the agency certifies that the 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities and publishes 

such certification along with a statement 

providing the factual basis for such 

certification in the Federal Register. An 

IRFA must contain: (i) A description of 

the reasons why action by the agency is 

being considered; (ii) a succinct 

statement of the objectives of, and legal 

basis for, the proposed rule; (iii) a 

description of, and, where feasible, an 

estimate of the number of small entities 

to which the proposed rule will apply; 

(iv) a description of the projected 

reporting, recordkeeping, and other 

compliance requirements of the 

proposed rule, including an estimate of 

the classes of small entities that will be 

subject to the requirement and the type 

of professional skills necessary for 

preparation of the report or record; (v) 

an identification, to the extent 

practicable, of all relevant Federal rules 

that may duplicate, overlap with, or 

conflict with the proposed rule; and (vi) 

a description of any significant 

alternatives to the proposed rule that 

accomplish its stated objectives. 

1. OCC 

The OCC currently supervises 1,103 

institutions (commercial banks, trust 

companies, Federal savings 

associations, and branches or agencies 

of foreign banks),303 of which 


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304The OCC bases its estimate of the number of 

small entities on the SBA’s size thresholds for 

commercial banks and savings institutions, and 

trust companies, which are $750 million and $41.5 

million, respectively. Consistent with the General 

Principles of Affiliation 13 CFR 121.103(a), the OCC 

counts the assets of affiliated financial institutions 

when determining if the OCC should classify an 

OCC-supervised institution as a small entity. The 

OCC uses December 31, 2021, to determine size 

because a ‘‘financial institution’s assets are 

determined by averaging the assets reported on its 

four quarterly financial statements for the preceding 

year.’’ See footnote 8 of the U.S. SBA’s Table of Size 

Standards. 

305The OCC uses broad categories to capture 

expenditures. The OCC does not attempt to 

separately identify the costs associated with each 

requirement. 

306To estimate wages the OCC reviewed May 

2020 data for wages (by industry and occupation) 

from the U.S. Bureau of Labor Statistics (BLS) for 

credit intermediation and related activities (NAICS 

5220A1). To estimate compensation costs 

associated with the rule the OCC uses $114.17 per 

hour, which is based on the average of the 90th 

percentile for six occupations adjusted for inflation 

(2 percent as of Q1 2021), plus an additional 33.4 

percent for benefits (based on the percent of total 

compensation allocated to benefits as of Q4 2020 for 

NAICS 522: Credit intermediation and related 

activities). 307 12 U.S.C. 2905. 

308 87 FR 18627, 18630 (Mar. 31, 2022) (NAICS 

codes 522110–522190). Consistent with the General 

Principles of Affiliation in 13 CFR 121.103, the 

assets of all domestic and foreign affiliates are 

counted toward the $750 million threshold when 

determining whether to classify a depository 

institution as a small entity. 

309The Board’s estimate is based on total assets 

reported on Forms FR Y–9 (Consolidated Financial 

Statements for Holding Companies) and FFIEC 041 

(Consolidated Reports of Condition and Income) for 

2021. 

310By comparison, the agencies’ current 

regulations define ‘‘small bank’’ to mean a bank 

that, as of December 31 of either of the prior two 

calendar years, had assets of less than $346 million 

and define ‘‘intermediate small bank’’ to mean a 

bank with assets of at least $346 million as of 

December 31 of both of the prior two calendar years 

and less than $1.384 billion as of December 31 of 

either of the prior two calendar years. 

approximately 655 are small entities 

under the RFA.304 The OCC estimates 

that the proposed rule would impact 

approximately 636 of these small 

entities. Among these 636 small entities, 

four are limited purpose banks, two are 

wholesale banks, and three are 

evaluated based on an OCC-approved 

strategic plan. 

The OCC reviews the costs associated 

with the activities necessary to comply 

with requirements in a proposed rule to 

estimate expenditures by entities subject 

to the rule.305 In doing so, the OCC 

estimates the total time required to 

implement the proposed rule and the 

hourly wage of bank employees who 

may be responsible for the tasks 

associated with achieving compliance 

with the proposed rule. For OCC cost 

estimates, the OCC uses a compensation 

rate of $114 per hour.306

Because the proposal maintains the 

current small bank evaluation process 

and the small bank performance 

standards, the proposal would not 

impose any new requirements on OCCsupervised small entities with less than 

$600 million in assets. However, the 

OCC believes that these small entities 

would need to review the proposed rule 

and ensure their policies and 

procedures are compliant. The OCC 

estimates the annual cost for small 

entities to conduct this review would be 

approximately $4,560 dollars per bank 

(40 hours × $114 per hour). For 

supervised small entities that are 

defined as intermediate banks under the 

proposal, i.e., banks with assets between 

$600 million and $750 million, the 

proposal would add some additional 

compliance burden because these banks 

would be subject to the new Retail 

Lending Test, but these banks would not 

be subject to regulatory data collection 

and maintenance requirements for retail 

loans. Therefore, the OCC estimates the 

annual cost for these banks for this 

additional compliance burden (plus the 

cost of reviewing the proposed rule and 

ensuring that policies and procedures 

are compliant) would be approximately 

$9,120 (80 hours × $114 per hour). 

In general, the OCC classifies the 

economic impact on a 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 the proposed rule would 

have a significant economic impact on 

approximately zero entities, which is 

not a substantial number. Therefore, the 

OCC certifies that the proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities. 

2. Board 

The Board is providing an IRFA with 

respect to the proposed rule. For the 

reasons described below, the Board 

believes that the proposal would not 

have a significant economic impact on 

a substantial number of small entities. 

The Board invites public comment on 

all aspects of its IRFA. 

a. Reasons Action Is Being Considered 

The agencies are proposing changes to 

update and clarify their CRA 

regulations, which establish the 

framework and criteria by which the 

agencies assess a bank’s record of 

helping to meet the credit needs of its 

community, including low- and 

moderate-income neighborhoods, 

consistent with safe and sound 

operations. Additional discussion of the 

rationale for the proposal is provided in 

the introductory paragraphs to, as well 

as throughout, the SUPPLEMENTARY

INFORMATION. 

b. Objectives of the Proposed Rule 

The CRA vests the agencies with 

broad authority to promulgate 

regulations to carry out the purposes of 

the CRA with respect to the institutions 

that each agency supervises.307 The 

proposed changes to the agencies’ CRA 

regulations are guided by the specific 

objectives laid out in the introductory 

paragraphs of the SUPPLEMENTARY

INFORMATION. 

c. Description and Estimate of the 

Number of Small Entities 

Board-supervised institutions that 

would be subject to the proposed rule 

are state member banks (as defined in 

section 3(d)(2) of the Federal Deposit 

Insurance Act of 1991), and uninsured 

state branches of a foreign bank (other 

than limited branches) resulting from 

certain acquisitions under the 

International Banking Act, unless such 

bank does not perform commercial or 

retail banking services by granting credit 

to the public in the ordinary course of 

business. 

The SBA has adopted size standards 

providing that depository institutions 

with average assets of less than $750 

million over the preceding year (based 

on the institution’s four quarterly Call 

Reports) are considered small 

entities.308 The Board estimates that 

approximately 450 Board-supervised 

small entities would be subject to the 

proposed rule.309 Of these, 

approximately 420 would be considered 

small banks under the proposal, and 

approximately 30 would be considered 

intermediate banks under the proposal. 

The proposal would define ‘‘small 

bank’’ to mean a bank that had average 

assets of less than $600 million in either 

of the prior two calendar years, and 

would define ‘‘intermediate bank’’ to 

mean a bank that had average assets of 

at least $600 million in both of the prior 

two calendar years and average assets of 

less than $2 billion in either of the prior 

two calendar years, in each case based 

on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years.310

d. Estimating Compliance Requirements 

The proposal includes a new 

evaluation framework for evaluating the 

CRA performance of banks that is 

tailored by bank size and business 

model. For example, the agencies 

propose an evaluation framework that 


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311Although the proposed Retail Lending Test 

represents a significant change from the lending test 

applicable to intermediate small banks in the 

agencies’ current regulations, intermediate banks 

would not need to collect, maintain, or report data 

to facilitate the application of this test. Rather, as 

under the current regulations, examiners would 

continue to use information gathered from 

individual loan files or maintained on an 

intermediate bank’s internal operating systems for 

purposes of the Retail Lending Test. 

312 In addition to the voluntary or elective 

provisions described herein, a small bank or 

intermediate bank may elect to be evaluated under 

a strategic plan, as under the agencies’ current 

regulations. Additionally, any eligible bank may 

request to be designated as a wholesale or limited 

purpose bank. Under the proposal, a wholesale or 

limited purpose bank would be evaluated under the 

Community Development Financing Test for 

Wholesale or Limited Purpose Banks, which is 

similar to the community development test for 

wholesale or limited purpose banks under the 

agencies’ current CRA regulations. 

would establish the following four tests 

for large retail banks: Retail Lending 

Test, Retail Services and Products Test, 

Community Development Financing 

Test, and Community Development 

Services Test. In addition to the new 

CRA evaluation framework, the 

proposal includes data collection, 

maintenance, and reporting 

requirements necessary to facilitate the 

application of various tests. A detailed 

summary of the proposal’s requirements 

is provided in Sections III through XX 

of the SUPPLEMENTARY INFORMATION. 

With respect to the impact of the 

proposal on small banks and 

intermediate banks, the Board 

distinguishes between: (i) Proposed 

requirements that are mandatory for 

small banks or intermediate banks or 

that apply to these banks by default, and 

(ii) proposed provisions that are 

voluntary for small banks or 

intermediate banks or that apply at 

these banks’ election. 

Mandatory or default requirements. 

Under the proposal, small banks would 

by default be evaluated under the small 

bank performance standards in § __.29, 

which evaluates a small bank’s 

performance in helping to meet the 

credit needs of its facility-based 

assessment areas. These small bank 

performance standards are substantially 

the same as the small bank performance 

standards in the agencies’ current CRA 

regulations. 

Intermediate banks would by default 

be evaluated under the Retail Lending 

Test in § __.22 and the community 

development performance standards in 

§ __.29(b)(2). The Retail Lending Test 

would evaluate an intermediate bank’s 

record of helping to meet the credit 

needs of its facility-based assessment 

areas through the bank’s origination and 

purchase of retail loans in each facilitybased assessment area (and, as 

applicable, in its outside retail lending 

area).311 The community development 

performance standards in § __.29(b)(2) 

would be used to evaluate an 

intermediate bank’s community 

development performance. These 

community development performance 

standards are substantially the same as 

the criteria for evaluating an 

intermediate small bank under the 

community development test in the 

agencies’ current CRA regulations. 

In addition, both small banks and 

intermediate banks would be required to 

maintain a public file as provided in 

§ __.43. The proposed public file 

requirements that are mandatory for 

small banks and intermediate banks are 

substantially the same as the public file 

requirements that are mandatory for 

small banks and intermediate small 

banks under the agencies’ current CRA 

regulations. As under the current CRA 

regulations, small banks and 

intermediate banks would generally be 

exempt by default from the data 

collection, maintenance, and reporting 

requirements of § __.42 of the proposal. 

Voluntary or elective provisions.312 A 

small bank that does not wish to be 

evaluated under the small bank 

performance standards may elect to be 

evaluated pursuant to the proposed 

Retail Lending Test. Similarly, under 

the proposal, a small bank may 

voluntarily request additional 

consideration for activities that would 

qualify for consideration under the 

proposed Retail Services and Products 

Test, Community Development 

Financing Test, or Community 

Development Services Test. In general, 

even where a small bank opts to be 

evaluated under one or more of these 

alternative tests, it would not be 

required to comply with the 

corresponding data collection, 

maintenance, and reporting 

requirements that are applicable to large 

banks under the proposal, as described 

in detail in Section XIX of the 

SUPPLEMENTARY INFORMATION. 

An intermediate bank that does not 

wish to be evaluated under the 

community development performance 

standards in § __.29(b)(2) may elect to be 

evaluated pursuant to the Community 

Development Financing Test. The 

Community Development Financing 

Test would evaluate an intermediate 

bank’s record of helping to meet the 

community development financing 

needs of the bank’s facility-based 

assessment areas, states, multistate 

MSAs, and nationwide area, through its 

provision of community development 

loans and community development 

investments. Where an intermediate 

bank elects to be evaluated under the 

Community Development Financing 

Test, the intermediate bank would be 

required to collect and maintain the 

loan and investment data specified in 

§ __.42(a)(5)(ii). If an intermediate bank 

elects to be evaluated under the 

Community Development Financing 

Test, the intermediate bank may 

voluntarily request additional 

consideration for activities that would 

qualify for consideration under the 

proposed Retail Services and Products 

Test or Community Development 

Services Test. In general, where an 

intermediate bank requests additional 

consideration for activities that would 

qualify for consideration under the 

proposed Retail Services and Products 

Test or Community Development 

Services test, the intermediate bank 

would not be required to comply with 

the corresponding data collection, 

maintenance and reporting 

requirements that are applicable to large 

banks under the proposal, as described 

in detail in Section XIX of the 

SUPPLEMENTARY INFORMATION. 

The agencies’ current CRA regulations 

similarly allow small banks and 

intermediate small banks to voluntarily 

opt into one or more alternative tests in 

lieu of the mandatory or default 

requirements. However, based on the 

Board’s supervisory experience with its 

current CRA regulation, few small banks 

or intermediate small banks choose to 

be evaluated under alternative tests, and 

the Board expects that this would 

continue to be the case under the 

proposal. 

For the reasons described above, the 

Board does not believe that the 

proposed rule would have a significant 

economic impact on a substantial 

number of small entities. 

e. Duplicative, Overlapping, and 

Conflicting Rules 

The Board is not aware of any Federal 

rules that may duplicate, overlap with, 

or conflict with the proposed rule. 

f. Significant Alternatives Considered 

In developing the proposal, one 

important goal of the agencies was to 

tailor standards for bank size and 

business models and minimize data 

collection and reporting burden. 

Consistent with this goal, under the 

proposal, small entities subject to the 

proposal would generally continue to be 

evaluated in the same manner as under 

the agencies’ current CRA regulations. 

In addition, the proposal would not 

impose new mandatory data collection, 

maintenance, and reporting 

requirements on small banks or 


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313The SBA defines a small banking organization 

as having $600 million or less in assets, where an 

organization’s ‘‘assets are determined by averaging 

the assets reported on its four quarterly financial 

statements for the preceding year.’’ See 13 CFR 

121.201 (as amended by 84 FR 34261, effective Aug. 

19, 2019). In its determination, the ‘‘SBA counts the 

receipts, employees, or other measure of size of the 

concern whose size is at issue and all of its 

domestic and foreign affiliates.’’ See 13 CFR 

121.103. Following these regulations, the FDIC uses 

a covered entity’s affiliated and acquired assets, 

averaged over the preceding four quarters, to 

determine whether the covered entity is ‘‘small’’ for 

the purposes of RFA. 

314Call Report, Sept. 30, 2021. Nine insured 

domestic branches of foreign banks are excluded 

from the count of FDIC-insured depository 

institutions. These branches of foreign banks are not 

‘‘small entities’’ for purposes of the RFA. 

intermediate banks. The agencies did 

not consider an alternative to the 

proposal that would impose new 

compliance requirements on small 

entities subject to the proposal. 

3. FDIC 

The SBA has defined ‘‘small entities’’ 

to include banking organizations with 

total assets less than or equal to $750 

million.313 The proposed rule seeks to 

establish a definition of ‘‘small’’ insured 

depository institution as one with 

average assets of less than $600 million 

in either of the prior two calendar years, 

based on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years. The agencies, including 

the FDIC, are in the process of seeking 

approval from the SBA to use the 

proposed $600 million threshold, 

adjusted annually for inflation, rather 

than the SBA’s recently updated size 

standards, which include a $750 million 

threshold for small banks. In requesting 

this approval, the agencies believe that 

it is appropriate to evaluate banks with 

assets of between $600 million and $750 

million under the proposed 

intermediate banks standards. While the 

FDIC undergoes that approval process it 

will employ the SBA’s existing $750 

million size standard in its Regulatory 

Flexibility Act compliance activities. 

Generally, the FDIC considers a 

significant effect to be a quantified effect 

in excess of 5 percent of total annual 

salaries and benefits per institution, or 

2.5 percent of total noninterest 

expenses. The FDIC believes that effects 

in excess of these thresholds typically 

represent significant effects for FDICinsured institutions. The FDIC does not 

believe that the proposed rule, if 

adopted, would have a significant 

economic effect on a substantial number 

of small entities. However, some 

expected effects of the proposed rule are 

difficult to assess or accurately quantify 

given current information, therefore the 

FDIC has included an IRFA in this 

section. 

a. Reasons Why This Action Is Being 

Considered 

Over the past two decades, technology 

and the expansion of interstate banking 

has transformed the financial services 

industry and how banking services are 

delivered and consumed. These changes 

affect all banks, regardless of size or 

location, and are most evident in banks 

that have a limited physical presence or 

that rely heavily on technology to 

deliver their products and services. As 

banking has evolved, banks’ 

communities are not solely identifiable 

by the areas that surround their physical 

locations. The Federal banking agencies 

have also gained a greater 

understanding of communities’ needs 

for lending and investment, such as the 

need for community development 

investments and loans with maturities 

longer than the typical CRA evaluation 

period. The current CRA regulatory 

framework has not kept pace with the 

transformation of banking and has had 

the unintended consequence of 

incentivizing banks to limit some of 

their community development loans to 

the length of a CRA evaluation period. 

b. Policy Objectives 

As previously discussed in the 

introductory paragraphs to, as well as in 

Sections I and II of, the SUPPLEMENTARY

INFORMATION, in response to feedback, 

the agencies propose to strengthen the 

CRA regulatory framework to better 

achieve the underlying statutory 

purpose of encouraging banks to help 

serve the credit needs of their 

communities by making the CRA 

framework more objective, transparent, 

consistent, and easy to understand. To 

accomplish these goals, the proposal 

would: Clarify which activities qualify 

for CRA credit; update where activities 

count for CRA credit; create a more 

transparent and objective method for 

measuring CRA performance; and 

provide for more transparent, 

consistent, and timely CRA-related data 

collection, recordkeeping, and 

reporting. Revisions that reflect these 

objectives would provide clarity and 

visibility for all stakeholders on how a 

bank’s CRA performance is evaluated 

and the level of CRA activities banks 

conduct. These changes also would 

encourage banks to serve their entire 

communities, including low- and 

moderate-income neighborhoods, more 

effectively through a broader range of 

CRA activities. 

c. Legal Basis 

The FDIC is issuing this proposed rule 

under the authorities granted to it under 

the Community Reinvestment Act of 

1977. For a discussion of the legal basis 

of the proposed rule, please refer to 

Section I of the SUPPLEMENTARY

INFORMATION of this proposed rule. 

d. Description of the Rule 

As previously discussed, the 

proposed rule, if adopted, would make 

the CRA regulatory framework more 

transparent and objective, and help 

ensure that all relevant compliance 

activities are considered and that the 

scope of the performance evaluation 

more accurately reflects the 

communities served by each institution. 

For a more extensive discussion of the 

proposed rule, please refer to Section II 

of the SUPPLEMENTARY INFORMATION of 

this proposed rule. 

e. Small Entities Affected 

The FDIC supervises 3,128 depository 

institutions, of which 2,355 are 

identified as small institutions by the 

terms of the RFA.314 The proposed rule 

would affect all FDIC-supervised 

institutions, therefore the FDIC 

estimates that the proposed rule would 

affect 2,355 small, FDIC-supervised 

institutions. The proposed rule, if 

adopted, would make the CRA 

regulatory framework more transparent 

and objective, and help ensure that all 

relevant compliance activities are 

considered and that the scope of the 

compliance evaluation more accurately 

reflects the communities served by each 

institution. The proposed rule would 

impact four different groups of small, 

FDIC-supervised institutions: Small 

banks, intermediate banks, small banks 

designated as wholesale or limited 

purpose, and small banks examined 

under a strategic plan. Of the 2,355 

small, FDIC-supervised institutions, 

2,289 would meet the criteria for 

designation as a small bank, 52 would 

meet the criteria for designation as an 

intermediate bank, while four would 

meet the definition of wholesale or 

limited purpose institutions. Finally, 10 

small, FDIC-supervised institutions 

have elected to use strategic plans. 

Wholesale or limited purpose banks 

are subject to the combined community 

development test under the current CRA 

regulations, and would be subject to the 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks under the proposed rule, if 

adopted. As previously discussed, the 

combined community development test 

is generally similar to the proposed 

Community Development Financing 


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315 12 CFR 345.26(a)(1). 

316 12 CFR 345.29(a) of the proposed regulations. 

317 12 CFR __.26(b). 

318 12 CFR __.26(c). 319 12 CFR 345.26(b) and 12 CFR 345.26(c). 

Test for Wholesale or Limited Purpose 

Banks, and therefore the FDIC does not 

believe that the proposed rule would 

substantively affect these four entities. 

As previously discussed, banks 

evaluated pursuant to an approved 

strategic plan are generally subject to 

similar recordkeeping, reporting and 

disclosure requirements under the 

current and proposed CRA regulations. 

However, the proposed rule is expected 

to change the way in which Strategic 

Plan banks are evaluated and therefore 

could pose some substantive effects. 

But, with the proposed rule the agencies 

seek to establish CRA evaluation metrics 

and goals that are responsive to the 

characteristics of the institutions to 

which they are applied. Therefore, the 

FDIC does not believe that the proposed 

rule would substantively affect these 10 

small, FDIC-supervised institutions who 

have currently elected to be evaluated 

under strategic plans because their 

metrics and goals would appropriately 

reflect their breadth of activities for 

institutions of a smaller size. 

Of the 2,355 small, FDIC-supervised 

institutions, 447 (19.0 percent) that are 

not wholesale, limited purpose, or 

strategic plan banks reported total assets 

of at least $346 million on both the 

December 31, 2021 and December 31, 

2020 Call Reports, and reported less 

than $600 million in average assets for 

the four quarters of 2020 or the four 

quarters of 2021. Additionally, 52 (2.2 

percent) small, FDIC-supervised 

institutions reported average assets of at 

least $600 million as of December 31 for 

both of the prior two calendar years and 

less than $750 million in affiliated and 

acquired assets, averaged over the 

preceding four quarters ending 

December 31, 2021. Therefore, the FDIC 

estimates that the proposed rule would 

most directly affect 447 small, FDICsupervised institutions that are 

currently subject to the intermediate 

small bank performance standards but 

would be subject to the small bank 

performance standards of the proposed 

rule, and 52 small, FDIC-supervised 

institutions that are currently subject to 

the intermediate small bank 

performance standards but would be 

subject to the intermediate bank 

performance standards of the proposed 

rule. Apart from these 447 proposed 

small banks, 52 proposed intermediate 

banks and the 14 wholesale, limited 

purpose, and strategic plan banks, the 

remainder of the 2,355 small, FDICsupervised institutions would be subject 

to the proposed small bank performance 

standards, just as they are subject to the 

standards applicable to the smallest 

institutions under the current 

regulation. As discussed in the 

SUPPLEMENTARY INFORMATION and below, 

the FDIC believes the proposed small 

bank performance standards are 

substantively similar to the current 

standards. 

f. Expected Effects 

If the proposed rule was adopted, 

small banks generally would see no 

change in their exam elements. Small 

banks are presently evaluated under the 

small bank performance standards,315

which are substantively similar to the 

proposed small bank performance 

standards.316 Small banks would have 

the option of being evaluated under the 

new Retail Lending Test, so there is the 

possibility that small banks could 

experience changes in compliance 

requirements related to the proposed 

rule. However, as small bank 

participation is voluntary in the 

investments and services elements of 

the current regulation, and the Retail 

Lending Test of the proposed rule, any 

changes resulting from these aspects of 

the proposed rule would likely not be 

disadvantageous or costly to small 

institutions. 

If the proposed rule were adopted, 

small, FDIC-supervised institutions 

presently classified as intermediate 

small banks, but who would be 

classified as intermediate banks, could 

experience some change in their exam 

elements. Intermediate small banks are 

currently evaluated under a lending 

test 317 and a community development 

test,318 which assesses community 

development loans, qualified 

investments, and community 

development services together. If 

adopted, the proposed rule would 

evaluate Intermediate banks under the 

proposed Retail Lending Test, with 

certain provisions tailored to 

intermediate banks, and the status quo 

community development test, unless 

they choose to opt into the Community 

Development Financing Test. The 

proposed Retail Lending Test is 

intended to make a bank’s retail lending 

evaluation more transparent and 

predictable by specifying quantitative 

standards for lending consistent with 

achieving, for example, a ‘‘Low 

Satisfactory’’ or ‘‘Outstanding’’ 

conclusion in an assessment area. The 

proposed rule would limit the 

evaluation of an intermediate bank’s 

retail lending performance to areas 

outside of its facility-based assessment 

areas only if it does more than 50 

percent of its lending outside of its 

facility-based assessment areas. 

Intermediate banks would have the 

option of being evaluated under the new 

Community Development Financing 

Test, so there is the possibility that 

intermediate banks could experience 

changes in compliance requirements 

related to the proposed rule. However, 

since it is an intermediate bank’s choice 

to participate in the Community 

Development Financing Test of the 

proposed rule or continue to be 

evaluated under the current 

intermediate small bank community 

development test as described in § __

.29, any changes resulting from these 

aspects of the proposed rule are likely 

not to be disadvantageous or costly to 

intermediate institutions. 

The proposed rule would decrease 

compliance requirements for 447 small, 

FDIC-supervised institutions by making 

them subject to the small bank 

performance standards rather than the 

intermediate bank performance 

standards. Small banks that are also 

intermediate small banks are presently 

evaluated under the small bank 

performance standards and the 

community development test.319 Under 

the proposed rule, 447 small, FDICsupervised institutions would be newly 

classified as small banks, and therefore 

would no longer be subject to the 

community development test. 

Small, FDIC-supervised institutions 

are unlikely to experience substantive 

changes to the regulatory costs of 

compliance with the CRA regulations as 

amended by the proposed rule. Under 

the proposed rule, as under the current 

CRA regulations, small and intermediate 

banks would generally be exempt from 

the data collection, reporting, and 

disclosure requirements of § __.42 of the 

proposal. 

The proposed rule’s publicly available 

list of examples of qualifying activities 

would benefit small, FDIC-supervised 

institutions by establishing a reference 

for qualifying activities. The proposal 

would establish an optional process 

through which FDIC-insured 

institutions can seek confirmation of a 

particular activity and have it added to 

the list. Institutions that seek to do this 

could incur some costs, but the FDIC 

believes that small, FDIC-supervised 

institutions would only incur such costs 

if they believe that the benefits 

outweigh the costs. 

The proposed amendments to the 

CRA examination criteria and methods 

could result in changes to the ratings. 

Some small, FDIC-supervised 

institutions may experience changes in 

their CRA examination ratings, while 


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320 12 CFR 345.29(a). 

others may experience no change. 

Further, such potential changes could 

cause some small, FDIC-supervised 

institutions to incur costs associated 

with making changes to their CRA 

policies and procedures. The FDIC does 

not currently have access to information 

that would enable it to estimate these 

effects of the proposed rule. However, as 

previously discussed, small banks 

generally would see no change in their 

exam elements. Additionally, 

participation by small banks in the 

Retail Lending Test is voluntary, and 

therefore the FDIC believes that any 

associated changes to CRA examination 

ratings for small banks are not likely to 

be substantial. 

To the extent that the proposed rule, 

if adopted, affected the ratings that 

small, FDIC-supervised institutions 

receive from a CRA examination, it 

could affect their ability to accomplish 

other activities. Under current 

regulation and guidance, an institution’s 

CRA examination rating is an element 

considered if an institution applies to 

establish a new domestic branch or 

other deposit-taking facility, exercise 

Trust Powers, or merge with or acquire 

another institution.320 The FDIC does 

not have the information necessary to 

estimate such effects, if any, on insured 

institutions. 

g. Other Statutes and Federal Rules 

The FDIC has not identified any likely 

duplication, overlap, and/or potential 

conflict between this proposed rule and 

any other Federal rule. 

h. Alternatives Considered 

The FDIC is proposing revisions to the 

CRA to advance the objectives discussed 

above. The FDIC considered the status 

quo alternative of not revising the 

existing CRA regulations. However, for 

reasons stated previously the FDIC 

considers the proposed rule to be a more 

appropriate alternative. 

The FDIC also considered alternatives 

to the asset size thresholds that 

delineate small, intermediate, and large 

banks. For example, as previously 

discussed, the agencies are in the 

process of seeking approval from the 

SBA to use the proposed $600 million 

threshold, adjusted annually for 

inflation, rather than the SBA’s recently 

updated size standards, which include a 

$750 million threshold for small banks. 

In requesting this approval, the agencies 

believe that it is appropriate to evaluate 

banks with assets of between $600 

million and $750 million under the 

proposed intermediate bank standards, 

and that these banks have the capacity 

to conduct community development 

activities, as would be a required 

component of the evaluation for 

intermediate, but not small banks. 

Additionally, the agencies considered 

increasing the large bank asset threshold 

beyond the proposed $2 billion level, 

but decided it would remove a greater 

share of banks that play a significant 

role in fulfilling low- and moderateincome credit needs in local areas from 

the more comprehensive evaluation 

included in the proposed large bank 

evaluation approach. 

The FDIC invites comments on all 

aspects of the supporting information 

provided in this section, and in 

particular, whether the proposed rule 

would have any significant effects on 

small entities that the FDIC has not 

identified. 

OCC Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 

(Unfunded Mandates Act) (2 U.S.C. 

1532) requires that the OCC prepare a 

budgetary impact statement before 

promulgating a rule that includes any 

Federal mandate 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 

(adjusted annually for inflation, 

currently $165 million) in any one year. 

If a budgetary impact statement is 

required, section 205 of the Unfunded 

Mandates Act (2 U.S.C. 1535) also 

requires the OCC to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule. 

We estimate that expenditures to 

comply with mandates during the first 

12-month period of the proposed rule’s 

implementation would be 

approximately $42.8 million. Therefore, 

we conclude that the proposed rule 

would not result in an expenditure of 

$165 million or more annually by state, 

local, and tribal governments, or by the 

private sector. Accordingly, the OCC has 

not prepared the written statement 

described in section 202 of the UMRA. 

Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act of 1994 

(RCDRIA), 12 U.S.C. 4802(a), in 

determining the effective date and 

administrative compliance requirements 

for new regulations that impose 

additional reporting, disclosure, or other 

requirements on insured depository 

institutions, the agencies will consider, 

consistent with principles of safety and 

soundness and the public interest: (i) 

Any administrative burdens that the 

proposed rule would place on 

depository institutions, including small 

depository institutions and customers of 

depository institutions; and (ii) the 

benefits of the proposed rule. The 

agencies request comment on any 

administrative burdens that the 

proposed rule would place on 

depository institutions, including small 

depository institutions, and their 

customers, and the benefits of the 

proposed rule that the agencies should 

consider in determining the effective 

date and administrative compliance 

requirements for a final rule. 

Paperwork Reduction Act 

Certain provisions of the proposed 

rule contain ‘‘collections of 

information’’ within the meaning of the 

Paperwork Reduction Act (PRA) of 1995 

(44 U.S.C. 3501 through 3521). In 

accordance with the requirements of the 

PRA, the agencies may not conduct or 

sponsor, and the respondent is not 

required to respond to, an information 

collection unless it displays a currently 

valid OMB control number. The 

information collections contained in the 

proposed rule have been submitted to 

OMB for review and approval by the 

OCC and FDIC under section 3507(d) of 

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

1320.11 of OMB’s implementing 

regulations (5 CFR part 1320). The 

Board reviewed the proposed rule under 

the authority delegated to the Board by 

OMB. The agencies are proposing to 

extend for three years, with revision, 

these information collections. 

Title of Information Collection: OCC 

Community Reinvestment Act; Board 

Reporting, Recordkeeping, and 

Disclosure Requirements Associated 

with Regulation BB; FDIC, Community 

Reinvestment Act. 

OMB Control Numbers: OCC 1557– 

0160; Board 7100–0197; FDIC 3064– 

0092. 

Frequency of Response: On occasion. 

Affected Public: Businesses or other 

for-profit. 

Respondents: 

OCC: National banks, Federal savings 

associations, Federal branches and 

agencies. 

FDIC: All insured state nonmember 

banks, insured state-licensed branches 

of foreign banks, insured state savings 

associations, and bank service 

providers. 

Board: All state member banks (as 

defined in 12 CFR 208.2(g)), bank 

holding companies (as defined in 12 

U.S.C. 1841), savings and loan holding 

companies (as defined in 12 U.S.C. 

1467a), foreign banking organizations 

(as defined in 12 CFR 211.21(o)), foreign 


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banks that do not operate an insured 

branch, state branch or state agency of 

a foreign bank (as defined in 12 U.S.C. 

3101(11) and (12)), Edge or agreement 

corporations (as defined in 12 CFR 

211.1(c)(2) and (3)), and bank service 

providers. 

The information collection 

requirements in the proposed rule are as 

follows: 

§ __.26 Wholesale and limited 

purpose banks. Banks requesting a 

designation as either a wholesale bank 

or limited purpose bank would be 

required to file a request in writing with 

the appropriate Federal banking agency 

at least 3 months prior to the proposed 

effective date of the designation. 

§ __.27 Strategic plan. Banks could 

submit a strategic plan to the 

appropriate Federal banking agency for 

approval. Requirements regarding the 

content of such a plan are set forth in 

§ __.27 of the proposed rule. The 

appropriate Federal banking agency 

would assess a bank’s record of helping 

to meet the credit needs of its facilitybased assessment areas, and, as 

applicable, its retail assessment areas, 

and geographic areas served at the 

institution level under its strategic plan 

if the plan has been properly submitted, 

been approved, is in effect, and in 

operation for a minimum of one year. 

The proposal specifies requirements for 

the term of a strategic plan, the 

treatment of multiple assessment areas, 

the treatment of operations subsidiaries 

or operating subsidiaries, as applicable, 

and affiliates, public participation, 

submission, content, and amendment. 

Additionally, during the term of a plan, 

a bank could request that the 

appropriate Federal banking agency 

approve an amendment to the plan in 

the absence of a change in material 

circumstances. A bank that requests 

such an amendment would be required 

to provide an explanation regarding 

why it is necessary and appropriate to 

amend its plan goals. 

§ __.42(a)(1) Small business and 

small farm loans data. A bank, except 

a small bank or an intermediate bank, 

would be required to collect and 

maintain in prescribed machine 

readable form, until the completion of 

its next CRA examination, data on small 

business and small farm loans 

originated or purchased by the bank 

during the evaluation period. 

§ __.42(a)(2) Consumer loans data— 

automobile loans. A bank with assets of 

over $10 billion would be required to 

collect and maintain in prescribed 

machine readable form, until the 

completion of its next CRA 

examination, data for automobile loans 

originated or purchased by the bank 

during the evaluation period. 

§ __.42(a)(4) Retail services and 

products data. A large bank would be 

required to collect and maintain data in 

a machine readable form until the 

completion of its next CRA 

examination. These data include 

information regarding branches and 

remote service facilities, and 

information with respect to retail 

services and products offered and 

provided by the bank during the 

evaluation period. Large banks with 

assets of over $10 billion, or large banks 

with assets of $10 billion or less that 

requests additional consideration for 

digital and other delivery systems, must 

collect and maintain data on the range 

of services and products offered through 

digital and other delivery systems and 

digital activity by individuals in low, 

moderate, middle, and upper-income 

census tracts. Large banks with assets of 

over $10 billion, or large banks with 

assets of $10 billion or less, that request 

additional consideration for responsive 

deposit products, must collect and 

maintain data including the number of 

deposit products opened and closed by 

individuals in low-, moderate-, middle-, 

and upper-income census tracts. 

§ __.42(a)(5) Community 

development loans and community 

development investments data. A bank, 

except a small or an intermediate bank, 

would be required to collect and 

maintain the following data for 

community development loans and 

community development investments 

originated or purchased by the bank: 

general information on the loan or 

investment; community development 

loan or investment activity information; 

the indicators of the impact of the 

activity as applicable; location 

information; other information relevant 

to determining that an activity meets the 

standards under community 

development; and allocation of dollar 

value of the activity to counties served 

by the community development activity, 

if available. Large banks would be 

required to collect and maintain this 

information in prescribed machine 

readable form. An intermediate bank 

that opts to be evaluated under the 

Community Development Financing 

Test, would be required to collect and 

maintain this information in the format 

used by the bank in the normal course 

of business. Both of these types of banks 

would be required to maintain this data 

until completion of its next CRA 

examination. These banks would be 

required to collect and maintain, on an 

annual basis, data for loans and 

investments originated or purchased 

during the evaluation period. Likewise, 

these banks would be required to collect 

and maintain data on community 

development loans and investments 

from prior years that are held on the 

bank’s balance sheet at the end of each 

quarter. 

§ .42(a)(6) Community development 

services data. A large bank with assets 

of over $10 billion would be required to 

collect and maintain in prescribed 

machine readable form until the 

completion of its next CRA 

examination, community development 

services data including bank 

information, community development 

services activity information, and 

location information. 

§ __.42(a)(7) Deposits data. A large 

bank that had assets of over $10 billion 

would be required to collect and 

maintain annually in prescribed 

machine readable form until the 

completion of its next CRA 

examination, the dollar amount of its 

deposits at the county level, based upon 

the address associated with the 

individual account (except for account 

types where an address is not available), 

calculated based on average daily 

balances as provided in statements such 

as monthly or quarterly statements. A 

large bank with assets of $10 billion or 

less that opts to collect and maintain 

deposits data would be required to do 

so in machine readable form, until 

completion of the bank’s next CRA 

examination. 

§ __.42(b)(1) Small business and 

small farm loan data. A bank, except a 

small or intermediate bank, would be 

required to report annually by April 1 

in prescribed machine readable form, 

certain aggregate data for small business 

or small farm loans for each census tract 

in which the bank originated or 

purchased such loans. 

§ __.42(b)(2) Consumer loans— 

automobile loans data. A bank with 

assets of over $10 billion would be 

required to report annually by April 1, 

in prescribed machine readable form, 

the aggregate number and amount of 

automobile loans and the number and 

amount of those loans made to low- and 

moderate-income borrowers for each 

census tract in which they originated or 

purchased such loans. 

§ __.42(b)(3) Community 

development loan and community 

development investment data. A bank, 

except a small or an intermediate bank, 

would be required to report annually by 

April 1 the following community 

development loan and community 

development investment data: general 

information on loans and investments; 

community development loan or 

investment activity information; 

indicators of the impact of the activity; 


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location information; other information 

relevant to determining that an activity 

meets the standards under community 

development; and allocation of dollar 

value of activity to counties served by 

the community development activity (if 

available). 

§ __.42(b)(4) Community 

development services data. A large bank 

with assets of over $10 billion would be 

required to report annually by April 1, 

community development services data 

including bank information. 

§ __.42(b)(5) Deposits data. A large 

bank with assets of over $10 billion 

would be required to report annually by 

April 1 in prescribed machine readable 

form the deposits data for the previous 

calendar year including for each county, 

state, and multistate MSA and for the 

institution overall. The reporting would 

include the average annual deposit 

balances (calculated based on average 

daily balances as provided in statements 

such as monthly or quarterly statements, 

as applicable), in aggregate, of deposit 

accounts with associated addresses 

located in such county, state or 

multistate MSA where available, and for 

the institution overall. 

§ __.42(c) Data on operations 

subsidiaries or operating subsidiaries. 

To the extent that their operations 

subsidiaries, or operating subsidiaries, 

as applicable, engage in retail lending, 

retail services, community development 

financing, or community development 

services activities, a bank would be 

required to collect, maintain, and report 

these activities for purposes of 

evaluating the bank’s performance. For 

home mortgage loans, a bank would 

need to be prepared to identify the loans 

reported by the operations subsidiary, or 

operating subsidiary, under 12 CFR part 

1003, if applicable, or collect and 

maintain home mortgage loans by the 

operations subsidiary that the bank 

would have collected and maintained 

under § _.42(a)(3) had the loans been 

originated or purchased by the bank. 

§ __.42(d) Data on other affiliates. A 

bank that elects to have loans by an 

affiliate considered for purposes of this 

part would be required to collect, 

maintain, and report the lending and 

investments data they would have 

collected, maintained, and reported 

under § __.42(a) or (b) had the loans or 

investments been originated or 

purchased by the bank. For home 

mortgage loans, it would also need to 

identify the home mortgage loans 

reported by its affiliate under 12 CFR 

part 1003, if applicable, or collect and 

maintain home mortgage loans by the 

affiliate that the bank would have 

collected and maintained under § __

.42(a)(3) had the loans been originated 

or purchased by the bank. 

§ __.42(e) Data on community 

development financing by a consortium 

or a third party. A bank that elects to 

have community development loans 

and community development 

investments by a consortium or third 

party be considered for purposes of this 

part would be required to collect, 

maintain, and report the lending and 

investments data they would have 

collected, maintained, and reported 

under § __.42(a)(5) and (b)(3) if the loans 

or investments had been originated or 

purchased by the bank. 

§ __.42(f)(1) Facility-based 

assessment areas. A bank, except a 

small bank or intermediate bank, would 

be required to collect and report to the 

[Agency] by April 1 of each year a list 

of each facility-based assessment area 

showing the states, MSAs, counties or 

county equivalents, metropolitan 

divisions, and nonmetropolitan counties 

within each facility-based assessment 

area. 

§ __.42(f)(2) Retail lending 

assessment areas. A large bank would 

be required to delineate retail lending 

assessment area based on geographic, 

MSA, and nonmetropolitan areas of 

states criteria specified in the proposal. 

A large bank would be required to 

collect and report a list showing the 

MSAs and nonmetropolitan counties 

within each retail lending assessment 

area by April 1 of each year. 

§§ __.43, __.44. Public File and Public 

Notice. Banks would be required to 

maintain a public file, in either paper or 

digital format, that includes prescribed 

information. Banks would be required to 

provide copies on request, either on 

paper or in another form acceptable to 

the person making the request, of the 

information in its public file. A bank 

would also be required to provide in the 

public area of its main office and 

branches the public notice set forth in 

proposed appendix F. 

BURDEN ESTIMATES

Source and 

type of burden Description 

Estimated 

number of 

respondents 

Average 

estimated 

time per 

response 

Frequency of 

response 

Total 

estimated 

annual burden 

Reporting 

§ __.26 ........... Wholesale and limited purpose banks.

OCC ..................................................................................... 12 4 1 48 

Board ................................................................................... 1 4 1 4 

FDIC ..................................................................................... 1 4 1 4 

§ __.27 ........... Strategic plan.

OCC ..................................................................................... 6 400 1 2,400 

Board ................................................................................... 6 400 1 2,400 

FDIC ..................................................................................... 11 400 1 4,400 

§ __.42(b)(1) ... Small business and small farm loan data.

OCC ..................................................................................... 139 8 1 1,112 

Board ................................................................................... 100 8 1 800 

FDIC ..................................................................................... 216 8 1 1,728 

§ __.42(b)(2) ... Consumer loans—automobile loans data.

OCC ..................................................................................... 50 8 1 400 

Board ................................................................................... 25 8 1 200 

FDIC ..................................................................................... 48 8 1 384,336 

§ __.42(b)(3) ... Community development loan and community development investment data.

OCC ..................................................................................... 148 8 1 1,184 

Board ................................................................................... 114 8 1 912 

FDIC ..................................................................................... 227 8 1 1,816 

§ __.42(b)(4) ... Community development services data.


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BURDEN ESTIMATES—Continued 

Source and 

type of burden Description 

Estimated 

number of 

respondents 

Average 

estimated 

time per 

response 

Frequency of 

response 

Total 

estimated 

annual burden 

OCC ..................................................................................... 46 8 1 368 

Board ................................................................................... 36 8 1 288 

FDIC ..................................................................................... 48 8 1 384 

§ __.42(b)(5) ... Deposits data.

OCC ..................................................................................... 46 8 1 368 

Board ................................................................................... 36 8 1 288 

FDIC ..................................................................................... 48 8 1 384 

§ __.42(c) ....... Data on operations subsidiaries/operating subsidiaries.

OCC ..................................................................................... 174 38 1 6,612 

Board ................................................................................... 191 38 1 7,258 

FDIC ..................................................................................... 684 38 1 25,992 

§ __.42(d) ....... Data on other affiliates.

OCC ..................................................................................... 9 38 1 342 

Board ................................................................................... 6 38 1 228 

FDIC ..................................................................................... 233 38 1 8,854 

§ __.42(e) ....... Data on community development financing by a consortium or a third party.

OCC ..................................................................................... 31 17 1 527 

Board ................................................................................... 15 17 1 255 

FDIC ..................................................................................... 13 17 1 221 

§ __.42(f)(1) .... Facility-based assessment areas data.

OCC ..................................................................................... 151 2 1 302 

Board ................................................................................... 114 2 1 228 

FDIC ..................................................................................... 237 2 1 474 

§ __.42(f)(2) .... Retail Lending Assessment Areas.

OCC ..................................................................................... 139 4 1 556 

Board ................................................................................... 15 4 1 60 

FDIC ..................................................................................... 69 4 1 276 

Recordkeeping 

§ __.42(a)(1) ... Small business and small farm loan data.

OCC ..................................................................................... 139 219 1 30,441 

Board ................................................................................... 100 219 1 21,900 

FDIC ..................................................................................... 216 219 1 47,304 

§ __.42(a)(2) ... Consumer loan data—automobile loans.

OCC ..................................................................................... 50 75 1 3,750 

Board ................................................................................... 25 75 1 1,875 

FDIC ..................................................................................... 48 75 1 3,600 

§ __.42(a)(4) ... Retail services and products data.

OCC ..................................................................................... 139 50 1 6,950 

Board ................................................................................... 108 50 1 5,400 

FDIC ..................................................................................... 216 50 1 10,800 

§ __.42(a)(5) ... Community development loan and community development investment data.

OCC ..................................................................................... 148 300 1 44,400 

Board ................................................................................... 114 300 1 34,200 

FDIC ..................................................................................... 227 300 1 68,100 

§ __.42(a)(6) ... Community development services data.

OCC ..................................................................................... 46 50 1 2,300 

Board ................................................................................... 48 50 1 2,400 

FDIC ..................................................................................... 42 50 1 2,100 

§ __.42(a)(7) ... Deposits data.

OCC ..................................................................................... 46 350 1 16,100 

Board ................................................................................... 36 350 1 12,600 

FDIC ..................................................................................... 48 350 1 16,800 

Disclosures 

§ __.43 ........... Content and availability of public file.

§ __.44 ........... Public notice by banks.

OCC ..................................................................................... 977 10 1 9,770 

Board ................................................................................... 695 10 1 6,950 

FDIC ..................................................................................... 3,128 10 1 31,280 

Total Estimated Annual Burden 

OCC ..................................................................................... ........................ ........................ ........................ 127,930 

Board ................................................................................... ........................ ........................ ........................ 97,646 


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BURDEN ESTIMATES—Continued 

Source and 

type of burden Description 

Estimated 

number of 

respondents 

Average 

estimated 

time per 

response 

Frequency of 

response 

Total 

estimated 

annual burden 

FDIC ..................................................................................... ........................ ........................ ........................ 225,201 

Comments Are Invited on 

(a) Whether the collection of 

information is necessary for the proper 

performance of the functions of the 

agencies, including whether the 

information has practical utility; 

(b) The accuracy of the agencies’ 

estimate of the burden of the collection 

of information; 

(c) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

(d) Ways to minimize the burden of 

the collection on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology; and 

(e) Estimates of capital or start-up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Commenters may submit comments 

regarding the burden estimate, or any 

other aspect of this collection of 

information, including suggestions for 

reducing the burden, to the addresses 

listed in the ADDRESSES caption in the 

NPR. All comments will become a 

matter of public record. A copy of the 

comments may also be submitted to the 

OMB desk officer for the agencies: By 

mail to U.S. Office of Management and 

Budget, 725 17th Street NW, #10235, 

Washington, DC 20503; by facsimile to 

(202) 395–5806; or by email to: oira_

submission@omb.eop.gov, Attention, 

Federal Banking Agency Desk Officer. 

Plain Language 

Section 722 of the Gramm-LeachBliley Act requires the agencies to use 

plain language in all proposed and final 

rules published after January 1, 2000. 

The agencies invite comment on how to 

make this proposed rule easier to 

understand. 

For example: 

• Have the agencies organized the 

material to inform your needs? If not, 

how could the agencies present the 

proposed rule more clearly? 

• Are the requirements in the 

proposed rule clearly stated? If not, how 

could the proposal be more clearly 

stated? 

• Does the proposed regulation 

contain technical language or jargon that 

is not clear? If so, which language 

requires clarification? 

• Would a different format (grouping 

and order of sections, use of headings, 

paragraphing) make the proposed 

regulation easier to understand? If so, 

what changes would achieve that? 

• Is this section format adequate? If 

not, which of the sections should be 

changed and how? 

• What other changes can the 

agencies incorporate to make the 

proposed regulation easier to 

understand? 

XXIII. Text of Common Proposed Rule 

(All Agencies) 

The text of the agencies’ common 

proposed rule appears below: 

PART __—COMMUNITY 

REINVESTMENT 

Sec. 

Subpart A—General 

__.11 Authority, purposes, and scope. 

__.12 Definitions. 

__.13 Community development definitions. 

__.14 Qualifying activities confirmation and 

illustrative list of activities. 

__.15 Impact review of community 

development activities. 

Subpart B—Geographic Considerations 

__.16 Facility-based assessment areas. 

__.17 Retail lending assessment areas. 

__.18 Areas for eligible community 

development activity. 

Subpart C—Standards for Assessing 

Performance 

__.21 Performance tests, standards, and 

ratings, in general. 

__.22 Retail lending test. 

__.23 Retail services and products test. 

__.24 Community development financing 

test. 

__.26 Wholesale or limited purpose banks. 

__.27 Strategic plan. 

__.28 Assigned conclusions and ratings. 

__.29 Performance standards for small 

banks and intermediate banks. 

__.31 [Reserved]. 

Subpart D—Records, Reporting, Disclosure, 

and Public Engagement Requirements 

__.42 Data collection, reporting, and 

disclosure. 

__.43 Content and availability of public file. 

__.44 Public notice by banks. 

__.45 Publication of planned examination 

schedule. 

__.46 Public engagement. 

Subpart E—Transition Rules 

__.51 Applicability dates, and transition 

provisions. 

Appendix A to Part __—Calculations for the 

Retail Tests 

Appendix B to Part __—Calculations for the 

Community Development Tests 

Appendix C to Part __—Performance Test 

Conclusions 

Appendix D to Part __—Ratings 

Appendix E to Part __—Small Bank 

Conclusions and Ratings and 

Intermediate Bank Community 

Development Evaluation Conclusions 

Appendix F to Part __[Reserved] 

PART __—COMMUNITY 

REINVESTMENT 

Subpart A—General 

§ __.11 Authority, purposes, and scope. 

(a) [Reserved]. 

(b) Purposes. This part implements 

the requirement in the Community 

Reinvestment Act (12 U.S.C. 2901 et 

seq.) (CRA) that the [Agency] assess a 

bank’s record of helping to meet the 

credit needs of the local communities in 

which the bank is chartered, consistent 

with the safe and sound operation of the 

bank, and to take this record into 

account in the agency’s evaluation of an 

application for a deposit facility by the 

bank. Accordingly, this part: 

(1) Establishes the framework and 

criteria by which the [Agency] assesses 

a bank’s record of responding to the 

credit needs of its entire community, 

including low- and moderate-income 

neighborhoods, consistent with the safe 

and sound operation of the bank; and 

(2) Provides that the [Agency] takes 

that record into account in considering 

certain applications. 

(c) [Reserved]. 

§ __.12 Definitions. 

For purposes of this part, the 

following definitions apply: 

Affiliate means any company that 

controls, is controlled by, or is under 

common control with another company. 

The term ‘‘control’’ has the same 

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. 

Affordable housing means activities 

described in § __.13(b). 


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Area median income means: 

(1) The median family income for the 

metropolitan statistical area (MSA), if a 

person or census tract is located in an 

MSA, or for the metropolitan division, 

if a person or census tract is located in 

an MSA that has been subdivided into 

metropolitan divisions; or 

(2) The statewide nonmetropolitan 

median family income, if a person or 

census tract is located outside an MSA. 

Bank means [Agency definition of 

bank]. 

Branch means a staffed banking 

facility, whether shared or unshared, 

that is approved or authorized as a 

branch by the [Agency] and that is open 

to, and accepts deposits from, the 

general public. 

Census tract means a census tract 

delineated by the U.S. Census Bureau in 

the most recent decennial census. 

Closed-end home mortgage loan has 

the same meaning given to the term 

‘‘closed-end mortgage loan’’ in 12 CFR 

1003.2(d), excluding multifamily loans 

as defined in this section. 

Community development means 

activities described in § __.13(b) through 

(l). 

Community Development Financial 

Institution (CDFI) has the same meaning 

given to that term in section 103(5)(A) 

of the Riegle Community Development 

and Regulatory Improvement Act of 

1994 (12 U.S.C. 4701 et seq.). 

Community development investment 

means a lawful investment, including a 

legally binding commitment to invest 

that is reported on Schedule RC–L of the 

Consolidated Reports of Condition and 

Income as filed under 12 U.S.C. 1817 

(Call Report), deposit, membership 

share, grant, or monetary or in-kind 

donation that has a primary purpose of 

community development, as described 

in § __.13(a). 

Community development loan means 

a loan, including a legally binding 

commitment to extend credit, such as a 

standby letter of credit, that: 

(1) Has a primary purpose of 

community development, as described 

in § __.13(a); and 

(2) Has not been considered by the 

bank, an [operations subsidiary or 

operating subsidiary] of the bank, or an 

affiliate of the bank under the Retail 

Lending Test as an automobile loan, 

closed-end home mortgage loan, openend home mortgage loan, small business 

loan, or small farm loan, unless: 

(i) The loan is for a multifamily 

dwelling (as defined in 12 CFR 

1003.2(n)); or 

(ii) In the case of an intermediate bank 

that is not required to report a home 

mortgage loan, a small business loan, or 

a small farm loan, the bank may opt to 

have the loan considered under the 

Retail Lending Test in § __.22 or under 

the intermediate bank community 

development performance standards in 

§ __.29(b)(2), or, if the bank opts in, the 

Community Development Financing 

Test in § __.24. 

Community development services 

means activities described in § __.25(d). 

Consumer loan means a loan to one or 

more individuals for household, family, 

or other personal expenditures. A 

consumer loan does not include a 

closed-end home mortgage loan, an 

open-end home mortgage loan, a 

multifamily loan, a small business loan, 

or a small farm loan. A consumer loan 

includes the following categories of 

loans: 

(1) Automobile loan, which means a 

consumer loan extended for the 

purchase of and secured by a new or 

used passenger car or other vehicle, 

such as a minivan, a pickup truck, a 

sport-utility vehicle, a van, or a similar 

light truck for personal use, as defined 

in Schedule RC–C of the Call Report; 

(2) Credit card loan, which means a 

line of credit for household, family, or 

other personal expenditures that is 

accessed by a borrower’s use of a ‘‘credit 

card,’’ as defined in 12 CFR 1026.2; 

(3) Other revolving credit plan, which 

means a revolving credit plan that is not 

accessed by credit card; and 

(4) Other consumer loan, which is a 

consumer loan that is not included in 

one of the other categories of consumer 

loans. 

County means any county or 

statistically equivalent entity as defined 

by the U.S. Census Bureau. 

Deposits, for purposes of this part, has 

the following meanings: 

(1) For banks that collect, maintain, 

and report deposits data as provided in 

§ __.42, deposits means deposits in 

domestic offices of individuals, 

partnerships, and corporations, and of 

commercial banks and other depository 

institutions in the U.S. as defined in 

Schedule RC–E of the Call Report; 

deposits does not include U.S. 

Government deposits, state and local 

government deposits, domestically held 

deposits of foreign governments or 

official institutions, or domestically 

held deposits of foreign banks or other 

foreign financial institutions; 

(2) For banks that collect and 

maintain, but that do not report, 

deposits data as provided in § __.42, 

deposits means deposits in domestic 

offices of individuals, partnerships, and 

corporations, and of commercial banks 

and other depository institutions in the 

U.S. as defined in Schedule RC–E of the 

Call Report; deposits does not include 

U.S. Government deposits, state and 

local government deposits, domestically 

held deposits of foreign governments or 

official institutions, or domestically 

held deposits of foreign banks or other 

foreign financial institutions, except 

that, for purposes of the Retail Lending 

Test’s Market Volume Benchmark and 

for all community development 

financing benchmarks, deposits has the 

same meaning as in the FDIC’s 

Summary of Deposits Reporting 

Instructions; 

(3) For banks that do not collect and 

maintain deposits data as provided in 

§ __.42, deposits has the same meaning 

as in the FDIC’s Summary of Deposits 

Reporting Instructions. 

Deposit location means: 

(1) For banks that collect and 

maintain deposits data as provided in 

§ __.42, the census tract or county, as 

applicable, in which the consumer 

resides, or the census tract or county, as 

applicable, in which the business is 

located if it has a local account. 

(2) For banks that collect and 

maintain, but that do not report, 

deposits data as provided in § __.42, the 

census tract or county, as applicable, in 

which the consumer resides, or the 

census tract or county, as applicable, in 

which the business is located if it has 

a local account except that, for purposes 

of the Market Volume Benchmark and 

for all community development 

financing benchmarks, the county of the 

bank branch to which the deposits are 

assigned in the FDIC’s Summary of 

Deposits. 

(3) For banks that do no collect and 

maintain deposits data as provided in 

§ __.42, the county of the bank branch 

to which the deposits are assigned in 

the FDIC’s Summary of Deposits. 

Dispersion of retail lending means 

how geographically diffuse or widely 

spread such lending is across census 

tracts of different income levels within 

a facility-based assessment area, retail 

lending assessment area, or outside 

retail lending area. 

Distressed or underserved 

nonmetropolitan middle-income census 

tract means a census tract publicly 

designated as such by the Board, the 

Federal Deposit Insurance Corporation 

(FDIC), and the Office of the 

Comptroller of the Currency (OCC), 

based on the criteria in paragraphs (1) 

and (2) of this definition, compiled in a 

list and published annually by the 

Federal Financial Institutions 

Examination Council (FFIEC). 

(1) A nonmetropolitan middle-income 

census tract is designated as distressed 

if it is in a county that meets one or 

more of the following criteria: 

(i) An unemployment rate of at least 

1.5 times the national average; 


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(ii) A poverty rate of 20 percent or 

more; or 

(iii) A population loss of 10 percent 

or more between the previous and most 

recent decennial census or a net 

migration loss of five percent or more 

over the five-year period preceding the 

most recent census. 

(2) A nonmetropolitan middle-income 

census tract is designated as 

underserved if it meets the criteria for 

population size, density, and dispersion 

that indicate the area’s population is 

sufficiently small, thin, and distant from 

a population center that the census tract 

is likely to have difficulty financing the 

fixed costs of meeting essential 

community needs. The criteria for these 

designations are based on the Urban 

Influence Codes established by the U.S. 

Department of Agriculture’s Economic 

Research Service numbered ‘‘7,’’ ‘‘10,’’ 

‘‘11,’’ or ‘‘12.’’ 

Distribution of retail lending refers to 

how such lending is apportioned among 

borrowers of different income levels, 

businesses or farms of different sizes, or 

among census tracts of different income 

levels. 

Evaluation period refers to the period 

of time between CRA examinations, 

generally in calendar years, in 

accordance with the [Agency’s] 

guidelines and procedures. 

Facility-based assessment area means 

a geographic area delineated in 

accordance with § __.16. 

High opportunity area means: 

(1) An area designated by the U.S. 

Department of Housing and Urban 

Development (HUD) as a ‘‘Difficult 

Development Area’’ (DDA); or 

(2) An area designated by a state or 

local Qualified Allocation Plan as a 

High Opportunity Area, and where the 

poverty rate falls below 10 percent (for 

metropolitan areas) or 15 percent (for 

nonmetropolitan areas). 

Home mortgage loan means a closedend home mortgage loan or an open-end 

home mortgage loan as these terms are 

defined in this section and that is not an 

excluded transaction under 12 CFR 

1003.3(c)(1) through (10) and (13). 

Income level includes: 

(1) Low-income, which means: 

(i) For individuals within a census 

tract, an individual income that is less 

than 50 percent of the area median 

income; or 

(ii) For a census tract, a median family 

income that is less than 50 percent of 

the area median income. 

(2) Moderate-income, which means: 

(i) For individuals within a census 

tract, an individual income that is at 

least 50 percent and less than 80 percent 

of the area median income; or 

(ii) For a census tract, a median family 

income that is at least 50 percent and 

less than 80 percent of the area median 

income. 

(3) Middle-income, which means: 

(i) For individuals within a census 

tract, an individual income that is at 

least 80 percent and less than 120 

percent of the area median income; or 

(ii) For a census tract, a median family 

income that is at least 80 percent and 

less than 120 percent of the area median 

income. 

(4) Upper-income, which means: 

(i) For individuals within a census 

tract, an individual income that is 120 

percent or more of the area median 

income; or 

(ii) For a census tract, a median family 

income that is 120 percent or more of 

the area median income. 

Intermediate bank means a bank that 

had average assets of at least $600 

million in both of the prior two calendar 

years and less than $2 billion in either 

of the prior two calendar years, based on 

the assets reported on its four quarterly 

Call Reports for each of those calendar 

years. The $600 million figure and the 

$2 billion figure will be adjusted 

annually and published by the 

[Agency], 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 12-month period 

ending in November, with rounding to 

the nearest million. 

Large bank means a bank that had 

average assets of at least $2 billion in 

both of the prior two calendar years, 

based on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years. The $2 billion figure 

will be adjusted annually and published 

by the [Agency], based on the year-toyear change in the average of the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers, not 

seasonally adjusted, for each 12-month 

period ending in November, with 

rounding to the nearest million. 

Limited purpose bank means a bank 

that offers only a narrow retail product 

line (such as credit cards, other 

revolving consumer credit plans, other 

consumer loans, or other non-reported 

commercial and farm loans) to a 

regional or broader market and for 

which a designation as a limited 

purpose bank is in effect, in accordance 

with § __.26. 

Loan location. A loan is located as 

follows: 

(1) A consumer loan is located in the 

census tract where the borrower resides 

at the time that the consumer submits 

the loan application; 

(2) A home mortgage loan is located 

in the census tract where the property 

securing the loan is located; and 

(3) A small business loan or small 

farm loan is located in the census tract 

where the main business facility or farm 

is located or where the loan proceeds 

otherwise will be applied, as indicated 

by the borrower. 

Low branch access census tract means 

a census tract with one bank, thrift, or 

credit union branch within: 

(1) Ten miles of the census tract 

center of population or within the 

census tract in nonmetropolitan areas; 

(2) Five miles of the census tract 

center of population or within the 

census tract in a census tract located in 

an MSA but primarily outside of the 

principal city components of the MSA; 

or 

(3) Two miles of the census tract 

center of population or within the 

census tract in a census tract located in 

an MSA and primarily within the 

principal city components of the MSA. 

Low-cost education loan means any 

private education loan, as defined in 

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

Act (15 U.S.C. 1650(a)(8)) (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 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). 

Low-income credit union (LICU) has 

the same meaning given to that term in 

12 CFR 701.34. 

Metropolitan area means any MSA, 

combined MSA, or metropolitan 

division as defined by the Director of 

the Office of Management and Budget. 

Metropolitan division has the same 

meaning given to that term by the 

Director of the Office of Management 

and Budget. 

Metropolitan statistical area (MSA) 

has the same meaning given to that term 

by the Director of the Office of 

Management and Budget. 

Military bank means a bank whose 

business predominately consists of 

serving the needs of military personnel 

who serve or have served in the armed 

forces (including the U.S. Air Force, 

U.S. Army, U.S. Coast Guard, U.S. 

Marine Corps, and U.S. Navy) or 

dependents of military personnel. 

Minority depository institution (MDI) 

means an entity that: 


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(1) For purposes of activities 

conducted pursuant to 12 U.S.C. 2907(a) 

(i.e., donating, selling on favorable 

terms (as determined by the [Agency]), 

or making available on a rent-free basis 

any branch of the bank, which is located 

in a predominately minority 

neighborhood) has the meaning given to 

that term in 12 U.S.C. 2907(b)(1); and 

(2) For all other purposes: 

(i) Has the meaning given to that term 

in 12 U.S.C. 2907(b)(1); 

(ii) Is a minority depository 

institution, as defined in section 308 of 

the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989 

(FIRREA) (12 U.S.C. 1463 note); or 

(iii) Is considered to be a minority 

depository institution by the 

appropriate Federal banking agency. For 

purposes of this paragraph, ‘‘appropriate 

Federal banking agency’’ has the 

meaning given to it in 12 U.S.C. 1813(q). 

Multifamily loan means a loan for a 

‘‘multifamily dwelling’’ as defined in 12 

CFR 1003.2(n). 

Multistate metropolitan statistical 

area (multistate MSA) has the same 

meaning given to that term by the 

Director of the Office of Management 

and Budget. 

Nationwide area means the entire 

United States and its territories. 

Native land area means: 

(1) All land within the limits of any 

Indian reservation under the 

jurisdiction of the U.S. Government, as 

described in 18 U.S.C. 1151(a); 

(2) All dependent Indian communities 

within the borders of the United States 

whether within the original or 

subsequently acquired territory thereof, 

and whether within or without the 

limits of a state, as described in 18 

U.S.C. 1151(b); 

(3) All Indian allotments, the Indian 

titles to which have not been 

extinguished, including rights-of-way 

running through the same, as defined in 

18 U.S.C. 1151(c); 

(4) Any land held in trust by the 

United States for Native Americans, as 

described in 38 U.S.C. 3765(1)(A); 

(5) Reservations established by a state 

government for a tribe or tribes 

recognized by the state; 

(6) Any Alaska Native village as 

defined in 43 U.S.C 1602(c); 

(7) Lands that have the status of 

Hawaiian Home Lands as defined in 

section 204 of the Hawaiian Homes 

Commission Act, 1920 (42 Stat. 108), as 

amended; 

(8) Areas defined by the U.S. Census 

Bureau as Alaska Native Village 

Statistical Areas, Oklahoma Tribal 

Statistical Areas, Tribal-Designated 

Statistical Areas, or American Indian 

Joint-Use Areas; and 

(9) Land areas of state-recognized 

Indian tribes and heritage groups that 

are defined and recognized by 

individual states and included in the 

U.S. Census Bureau’s annual Boundary 

and Annexation Survey. 

Nonmetropolitan area means any area 

that is not located in an MSA. 

Open-end home mortgage loan has 

the same meaning as given to the term 

‘‘open-end line of credit’’ in 12 CFR 

1003.2(o), excluding multifamily loans 

as defined in this section. 

[Operations subsidiary or operating 

subsidiary] means [Agency definition of 

operations subsidiary or operating 

subsidiary]. 

Outside retail lending area means the 

nationwide area outside of a bank’s 

facility-based assessment areas and, as 

applicable, retail lending assessment 

areas. 

Remote service facility means an 

automated, virtually staffed, or 

unstaffed banking facility owned or 

operated by, or operated exclusively for, 

a bank, such as an automated teller 

machine (ATM), interactive teller 

machine, cash dispensing machine, or 

other remote electronic facility at which 

deposits are received, cash dispersed, or 

money lent. 

Retail banking services means retail 

financial services provided by a bank to 

consumers, small businesses, and small 

farms and includes a bank’s systems for 

delivering retail financial services. 

Retail lending assessment area means 

a geographic area, separate and distinct 

from a facility-based assessment area, 

delineated in accordance with § __.17. 

Retail loan. (1) For purposes of the 

Retail Lending Test in § __.22, retail 

loan means an automobile loan, closedend home mortgage loan, open-end 

home mortgage loan, multifamily loan, 

small business loan, or small farm loan; 

(2) For all other purposes, retail loan 

means a consumer loan, home mortgage 

loan, small business loan, or small farm 

loan. 

Small bank means a bank that had 

average assets of less than $600 million 

in either of the prior two calendar years, 

based on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years. The $600 million figure 

will be adjusted annually and published 

by the [Agency], based on the year-toyear change in the average of the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers, not 

seasonally adjusted, for each 12-month 

period ending in November, with 

rounding to the nearest million. 

Small business means a business that 

had gross annual revenues for its 

preceding fiscal year of $5 million or 

less. 

Small business loan means, 

notwithstanding the definition of ‘‘small 

business’’ in this section, a loan 

included in ‘‘loans to small businesses’’ 

as defined in the instructions for 

preparation of the Call Report. 

Small farm means a farm that had 

gross annual revenues for its preceding 

fiscal year of $5 million or less. 

Small farm loan means, 

notwithstanding the definition of ‘‘small 

farm’’ in this section, a loan included in 

‘‘loans to small farms’’ as defined in the 

instructions for preparation of the Call 

Report. 

State means a U.S. state or territory, 

and includes the District of Columbia. 

Targeted census tract means: 

(1) A low-income census tract or a 

moderate-income census tract; or 

(2) A distressed or underserved 

nonmetropolitan middle-income census 

tract. 

Very low branch access census tract 

means a census tract with no bank, 

thrift, or credit union branches within: 

(1) Ten miles of the census tract 

center of population or within the 

census tract in nonmetropolitan areas; 

(2) Five miles of the census tract 

center of population or within the 

census tract located in an MSA but 

primarily outside of the principal city 

components of the MSA; or 

(3) Two miles of the census tract 

center of population or within the 

census tract located in an MSA and 

primarily within the principal city 

components of the MSA. 

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 § _

_.26. 

Women’s depository institution (WDI) 

has the same meaning given to that term 

in 12 U.S.C. 2907(b)(2). 

§ __.13 Community Development 

Definitions. 

(a) Consideration for activities with a 

primary purpose of community 

development. A bank may receive 

community development consideration 

for a loan, investment, or service that 

has a primary purpose of community 

development. A bank will receive 

consideration for the entire activity 

where the activity meets the criteria for 

having a primary purpose of community 

development under paragraphs (a)(1)(i) 

and (a)(1)(ii) of this section, except that 

a bank will receive consideration for the 

portion of any activity considered to 

have a primary purpose of community 

development under paragraph 

(a)(1)(i)(A) of this section. 


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(1) Primary purpose of community 

development. A loan, investment, or 

service has a primary purpose of 

community development: 

(i) If a majority of the dollars, 

applicable beneficiaries, or housing 

units of the activity are identifiable to 

one or more of the community 

development purposes in paragraph 

(a)(2) of this section; 

(A) Where an activity supports rental 

housing purchased, developed, 

financed, rehabilitated, improved, or 

preserved in conjunction with a federal, 

state, local, or tribal government 

affordable housing plan, program, 

initiative, tax credit, or subsidy with a 

stated purpose or bona fide intent of 

providing affordable housing for lowincome or moderate-income individuals 

under paragraph (b)(1) of this section, 

and fewer than 50 percent of the 

housing units supported by that activity 

are affordable, the activity has a primary 

purpose of community development 

only for the percentage of total housing 

units in any development that are 

affordable. 

(B) Notwithstanding paragraph 

(a)(1)(i)(A) of this section, where an 

activity involves low-income housing 

tax credits to support affordable housing 

under paragraph (b) of this section, the 

activity has a primary purpose of 

community development for the full 

value of the investment even where 

fewer than 50 percent of the housing 

units supported by that activity are 

affordable. 

(ii) If the express, bona fide intent of 

the activity is one or more of the 

community development purposes in 

paragraph (a)(2) of this section and the 

activity is specifically structured to 

achieve, or is reasonably certain to 

accomplish, the community 

development purpose. 

(2) Community development 

purposes. Loans, investments, or 

services meet the definition of 

community development purpose if 

they promote one or more of the 

following: 

(i) Affordable housing that benefits 

low- or moderate-income individuals, as 

described in paragraph (b) of this 

section; 

(ii) Economic development that 

supports small businesses or small 

farms, as described in paragraph (c) of 

this section; 

(iii) Community supportive services 

that serve or assist low- or moderateincome individuals, as described in 

paragraph (d) of this section; 

(iv) Revitalization activities 

undertaken in conjunction with a 

federal, state, local, or tribal government 

plan, program, or initiative that must 

include an explicit focus on revitalizing 

or stabilizing targeted census tracts, as 

described in paragraph (e) of this 

section; 

(v) Essential community facilities that 

benefit or serve residents of targeted 

census tracts, as described in paragraph 

(f) of this section; 

(vi) Essential community 

infrastructure that benefits or serves 

residents of targeted census tracts, as 

described in paragraph (g) of this 

section; 

(vii) Recovery activities that support 

the revitalization of a designated 

disaster area, as described in paragraph 

(h) of this section; 

(viii) Disaster preparedness and 

climate resiliency activities that benefit 

or serve residents of targeted census 

tracts, as described in paragraph (i) of 

this section; 

(ix) Activities undertaken with MDIs, 

WDIs, LICUs, or CDFIs certified by the 

U.S. Department of the Treasury’s 

Community Development Institutions 

Fund (Treasury Department-certified 

CDFIs), as described in paragraph (j) of 

this section; 

(x) Financial literacy programs or 

initiatives, including housing 

counseling, as described in paragraph 

(k) of this section; or 

(xi) Activities undertaken in Native 

Land Areas that benefit or serve 

residents, including low- or moderateincome residents, of Native Land Areas, 

as described in paragraph (l) of this 

section. 

(b) Affordable housing. Activities that 

support affordable housing for low- or 

moderate-income individuals are: 

(1) Rental housing in conjunction with 

a government affordable housing plan, 

program, initiative, tax credit, or 

subsidy. Rental housing purchased, 

developed, financed, rehabilitated, 

improved, or preserved in conjunction 

with a federal, state, local, or tribal 

government affordable housing plan, 

program, initiative, tax credit, or 

subsidy with a stated purpose or bona 

fide intent of providing affordable 

housing for low- or moderate-income 

individuals; 

(2) Multifamily rental housing with 

affordable rents. Rents are deemed 

affordable for purchased, developed, 

financed, rehabilitated, improved, or 

preserved multifamily rental housing if, 

for the majority of the units, the 

monthly rent as underwritten by the 

bank, reflecting post-construction or 

post-renovation changes as applicable, 

does not exceed 30 percent of 60 

percent of the area median income for 

the metropolitan area or 

nonmetropolitan county, and: 

(i) The housing is located in a low- or 

moderate-income census tract; 

(ii) The housing is purchased, 

developed, financed, rehabilitated, 

improved, or preserved by any nonprofit organization with a stated mission 

of, or that otherwise directly supports, 

providing affordable housing; 

(iii) The property owner has made an 

explicit written pledge to maintain 

affordable rents for low- or moderateincome individuals for at least five years 

or the length of the financing, 

whichever is shorter; or 

(iv) The bank provides documentation 

that a majority of the housing units are 

occupied by low- or moderate-income 

individuals or families. 

(3) Activities that support affordable 

owner-occupied housing for low- or 

moderate-income individuals. 

Activities, excluding single-family home 

mortgage loans considered under the 

Retail Lending Test in § __.22, that 

directly assist low- or moderate-income 

individuals to obtain, maintain, 

rehabilitate, or improve affordable 

owner-occupied housing or activities 

that support programs, projects, or 

initiatives that assist low- or moderateincome individuals to obtain, maintain, 

rehabilitate, or improve affordable 

owner-occupied housing; and 

(4) Mortgage-backed securities. 

Purchases of mortgage-backed securities 

that contain a majority of either loans 

financing housing for low- or moderateincome individuals or loans financing 

housing that otherwise qualifies as 

affordable housing under paragraph (b) 

of this section. 

(c) Economic development. Economic 

development activities are: 

(1) Activities undertaken consistent 

with federal, state, local, or tribal 

government plans, programs, or 

initiatives that support small businesses 

or small farms as those entities are 

defined in the plans, programs, or 

initiatives, notwithstanding how those 

entities are defined in § __.12, including 

lending to, investing in, or providing 

services to an SBA Certified 

Development Company (13 CFR 120.10), 

Small Business Investment Company 

(13 CFR 107), New Markets Venture 

Capital Company (13 CFR 108), 

qualified Community Development 

Entity (26 U.S.C. 45D(c)), or U.S. 

Department of Agriculture Rural 

Business Investment Company (7 CFR 

4290.50); 

(2) Support for financial 

intermediaries that lend to, invest in, or 

provide technical assistance to 

businesses or farms with gross annual 

revenues of $5 million or less; or 

(3) Providing technical assistance to 

support businesses or farms with gross 


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annual revenues of $5 million or less, or 

providing services such as shared space, 

technology, or administrative assistance 

to such businesses or farms or to 

organizations that have a primary 

purpose of supporting such businesses 

or farms. 

(d) Community supportive services. 

Community supportive services are 

general welfare services that serve or 

assist low- or moderate-income 

individuals including, but not limited 

to, childcare, education, workforce 

development and job training programs, 

and health services and housing 

services programs that serve or assist 

low- or moderate-income individuals, 

including: 

(1) Activities conducted with a nonprofit organization that has a defined 

mission or purpose of serving low- or 

moderate-income individuals or is 

limited to offering community 

supportive services exclusively to lowand moderate-income individuals; 

(2) Activities conducted with a nonprofit organization located in and 

serving low- or moderate-income census 

tracts; 

(3) Activities conducted in low- or 

moderate-income census tracts and 

targeted to the residents of the census 

tract; 

(4) Activities offered to individuals at 

a workplace where the majority of 

employees are low- or moderate-income, 

based on readily available U.S. Bureau 

of Labor Statistics data for the average 

wage for workers in that particular 

occupation or industry; 

(5) Activities provided to students or 

their families through a school at which 

the majority of students qualify for free 

or reduced-price meals under the U.S. 

Department of Agriculture’s National 

School Lunch Program; 

(6) Activities that have a primary 

purpose of benefitting or serving 

individuals who receive or are eligible 

to receive Medicaid; 

(7) Activities that benefit or serve 

individuals who receive or are eligible 

to receive Federal Supplemental 

Security Income, Social Security 

Disability Insurance, or support through 

other Federal disability assistance 

programs; or 

(8) Activities that benefit or serve 

recipients of government assistance 

plans, programs, or initiatives that have 

income qualifications equivalent to, or 

stricter than, the definitions of low- and 

moderate-income as defined in this part. 

Examples include, but are not limited 

to, HUD’s section 8, 202, 515, and 811 

programs or the U.S. Department of 

Agriculture’s section 514, 516, and 

Supplemental Nutrition Assistance 

programs. 

(e) Revitalization activities 

undertaken in conjunction with a 

government plan, program, or initiative. 

Revitalization activities are those 

undertaken in conjunction with a 

federal, state, local, or tribal government 

plan, program, or initiative that includes 

an explicit focus on revitalizing or 

stabilizing targeted census tracts. 

Revitalization activities include, and are 

not limited to, adaptive reuse of vacant 

or blighted buildings, brownfield 

redevelopment, or activities consistent 

with a plan for a business improvement 

district or main street program. 

Revitalization activities do not include 

housing-related activities. Revitalization 

activities must meet the following 

criteria: 

(1) The activities benefit or serve 

residents, including low- or moderateincome residents, in one or more of the 

targeted census tracts; and 

(2) The activities do not displace or 

exclude low- or moderate-income 

residents in the targeted census tracts. 

(f) Essential community facilities 

activities. Essential community facilities 

activities are those that provide 

financing or other support for public 

facilities that provide essential services 

generally accessible by a local 

community, including, but not limited 

to, schools, libraries, childcare facilities, 

parks, hospitals, healthcare facilities, 

and community centers. Activities that 

support essential community facilities 

are activities conducted in targeted 

census tracts that meet the following 

criteria: 

(1) The activities benefit or serve 

residents, including low- or moderateincome residents, in one or more of the 

targeted census tracts; 

(2) The activities do not displace or 

exclude low- or moderate-income 

residents in the targeted census tracts; 

and 

(3) An activity that finances or 

supports essential community facilities 

must be conducted in conjunction with 

a federal, state, local, or tribal 

government plan, program, or initiative 

that includes an explicit focus on 

benefitting or serving the targeted 

census tracts. 

(g) Essential community infrastructure 

activities. Essential community 

infrastructure activities are those that 

provide financing and other support for 

infrastructure, including, but not 

limited to, broadband, 

telecommunications, mass transit, water 

supply and distribution, and sewage 

treatment and collection systems. 

Activities that support essential 

community infrastructure are activities 

conducted in targeted census tracts that 

meet the following criteria: 

(1) The activities benefit or serve 

residents, including low- or moderateincome residents, in one or more of the 

targeted census tracts; 

(2) The activities do not displace or 

exclude low- or moderate-income 

residents in the targeted census tracts; 

and 

(3) An activity that finances or 

supports essential community 

infrastructure must be conducted in 

conjunction with a federal, state, local, 

or tribal government plan, program, or 

initiative that includes an explicit focus 

on benefitting the targeted census tracts. 

(h) Recovery activities in designated 

disaster areas. Activities that promote 

recovery from a designated disaster: 

(1) Are activities that revitalize or 

stabilize geographic areas subject to a 

Major Disaster Declaration administered 

by the Federal Emergency Management 

Agency (FEMA). Activities that promote 

recovery from a designated disaster 

exclude activities that revitalize or 

stabilize counties designated to receive 

only FEMA Public Assistance 

Emergency Work Category A (Debris 

Removal) and/or Category B (Emergency 

Protective Measures), unless the Board, 

the FDIC, and the OCC announce a 

temporary exception. Activities are 

eligible for 36 months after a Major 

Disaster Declaration, unless extended by 

the Board, the FDIC, and the OCC; 

(2) Must benefit or serve residents, 

including low- or moderate-income 

residents, and not displace or exclude 

low- or moderate-income residents, of 

such geographic areas; and 

(3) Must be conducted in conjunction 

with a federal, state, local, or tribal 

government disaster plan that includes 

an explicit focus on benefitting the 

designated disaster area. 

(i) Disaster preparedness and climate 

resiliency activities. Disaster 

preparedness and climate resiliency 

activities are activities that assist 

individuals and communities to prepare 

for, adapt to, and withstand natural 

disasters, weather-related disasters, or 

climate-related risks. Disaster 

preparedness and climate resiliency 

activities are those conducted in 

targeted census tracts that meet the 

following criteria: 

(1) The activities benefit or serve 

residents, including low- or moderateincome residents, in one or more of the 

targeted census tracts; and 

(2) The activities do not displace or 

exclude low- or moderate-income 

residents in the targeted census tracts; 

(3) A disaster preparedness and 

climate resiliency activity must be 

conducted in conjunction with a 

federal, state, local, or tribal government 

plan, program, or initiative focused on 


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disaster preparedness or climate 

resiliency that includes an explicit focus 

on benefitting a geographic area that 

includes the targeted census tracts. 

(j) Activities with MDIs, WDIs, LICUs, 

or CDFIs. Activities with MDIs, WDIs, 

LICUs, or CDFIs are: 

(1) Investments, loan participations, 

and other ventures undertaken by any 

bank, including by MDIs and WDIs, in 

cooperation with other MDIs, other 

WDIs, or LICUs; and 

(2) Lending, investment, and service 

activities undertaken in connection with 

a Treasury Department-certified CDFI. A 

bank’s lending, investment, and service 

activities undertaken in connection with 

a Treasury Department-certified CDFI at 

the time of the activity will be presumed 

to qualify for favorable community 

development consideration. 

(k) Financial literacy. Activities that 

promote financial literacy are those that 

assist individuals and families, 

including low- or moderate-income 

individuals and families, to make 

informed financial decisions regarding 

managing income, savings, credit, and 

expenses, including with respect to 

homeownership. 

(l) Qualifying activities in Native Land 

Areas. (1) Activities in Native Land 

Areas are activities related to 

revitalization, essential community 

facilities, essential community 

infrastructure, and disaster 

preparedness and climate resiliency that 

are specifically targeted to and 

conducted in Native Land Areas. 

Activities in Native Land Areas must 

benefit residents of Native Land Areas, 

including low- or moderate-income 

residents. 

(i) Revitalization activities in Native 

Land Areas are those undertaken in 

conjunction with a Federal, state, local, 

or tribal government plan, program, or 

initiative that includes an explicit focus 

on revitalizing or stabilizing Native 

Land Areas and a particular focus on 

low- or moderate-income households. 

Revitalization activities in Native Land 

Areas: 

(A) Must benefit or serve residents of 

Native Land Areas, with substantial 

benefits for low- or moderate-income 

residents; and 

(B) Must not displace or exclude lowor moderate-income residents 

(ii) Essential community facilities in 

Native Land Areas are public service 

facilities that provide essential services 

to a community, including, but not 

limited to, schools, libraries, childcare 

facilities, parks, hospitals, healthcare 

facilities, and community centers. 

Activities that support essential 

community facilities must benefit or 

serve residents, including low- or 

moderate-income residents, of Native 

Land Areas; 

(iii) Eligible community infrastructure 

in Native Land Areas includes, but is 

not limited to, broadband, 

telecommunications, mass transit, water 

supply and distribution, and sewage 

treatment and collection systems. 

Activities that support eligible 

community infrastructure must benefit 

or serve residents, including low- or 

moderate-income residents, of one or 

more of Native Land Areas; and 

(iv) Disaster preparedness and climate 

resiliency activities in Native Land 

Areas are activities that assist 

individuals and communities to prepare 

for, adapt to, and withstand natural 

disasters, weather-related disasters, or 

climate-related risks. Disaster 

preparedness and climate resiliency 

activities must benefit or serve 

residents, including low- or moderateincome residents, of Native Land Areas. 

(2) Activities that support and benefit 

Native Land Areas under paragraphs 

(l)(1)(ii) and (l)(1)(iii) of this section 

must: 

(i) Benefit or serve residents, 

including low- or moderate-income 

residents, of Native Land Areas, and 

must not displace or exclude low- or 

moderate-income residents of such 

geographic areas; and 

(ii) Be conducted in conjunction with 

a Federal, state, local, or tribal 

government plan, program, or initiative 

that benefits or serves residents of 

Native Land Areas. 

(3) Activities that support and benefit 

Native Land Areas under paragraph 

(l)(1)(iv) of this section must: 

(i) Benefit or serve residents, 

including low- or moderate-income 

residents, of Native Land Areas, and 

must not displace or exclude low- or 

moderate-income residents of such 

geographic areas; and 

(ii) Be conducted in conjunction with 

a Federal, state, local, or tribal 

government plan, program, or initiative 

focused on disaster preparedness or 

climate resiliency that benefits or serves 

residents of Native Land Areas. 

§ __.14 Qualifying activities confirmation 

and illustrative list of activities. 

(a) Illustrative activities list. The 

Board, the FDIC, and the OCC maintain 

a publicly available illustrative list of 

non-exhaustive examples of community 

development activities that qualify for 

CRA consideration. 

(b) Modifying the illustrative activities 

list. (1) The Board, the FDIC, and the 

OCC will update the illustrative list of 

activities periodically. 

(2) If the Board, the FDIC, and the 

OCC determine that an activity is no 

longer eligible for CRA community 

development consideration, the owner 

of the loan or investment at the time of 

the determination will continue to 

receive CRA consideration for the 

remaining term or period of the loan or 

investment. However, these loans or 

investments will not be considered 

eligible for CRA community 

development consideration for any 

purchasers of that loan or investment 

after the determination. 

(c) Confirmation of an eligible 

activity. Pursuant to paragraph (d) of 

this section, a bank subject to this part 

may submit a request to the [Agency] for 

confirmation that an activity is eligible 

for CRA consideration. When the Board, 

the FDIC, and the OCC confirm that an 

activity is or is not eligible for CRA 

consideration, the [Agency] will notify 

the requestor, and the Board, the FDIC, 

and the OCC may add the activity to the 

publicly available illustrative list of 

activities, incorporating any conditions 

imposed, if applicable. 

(d) Process. (1) A bank may request 

that the [Agency] confirm that an 

activity is eligible for CRA consideration 

by submitting a request to the [Agency], 

in a format prescribed by the [Agency]. 

(2) In responding to a request for 

confirmation that an activity is eligible 

for CRA consideration, the Board, the 

FDIC, and the OCC will consider: 

(i) The information provided to 

describe and support the request; 

(ii) Whether the activity is consistent 

with the safe and sound operation of the 

bank; and 

(iii) Any other information that the 

agencies deem relevant. 

(3) The Board, the FDIC, and the OCC 

may impose any conditions on 

confirmation of an activity’s eligibility 

for CRA consideration, in order to 

ensure consistency with the 

requirements of this part. 

§ __.15 Impact Review of Community 

Development Activities. 

(a) Impact review, in general. Under 

the Community Development Financing 

Test in § __.24, the Community 

Development Services Test in § __.25, 

and the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks in § __.26, the [Agency] 

evaluates the impact and responsiveness 

of a bank’s community development 

activities in each facility-based 

assessment area and, as applicable, each 

state, multistate MSA, and nationwide 

area. In evaluating the impact and 

responsiveness of a bank’s qualifying 

activities, the [Agency] may take into 

account performance context 

information set out in § __.21(e), as 

applicable. 


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(b) Impact review factors. Factors 

considered in evaluating the impact and 

responsiveness of a bank’s qualifying 

activities include, but are not limited to, 

whether the activities: 

(1) Serve persistent poverty counties, 

defined as counties or countyequivalents that have had poverty rates 

of 20 percent or more for the past 30 

years, as measured by the most recent 

decennial censuses; 

(2) Serve geographic areas with low 

levels of community development 

financing; 

(3) Support an MDI, WDI, LICU, or 

Treasury Department-certified CDFI; 

(4) Serve low-income individuals and 

families; 

(5) Support small businesses or small 

farms with gross annual revenues of 

$250,000 or less; 

(6) Directly facilitate the acquisition, 

construction, development, 

preservation, or improvement of 

affordable housing in High Opportunity 

Areas; 

(7) Benefit Native communities, such 

as qualifying activities in Native Land 

Areas under § __.13(l); 

(8) Are a qualifying grant or donation; 

(9) Reflect bank leadership through 

multi-faceted or instrumental support; 

or 

(10) Result in a new community 

development financing product or 

service that addresses community 

development needs for low- or 

moderate-income individuals and 

families. 

Subpart B—Geographic 

Considerations 

§ __.16 Facility-based assessment areas. 

(a) In general. A bank must delineate 

one or more facility-based assessment 

areas within which the [Agency] 

evaluates the bank’s record of helping to 

meet the credit needs of its community 

pursuant to the standards in this part. 

The [Agency] does not evaluate the 

bank’s delineation of its facility-based 

assessment areas as a separate 

performance criterion, but the [Agency] 

reviews the delineation for compliance 

with the requirements of this section. 

(b) Facility-based assessment areas for 

evaluating performance. (1) A facilitybased assessment area must include 

each county in which a bank has a main 

office, a branch, any other staffed bank 

facility that accept deposits, or a 

deposit-taking remote service facility, 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 loans, small farm loans, 

and automobile loans). For purposes of 

this paragraph, facilities refers to those 

that are open to the general public and 

excludes nonpublic facilities. 

(2) Except as provided in paragraph 

(b)(3) of this section, a facility-based 

assessment area must consist 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 counties within an MSA, 

metropolitan division, or the 

nonmetropolitan area of a state and may 

not extend beyond an MSA boundary or 

beyond a state boundary unless the 

assessment area is located in a 

multistate MSA or combined statistical 

area. 

(3) An intermediate bank or a small 

bank may adjust the boundaries of its 

facility-based assessment areas to 

include only the portion of a county that 

it reasonably can be expected to serve, 

subject to paragraph (c) of this section. 

A facility-based assessment area that 

includes a partial county must consist 

only of whole census tracts. 

(c) Limitations on the delineation of a 

facility-based assessment area. Each 

bank’s facility-based assessment areas: 

(1) May not reflect illegal 

discrimination; and 

(2) May not arbitrarily exclude low- or 

moderate-income census tracts, taking 

into account the bank’s size and 

financial condition. 

(d) Military banks. Notwithstanding 

the requirements of this section, a bank 

whose business predominantly consists 

of serving the needs of military 

personnel or their dependents who are 

not located within a defined geographic 

area may delineate its entire deposit 

customer base as its assessment area. 

(e) Use of facility-based assessment 

areas. The [Agency] uses the facilitybased assessment areas delineated by a 

bank in its evaluation of the bank’s CRA 

performance unless the [Agency] 

determines that the facility-based 

assessment areas do not comply with 

the requirements of this section. 

§ __.17 Retail lending assessment areas. 

(a) In general. The [Agency] evaluates 

a large bank’s performance, including a 

large bank that elects to be evaluated 

under an approved strategic plan, by 

assessing the bank’s retail lending 

activities in one or more retail lending 

assessment areas outside of the bank’s 

facility-based assessment areas. A large 

bank must delineate retail lending 

assessment areas based upon the criteria 

in paragraphs (b) and (c) of this section. 

(b) Geographic requirements 

regarding retail lending assessment 

areas. (1) A retail lending assessment 

area must consist of either: 

(i) The entirety of a single MSA (using 

the MSA boundaries that were in effect 

as of January 1 of the calendar year in 

which the delineation applies), 

excluding counties inside facility-based 

assessment areas; or 

(ii) All of the counties in a single state 

that are not included in an MSA (using 

the MSA boundaries that were in effect 

as of January 1 of the calendar year in 

which the delineation applies), 

excluding counties inside facility-based 

assessment areas, aggregated into a 

single retail lending assessment area. 

(2) A retail lending assessment area 

may not extend beyond an MSA 

boundary or beyond a state boundary 

unless the assessment area is located in 

a multistate MSA or combined 

statistical area. 

(c) Delineation of retail lending 

assessment areas. A large bank must 

delineate a retail lending assessment 

area in any MSA or nonmetropolitan 

area of a state, respectively, in which it 

originated, as of December 31 of each of 

the two preceding calendar years, in 

that geographic area: 

(1) At least 100 home mortgage loans 

outside of facility-based assessment 

areas; or 

(2) At least 250 small business loans 

outside of facility-based assessment 

areas. 

(d) Use of retail lending assessment 

areas. The [Agency] uses the retail 

lending assessment areas delineated by 

a large bank in its evaluation of the 

bank’s retail lending performance unless 

the [Agency] determines that the retail 

lending assessment areas do not comply 

with the requirements of this section. 

§ __.18 Areas for eligible community 

development activity. 

In addition to a bank receiving 

consideration under this part for 

community development activities 

conducted in its facility-based 

assessment areas, a bank will also 

receive consideration for community 

development loans, community 

development investments, and 

community development services 

provided outside of its facility-based 

assessment areas within the states and 

multistate MSAs in which the bank has 

a facility-based assessment area and in 

a nationwide area, as provided in §§ __

.21, __.24, __.25, __.26, __.28, and 

appendices C and D of this part, as 

applicable. 


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Subpart C—Standards for Assessing 

Performance 

§ __.21 Performance tests, standards, and 

ratings, in general. 

(a) Performance tests. The [Agency] 

uses the following performance tests 

and standards to assess a bank’s CRA 

performance: 

(1) The Retail Lending Test as 

provided in § __.22. 

(2) The Retail Services and Products 

Test as provided in § __.23. 

(3) The Community Development 

Financing Test as provided in § __.24. 

(4) The Community Development 

Services Test as provided in § __.25. 

(5) The Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks as provided in § __.26. 

(6) The small bank performance 

standards as provided in § __.29(a). 

(7) The intermediate bank community 

development performance standards as 

provided in § __.29(b)(2). 

(8) Standards in a strategic plan 

approved as provided in § __.27. 

(b) Application of performance tests 

and standards. (1) Large banks. To 

evaluate the performance of a large 

bank, the [Agency] applies the Retail 

Lending Test, the Retail Services and 

Products Test, the Community 

Development Financing Test, and the 

Community Development Services Test. 

(2) Intermediate banks. (i) To evaluate 

the performance of an intermediate 

bank, the [Agency] applies the Retail 

Lending Test and either the community 

development performance standards as 

provided in § __.29(b)(2) or, if the bank 

chooses, the Community Development 

Financing Test. 

(ii) If an intermediate bank chooses 

evaluation under the Community 

Development Financing Test, the 

following applies: 

(A) The [Agency] evaluates the 

intermediate bank for the evaluation 

period preceding the bank’s next CRA 

examination under the Community 

Development Financing Test and 

continues evaluations under the 

Community Development Financing 

Test for subsequent evaluation periods 

until the bank opts out. If an 

intermediate bank opts out of the 

Community Development Financing 

Test, the [Agency] reverts to evaluating 

the bank under the intermediate bank 

community development performance 

standards, starting with the entire 

evaluation period preceding the bank’s 

next CRA examination. 

(B) The intermediate bank may 

request additional consideration for 

activities that qualify under the Retail 

Services and Products Test or the 

Community Development Services Test 

and, after considering such activities, 

the [Agency] may adjust the bank’s 

rating at the institution level from 

‘‘Satisfactory’’ to ‘‘Outstanding,’’ if the 

bank would have received a 

‘‘Satisfactory’’ before the additional 

consideration. 

(3) Small banks. (i) To evaluate the 

performance of a small bank, the 

[Agency] applies the small bank 

performance standards as provided in 

§ __.29(a), unless the bank chooses 

evaluation under the Retail Lending 

Test. 

(ii) If a small bank chooses evaluation 

under the Retail Lending Test, the 

following applies: 

(A) The [Agency] applies the same 

provisions used for evaluating 

intermediate banks under the Retail 

Lending Test to the small bank, except 

for § __.22(a)(3). 

(B) The [Agency] evaluates the small 

bank for the evaluation period 

preceding the bank’s next CRA 

examination under the Retail Lending 

Test and continues evaluations under 

the Retail Lending Test for subsequent 

evaluation periods until the bank opts 

out. If a small bank opts out of the Retail 

Lending Test, the [Agency] reverts to 

evaluating the bank under the small 

bank performance standards as provided 

in § __.29(a), starting with the entire 

evaluation period preceding the bank’s 

next CRA examination. 

(C) The small bank may request 

additional consideration for activities 

that qualify under the Retail Services 

and Products Test, the Community 

Development Financing Test, or the 

Community Development Services Test 

and, after considering such activities, 

the [Agency] may adjust the bank’s 

rating at the institution level from 

‘‘Satisfactory’’ to ‘‘Outstanding.’’ 

(4) Wholesale or limited purpose 

banks. (i) The [Agency] evaluates a 

wholesale or limited purpose bank 

under the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks. 

(ii) A wholesale or limited purpose 

bank may request additional 

consideration for activities that qualify 

under the Community Development 

Services Test and, after considering 

such activities, the [Agency] may adjust 

the bank’s rating at the institution level 

from ‘‘Satisfactory’’ to ‘‘Outstanding.’’ 

(5) Banks operating under a strategic 

plan. The [Agency] evaluates the 

performance of a bank that chooses 

evaluation under a strategic plan 

approved under § __.27 in accordance 

with the goals set forth in such plan. 

(c) Activities of [operations 

subsidiaries or operating subsidiaries] 

and other affiliates. In the performance 

evaluation of a bank, the [Agency] 

considers the qualifying activities of a 

bank’s [operations subsidiaries or 

operating subsidiaries] and other 

affiliates in accordance with paragraphs 

(c)(1) and (c)(2) of this section, provided 

that no other bank, other [operations 

subsidiaries or operating subsidiaries], 

or other affiliates of the bank claim the 

activity for purposes of this part. 

(1) Activities of [operations 

subsidiaries or operating subsidiaries]. 

The [Agency] considers the qualifying 

activities of a bank’s [operations 

subsidiaries or operating subsidiaries] as 

part of the bank’s performance 

evaluation, unless an [operations 

subsidiary or operations subsidiary] is 

independently subject to the CRA. The 

bank must collect, maintain, and report 

data on the activities of its [operations 

subsidiaries or operating subsidiaries] as 

provided in § __.42(d). 

(2) Activities of other affiliates. The 

[Agency] considers the qualifying 

activities of affiliates of a bank that are 

not [operations subsidiaries or operating 

subsidiaries], if the bank so chooses, 

subject to the following: 

(i) The affiliate is not independently 

subject to the CRA. 

(ii) The bank collects, maintains, and 

reports data on the activities of the 

affiliate as provided in § __.42(e). 

(iii) Under the Retail Lending Test, if 

a bank chooses to have the [Agency] 

consider retail loans within a retail loan 

category that are made or purchased by 

one or more of the bank’s affiliates in a 

particular facility-based assessment 

area, retail lending assessment area, 

outside retail lending area, state, or 

multistate MSA, or nationwide, the 

[Agency] will consider, subject to 

paragraphs (c)(2)(i) and (c)(2)(ii) of this 

section, all of the retail loans within that 

retail loan category made by all of the 

bank’s affiliates in, respectively, the 

particular facility-based assessment 

area, retail lending assessment area, 

outside retail lending area, state, or 

multistate MSA, or nationwide. 

(d) Community development 

financing by a consortium or a third 

party. If a bank participates in a 

consortium that makes community 

development loans or community 

development investments, or if a bank 

invests in a third party that makes such 

loans or investments, those loans or 

investments may be considered, at the 

bank’s option, subject to the following 

limitations: 

(i) The bank must report the data 

pertaining to these loans and 

investments under § __.42(f); 

(ii) If the participants or investors 

choose to allocate qualifying loans or 

investments among themselves for 


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consideration under this section, no 

participant or investor may claim a loan 

origination, loan purchase, or 

investment if another participant or 

investor claims the same loan 

origination, loan purchase, or 

investment; and 

(iii) The bank may not claim loans or 

investments accounting for more than 

its percentage share (based on the level 

of its participation or investment) of the 

total qualifying loans or investments 

made by the consortium or third party. 

(e) Performance context information 

considered. When applying the 

performance tests and standards 

provided in paragraphs (a) and (b) of 

this section, including in considering 

whether to approve a strategic plan, the 

[Agency] may consider performance 

context information to the extent that it 

is not considered as part of the tests and 

standards in paragraphs (a) and (b) of 

this section, including: 

(1) Any information regarding a 

bank’s institutional capacity or 

constraints, including the size and 

financial condition of the bank, safety 

and soundness limitations, or any other 

bank-specific factors that significantly 

affect the bank’s ability to conduct retail 

banking or community development 

activities in its facility-based assessment 

areas; 

(2) Any information regarding the 

bank’s past performance; 

(3) Demographic data on income 

levels and income distribution, nature 

of housing stock, housing costs, 

economic climate, or other relevant data 

pertaining to the geographic areas in 

which the bank is evaluated; 

(4) Any information about retail 

banking and community development 

needs and opportunities in the 

geographic areas in which the bank is 

evaluated provided by the bank or other 

relevant sources, including but not 

limited to members of the community, 

community organizations, state, local, 

and tribal governments, and economic 

development agencies; 

(5) Data and information provided by 

the bank regarding the bank’s business 

strategy and product offerings; 

(6) The bank’s public file, as 

described in § __.43, including any oral 

or written comments about the bank’s 

CRA performance submitted to the bank 

or the [Agency] and the bank’s 

responses to those comments; and 

(7) Any other information deemed 

relevant by the [Agency]. 

(f) Conclusions and ratings. (1) 

Conclusions. As provided in § __.28 and 

appendix C of this part, the [Agency] 

assigns to a bank, other than a small 

bank, conclusions for the bank’s 

performance on the applicable tests and 

standards in this section, as follows: 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ 

‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ or ‘‘Substantial 

Noncompliance.’’ As provided in § __.28 

and appendix E of this part, the 

[Agency] assigns to a small bank 

conclusions for the bank’s performance 

on the applicable tests and standards in 

this section, as follows: ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance.’’ 

(2) Ratings. The [Agency] assigns to a 

bank a rating regarding its overall CRA 

performance, as applicable, in each 

state, in each multistate MSA, and at the 

institution level. The ratings assigned by 

the [Agency] reflect 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. As provided in 

§ __.28 and appendices D and E of this 

part, the [Agency] assigns to a bank a 

rating of: ‘‘Outstanding’’; ‘‘Satisfactory’’; 

‘‘Needs to Improve’’; or ‘‘Substantial 

Noncompliance.’’ 

(3) Performance scores. As provided 

in § __.28 and appendices C and D of 

this part, the [Agency] develops 

performance scores in connection with 

assigning conclusions and ratings for a 

bank, other than a small bank evaluated 

under the small bank performance 

standards in § __.29(a), a wholesale or 

limited purpose bank under the 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks in § __.26, or a bank evaluated 

based on a strategic plan under § __.27. 

(g) Safe and sound operations. The 

CRA and this part do not require a bank 

to make loans or investments or to 

provide services that are inconsistent 

with safe and sound banking practices, 

including underwriting standards. 

Banks are permitted to develop and 

apply flexible underwriting standards 

for loans that benefit low- or moderateincome individuals, small businesses or 

small farms, and low- or moderateincome census tracts, only if consistent 

with safe and sound operations. 

§ __.22 Retail lending test. 

(a) Retail Lending Test—scope. (1) 

General. The Retail Lending Test 

evaluates a bank’s record of helping to 

meet the credit needs of its facilitybased assessment areas through a bank’s 

origination and purchase of retail loans 

in each facility-based assessment area. 

(2) Large banks. For large banks, the 

Retail Lending Test also evaluates a 

bank’s record of helping to meet credit 

needs, through the bank’s origination 

and purchase of retail loans, as 

applicable: 

(i) In each retail lending assessment 

area; and 

(ii) In its outside retail lending area, 

at the institution level. 

(3) Intermediate banks. For 

intermediate banks, the Retail Lending 

Test also evaluates, at the institution 

level, a bank’s record of helping to meet 

credit needs through the bank’s 

origination and purchase of retail loans 

in its outside retail lending area if the 

bank originates and purchases over 50 

percent of its retail loans, by dollar 

amount, outside of its facility-based 

assessment areas over the relevant 

evaluation period. 

(4) Major product line. (i) Major 

product line refers to retail lending in 

each of the following, separate 

categories: 

(A) Closed-end home mortgage loans: 

(to include home purchase, home 

refinance, home improvement, and 

other purpose closed-end loans, but not 

including multifamily loans); 

(B) Open-end home mortgage loans (to 

include, but not limited to, home equity 

lines of credit, but not including 

multifamily loans); 

(C) Multifamily loans; 

(D) Small business loans; 

(E) Small farm loans; and 

(F) Automobile loans; 

(ii) Major product line with regard to 

closed-end home mortgage loans, openend home mortgage loans, multifamily 

loans, small business loans, and small 

farm loans, respectively, means any 

category of such loans that individually 

comprises 15 percent or more of a 

bank’s retail lending in a particular 

facility-based assessment area, retail 

lending assessment area, or outside 

retail lending area, by dollar amount, 

over the relevant evaluation period; 

(iii) (A) Major product line with 

regard to automobile loans means 

automobile loans that collectively 

comprise 15 percent or more of a bank’s 

retail lending in a particular facilitybased assessment area, retail lending 

assessment area, or outside retail 

lending area, based on a combination of 

the dollar amount and number of loans, 

over the relevant evaluation period. 

(B) Specifically, automobile loans will 

be considered a major product line if the 

average of the percentage of automobile 

lending dollars out of total retail lending 

dollars and the percentage of 

automobile loans by loan count out of 

all total retail lending by loan count is 

15 percent or greater in a particular 

facility-based assessment area, retail 

lending assessment area, or outside 

retail lending area. 

(5) Exclusion. (i) A retail loan may be 

considered only under the Retail 

Lending Test and is not eligible for 


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consideration under the Community 

Development Financing Test in § __.24 

or the intermediate bank community 

development performance standards in 

§ __.29(b)(2); 

(ii) Notwithstanding paragraph 

(a)(5)(i), a multifamily loan under § __

.13(b) may be considered under the 

Retail Lending Test and under the 

Community Development Financing 

Test; 

(iii) Notwithstanding paragraph 

(a)(5)(i), in the case of an intermediate 

bank that is not required to report a 

home mortgage loan, a small business 

loan, or a small farm loan, the bank may 

opt to have the loan considered under 

the Retail Lending Test or, if the loan is 

a qualifying activity pursuant to § __.13, 

under the Community Development 

Financing Test or the intermediate bank 

community development performance 

standards in § __.29(b)(2). 

(b) Methodology. (1) Retail lending 

volume screen. The [Agency] first 

reviews numerical metrics regarding a 

bank’s retail lending volume in each 

facility-based assessment area that are 

developed under paragraph (c) of this 

section. 

(2) Retail lending distribution metrics. 

The [Agency] also uses numerical 

metrics, developed under paragraph (d) 

of this section, to evaluate the 

geographic and borrower distribution of 

a bank’s major product lines in each 

facility-based assessment area and, as 

applicable: 

(i) In each retail lending assessment 

area; and 

(ii) In its outside retail lending area, 

at the institution level, using a tailored 

benchmark based on the bank’s specific 

geographic markets served. 

(3) Additional factors considered. The 

[Agency] also uses criteria described in 

paragraph (e) of this section to evaluate 

a bank’s retail lending performance in 

its facility-based assessment areas. 

(c) Retail lending volume screen. (1) 

Banks that meet or surpass the retail 

lending volume threshold in a facilitybased assessment area. If the [Agency] 

determines that a bank meets or 

surpasses the Retail Lending Volume 

Threshold in a facility-based assessment 

area under paragraph (c)(3) of this 

section: 

(i) The [Agency] will evaluate a bank’s 

retail loan distribution for each major 

product line under paragraph (d) of this 

section to determine a bank’s applicable 

recommended conclusion for retail 

lending performance; and 

(ii) The [Agency] will assign the bank 

a recommended Retail Lending Test 

conclusion in the facility-based 

assessment area based upon its retail 

lending performance under paragraphs 

(c) and (d) of this section. The [Agency] 

will also evaluate the criteria in 

paragraph (e) of this section to 

determine whether to adjust the 

recommended Retail Lending Test 

conclusion. 

(2) Banks that fail to meet the retail 

lending volume threshold in a facilitybased assessment area. If the [Agency] 

determines that a bank fails to meet the 

Retail Lending Volume Threshold in a 

facility-based assessment area under 

paragraph (c)(3) of this section: 

(i) If, after reviewing the factors in in 

paragraph (c)(2)(iii) of this section, the 

[Agency] determines that there is an 

acceptable basis for the bank failing to 

meet Retail Lending Volume Threshold 

in a facility-based assessment area, the 

[Agency] will evaluate the bank’s retail 

loan distribution for each major product 

line under paragraph (d) of this section 

to develop a recommended Retail 

Lending Test conclusion. The [Agency] 

will also evaluate the criteria in 

paragraph (e) of this section to 

determine whether to adjust the 

recommended Retail Lending Test 

conclusion; 

(ii) (A) If, after reviewing the factors 

described in paragraph (c)(2)(iii) of this 

section, the [Agency] determines there 

is not an acceptable basis for a large 

bank failing to meet Retail Lending 

Volume Threshold in a facility-based 

assessment area, the [Agency] will 

assign the bank a Retail Lending Test 

conclusion of ‘‘Substantial 

Noncompliance’’ or ‘‘Needs to Improve’’ 

in that facility-based assessment area 

based upon: 

(1) The bank’s retail lending volume 

and the extent by which it failed to meet 

the Retail Lending Volume Threshold; 

(2) Its retail loan distribution for each 

major product line under paragraph (d) 

of this section; and 

(3) The criteria in paragraph (e) of this 

section. 

(B) If, after reviewing the factors 

described in paragraph (c)(2)(iii) of this 

section, the [Agency] determines there 

is not an acceptable basis for an 

intermediate bank, or a small bank that 

opts to be evaluated under the Retail 

Lending Test, failing to meet the Retail 

Lending Volume Threshold in a facilitybased assessment area, the [Agency] will 

take into account the bank’s 

performance relative to the Retail 

Lending Volume Threshold when 

determining the bank’s recommended 

Retail Lending Test conclusion in that 

facility-based assessment area. 

(iii) The [Agency] will determine 

whether there is an acceptable basis for 

a bank failing to meet the Retail Lending 

Volume Threshold in a facility-based 

assessment area by considering the 

bank’s institutional capacity and 

constraints, including the financial 

condition of a bank, the presence or lack 

thereof of other lenders in the 

geographic area, safety and soundness 

limitations, business strategy, and other 

factors that limit the bank’s ability to 

lend in the assessment area. 

(3) Retail lending volume threshold. 

The [Agency] determines that a bank 

has met or surpassed the Retail Lending 

Volume Threshold in a facility-based 

assessment area where the bank has a 

Bank Volume Metric of 30 percent or 

greater of the Market Volume 

Benchmark for that facility-based 

assessment area. The Bank Volume 

Metric and the Market Volume 

Benchmark for a facility-based 

assessment are derived under section I 

of appendix A of this part. 

(d) Retail lending distribution metrics. 

(1) Scope. For each major product line, 

the [Agency] evaluates the geographic 

and borrower distributions of a bank’s 

retail loans, as applicable: 

(i) In each facility-based assessment 

area; 

(ii) In each retail lending assessment 

area; and 

(iii) In its outside retail lending area, 

at the institution level. 

(2) Recommended Retail Lending Test 

conclusions. (i) Using bank borrower 

and geographic distributions for each 

major product line compared against 

applicable performance ranges, as 

described in appendix A of this part, the 

[Agency] will assign a bank 

recommended Retail Lending Test 

conclusion, as determined in appendix 

A of this part, in: 

(A) (1) Each facility-based assessment 

area of a large bank where the bank 

meets or surpasses the Retail Lending 

Volume Threshold under paragraph (c) 

of this section or the [Agency] 

determines that the bank has an 

acceptable basis for failing to meet the 

Retail Lending Volume Threshold; and 

(2) Each facility-based assessment 

area of an intermediate bank; 

(B) Each retail lending assessment 

area of a large bank; and 

(C) As applicable, a large bank’s or an 

intermediate bank’s outside retail 

lending area, at the institution level. 

(ii) Geographic distribution measures. 

Regarding a bank’s geographic 

distribution of retail lending, the 

[Agency] will review a bank’s 

performance in low- and moderateincome census tracts using the 

following measures: 

(A) A Geographic Bank Metric, 

derived under section III.1 of appendix 

A of this part; 


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(B) A Geographic Market Benchmark, 

derived under section III.2.a of 

appendix A of this part; and 

(C) A Geographic Community 

Benchmark, derived under section 

III.2.b of appendix A of this part. 

(D). For each major product line, the 

[Agency] will compare the following in 

low-income census tracts and moderateincome census tracts, respectively: 

(1) The bank’s performance, as 

captured by the Geographic Bank Metric 

and as described in sections V.2.b and 

V.2.c of appendix A of this part, 

compared against: 

(2) Performance ranges, with 

boundaries based upon the Geographic 

Market Benchmark and the Geographic 

Community Benchmark as described in 

section V.2 of appendix A of this part, 

associated with each potential 

recommended Retail Lending Test 

performance conclusion: 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ 

‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ and ‘‘Substantial 

Noncompliance.’’ 

(iii) Borrower distribution measures. 

Regarding the bank’s borrower 

distribution of retail lending, apart from 

multifamily lending, the [Agency] will 

review a bank’s retail lending 

performance regarding, as applicable, 

low-income borrowers and moderateincome borrowers, small businesses 

with gross annual revenues of $250,000 

or less and small businesses with gross 

annual revenues of more than $250,000 

but less than or equal to $1 million, and 

small farms with gross annual revenues 

of $250,000 or less and small farms with 

gross annual revenues of more than 

$250,000 but less than or equal to $1 

million, using the following measures: 

(A) A Borrower Bank Metric, derived 

under section IV.1 of appendix A of this 

part; 

(B) A Borrower Market Benchmark, 

derived under section IV.2.a of 

appendix A of this part; and 

(C) A Borrower Community 

Benchmark, derived under section 

IV.2.b of appendix A of this part. 

(D) For each major product line, the 

[Agency] will compare the following 

regarding lending to, as applicable: lowincome borrowers and moderate-income 

borrowers; small businesses with gross 

annual revenues of $250,000 or less and 

small businesses with gross annual 

revenues of more than $250,000 but less 

than or equal to $1 million, and small 

farms with gross annual revenues of 

$250,000 or less and small farms with 

gross annual revenues of more than 

$250,000 but less than or equal to $1 

million: 

(1) The bank’s performance, as 

captured by the Borrower Bank Metric 

and as described in section V.2 of 

appendix A of this part, compared 

against: 

(2) Performance ranges, with 

boundaries based upon the Borrower 

Market Benchmark and the Borrower 

Community Benchmark as described in 

sections V.2.d and V.2.e of appendix A 

of this part, associated with each 

potential recommended Retail Lending 

Test performance conclusion: 

‘‘Outstanding’’; ‘‘High Satisfactory’’; 

‘‘Low Satisfactory’’; ‘‘Needs to 

Improve’’; and ‘‘Substantial 

Noncompliance.’’ 

(e) Additional factors considered 

when evaluating retail lending 

performance. In addition to considering 

how a bank performs relative to the 

Retail Lending Volume Threshold 

described in paragraph (c) of this 

section and the performance ranges 

described in paragraph (d) of this 

section, the [Agency] evaluates the retail 

lending performance of a bank in each 

facility-based assessment area by 

considering: 

(1) Information indicating that a bank 

has purchased retail loans for the sole 

or primary purpose of inappropriately 

influencing its retail lending 

performance evaluation, including but 

not limited to subsequent resale of some 

or all of those retail loans or any 

indication that some or all of the loans 

have been considered in multiple banks’ 

CRA evaluations. 

(2) The dispersion of retail lending 

within the facility-based assessment 

area to determine whether there are gaps 

in lending in the facility-based 

assessment area that are not explained 

by performance context. 

(3) The number of banks whose 

reported retail lending and deposits data 

is used to establish the applicable Retail 

Lending Volume Threshold, geographic 

distribution, and borrower distribution 

thresholds. 

(4) Missing or faulty data that would 

be necessary to calculate the relevant 

metrics and benchmarks or any other 

factors that prevent the [Agency] from 

calculating a recommended conclusion. 

If unable to calculate a recommended 

conclusion, the [Agency] will assign a 

Retail Lending Test conclusion based on 

consideration of the relevant available 

data. 

(f) Retail Lending Test performance 

conclusions and ratings. (1) 

Conclusions. As provided in § __.28 and 

appendix C of this part, the [Agency] 

assigns conclusions for a bank’s Retail 

Lending Test performance in, as 

applicable, its facility-based assessment 

areas, retail lending assessment areas, 

and outside retail lending area. As 

described in appendix C of this part, 

conclusions assigned for a bank’s 

performance in facility-based 

assessment areas and, as applicable, 

retail lending assessment areas are the 

basis for assigned conclusions at the 

state, multistate MSA, and institution 

levels. As applicable, a bank’s assigned 

conclusion at the institution level is also 

informed by the bank’s retail lending 

activities in its outside retail lending 

area. 

(2) Ratings. As provided in § __.28 

and appendix D of this part, the 

[Agency] incorporates a bank’s Retail 

Lending Test conclusions into, as 

applicable, its state, multistate MSA, 

and institution ratings. 

§ __.23 Retail services and products test. 

(a) Scope of Retail Services and 

Products Test. (1) In general. The Retail 

Services and Products Test evaluates the 

availability and responsiveness of a 

bank’s retail banking services and 

products targeted to low- and moderateincome individuals and in low- and 

moderate-income census tracts in a 

bank’s facility-based assessment areas 

and at the state, multistate MSA, and 

institution levels. The [Agency] 

considers the bank’s delivery systems, 

as described in paragraph (b) of this 

section, and the bank’s products and 

other services, as described in paragraph 

(c) of this section. 

(2) Exclusion. Activities considered 

for a bank under the Community 

Development Services Test may not be 

considered under the Retail Services 

and Products Test. 

(b) Delivery systems. To evaluate a 

bank’s delivery systems, the [Agency] 

analyzes the following: branch 

availability and services, as provided in 

paragraph (b)(1) of this section and 

remote service facility availability, as 

provided in paragraph (b)(2) of this 

section. For a large bank that had 

average assets of over $10 billion in both 

of the prior two calendar years, based on 

the assets reported on its four quarterly 

Call Reports for each of those calendar 

years, the [Agency] also analyzes digital 

and other delivery systems, as provided 

in paragraph (b)(3) of this section. A 

large bank that had average assets of $10 

billion or less in either of the prior two 

calendar years, based on the assets 

reported on its four quarterly Call 

Reports for each of those calendar years, 

may request additional consideration 

under the Retail Services and Products 

Test for its digital and other delivery 

systems under paragraph (b)(3) of this 

section. 

(1) Branch availability and services. 

The [Agency] evaluates a bank’s branch 

distribution, branch openings and 

closings, and branch hours of operation 


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and services responsive to the needs of 

low- and moderate-income individuals 

and in low- and moderate-income 

communities. 

(i) Branch distribution. The [Agency] 

evaluates a bank’s branch distribution 

based on the following: 

(A) Branch distribution metrics. The 

[Agency] considers the number and 

percentage of the bank’s branches 

within low-, moderate-, middle-, and 

upper-income census tracts. 

(B) Benchmarks. The [Agency]’s 

consideration of the branch distribution 

metrics in a facility-based assessment 

area is informed by the following 

benchmarks: 

(1) Percentage of census tracts in the 

facility-based assessment area by low-, 

moderate-, middle-, and upper-income 

census tracts, respectively; 

(2) Percentages of households in the 

facility-based assessment area by low-, 

moderate-, middle-, and upper-income 

census tracts, respectively; 

(3) Percentage of total businesses in 

the facility-based assessment area by 

low-, moderate-, middle-, and upperincome census tracts, respectively; and 

(4) Percentage of all full-service bank 

branches in the facility-based 

assessment area by low-, moderate-, 

middle-, and upper-income census 

tracts, respectively. 

(C) Geographic considerations. The 

[Agency] considers the availability of 

branches in the following census tracts: 

(1) Low branch access census tracts or 

very low branch access census tracts, as 

defined in § __.12; 

(2) Middle- and upper-income census 

tracts in which branches deliver 

services to low- and moderate-income 

individuals; 

(3) Distressed or underserved 

nonmetropolitan middle-income census 

tracts; and 

(4) Native Land Areas. 

(ii) Branch openings and closings. 

The [Agency] evaluates the bank’s 

record of opening and closing branches 

since the previous examination to 

inform the degree of accessibility of 

banking services to low- and moderateincome individuals and low- and 

moderate-income census tracts. 

(iii) Branch hours of operation and 

services. The [Agency] evaluates the 

following: 

(A) The reasonableness of branch 

hours in low- and moderate-income 

census tracts compared to middle- and 

upper-income census tracts, including 

but not limited to whether branches 

offer extended and weekend hours. 

(B) The range of services provided at 

branches in low-, moderate-, middle-, 

and upper-income census tracts, 

respectively, including but not limited 

to: 

(1) Bilingual and translation services; 

(2) Free or low-cost check cashing 

services, including but not limited to 

government and payroll check cashing 

services; 

(3) Reasonably priced international 

remittance services; and 

(4) Electronic benefit transfer 

accounts. 

(C) The degree to which branch 

services are responsive to the needs of 

low- and moderate-income individuals 

in a bank’s facility-based assessment 

areas. 

(2) Remote service facility availability. 

The [Agency] evaluates a bank’s remote 

service facility availability in a facilitybased assessment area based on the 

following: 

(i) Remote service facility distribution 

metrics. The [Agency] considers the 

number and percentage of the bank’s 

remote service facilities within low-, 

moderate-, middle-, and upper-income 

census tracts. 

(ii) Benchmarks. The [Agency]’s 

consideration of the remote service 

facility distribution metrics is informed 

by the following benchmarks: 

(A) Percentage of census tracts in the 

facility-based assessment area by low-, 

moderate-, middle-, and upper-income 

census tracts, respectively; 

(B) Percentage of households in the 

facility-based assessment area by low-, 

moderate-, middle-, and upper-income 

census tracts, respectively; and 

(C) Percentage of total businesses in 

the facility-based assessment area by 

low-, moderate-, middle-, and upperincome census tracts, respectively. 

(iii) Access to out-of-network remote 

service facilities. The [Agency] reviews 

whether the bank offers customers feefree access to out-of-network ATMs in 

low- and moderate-income census 

tracts. 

(3) Digital and other delivery systems. 

The [Agency] evaluates the availability 

and responsiveness of a bank’s digital 

and other delivery systems, including to 

low- and moderate-income individuals, 

by reviewing the following: 

(i) Digital activity by individuals in 

low-, moderate-, middle-, and upperincome census tracts, respectively, such 

as: 

(A) The number of checking and 

savings accounts opened digitally in 

low-, moderate-, middle-, and upperincome census tracts, respectively; 

(B) Accountholder usage data by type 

of digital and other delivery systems in 

low-, moderate-, middle-, and upperincome census tracts, respectively; 

(ii) The range of digital and other 

delivery systems, including but not 

limited to online banking, mobile 

banking, and telephone banking; and 

(iii) The bank’s strategy and initiatives 

to serve low- and moderate-income 

individuals with digital and other 

delivery systems. 

(c) Credit and deposit products. As 

provided in paragraph (c)(1) of this 

section, the [Agency] analyzes the 

responsiveness of credit products and 

programs not covered under paragraph 

(b) of this section to the needs of lowand moderate-income individuals, small 

businesses, and small farms. As 

provided in paragraph (c)(2) of this 

section, for a large bank that had average 

assets of over $10 billion in both of the 

prior two calendar years, based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years, 

the [Agency] also analyzes a bank’s 

deposit products and other services not 

covered under paragraph (b) of this 

section. A large bank that had average 

assets of $10 billion or less in either of 

the prior two calendar years, based on 

the assets reported on its four quarterly 

Call Reports for each of those calendar 

years, may request additional 

consideration under the Retail Services 

and Products Test for its deposit 

products and other services under 

paragraph (c)(2) of this section. 

(1) Responsiveness of credit products 

and programs to the needs of low- and 

moderate-income individuals, small 

businesses, and small farms. The 

[Agency] evaluates whether a bank’s 

credit products and programs are, in a 

safe and sound manner, responsive to 

the needs of low- and moderate-income 

individuals (including through low-cost 

education loans), small businesses, and 

small farms. Categories of responsive 

credit products and programs may 

include, but are not limited to, credit 

products and programs that: 

(i) Facilitate home mortgage and 

consumer lending targeted to low- or 

moderate-income borrowers in a safe 

and sound manner. 

(ii) Meet the needs of small businesses 

and small farms, including the smallest 

businesses and smallest farms, in a safe 

and sound manner; or 

(iii) Are conducted in cooperation 

with MDIs, WDIs, LICUs, or Treasury 

Department-certified CDFIs in a safe and 

sound manner. 

(2) Deposit products responsive to the 

needs of low- and moderate-income 

individuals. (i) Availability of deposit 

products responsive to the needs of lowand moderate-income individuals. The 

[Agency] evaluates whether the bank 

offers deposit products that have 

features and cost characteristics 

responsive to the needs of low- and 

moderate-income individuals, 

consistent with safe and sound 

operations, including but not limited to 


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deposit products with the following 

types of features: 

(A) Low-cost features, including but 

not limited to deposit products with no 

overdraft or insufficient funds fees, no 

or low minimum opening balance, no or 

low monthly maintenance fees, or free 

or low-cost check-cashing and bill-pay 

services; 

(B) Features facilitating broad 

functionality and accessibility, 

including but not limited to deposit 

products with in-network ATM access, 

debit cards for point-of-sale and bill 

payments, and immediate access to 

funds for customers cashing 

government, payroll, or bank-issued 

checks; or 

(C) Features facilitating inclusivity of 

access by persons without banking or 

credit histories, or with adverse banking 

histories. 

(ii) Usage of deposit products 

responsive to the needs of low- and 

moderate-income individuals. The 

[Agency] evaluates the usage of a bank’s 

deposit products that have features and 

cost characteristics responsive to the 

needs of low- and moderate-income 

individuals by considering, for example, 

the following: 

(A) The number of responsive deposit 

accounts opened and closed during each 

year of the evaluation period in low-, 

moderate-, middle-, and upper-income 

census tracts, respectively. 

(B) In connection with § __

.23(c)(2)(ii)(A), the percentage of 

responsive deposit accounts compared 

to total deposit accounts for each year 

of the evaluation period. 

(C) Marketing, partnerships, and other 

activities that the bank has undertaken 

to promote awareness and use of 

responsive deposit accounts by low- and 

moderate-income individuals. 

(d) Retail Services and Products Test 

performance conclusions and ratings. 

(1) Conclusions. As provided in § __.28 

and appendix C of this part, the 

[Agency] assigns conclusions for the 

retail services and products 

performance of a bank based upon the 

[Agency]’s assessment of the bank’s 

performance in, as applicable, each 

facility-based assessment area, state, 

multistate MSA, and at the institution 

level. 

(2) Ratings. As provided in § __.28 

and appendix D of this part, the 

[Agency] incorporates a bank’s Retail 

Services and Products Test conclusions 

into, as applicable, its state, multistate 

MSA, and institution ratings. 

§ __.24 Community development financing 

test. 

(a) Scope of Community Development 

Financing Test. (1) In general. The 

Community Development Financing 

Test evaluates a bank’s record of helping 

to meet the community development 

financing needs of the bank’s facilitybased assessment areas, states, 

multistate MSAs, and nationwide area, 

through its provision of community 

development loans and community 

development investments. In 

determining whether a bank’s 

community development loans or 

community development investments 

serve a facility-based assessment area, 

state, multistate MSA, or nationwide 

area, the [Agency] considers information 

provided by the bank and, as needed, 

publicly available information and 

information provided by government or 

community sources that demonstrates 

that the activity includes serving 

individuals or census tracts located 

within the facility-based assessment 

area, state, multistate MSA, or 

nationwide area. Community 

development financing dollars will be 

allocated in accordance with section 13 

of appendix B of this part. 

(2) Exclusion. (i) In general, a retail 

loan may only be considered under the 

Retail Lending Test in § __.22 and is not 

eligible for consideration under the 

Community Development Financing 

Test; 

(ii) A multifamily loan described in 

§ __.13(b) may be considered both under 

the Retail Lending Test in § __.22 and 

under the Community Development 

Financing Test; 

(iii) An intermediate bank that is not 

required to report a home mortgage 

loan, a small business loan, or a small 

farm loan may opt to have the home 

mortgage loan, small business loan, or 

small farm loan considered either under 

the Retail Lending Test in § __.22 or, if 

the loan is a qualifying activity pursuant 

to § __.13, under the Community 

Development Financing Test or the 

intermediate bank community 

development evaluation in § __.29, as 

applicable. 

(b) Bank performance in a facilitybased assessment area. The [Agency] 

evaluates the community development 

financing performance of a bank in a 

facility-based assessment area based on 

consideration of the numerical metrics 

under paragraph (b)(1) of this section 

and a review of the impact and 

responsiveness of the bank’s activities 

in a facility-based assessment area 

under § __.15. 

(1) Bank Assessment Area Community 

Development Financing Metric. The 

Bank Assessment Area Community 

Development Financing Metric, as 

specified in section 2 of appendix B of 

this part, measures the dollar value of a 

bank’s community development loans 

and community development 

investments that serve the facility-based 

assessment area for each year, averaged 

over the years of the evaluation period, 

against the dollar value of deposits from 

the bank’s deposit accounts in the 

facility-based assessment area, averaged 

over the evaluation period. 

(2) Benchmarks. The Bank 

Assessment Area Community 

Development Financing Metric is 

compared to the following benchmarks: 

(i) Assessment Area Community 

Development Financing Benchmark. 

The Assessment Area Community 

Development Financing Benchmark, as 

specified in section 3 of appendix B of 

this part, measures the community 

development financing activity of large 

banks in the aggregate in the bank’s 

facility-based assessment area against 

the total dollar value of deposits from 

large bank deposit accounts in the 

facility-based assessment area. 

(ii) Metropolitan and 

Nonmetropolitan Nationwide 

Community Development Financing 

Benchmarks. The Metropolitan and 

Nonmetropolitan Nationwide 

Community Development Financing 

Benchmarks, as specified in section 4 of 

appendix B of this part, measure the 

community development financing 

activity of large banks in the aggregate 

nationally for metropolitan areas (if the 

relevant facility-based assessment area 

is in a metropolitan area) or for 

nonmetropolitan areas (if the relevant 

facility-based assessment area is in a 

nonmetropolitan area) against the total 

dollar value of deposits from large bank 

deposit accounts in those areas, 

respectively. 

(c) Bank performance in a state, 

multistate MSA, and nationwide area. 

(1) In general. The [Agency] evaluates 

the community development financing 

performance of a bank in a state, 

multistate MSA, and nationwide area, as 

applicable, based on the two 

components in paragraph (c)(1)(i) and 

(c)(1)(ii) of this section. The [Agency] 

assigns a conclusion for the bank’s 

performance at each state, multistate 

MSA, and nationwide area, respectively, 

based on a weighted combination of 

these components in accordance with 

section 15 of appendix B of this part: 

(i) A weighted average under 

paragraphs (c)(2)(i), (c)(3)(i), and (c)(4)(i) 

of this section of the bank’s facilitybased assessment area conclusions for 

each area where conclusions are 

assigned, as applicable, calculated in 

accordance with section 16 of appendix 

B of this part; and 

(ii) An assessment under paragraphs 

(c)(2)(ii), (c)(3)(ii), and (c)(4)(ii) of this 

section, respectively, which combines 


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consideration of the applicable metrics 

and benchmarks with a review of the 

impact of the bank’s activities in those 

respective areas under § __.15. 

(2) Bank performance in a state. The 

two components of the [Agency]’s 

assessment of a bank’s community 

development performance in a state are 

as follows: 

(i) Component one—weighted average 

of facility-based assessment area 

performance conclusions in a state. The 

[Agency] considers the weighted 

average of the bank’s conclusions for its 

facility-based assessment areas within 

the state, calculated in accordance with 

section 16 of appendix B of this part. 

(ii) Component two—metrics and 

impact assessment in a state. The 

[Agency] considers the numerical 

metrics of this paragraph and the impact 

of the bank’s activities in a state under 

§ __.15. The [Agency] combines the 

results of the metrics and benchmarks 

and the impact review in accordance 

with section 15.iii of appendix B of this 

part. 

(A) Bank State Community 

Development Financing Metric. The 

Bank State Community Development 

Financing Metric, as specified in section 

5 of appendix B of this part, measures 

the dollar value of a bank’s community 

development loans and community 

development investments that serve a 

state against the dollar value of deposits 

from the bank’s deposit accounts in the 

state. 

(B) Benchmarks. The Bank State 

Community Development Financing 

Metric is compared to the following 

benchmarks: 

(1) State Community Development 

Financing Benchmark. The State 

Community Development Financing 

Benchmark, as specified in section 6 of 

appendix B of this part, measures the 

community development financing 

activity of large banks in the state in the 

aggregate against the total dollar value 

of deposits from large bank deposit 

accounts in the state. 

(2) State Weighted Assessment Area 

Community Development Financing 

Benchmark. The State Weighted 

Assessment Area Community 

Development Financing Benchmark, as 

specified in section 7 of appendix B of 

this part, is the average of the bank’s 

Assessment Area Community 

Development Financing Benchmarks for 

each facility-based assessment area 

within the state, weighted in accordance 

with section 17 of appendix B of this 

part. 

(3) Bank performance in a multistate 

MSA. The two components of the 

[Agency]’s assessment of a bank’s 

community development performance 

in a multistate MSA are as follows: 

(i) Component one—weighted average 

of facility-based assessment area 

performance in a multistate MSA. The 

[Agency] considers the weighted 

average of the bank’s conclusions for its 

facility-based assessment areas within 

the multistate MSA, calculated in 

accordance with section 16 of appendix 

B of this part. 

(ii) Component two—metrics and 

impact assessment in a multistate MSA. 

The [Agency] considers the numerical 

metrics in this paragraph and the impact 

of the bank’s activities in a multistate 

MSA under § __.15. The [Agency] 

combines the results of the metrics and 

benchmarks and the impact review in 

accordance with section 15.iii of 

appendix B of this part. 

(A) Bank Multistate MSA Community 

Development Financing Metric. The 

Bank Multistate MSA Community 

Development Financing Metric, as 

specified in section 8 of appendix B of 

this part, measures the dollar value of a 

bank’s community development loans 

and community development 

investments that serve a multistate MSA 

against the dollar value of deposits from 

deposit accounts in the multistate MSA. 

(B) Benchmarks. The Bank Multistate 

Community Development Financing 

Metric is compared to the following 

benchmarks: 

(1) Multistate MSA Community 

Development Financing Benchmark. 

The Multistate MSA Community 

Development Financing Benchmark, as 

specified in section 9 of appendix B of 

this part, measures the community 

development activity of large banks in 

the aggregate in the multistate MSA 

against the total dollar value of deposits 

from large bank deposit accounts in the 

multistate MSA. 

(2) Multistate MSA Weighted 

Assessment Area Community 

Development Financing Benchmark. 

The Multistate MSA Weighted 

Assessment Area Community 

Development Financing Benchmark, as 

specified in section 10 of appendix B of 

this part, is the weighted average of the 

bank’s Bank Assessment Area 

Community Development Financing 

Benchmarks for each facility-based 

assessment area within the multistate 

MSA, calculated in accordance with 

section 17 of appendix B of this part. 

(4) Bank performance in a nationwide 

area. The two components of the 

[Agency]’s assessment of a bank’s 

community development performance 

in a nationwide area are as follows: 

(i) Component one—weighted average 

of facility-based assessment area 

performance in a nationwide area. The 

[Agency] considers the average of the 

bank’s conclusions for its assessment 

areas within the nationwide area, 

weighted in accordance with section 16 

of appendix B of this part. 

(ii) Component two—metrics and 

impact assessment in a nationwide area. 

The [Agency] considers the numerical 

metrics of this paragraph and the impact 

of the bank’s activities in a nationwide 

area under § __.15. The [Agency] 

combines the results of the metrics and 

benchmarks and the impact review in 

accordance with section 15.iii of 

appendix B of this part. 

(A) Bank Nationwide Community 

Development Financing Metric. The 

Bank Nationwide Community 

Development Financing Metric, as 

specified in section 11 of appendix B of 

this part, measures the bank’s total 

community development financing 

activity in a nationwide area for each 

year, averaged over the years of the 

evaluation period, divided by the total 

dollar amount of deposits from bank 

deposit accounts in a nationwide area, 

averaged over the years of the 

evaluation period. 

(B) Benchmarks. The Bank 

Nationwide Community Development 

Financing Metric is compared to the 

following benchmarks: 

(1) Nationwide Community 

Development Financing Benchmark. 

The Nationwide Community 

Development Financing Benchmark, as 

specified in section 12 of appendix B of 

this part, measures the community 

development financing activity of large 

banks in the aggregate in a nationwide 

area for each year, averaged over the 

years of the evaluation period, divided 

by the total dollar amount of deposits 

from large bank deposit accounts in a 

nationwide area, averaged over the years 

of the evaluation period. 

(2) Nationwide Weighted Assessment 

Area Community Development 

Financing Benchmark. The Nationwide 

Weighted Assessment Area Community 

Development Financing Benchmark, as 

specified in section 13 of appendix B of 

this part, is the weighted average of the 

bank’s Bank Assessment Area 

Community Development Financing 

Benchmarks for each facility-based 

assessment area within the nationwide 

area, calculated in accordance with 

section 17 of appendix B of this part. 

(d) Community Development 

Financing Test performance 

conclusions and ratings. (1) 

Conclusions. As provided in § __.28 and 

appendix C of this part, the [Agency] 

assigns conclusions for the Community 

Development Financing Test 

performance of a bank based upon the 

[Agency]’s assessment of the bank’s 


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performance in each facility-based 

assessment area, state, multistate MSA, 

and nationwide area. 

(2) Ratings. As provided in § __.28 

and appendix D of this part, the 

[Agency] incorporates a bank’s 

Community Development Financing 

Test conclusions into, as applicable, its 

state, multistate MSA, and institution 

ratings. 

§ __.25 Community development services 

test. 

(a) Scope of Community Development 

Services Test. The Community 

Development Services Test evaluates a 

bank’s record of helping to meet the 

community development services needs 

of the bank’s facility-based assessment 

areas, states, multistate MSAs, and 

nationwide area. Community 

development services are defined in 

paragraph (d) of this section. In 

determining whether a bank’s 

community development services serve 

a facility-based assessment area, state, 

multistate MSA, or nationwide area, the 

[Agency] considers publicly available 

information and information provided 

by the bank or government or 

community sources that demonstrates 

that the activity includes serving 

individuals or census tracts located 

within the facility-based assessment 

area, state, multistate MSA, or 

nationwide area, as applicable. 

(b) Bank performance in a facilitybased assessment area. The [Agency] 

evaluates the community development 

services performance of a bank in a 

facility-based assessment area based on 

a review of the bank’s provision of 

community development services under 

paragraph (b)(1) of this section and, as 

applicable, a metric measuring the 

bank’s community development 

services hours under paragraph (b)(2) of 

this section. The [Agency] also reviews 

the impact and responsiveness of a 

bank’s community development 

services activities in a facility-based 

assessment area under paragraph (b)(3) 

of this section. 

(1) Review of the provision of 

community development services. The 

[Agency] reviews the extent to which a 

bank provides community development 

services based on any relevant 

information provided to the [Agency] by 

a bank, including any information 

required to be collected under § __.42, 

as applicable. This review may include 

consideration of one or more of the 

following types of information: 

(i) The total number of hours for all 

community development services 

performed by a bank; 

(ii) The number and type of 

community development services 

offered; 

(iii) For nonmetropolitan areas, the 

number of activities related to the 

provision of financial services; 

(iv) The number and proportion of 

community development service hours 

completed by, respectively, executive 

and other employees of the bank; 

(v) The extent to which community 

development services are used, as 

demonstrated by information such as 

the number of low- and moderateincome participants, organizations 

served, and sessions sponsored, as 

applicable; and 

(vi) Any other evidence that the 

bank’s community development 

services benefit low- and moderateincome individuals or are otherwise 

responsive to community development 

needs. 

(2) Bank Assessment Area Community 

Development Service Hours Metric. For 

a large bank that had average assets of 

over $10 billion in both of the prior two 

calendar years, based on the assets 

reported on its four quarterly Call 

Reports for each of those calendar years, 

as of December 31, the [Agency] also 

considers the Bank Assessment Area 

Community Development Service Hours 

Metric. The Bank Assessment Area 

Community Development Service Hours 

Metric measures the total number of 

hours for all community development 

services performed by a bank in a 

facility-based assessment area during 

the evaluation period, divided by the 

total number of full-time equivalent 

bank employees in the facility-based 

assessment area, to obtain the average 

number of community development 

service hours per full-time equivalent 

employee. 

(3) Impact review. The [Agency] 

evaluates the impact and responsiveness 

of the bank’s community development 

services in a facility-based assessment 

area under § __.15. 

(c) Bank performance in a state, 

multistate MSA, or nationwide area. 

The [Agency] evaluates the community 

development services performance of a 

bank in a state, multistate MSA, or 

nationwide area, as applicable under 

§ __.18, based on two components: 

(1) Component one—weighted 

average of facility-based assessment 

area performance in a state, multistate 

MSA, or nationwide area. The [Agency] 

considers the weighted average of the 

bank’s Community Development 

Services Test conclusions for its facilitybased assessment areas within a state, 

multistate MSA, or nationwide area, as 

applicable under § __.18, calculated in 

accordance with section 16 of appendix 

B of this part. 

(2) Component two—evaluation of 

community development services 

outside of facility-based assessment 

areas. For each state, multistate MSA, or 

nationwide area, as applicable, the 

[Agency] may adjust the results of the 

weighted average derived under 

paragraph (c)(1) upward, based on an 

evaluation of the bank’s community 

development services activities outside 

of its facility-based assessment areas, 

which may consider the following 

information: 

(i) The number, hours, and type of 

community development services 

conducted in the state, multistate MSA, 

or nationwide area; 

(ii) The proportion of activities related 

to the provision of financial services, as 

described in paragraph (d)(3) of this 

section; and 

(iii) The impact and responsiveness of 

the community development services in 

the state, multistate MSA, or nationwide 

area, consistent with the factors in 

paragraph (b)(3) of this section. 

(d) Community development 

services—defined. (1) In general. 

Community development services 

means activities that: 

(i) Have a primary purpose of 

community development, as defined in 

§ __.13(a)(1); 

(ii) Are volunteer activities performed 

by bank board members or employees of 

the bank; and 

(iii) Are related to financial services 

as described in paragraph (d)(3) of this 

section, unless otherwise indicated in 

paragraph (d)(4) of this section. 

(2) Exclusions. Community 

development services do not include 

volunteer activities by bank board 

members or employees of the bank who 

are not acting in their capacity as 

representatives of the bank. 

(3) Activities related to the provision 

of financial services. Activities related 

to the provision of financial services are 

generally activities that relate to credit, 

deposit, and other personal and 

business financial services. Activities 

related to financial services include, but 

are not limited to: 

(i) Serving on the board of directors of 

an organization that has a primary 

purpose of community development; 

(ii) Providing technical assistance on 

financial matters to non-profit, 

government, or tribal organizations or 

agencies supporting community 

development activities; 

(iii) Providing support for fundraising 

to organizations that have a primary 

purpose of community development; 

(iv) Providing financial literacy 

education as described in § __.13(k); or 


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(v) Providing services reflecting other 

areas of expertise at the bank, such as 

human resources, information 

technology, and legal services. 

(4) Community development services 

in nonmetropolitan areas. Banks may 

receive community development 

services consideration for volunteer 

activities undertaken in 

nonmetropolitan areas that otherwise 

meet the criteria for one or more of the 

community development definitions, as 

described in § __.13, even if unrelated to 

financial services. Examples of 

qualifying activities not related to 

financial services include, but are not 

limited to: 

(i) Assisting an affordable housing 

organization to construct homes; 

(ii) Volunteering at an organization 

that provides community support such 

as a soup kitchen, a homeless shelter, or 

a shelter for victims of domestic 

violence; and 

(iii) Organizing or otherwise assisting 

with a clothing drive or a food drive for 

a community service organization. 

(e) Community Development Services 

Test performance conclusions and 

ratings. (1) Conclusions. As provided in 

§ __.28 and appendix C of this part, the 

[Agency] assigns conclusions for a 

bank’s Community Development 

Services Test performance in, as 

applicable, each facility-based 

assessment area, state, multistate MSA, 

and at the institution level. 

(2) Ratings. As provided in § __.28 

and appendix D of this part, the 

[Agency] incorporates a bank’s 

Community Development Services Test 

conclusions into, as applicable, its state, 

multistate MSA, and institution ratings. 

§ __.26 Wholesale or limited purpose 

banks. 

(a) Bank request for designation as a 

wholesale or limited purpose bank. To 

receive a designation as a wholesale or 

limited purpose bank, a bank must file 

a request, in writing, with the [Agency] 

at least three months prior to the 

proposed effective date of the 

designation. If the [Agency] approves 

the designation, it remains in effect 

until the bank requests revocation of the 

designation or until one year after the 

[Agency] notifies a wholesale or limited 

purpose bank that the [Agency] has 

revoked the designation on its own 

initiative. 

(b) Performance evaluation. (1) To 

evaluate a wholesale or limited purpose 

bank, the [Agency] applies the 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks described in paragraphs (c) 

through (f) of this section. 

(2) A wholesale or limited purpose 

bank may request additional 

consideration for activities that would 

qualify for consideration under the 

Community Development Services Test. 

Based on a review of these activities, if 

warranted, the [Agency] may raise the 

bank’s rating at the institution level 

from ‘‘Satisfactory’’ to ‘‘Outstanding.’’ 

(c) Scope of Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks. (1) The Community 

Development Financing Test for 

Wholesale or Limited Purpose Banks 

evaluates a wholesale or limited 

purpose bank’s record of helping to 

meet the community development 

financing needs of the bank’s facilitybased assessment areas, states, 

multistate MSAs, and nationwide area, 

through its provision of community 

development loans and community 

development investments. 

(2) In determining whether a 

wholesale or limited purpose bank’s 

community development financing 

activities serve a facility-based 

assessment area, state, multistate MSA, 

or nationwide area, the [Agency] 

considers information provided by the 

bank and, as needed, publicly available 

information and information provided 

by government or community sources 

that demonstrate that the activities 

include serving individuals or census 

tracts located within the bank’s facilitybased assessment area, state, multistate 

MSA, or nationwide area. 

(3) Community development 

financing dollars will be allocated in 

accordance with section 14 of appendix 

B of this part. 

(d) Wholesale or limited purpose bank 

performance in a facility-based 

assessment area. The [Agency] 

evaluates the community development 

financing performance of a wholesale or 

limited purpose bank in a facility-based 

assessment area based on consideration 

of the total dollar value of a bank’s 

community development loans and 

community development investments 

that serve the facility-based assessment 

area for each year and a review of the 

impact and responsiveness of the bank’s 

activities in the facility-based 

assessment area under § __.15. 

(e) Wholesale or limited purpose bank 

performance in a state or multistate 

MSA. The [Agency] evaluates the 

community development financing 

performance of a wholesale or limited 

purpose bank in a state or multistate 

MSA based on consideration of the 

following: 

(1) The bank’s community 

development financing performance in 

its facility-based assessment areas in the 

state or multistate MSA; and 

(2) The dollar value of a bank’s 

community development loans and 

community development investments 

that serve the state or multistate MSA 

during the evaluation period and a 

review of the impact of the bank’s 

activities in the state or multistate MSA 

under § __.15. 

(f) Wholesale or limited purpose bank 

performance in a nationwide area. The 

[Agency] evaluates the community 

development financing performance of a 

wholesale or limited purpose bank in a 

nationwide area based on consideration 

of the following: 

(1) The bank’s community 

development financing performance in 

all of its facility-based assessment areas; 

and 

(2) The Wholesale or Limited Purpose 

Bank Community Development 

Financing Metric and a review of the 

impact of the bank’s nationwide 

activities under § __.15. The Wholesale 

or Limited Purpose Bank Community 

Development Financing Metric, as 

specified in section 18 of appendix B of 

this part, measures the average total 

dollar value of a bank’s community 

development loans and community 

development investments over the 

evaluation period against the bank’s 

quarterly average total assets over the 

evaluation period. 

(g) Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks performance conclusions 

and ratings. (1) Conclusions. As 

provided in § __.28 and appendix C of 

this part, the [Agency] assigns 

conclusions for a wholesale or limited 

purpose bank’s Community 

Development Financing Test 

performance in, as applicable, each 

facility-based assessment area, state, 

multistate MSA, and nationwide area. 

(2) Ratings. As provided in § __.28 

and appendix D of this part, the 

[Agency] incorporates a wholesale or 

limited purpose bank’s Community 

Development Financing Test 

conclusions into, as applicable, its state, 

multistate MSA, and institution ratings. 

§ __.27 Strategic plan. 

(a) Alternative election. The [Agency] 

will assess a bank’s record of helping to 

meet the credit needs of its facilitybased assessment areas and, as 

applicable, its retail lending assessment 

areas and other geographic areas served 

by the bank at the institution level 

under a strategic plan, if: 

(1) The bank has submitted the plan 

to the [Agency] as provided for in this 

section; 

(2) The [Agency] has approved the 

plan; 

(3) The plan is in effect; and 


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(4) The bank has been operating under 

an approved plan for at least one year. 

(b) Data reporting. The [Agency]’s 

approval of a plan does not affect the 

bank’s obligation, if any, to report data 

as required by § __.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 [Agency] will 

evaluate the bank’s performance. 

(2) Multiple assessment areas. A bank 

with more than one assessment area 

may prepare: 

(i) A single plan for all of its facilitybased assessment areas and, as 

applicable, retail lending assessment 

areas and geographic areas outside of its 

facility-based assessment areas and 

retail lending assessment areas at the 

institution level, with goals for each 

geographic area; or 

(ii) Separate plans for one or more of 

its facility-based assessment areas and, 

as applicable, retail lending assessment 

areas, and geographic areas outside of 

its facility-based assessment areas and 

retail lending assessment areas at the 

institution level. 

(3) Treatment of [operations 

subsidiaries or operating subsidiaries] 

and affiliates. (i) The activities of a 

bank’s [operations subsidiary or 

operating subsidiary] must be included 

in its plan(s) or be evaluated pursuant 

to the default evaluation methodology 

under which the bank would be 

examined in the absence of an approved 

plan, unless the [operations subsidiary 

or operating subsidiary] is subject to 

CRA requirements. 

(ii) Additionally, at a bank’s option, 

activities of other affiliates may be 

included in a plan, if those activities are 

not claimed for purposes of this part by 

any other institution. Other 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 those 

activities are not claimed for purposes 

of this part by another bank. 

(iii) The method by which loans are 

allocated among affiliated institutions 

for CRA purposes must reflect a 

reasonable basis for the allocation of 

banking activities among the 

institutions and must not be designed 

solely to artificially enhance any 

institution’s CRA evaluation. 

(d) Public participation in plan 

development. Before submitting a plan 

to the [Agency] for approval, a bank 

must: 

(1) Informally seek suggestions from 

members of the public in its facilitybased assessment areas covered by the 

plan while developing the plan; 

(2) Once the bank has developed a 

draft plan, formally solicit public 

comment on the draft plan for at least 

30 days by submitting the draft plan for 

publication on the [Agency]’s website 

and by publishing the draft plan on its 

website, or if the bank does not 

maintain a website by publishing notice 

in at least one print newspaper or digital 

publication of general circulation in 

each facility-based assessment area 

covered by the plan (or for military 

banks in at least one print newspaper or 

digital publication of general circulation 

targeted to members of the military). 

The draft plan should include both an 

electronic means by which, and a postal 

address where, members of the public 

can submit comments on the bank’s 

plan; and 

(3) During the period when the bank 

is formally soliciting public comment 

on its draft plan, make copies of the 

draft plan available for review at no cost 

at all offices of the bank in any facilitybased assessment area covered by the 

plan and provide copies of the draft 

plan upon request for a reasonable fee 

to cover copying and mailing, if 

applicable. 

(e) Submission of plan. The bank 

must submit its draft plan to the 

[Agency] at least three months prior to 

the proposed effective date of the plan. 

The bank must also submit with its draft 

plan a description of its efforts to seek 

suggestions from members of the public, 

including who was contacted and how 

information was gathered; any written 

or other public input received; and, if 

the plan was revised in light of the 

public input received, the initial draft 

plan as released for public comment. 

(f) Plan content. (1) Appropriateness 

of strategic plan election. A bank’s draft 

plan must include the same 

performance tests and standards that 

would otherwise be applied under this 

part, unless the bank is substantially 

engaged in activities outside the scope 

of these tests. The draft plan must 

specify how these activities are outside 

the scope of the otherwise applicable 

performance tests and standards and 

why being evaluated pursuant to a plan 

would be a more appropriate means to 

assess its record of helping to meet the 

credit needs of its community than if it 

were evaluated pursuant to the 

otherwise applicable performance tests 

and standards. 

(2) Appropriateness of geographic 

coverage of plan. A bank’s draft plan 

must incorporate measurable goals for 

all geographic areas that would be 

included pursuant to the performance 

tests and standards that would 

otherwise be applied in the absence of 

an approved plan. 

(3) Measurable goals. (i) As 

applicable, pursuant to the performance 

tests and standards that would 

otherwise be applied in the absence of 

an approved plan, a bank must specify 

measurable goals in its draft plan for 

helping to meet the: 

(A) Retail lending needs of, as 

applicable, its facility-based assessment 

areas, retail lending assessment areas, 

and outside retail lending area that are 

covered by the draft plan; 

(B) Retail services and products needs 

of its facility-based assessment areas 

and at the institution level that are 

covered by the draft plan; 

(C) Community development 

financing needs of its facility-based 

assessment areas, states, multistate 

MSAs, and nationwide areas that are 

covered by the draft plan; and 

(D) Community development services 

needs of its facility-based assessment 

areas and other geographic areas served 

by the bank that are covered by the draft 

plan. 

(ii) A bank must consider public 

comments and the bank’s capacity and 

constraints, product offerings, and 

business strategy in developing 

measurable goals in its draft plan that 

are appropriate for its retail lending, 

retail services and products, community 

development financing, and community 

development services activities. 

(iii) A bank must include in its draft 

plan a focus on the credit needs of lowand moderate-income individuals, small 

businesses, small farms, and low- and 

moderate-income census tracts, and 

explain how its draft plan’s measurable 

goals are responsive to the 

characteristics and credit needs of, as 

applicable, its assessment areas and 

other geographic areas served by the 

bank, considering public comment and 

the bank’s capacity and constraints, 

product offerings, and business strategy; 

(iv) In developing measurable goals 

related to its retail lending, a bank must 

incorporate measurable goals in its draft 

plan for each retail lending major 

product line and may develop 

additional goals that cover other 

lending-related activities based on the 

bank’s specific business strategy. 

(v) If a bank’s draft plan’s measurable 

goals related to its retail lending do not 

incorporate the Retail Lending Test’s 

metrics-based methodology as described 

in § __.22, the bank must explain why 

measurable goals that do not incorporate 

the Retail Lending Test’s metrics-based 

methodology are appropriate. 

(vi) If a bank’s draft plan’s measurable 

goals related to its community 

development financing do not 


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incorporate, as applicable, the 

Community Development Financing 

Test’s or the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks’ metrics-based 

methodology as described in §§ __.24 

and __.26, respectively, or for an 

intermediate bank address the 

community development performance 

standards for intermediate banks as 

provided in § __.29(b)(2), the bank must 

include an explanation as to why 

measurable goals do not incorporate, as 

applicable, the Community 

Development Financing Test or the 

Community Development Financing 

Test for Wholesale or Limited Purpose 

Banks’ metrics-based methodology, or 

for intermediate banks address the 

community development performance 

standards for intermediate banks. 

(4) Confidential information. A bank 

may submit additional information to 

the [Agency] on a confidential basis, but 

the goals stated in the draft plan must 

be sufficiently specific to enable the 

public and the [Agency] to judge the 

merits of the plan. 

(5) ‘‘Satisfactory’’ and ‘‘Outstanding’’ 

ratings goals. A bank must specify in its 

draft plan measurable goals that 

constitute ‘‘Satisfactory’’ performance 

and may specify measurable goals that 

constitute ‘‘Outstanding’’ performance. 

If a bank submits, and the [Agency] 

approves, both ‘‘Satisfactory’’ and 

‘‘Outstanding’’ measurable goals, the 

[Agency] will consider the bank eligible 

for an ‘‘Outstanding’’ rating. 

(6) Election if ‘‘Satisfactory’’ ratings 

goals not substantially met. A bank may 

elect in its draft plan that, if the bank 

fails to meet substantially its plan goals 

for a ‘‘Satisfactory’’ rating, the [Agency] 

will evaluate the bank’s performance 

using the performance tests and 

standards that would otherwise be 

applied in the absence of an approved 

plan. 

(g) Plan approval. (1) Timing. The 

[Agency] will act upon a draft plan 

within 90 calendar days after the 

[Agency] receives the complete draft 

plan and other material required under 

paragraph (e) of this section. If the 

[Agency] fails to act within this time 

period, the draft plan will be deemed 

approved unless the [Agency] extends 

the review period for good cause. 

(2) Public participation. In evaluating 

the draft plan’s goals, the [Agency] will 

consider: 

(i) The public’s involvement in 

formulating the draft plan, including 

specific information regarding the 

members of the public and 

organizations the bank contacted, how 

the bank collected information relevant 

to the draft plan, the nature of the 

public input, and whether the bank 

revised the draft plan in light of public 

input; 

(ii) Written public comment on the 

draft plan; and 

(iii) Any response by the bank to 

public comment on the draft plan. 

(3) Criteria for evaluating plan. The 

[Agency] evaluates a draft plan’s 

measurable goals, including the 

appropriateness of those goals and the 

information provided by the bank in § _

_.27(e) and (f), using the following 

criteria, as appropriate, and based on 

the bank’s capacity and constraints, 

product offerings, and business strategy: 

(i) The extent and breadth of retail 

lending or retail lending-related 

activities to address credit needs, 

including, as appropriate, the 

distribution of loans among different 

geographies, businesses and farms of 

different sizes, and individuals of 

different income levels and the 

qualitative aspects of the bank’s retail 

lending programs, as described in § __

.22; 

(ii) The dollar amount and qualitative 

aspects of the bank’s community 

development loans and investments in 

light of community development needs; 

(iii) The availability of bank retail 

products and the effectiveness of the 

bank’s systems for delivering retail 

banking services; and 

(iv) The number, hours, and type of 

community development services 

performed by the bank and the extent to 

which the bank’s community 

development services are impactful. 

(h) Plan amendment. (1) Material 

change in circumstances. During the 

term of a plan, a bank must amend its 

plan goals if a material change in 

circumstances: 

(i) Impedes its ability to substantially 

meet approved plan goals, such as 

financial constraints caused by 

significant events that impact the local 

or national economy; or 

(ii) Significantly increases its 

financial capacity and ability, such as 

through a merger or consolidation, to 

engage in retail lending, retail services 

and products, community development 

financing, or community development 

services activities referenced in an 

approved plan. 

(2) Elective revision of plan. (i) During 

the term of a plan, a bank may request 

the [Agency] to approve an amendment 

to the plan in the absence of a material 

change in circumstances. 

(ii) A bank that requests the [Agency] 

to approve an amendment to a plan in 

the absence of a material change in 

circumstances must provide an 

explanation regarding why it is 

necessary and appropriate to amend its 

plan goals. 

(3) Public participation in plan 

revision. A bank must develop an 

amendment to a previously approved 

plan in accordance with the public 

participation requirements of paragraph 

(d) of this section. 

(i) Plan assessment. (1) In general. 

The [Agency] approves the goals and 

assesses performance under a plan as 

provided for in appendix D of this part. 

(2) In determining whether a bank has 

substantially met its plan goals, the 

[Agency] will consider: 

(i) The number of unmet goals; 

(ii) The degree to which the goals 

were not met; 

(iii) The importance of those unmet 

goals to the plan as a whole; and 

(iv) Any circumstances beyond the 

control of the bank, such as economic 

conditions or other market factors or 

events that have adversely impacted the 

bank’s ability to perform. 

§ __.28 Assigned conclusions and ratings. 

(a) Conclusions. (1) In general. The 

[Agency] assigns conclusions for a 

bank’s performance under the respective 

performance tests that apply to the 

bank, as provided in §§ __.21 through _

_.28, __.29(b), and appendix C of this 

part of ‘‘Outstanding,’’ ‘‘High 

Satisfactory,’’ ‘‘Low Satisfactory,’’ 

‘‘Needs to Improve,’’ or ‘‘Substantial 

Noncompliance.’’ 

(2) Small banks. The [Agency] assigns 

performance conclusions for the 

performance of a small bank evaluated 

under § __.29(a), as provided in § __.28 

and appendix C of this part, of 

‘‘Outstanding,’’ ‘‘Satisfactory,’’ ‘‘Needs 

to Improve,’’ or ‘‘Substantial 

Noncompliance.’’ 

(b) Ratings. (1) In general. Subject to 

paragraph (d) of this section, the 

[Agency] assigns ratings for a bank’s 

overall performance at the state, 

multistate MSA, and institution level 

under §§ __.21 through __.27 and __.29, 

as applicable, of ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance.’’ 

(2) Performance score. Other than for 

a small bank evaluated under the small 

bank performance standards in § __

.29(a), a wholesale or limited purpose 

bank under the Community 

Development Financing Test for 

Wholesale or Limited Purpose Banks in 

§ __.26, a bank evaluated based on a 

strategic plan under § __.27, the 

[Agency] assigns a rating for the bank’s 

overall performance at the state, 

multistate MSA, and institution levels, 

respectively, in connection with a 

performance score, derived as provided 

in appendix D of this part, and any 


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adjustments in accordance with 

paragraph (d) of this section, § __.28, 

and appendix D of this part. 

(c) States and multistate MSAs. 

Regarding the [Agency]’s evaluation of a 

bank’s performance in a state or 

multistate MSA under this part, the 

following applies: 

(1) States. (i) The [Agency] evaluates 

a bank’s performance in any state in 

which the bank maintains one or more 

facility-based assessment areas. 

(ii) In assigning conclusions and 

ratings for a state, the [Agency] does not 

consider a bank’s activities in that state 

that take place in the portion of the state 

comprising any multistate MSA 

identified in paragraph (c)(2) of this 

section. 

(2) Multistate MSAs. The [Agency] 

evaluates a bank’s performance under 

this part in any multistate MSA in 

which the bank maintains a branch in 

two or more states located within that 

multistate MSA. 

(d) Effect of evidence of 

discriminatory or other illegal practices. 

(1) Scope. At the state, multistate MSA, 

and institution levels, the [Agency]’s 

evaluation of a bank’s performance 

under this part is adversely affected by 

evidence of discriminatory or other 

illegal practices: 

(i) In any census tract by the bank, 

including by [an operations subsidiary 

or operating subsidiary] of the bank; or 

(ii) In any facility-based assessment 

area, retail lending assessment area, or 

outside retail lending area by any 

affiliate whose retail loans are 

considered as part of the bank’s lending 

performance. 

(2) Evidence of discriminatory or 

other illegal practices. Evidence of 

discriminatory or other 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 12 U.S.C. 5531 

(regarding unfair, deceptive, or abusive 

acts or practices in connection with 

consumer financial products or 

services); 

(v) Violations of section 8 of the Real 

Estate Settlement Procedures Act; 

(vi) Violations of the Truth in Lending 

Act provisions regarding a consumer’s 

right of rescission; 

(vii) Violations of the Military 

Lending Act; and 

(viii) Violations of the 

Servicemembers Civil Relief Act. 

(3) Agency considerations. In 

determining the effect of evidence of 

practices described in paragraph (d)(2) 

of this section on the bank’s assigned 

state, multistate MSA, and institution 

ratings, the [Agency] will consider: The 

root cause or causes of any violations of 

law; the severity of any consumer harm 

resulting from violations of law; the 

duration of time over which the 

violations occurred; the pervasiveness 

of the violations; the degree to which 

the bank, [operations subsidiary or 

operating subsidiary], or affiliate, as 

applicable, has established an effective 

compliance management system across 

the institution to self-identify risks and 

to take the necessary actions to reduce 

the risk of non-compliance and 

consumer harm. 

(e) Consideration of past performance. 

When assigning ratings, the [Agency] 

considers a bank’s past performance. If 

a bank’s prior rating was ‘‘Needs to 

Improve,’’ the [Agency] may determine 

that a ‘‘Substantial Noncompliance’’ 

rating is appropriate where the bank 

failed to improve its performance since 

the previous evaluation period, with no 

acceptable basis for such failure. 

§ __.29 Performance standards for small 

banks and intermediate banks. 

(a) Small bank performance criteria. 

Unless a small bank opts to be evaluated 

under the Retail Lending Test in § __.22, 

the [Agency] evaluates a small bank’s 

performance in helping to meet the 

credit needs of its facility-based 

assessment areas pursuant to the criteria 

in this section. 

(1) Lending evaluation. A small bank’s 

retail lending performance is evaluated 

pursuant to the following criteria: 

(i) The bank’s loan-to-deposit ratio, 

adjusted for seasonal variation, and, as 

appropriate, other retail and community 

development lending-related activities, 

such as loan originations for sale to the 

secondary markets, community 

development loans, or community 

development investments; 

(ii) The percentage of loans and, as 

appropriate, other lending-related 

activities located in the bank’s facilitybased assessment areas; 

(iii) The bank’s record of lending to 

and, as appropriate, engaging in other 

retail and community development 

lending-related activities for borrowers 

of different income levels and 

businesses and farms of different sizes; 

(iv) The bank’s geographic 

distribution of retail loans; and 

(v) The bank’s record of taking action, 

if warranted, in response to written 

complaints about its performance in 

helping to meet credit needs in its 

facility-based assessment areas. 

(2) Additional consideration. The 

[Agency] may adjust a small bank rating 

of ‘‘Satisfactory’’ to ‘‘Outstanding’’ at 

the institution level, where a small bank 

requests and receives additional 

consideration for its performance in 

making community development 

investments and services and its 

performance in providing branches and 

other services and delivery systems that 

enhance credit availability in its facilitybased assessment areas. 

(3) Small bank performance ratings. 

The [Agency] rates the performance of a 

small bank evaluated under this section 

as provided in appendix E of this part. 

(b) Intermediate bank performance 

criteria. (1) Retail Lending Test and 

optional Community Development 

Financing Test. The [Agency] evaluates 

an intermediate bank under the Retail 

Lending Test in § __.22 and the 

community development performance 

standards as provided in § __.29(b)(2), 

unless an intermediate bank chooses to 

be evaluated under the Community 

Development Financing Test in § __.24. 

(2) Intermediate bank community 

development evaluation. An 

intermediate bank’s community 

development performance is evaluated 

pursuant to the following criteria: 

(i) The number and amount of 

community development loans; 

(ii) The number and amount of 

community development investments; 

(iii) The extent to which the bank 

provides community development 

services; and 

(iv) The bank’s responsiveness 

through such activities to community 

development lending, investment, and 

services needs. 

(3) Additional consideration. For an 

intermediate bank that opts to be 

evaluated under the Community 

Development Financing Test in § __.24, 

the [Agency] may adjust an intermediate 

bank rating of ‘‘Satisfactory’’ to 

‘‘Outstanding’’ at the institution level if 

the bank requests and receives 

additional consideration for activities 

that qualify under the Retail Services 

and Products Test in § __.23, the 

Community Development Services Test 

in § __.25, or both. 

(4) Intermediate bank performance 

ratings. The [Agency] rates the 

performance of an intermediate bank 

evaluated under this section as provided 

in appendices D and E of this part. 


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§ __.31 [Reserved] 

Subpart D—Records, Reporting, 

Disclosure, and Public Engagement 

Requirements 

§ __.42 Data collection, reporting, and 

disclosure. 

(a) Information required to be 

collected and maintained. (1) Small 

business and small farm loans data. A 

bank, except a small bank or an 

intermediate bank, must collect and 

maintain in machine readable form, as 

prescribed by the [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 bank 

during the evaluation period: 

(i) A unique number or alpha-numeric 

symbol that can be used to identify the 

relevant loan file; 

(ii) An indicator for the loan type as 

reported on the bank’s Call Report; 

(iii) The date of the loan origination 

or purchase; 

(iv) The loan amount at origination or 

purchase; 

(v) The loan location, including state, 

county, and census tract; 

(vi) An indicator for whether the loan 

was originated or purchased by the 

bank; and 

(vii) An indicator for whether the loan 

was to a business or farm with gross 

annual revenues of $1 million or less. 

(2) Consumer loans data—automobile 

loans. A bank that had average assets of 

over $10 billion in both of the prior two 

calendar years, based on the assets 

reported on its four quarterly Call 

Reports for each of those calendar years, 

must collect and maintain in machine 

readable form, as prescribed by the 

[Agency], until the completion of its 

next CRA examination, the following 

data, for each automobile loan 

originated or purchased by the bank 

during the evaluation period: 

(i) A unique number or alpha-numeric 

symbol that can be used to identify the 

relevant loan file; 

(ii) The date of the loan origination or 

purchase; 

(iii) The loan amount at origination or 

purchase; 

(iv) The loan location, including state, 

county, and census tract; 

(v) An indicator for whether the loan 

was originated or purchased by the 

bank; and 

(vi) The borrower annual income on 

which the bank relied when making the 

credit decision. 

(3) Home mortgage loans. If a bank, 

except a small or an intermediate bank, 

is subject to reporting under 12 CFR part 

1003, the bank must collect and 

maintain, in machine readable form, as 

prescribed by the [Agency], until the 

completion of its next CRA 

examination, 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 12 CFR part 1003. 

(4) Retail services and products data. 

(i) A large bank must collect and 

maintain in machine readable form, as 

prescribed by the [Agency], until 

completion of the bank’s next CRA 

examination, the following data with 

respect to retail services and products 

offered and provided by the bank during 

the evaluation period: 

(A) Number and location of branches 

and remote service facilities. As 

applicable, location information must 

include: 

(1) Street address; 

(2) City; 

(3) County; 

(4) State; and 

(5) Zip code; 

(B) An indicator for whether each 

branch is full-service or limited-service, 

and for each remote service facility 

whether it is deposit-taking, cashadvancing, or both; 

(C) Locations and dates of branch and 

remote service facility openings and 

closings, as applicable; 

(D) Hours of operation of each branch 

and remote service facility, as 

applicable; 

(E) Services offered at each branch 

that are responsive to low- and 

moderate-income individuals and lowand moderate-income census tracts; 

(ii) A large bank that had average 

assets of over $10 billion in both of the 

prior two calendar years (based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years) 

and a large bank that had average assets 

of $10 billion or less in either of the 

prior two calendar years (based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years) 

that requests additional consideration 

for digital and other delivery systems 

under § __.23(b)(3), must collect and 

maintain in machine readable form, as 

prescribed by the [Agency], until 

completion of the bank’s next CRA 

examination, the following data: 

(A) The range of services and 

products offered through digital and 

other delivery systems; 

(B) Digital activity by individuals in 

low-, moderate-, middle-, and upperincome census tracts, respectively, such 

as: 

(1) Number of savings and checking 

accounts opened through digital and 

other delivery systems, by census tract 

income level for each calendar year; 

(2) Accountholder usage data by type 

of digital and other delivery systems, by 

census tract income level for each 

calendar year; and 

(C) Optionally, additional information 

that demonstrates that digital and other 

delivery systems serve low- and 

moderate-income individuals and lowand moderate-income census tracts. 

(iii) A large bank that had average 

assets of over $10 billion in both of the 

prior two calendar years (based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years) 

and a large bank that had average assets 

of $10 billion or less in either of the 

prior two calendar years (based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years) 

that requests additional consideration 

for deposit products responsive to the 

needs of low- and moderate- income 

individuals under § __.23(c)(2), must 

collect and maintain in machine 

readable form, as prescribed by the 

[Agency], until completion of the bank’s 

next CRA examination, the following 

data: 

(A) The number of responsive deposit 

accounts opened and closed during each 

year of the evaluation period in low-, 

moderate-, middle-, and upper-income 

census tracts, respectively; 

(B) In connection with § __

.23(c)(2)(ii)(A), the percentage of 

responsive deposit accounts compared 

to total deposit accounts for each year 

of the evaluation period; 

(C) Optionally, additional information 

regarding the responsiveness of deposit 

products to the needs of low- and 

moderate-income individuals and lowand moderate-income census tracts. 

(5) Community development loans 

and community development 

investments data. (i)(A) A bank, except 

a small or an intermediate bank, must 

collect and maintain in machine 

readable form, as prescribed by the 

[Agency], until the completion of the 

bank’s next CRA examination, the data 

listed in paragraph (a)(5)(ii) of this 

section for community development 

loans and community development 

investments originated or purchased by 

the bank. 

(B) An intermediate bank that opts to 

be evaluated under the Community 

Development Financing Test in § __.24 

must collect and maintain in the format 

used by the bank in the normal course 

of business, until the completion of the 

bank’s next CRA examination, the data 

listed in paragraph (a)(5)(ii) of this 

section for community development 

loans and community development 


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34036 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

investments originated or purchased by 

the bank. 

(C) Pursuant to § __.42(a)(5)(i)(A) and 

(B), a bank must collect and maintain, 

on an annual basis, data for loans and 

investments originated or purchased 

during the evaluation period and for 

loans and investments from prior years 

that are held on the bank’s balance sheet 

at the end of each quarter (March 31, 

June 30, September 30, December 31) of 

the calendar year. 

(ii) Pursuant to § __.42(a)(5)(i)(A) and 

(B), a bank must collect and maintain 

the following data: 

(A) General information on the loan or 

investment: 

(1) A unique number or alphanumeric symbol that can be used to 

identify the loan or investment; 

(2) Date of origination, purchase, or 

transaction of the loan or investment; 

(3) Date the loan or investment was 

sold or paid off; and 

(4) (i) For the first year of the loan or 

investment, the loan or investment 

amount at origination or purchase for 

originations or purchases as of 

December 31 of the calendar year; and 

(ii) For all years following the first 

year of the loan or investment, the loan 

or investment amount reflected on the 

bank’s balance sheet as of the end of 

each quarter (March 31, June 30, 

September 30, December 31) of the 

calendar year. 

(B) Community development loan or 

investment activity information: 

(1) Name of organization or entity; 

(2) Activity type (loan or investment); 

(3) Community development purpose, 

as described in § __.13(a)(2); and 

(4) Activity detail, such as the specific 

type of financing and type of entity 

supported (e.g., low-income housing tax 

credit, New Markets Tax Credit, Small 

Business Investment Company, 

multifamily mortgage, private business, 

non-profit or mission-driven 

organization, mortgage-backed security, 

or other). 

(C) Indicators of the impact of the 

activity, as applicable: 

(1) Activity serves persistent poverty 

counties; 

(2) Activity serves geographic areas 

with low levels of community 

development financing; 

(3) Activity supports an MDI, WDI, 

LICU, or Treasury Department-certified 

CDFI; 

(4) Activity serves low-income 

individuals and families; 

(5) Activity supports small businesses 

or small farms with gross annual 

revenues of $250,000 or less; 

(6) Activity directly facilitates the 

acquisition, construction, development, 

preservation, or improvement of 

affordable housing in High Opportunity 

Areas; 

(7) Activity benefits Native 

communities, such as qualifying 

activities in Native Land Areas under 

§ l.13(l); 

(8) Activity is a qualifying grant or 

donation; 

(9) Activity reflects bank leadership 

through multi-faceted or instrumental 

support; and 

(10) Activity results in a new 

community development financing 

product or service that addresses 

community development needs for lowor moderate-income individuals and 

families. 

(D) Location information: 

(1) Street address; 

(2) City; 

(3) County; 

(4) State; 

(5) Zip code; and 

(6) Whether a bank is seeking 

consideration at the assessment area, 

statewide, or nationwide levels; 

(E) Other information relevant to 

determining that an activity meets the 

standards under § __.13; and 

(F) Allocation of dollar value of 

activity to counties served by the 

community development activity (if 

available): 

(1) Specific information about the 

dollar value of the activity that was 

allocated to each county served by the 

activity; and 

(2) A list of the geographic areas 

served by the activity, specifying any 

county, counties, state, states, or 

nationwide area served. 

(6) Community development services 

data. A large bank that had average 

assets of over $10 billion in both of the 

prior two calendar years, based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years, 

must collect and maintain in machine 

readable form, as prescribed by the 

[Agency], until the completion of the 

bank’s next CRA examination, the 

following community development 

services data: 

(i) Bank information: 

(A) Number of full-time equivalent 

employees at the facility-based 

assessment area, state, multistate MSA, 

and institution levels; and 

(B) Total number of community 

development services hours performed 

by the bank in each facility-based 

assessment area, state, multistate MSA, 

and in total. 

(ii) Community development services 

activity information: 

(A) Date of activity; 

(B) Name of organization or entity; 

(C) Community development purpose, 

as described in § __.13(a)(2); 

(D) Capacity served (e.g., board 

member, technical assistance, financial 

education, general volunteer); and 

(E) Whether the activity is related to 

the provision of financial services. 

(iii) Location information: 

(A) Street address; 

(B) City; 

(C) County; 

(D) State; 

(E) Zip code; and 

(F) Whether bank is seeking 

consideration at the assessment area, 

statewide, or nationwide level. 

(7) Deposits data. A large bank that 

had average assets of over $10 billion in 

both of the prior two calendar years, 

based on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years, must collect and 

maintain annually, in machine readable 

form as prescribed by the [Agency], 

until the completion of its next CRA 

examination, the dollar amount of its 

deposits at the county level, based upon 

the address associated with the 

individual account (except for account 

types where an address is not available), 

calculated based on average daily 

balances as provided in statements such 

as monthly or quarterly statements. A 

large bank that had average assets of $10 

billion or less in either of the prior two 

calendar years, based on the assets 

reported on its four quarterly Call 

Reports for each of those calendar years, 

that opts to collect and maintain the 

data in this paragraph must do so in 

machine readable form, as prescribed by 

the [Agency], until completion of the 

bank’s next CRA examination. 

(b) Information required to be 

reported. (1) Small business and small 

farm loan data. A bank, except a small 

bank or an intermediate bank, must 

report annually by April 1 to the 

[Agency] in machine readable form, as 

prescribed by the [Agency], the data 

listed in paragraphs (b)(1)(i) through 

(b)(1)(iv) of this section for the prior 

calendar year. For each census tract in 

which the bank originated or purchased 

a small business or small farm loan, the 

bank must report the aggregate number 

and amount of small business and small 

farm loans: 

(i) With an amount at origination of 

$100,000 or less; 

(ii) With an 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). 


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(2) Consumer loans—automobile 

loans data. A bank that had average 

assets of over $10 billion in both of the 

prior two calendar years, based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years, 

must report annually by April 1 to the 

[Agency] in machine readable form, as 

prescribed by the [Agency], for each 

census tract in which the bank 

originated or purchased an automobile 

loan, the aggregate number and amount 

of automobile loans and the number and 

amount of those loans made to low- and 

moderate-income borrowers. The 

[Agency] will not make automobile 

lending data reported under this 

paragraph publicly available in the form 

of a data set for all reporting banks. 

(3) Community development loans 

and community development 

investments data. A bank, except a 

small or an intermediate bank, must 

report annually by April 1 to the 

[Agency] community development loan 

and community development 

investment data described in paragraph 

(a)(5)(ii) of this section, except for the 

data described in paragraph 

(a)(5)(ii)(B)(1) of this section. 

(4) Community development services 

data. A large bank that had average 

assets of over $10 billion in both of the 

prior two calendar years, based on the 

assets reported on its four quarterly Call 

Reports for each of those calendar years, 

must report annually by April 1 to the 

[Agency] the community development 

services data listed in paragraph (a)(6)(i) 

of this section. 

(5) Deposits data. A large bank that 

had average assets of over $10 billion in 

both of the prior two calendar years, 

based on the assets reported on its four 

quarterly Call Reports for each of those 

calendar years, must report annually by 

April 1 to the [Agency] in machine 

readable form, as prescribed by the 

[Agency], the deposits data for the 

previous calendar year collected and 

maintained in accordance with 

paragraph (a)(7) of this section. This 

reporting must include, for each county, 

state, and multistate MSA and for the 

institution overall, the average annual 

deposit balances (calculated based on 

average daily balances as provided in 

statements such as monthly or quarterly 

statements, as applicable), in aggregate, 

of deposit accounts with associated 

addresses located in such county, state, 

or multistate MSA where available, and 

for the institution overall. The [Agency] 

will not make deposits data reported 

under this paragraph publicly available 

in the form of a data set for all reporting 

banks. 

(c) Data on [operations subsidiaries or 

operating subsidiaries]. To the extent 

that [operations subsidiaries or 

operating subsidiaries] engage in retail 

lending, retail services, community 

development financing, or community 

development services activities, a bank 

must collect, maintain, and report such 

activities of its [operations subsidiaries 

or operating subsidiaries] pursuant to 

paragraphs (a) and (b) of this section, as 

applicable, for purposes of evaluating 

the bank’s performance. For home 

mortgage loans, the bank must identify 

the home mortgage loans reported by 

the [operations subsidiary or operating 

subsidiary] under 12 CFR part 1003, if 

applicable, or collect and maintain 

home mortgage loans by the [operations 

subsidiary or operating subsidiary] that 

the bank would have collected and 

maintained under paragraphs (a)(3) of 

this section had the loans been 

originated or purchased by the bank. 

(d) Data on other affiliates. A bank 

that elects to have the [Agency] consider 

loans by an affiliate, for purposes of this 

part must collect, maintain, and report 

the lending and investments data that 

the bank would have collected, 

maintained, and reported pursuant to 

paragraphs (a) and (b) of this section 

had the loans or investments been 

originated or purchased by the bank. For 

home mortgage loans, the bank must 

also identify the home mortgage loans 

reported by affiliates under 12 CFR part 

1003, if applicable, or collect and 

maintain home mortgage loans by the 

affiliate that the bank would have 

collected and maintained under 

paragraphs (a)(3) of this section had the 

loans been originated or purchased by 

the bank. 

(e) Data on community development 

financing by a consortium or a third 

party. A bank that elects to have the 

[Agency] consider community 

development loans and community 

development investments by a 

consortium or third party for purposes 

of this part must collect, maintain, and 

report the lending and investments data 

that the bank would have collected, 

maintained, and reported under 

paragraphs (a)(5) and (b)(3) of this 

section had the loans or investments 

been originated or purchased by the 

bank. 

(f) Assessment area data. (1) Facilitybased assessment areas. A bank, except 

a small bank or an intermediate bank, 

must collect and report to the [Agency] 

annually by April 1 a list for each 

facility-based assessment area showing 

the states, MSAs, counties or countyequivalents, and metropolitan divisions 

within the facility-based assessment 

area. 

(2) Retail lending assessment areas. A 

large bank must collect and report to the 

[Agency] annually by April 1 a list for 

each retail lending assessment area 

showing the MSAs and counties within 

the retail lending assessment area, as 

applicable. 

(g) CRA Disclosure Statement. The 

[Agency] 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 

facility-based assessment area and each 

retail lending assessment area smaller 

than a county, if applicable) with a 

population of 500,000 persons or fewer 

in which the bank reported a small 

business or a small farm loan: 

(i) The number and amount of small 

business loans and small farm loans 

reported as originated or purchased 

located in low-, moderate-, middle-, and 

upper-income geographies; 

(ii) A list grouping each census tract 

according to whether the census tract is 

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

(iii) A list showing each census tract 

in which the bank reported a small 

business loan or a small farm loan; and 

(iv) The number and amount of small 

business loans and small farm loans to 

businesses and farms with gross annual 

revenues of $1 million or less; 

(2) For each county (and for each 

facility-based assessment area and retail 

lending assessment area smaller than a 

county, if applicable) with a population 

in excess of 500,000 persons in which 

the bank reported a small business loan 

or a small farm loan: 

(i) The number and amount of small 

business loans and small farm loans 

reported as originated or purchased 

located in census tracts 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 census tract 

in the county, facility-based assessment 

area, or retail lending assessment area 

according to whether the median 

income in the census tract 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 


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34038 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

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; and 

(iii) A list showing each census tract 

in which the bank reported a small 

business loan or a small farm loan; and 

(3) The number and amount of small 

business loans and small farm loans 

located inside each facility-based 

assessment area and retail lending 

assessment area reported by the bank 

and the number and amount of small 

business loans and small farm loans 

located outside of the facility-based 

assessment areas and retail lending 

assessment areas reported by the bank; 

(4) The number and amount of 

community development loans and 

community development investments 

reported as originated or purchased 

inside each facility-based assessment 

area, each state in which the bank has 

a branch, each multistate MSA in which 

a bank has a branch in two or more 

states of the multistate MSA, and 

nationwide outside of these states and 

multistate MSAs. 

(h) Aggregate disclosure statements. 

The [Agency], in conjunction with the 

[other Agencies], 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 reported small business lending, 

small farm lending, community 

development lending, and community 

development investments by all banks 

subject to reporting under 12 CFR parts 

25, 228, or 345. These disclosure 

statements indicate, for each census 

tract and with respect to community 

development loans, and community 

development investments for each 

county, the number and amount of all 

small business loans, small farm loans, 

community development loans, and 

community development investments, 

originated or purchased by reporting 

banks, except that the [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 a bank. 

(i) Central data depositories. The 

[Agency] makes the aggregate disclosure 

statements, described in paragraph (h) 

of this section, and the individual bank 

CRA Disclosure Statements, described 

in paragraph (g) of this section, available 

on the FFIEC’s website at www.ffiec.gov. 

(j) Race and ethnicity disclosure. (1) 

In general. The [Agency] includes in a 

large bank’s CRA performance 

evaluation the information in paragraph 

(j)(2) of this section concerning the 

distribution of a bank’s originations and 

applications of home mortgage loans by 

race and ethnicity in each of the bank’s 

assessment areas. This information is 

disclosed for each year of the evaluation 

period based on data reported under the 

Home Mortgage Disclosure Act (HMDA). 

(2) Data disclosed in CRA 

performance evaluations. For each of 

the bank’s facility-based assessment 

areas, and as applicable, its retail 

lending assessment areas, the [Agency] 

discloses the number and percentage of 

originations and applications of a bank’s 

home mortgage loans by borrower race 

and ethnicity, and compares such data 

to the aggregate mortgage lending of all 

lenders in the assessment area and the 

demographic data in that assessment 

area. 

(3) Effect on CRA conclusions and 

ratings. The disclosures made under 

paragraphs (j)(1) and (j)(2) of this section 

do not impact the conclusions or ratings 

of the bank. 

§ __.43 Content and availability of public 

file. 

(a) Information available to the 

public. A bank must maintain a public 

file, in either paper or digital format, 

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 [Agency]. 

The bank must include this copy in the 

public file within 30 business days after 

its receipt from the [Agency]; 

(3) A list of the bank’s branches, their 

street addresses, and census tracts; 

(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 census tracts; 

(5) A list of retail banking 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. A bank may elect to 

include information regarding the 

availability of other systems for 

delivering retail banking services (for 

example, mobile or online banking, loan 

production offices, and bank-at-work or 

mobile branch programs); 

(6) A map of each facility-based 

assessment area and retail lending 

assessment area showing the boundaries 

of the area and identifying the census 

tracts 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 and intermediate banks. A 

bank subject to the data reporting 

requirements described in § __.42 must 

include in its public file a written notice 

that the bank’s CRA Disclosure 

Statement pertaining to the bank, its 

[operations subsidiaries or operating 

subsidiaries], and its other affiliates, if 

applicable, may be obtained on the 

FFIEC’s website at https://

www.ffiec.gov/craadweb/ 

disrptmain.aspx. The bank must include 

the written notice in the public file 

within three business days after 

receiving notification from the FFIEC of 

the availability of the disclosure 

statement. 

(2) Banks required to report HMDA 

data. A bank required to report home 

mortgage loan data pursuant to 12 CFR 

part 1003 must include in its public file 

a written notice that the bank’s HMDA 

Disclosure Statement may be obtained 

on the Consumer Financial Protection 

Bureau’s (CFPB’s) website at 

www.consumerfinance.gov/hmda. In 

addition, if the [Agency] considered the 

home mortgage lending of a bank’s 

[operations subsidiaries or operating 

subsidiaries] or, at a bank’s election, the 

[Agency] considered the home mortgage 

lending of other bank affiliates, the bank 

must include in its public file the names 

of the [operations subsidiaries or 

operating subsidiaries] and the names of 

the affiliates and a written notice that 

the [operations subsidiaries’ or 

operating subsidiaries’] and other 

affiliates’ HMDA Disclosure Statements 

may be obtained at the CFPB’s website. 

The bank must include the written 

notices in the public file within three 

business days after receiving 

notification from the FFIEC of the 

availability of the disclosure statements. 

(3) Small banks. A small bank or a 

bank that was a small bank during the 

prior calendar year must include in its 

public file: 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. 


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(4) Banks with strategic plans. A bank 

that has been approved to be assessed 

under a strategic plan must include in 

its public file a copy of that plan. A 

bank need not include information 

submitted to the [Agency] 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 must 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 must update the 

description quarterly, by March 31, June 

30, September 30, and December 31, 

respectively. 

(c) Location of public information. A 

bank must make available to the public 

for inspection upon request and at no 

cost the information required in this 

section as follows: 

(1) All information required for the 

bank’s public file under this section 

must be maintained on the bank’s 

website. If the bank does not maintain 

a website, the information must be 

maintained at the main office and, if an 

interstate bank, at one branch office in 

each state; and 

(2) The public file must contain the 

following information: 

(i) A copy of the public section of the 

bank’s most recent CRA performance 

evaluation and a list of services 

provided by the branch; and 

(ii) Within five calendar days of the 

request, all the information that the 

bank is required to maintain under this 

section in the public file relating to the 

facility-based assessment area in which 

the branch is located. 

(d) Copies. Upon request, a bank must 

provide copies, either on paper or in 

digital 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 not provided 

in digital form). 

(e) Timing requirements. Except as 

otherwise provided in this section, a 

bank must ensure that its public file 

contains the information required by 

this section for each of the previous 

three calendar years, with the most 

recent calendar year included in its file 

annually by April 1 of the current 

calendar year. 

§ __.44 Public notice by banks. 

A bank must provide in the public 

area of its main office and each of its 

branches the appropriate public notice 

set forth in appendix F of this part. Only 

a branch of a bank having more than one 

facility-based assessment area must 

include the bracketed material in the 

notice for branch offices. Only a bank 

that is an affiliate of a holding company 

must include the next to the last 

sentence of the notices. A bank must 

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. 

§ __.45 Publication of planned examination 

schedule. 

The [Agency] publishes on its public 

website, at least 60 days in advance of 

the beginning of each calendar quarter, 

a list of banks scheduled for CRA 

examinations for the next two quarters. 

§ __.46 Public engagement. 

(a) In general. The [Agency] 

encourages communication between 

members of the public and banks, 

including through members of the 

public submitting written public 

comments regarding community credit 

needs and opportunities as well as 

regarding a bank’s record of helping to 

meet community credit needs. The 

[Agency] will take these comments into 

account in connection with the bank’s 

next scheduled CRA examination. 

(b) Submission of public comments. 

Members of the public may submit 

public comments regarding community 

credit needs and a bank’s CRA 

performance by submitting comments to 

the [Agency] electronically at [Agency 

contact information]. 

(c) Timing of public comments. If the 

[Agency] receives a public comment 

before the close date of a bank’s CRA 

examination, the public comment will 

be considered in connection with that 

CRA examination. If the [Agency] 

receives a public comment after the 

close date of a bank’s CRA examination, 

it will be considered in connection with 

the bank’s subsequent CRA 

examination. 

(d) Distribution of public comments. 

The [Agency] will forward all public 

comments received regarding a bank’s 

CRA performance to the bank. The 

[Agency] may also publish the public 

comments on its public website. 

Subpart E—Transition Rules 

§ __.51 Applicability dates, and transition 

provisions. 

(a) Applicability dates. (1) In general. 

Except as provided in paragraphs (a)(2), 

(b), and (c) of this section, this part is 

applicable to banks, and banks must 

comply with any requirements in this 

part, beginning on the first day of the 

first calendar quarter that is at least 60 

days after publication of the final rule. 

(2) Specific applicability dates. The 

following sections are applicable to 

banks, and banks must comply with any 

requirements in these sections, on the 

following dates: 

(i) On [DATE ONE YEAR AFTER 

DATE OF PUBLICATION IN THE 

FEDERAL REGISTER]: §§ __.12, 

excluding the definitions of ‘‘small 

business’’ and ‘‘small farm,’’ through __

.15; __.17 through __.28; __.29(b)(1) and 

(b)(3); __.42(a), (c), (d), (e), and (f); and 

appendices A through F. 

(ii) On [DATE TWO YEARS AFTER 

DATE OF PUBLICATION IN THE 

FEDERAL REGISTER], § __.12 with 

respect to the definitions of ‘‘small 

business’’ and ‘‘small farm’’; and § __

.42(b), (g), (h) and (i). 

(b) Examinations. (1) Start Date for 

CRA Examinations under New Tests. 

The [Agency] will begin conducting 

CRA examinations pursuant to the 

relevant performance tests described in 

§§ __.22 through __.28, as applicable, 

and § .42(j), after [DATE TWO YEARS 

AFTER DATE OF PUBLICATION IN 

THE FEDERAL REGISTER]. 

(2) Consideration of Bank Activities. 

(i) In assessing a bank’s CRA 

performance, the [Agency] will consider 

any loan, investment, or service that 

was eligible for CRA consideration at 

the time the bank conducted the 

activity. 

(ii) Notwithstanding paragraph (i), in 

assessing a bank’s CRA performance the 

[Agency] will consider any loan or 

investment that was eligible for CRA 

consideration at the time that the bank 

entered into a legally binding 

commitment to make the loan or 

investment. 

(c) Strategic Plans. (1) New and 

replaced strategic plans. The CRA 

regulatory requirements in effect on 

[DATE ONE DAY BEFORE DATE OF 

PUBLICATION DATE IN THE 

FEDERAL REGISTER] applies to any 

new strategic plan, including a plan that 

replaces an expired strategic plan, 

submitted to the [Agency] for approval 

on or after [DATE OF PUBLICATION IN 

THE FEDERAL REGISTER] but before 

[DATE ONE YEAR AFTER DATE OF 

PUBLICATION IN THE FEDERAL 

REGISTER]. Strategic plans approved 

under this paragraph remain in effect 

until the expiration date of the plan. 

(2) Existing strategic plans. A strategic 

plan in effect as of [DATE OF 

PUBLICATION IN THE FEDERAL 

REGISTER] remains in effect until the 

expiration date of the plan. 


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34040 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

Appendix A to Part __—Calculations 

for the Retail Tests 

Appendix A, based on requirements 

described in §§ __.22, __.23, and __.28, 

includes the following sections: 

Retail Lending Volume Screen; 

Geographic Distribution and Borrow 

Distribution Metrics and Benchmarks—In 

General 

Geographic Distribution Metrics and 

Benchmarks; 

Borrower Distribution Metrics and 

Benchmarks; 

Recommended Retail Lending Test 

Conclusions; and 

Retail Lending Test and Retail Services and 

Products Test Weighting and Conclusions in 

States, Multistate MSAs, and at the 

Institution Level. 

I. Retail Lending Volume Screen 

Section __.22(c)(3) provides that a large 

bank must have a Bank Volume Metric of 30 

percent or greater of the Market Volume 

Benchmark, or the [Agency] must determine 

that there is an acceptable basis for the bank 

failing to meet this threshold after reviewing 

the additional factors described in § __

.22(c)(2)(iii), to be eligible for a 

recommended Retail Lending Test 

conclusion of ‘‘Outstanding,’’ ‘‘High 

Satisfactory,’’ or ‘‘Low Satisfactory’’ in a 

facility-based assessment area. An 

intermediate bank, or a small bank that opts 

to be evaluated under the Retail Lending 

Test, that does not have a Bank Volume 

Metric of 30 percent or greater of the Market 

Volume Benchmark, where the [Agency] does 

not determine that there is an acceptable 

basis for the bank failing to meet the metric 

after reviewing the additional factors in § __

.22(c)(2)(iii), remains eligible for all possible 

recommended Retail Lending Test 

conclusions in a facility-based assessment 

area, with the [Agency] assessing the bank’s 

performance relative to the Retail Lending 

Volume Threshold as one factor in assigning 

a conclusion. 

The [Agency] calculates the Bank Volume 

Metric and the Market Volume Benchmark 

for a facility-based assessment area, and 

determines whether the bank has passed the 

Retail Lending Volume Threshold in that 

facility-based assessment area, as set forth 

below. 

1. Bank Volume Metric. The [Agency] 

calculates the Bank Volume Metric by 

dividing the annual average of the year-end 

total dollar amount of the bank’s originated 

and purchased automobile, closed-end home 

mortgage, open-end home mortgage, 

multifamily, small business, and small farm 

loans in the facility-based assessment area by 

the annual average of the bank’s deposits in 

that facility-based assessment area over the 

evaluation period. For a bank that collects 

and maintains deposits data as provided in 

§ __.42, the dollar amount of its deposits in 

each assessment area is the annual average of 

deposits over the evaluation period. For 

banks that do not collect and maintain 

deposits data as provided in § __.42, the 

[Agency] measures the dollars of deposits in 

each assessment area as the annual average 

of deposits assigned to branches that the 

bank operates in its assessment area, as 

reported in the FDIC’s Summary of Deposits, 

available at www.FDIC.gov, over the 

evaluation period. 

Example: Assume that the year-end total 

dollar amount of a bank’s originated and 

purchased loans in a facility-based 

assessment area, averaged over the years 

considered in the evaluation period, is $1 

million. Assume further that the evaluation 

period annual average of deposits in that 

facility-based assessment area is $5 million. 

The Bank Volume Metric for that facilitybased assessment area would be $1 million 

divided by $5 million, or 20 percent. 

2. Market Volume Benchmark. For each 

facility-based assessment area, the [Agency] 

calculates the Market Volume Benchmark. 

The numerator of the Market Volume 

Benchmark is the annual average of the yearend total dollar amount of all originated 

automobile, closed-end home mortgage, 

open-end home mortgage, multifamily, small 

business, and small farm loans in counties 

wholly or partially within the facility-based 

assessment area originated and reported by 

large banks that operated a branch in those 

counties at the end of that year. This 

numerator is divided by the annual average 

of the deposits of those banks from those 

counties. The deposits in the facility-based 

assessment area is the sum of: (i) The annual 

average of deposits in counties in the facilitybased assessment area reported by all large 

banks with assets of over $10 billion that 

operate a branch in the assessment area in 

the years of the evaluation period during 

which they operated a branch at the end of 

the year; and (ii) the annual average of 

deposits assigned to branches in the facilitybased assessment area by all large banks with 

assets of $10 billion or less, according to the 

FDIC’s Summary of Deposits, over the 

evaluation period. 

Example: Assume that the annual average 

of the year-end total dollar amount of all 

retail loans originated in counties wholly or 

partially within the facility-based assessment 

area by banks that operated a branch in that 

assessment area is $20 million. Assume 

further that the deposits sourced by those 

banks wholly or partially within the facilitybased assessment area is $50 million. The 

Market Volume Benchmark for that facilitybased assessment area would be $20 million 

divided by $50 million, or 40 percent. 

3. Retail Lending Volume Threshold. For 

each facility-based assessment area, the 

[Agency] calculates a Retail Lending Volume 

Threshold by multiplying the Market Volume 

Benchmark for that facility-based assessment 

area by 30 percent (or 0.3). The bank passes 

the Retail Lending Volume Threshold in a 

facility-based assessment area if the Bank 

Volume Metric is greater than or equal to the 

Retail Lending Volume Threshold. 

Example: Based on the above examples, 

the Retail Lending Volume Threshold would 

be calculated by multiplying the Market 

Volume Benchmark of 40 percent by 0.3 for 

a result of 12 percent. The Bank Volume 

Metric, 20 percent, is greater than the Retail 

Lending Volume Threshold. Accordingly, the 

bank passes the Retail Lending Volume 

Threshold. 

Bank Volume Metric (20%) > Retail 

Lending Volume Threshold {(40%) × 0.3 = 

12%} 

II. Geographic Distribution and Borrower 

Distribution Metrics and Benchmarks—in 

General 

1. The distribution metrics and 

benchmarks in this section apply: In a bank’s 

facility-based assessment areas and, as 

applicable, in retail lending assessment areas, 

and outside retail lending area. As 

applicable, the [Agency] assesses a bank’s 

Retail Lending Test performance in an 

outside retail lending area only at the 

institution level, using benchmarks tailored 

to the bank’s specific geographic areas 

served. 

2. An intermediate bank’s retail lending in 

an outside retail lending area is only 

evaluated if the bank originates and 

purchases over 50 percent of its retail loans, 

by dollar amount, outside of its facility-based 

assessment areas over the relevant evaluation 

period. 

3. A bank’s retail lending performance in 

the specified geographies is compared against 

applicable retail lending performance ranges, 

using geographic and borrower retail loan 

distribution metrics, as calculated in 

paragraphs III and IV of this appendix. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.014</GPH> EP03JN22.015</GPH>

Bank Retail Loans ($1 million) 

Bank Deposits ($5 million) = Bank Volume Metric (20%) 

Aggregate Market Retail Loans ($20 million) 

Aggregate Market Deposits ($50 million) = Market Volume Benchmark (40%) 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34041 

4. With the exception of the facility-based 

assessment area of a large bank in which it 

failed to meet the Retail Lending Volume 

Threshold and the [Agency] did not find an 

acceptable basis for the bank failing to meet 

the threshold, a bank will be assigned a 

recommended Retail Lending Test 

conclusion in the specified geographic areas 

of ‘‘Outstanding,’’ ‘‘High Satisfactory,’’ ‘‘Low 

Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance.’’ 

III. Geographic Distribution Metrics and 

Benchmarks 

For each of the bank’s major product lines 

in applicable geographic areas, a bank’s 

geographic distribution performance will be 

measured by means of a comparison of the 

Geographic Bank Metric to the Geographic 

Market Benchmark and the Geographic 

Community Benchmark. The relevant 

calculations are described below. 

1. Calculation of Geographic Bank Metrics. 

For each of a bank’s major product lines, the 

[Agency] measures the bank’s geographic 

distribution of retail lending, originated and 

purchased, in the applicable geographic area. 

For this measure, the [Agency] derives 

Geographic Bank Metrics, as set out below. 

The [Agency] calculates a Geographic Bank 

Metric for each of the bank’s major product 

lines in low-income census tracts and 

moderate-income census tracts by dividing 

the total number of the bank’s originated and 

purchased loans in low-income census tracts 

and moderate-income census tracts, 

respectively, by the total number of the 

bank’s originated and purchased loans in the 

geographic area overall for that product line. 

Example: Assume that a bank originated 

and purchased 25 small farm loans in one of 

its facility-based assessment areas during the 

evaluation period, and that five of these were 

located in low-income census tracts. The 

Geographic Bank Metric for small farm loans 

in low-income census tracts would be five 

divided by 25, for a result of 20 percent. 

Assume that the bank originated and 

purchased six small farm loans in moderateincome census tracts. The Geographic Bank 

Metric for small farm loans in moderateincome census tracts would be six divided by 

25, for a result of 24 percent. 

2. Calculation of Geographic Market 

Benchmarks and Geographic Community 

Benchmarks. For each of a bank’s major 

product lines in an applicable geographic 

area, the [Agency] compares the bank’s 

geographic distribution of retail lending, 

originated and purchased, in the geographic 

area, as measured by the Geographic Bank 

Metric, to benchmarks set by overall lending 

activity in the area, as well as other 

information. The [Agency] derives 

Geographic Market Benchmarks and 

Geographic Community Benchmarks, as set 

out below. The method for calculating the 

Geographic Market Benchmarks and 

Geographic Community Benchmarks in 

outside retail lending areas includes 

additional steps to tailor the benchmarks to 

the geographic areas in which the bank’s 

retail lending is concentrated. 

a. Geographic Market Benchmarks in 

Facility-Based Assessment Areas and Retail 

Lending Assessment Areas. The [Agency] 

calculates the Geographic Market Benchmark 

for each of the bank’s major product lines, in 

low-income census tracts and moderateincome census tracts respectively, by 

dividing the total number of loans in each 

major product line that were originated by 

lenders that report relevant data for that 

product line by the total number of loans in 

that product line in the geographic area 

overall that were originated by lenders that 

report relevant data for that product line. 

Example: Assume that lenders that report 

small farm loan data originated 100 small 

farm loans in the counties within the 

assessment area, and that 40 of these were 

located in low-income census tracts. The 

Geographic Market Benchmark for small farm 

loans in low-income census tracts would be 

40 divided by 100, or 40 percent. Assume 

that an additional 30 of these were located 

in moderate-income census tracts. The 

Geographic Market Benchmark for small farm 

loans in moderate-income census tracts 

would be 30 divided by 100, or 30 percent. 

b. Geographic Community Benchmarks in 

Facility-Based Assessment Areas and Retail 

Lending Assessment Areas. The [Agency] 

calculates the Geographic Community 

Benchmark for each major product line, in 

low-income census tracts and moderateincome census tracts respectively, as follows: 

i. For closed-end home mortgage loans and 

open-end home mortgage loans, by dividing 

the total number of owner-occupied 

residential units in low-income census tracts 

and moderate-income census tracts, 

respectively, by the total number of owneroccupied residential units in the geographic 

area overall. 

ii. For multifamily loans, by dividing the 

total number of residential units in 

multifamily buildings in low-income census 

tracts and moderate-income census tracts, 

respectively, by the total number of 

residential units in multifamily buildings in 

the geographic area overall. 

iii. For small business loans, by dividing 

the total number of small businesses in lowincome census tracts and moderate-income 

census tracts, respectively, by the total 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.019</GPH> EP03JN22.010</GPH>

Bank Loans in Low - Income Census Tracts (5) _ . . 0 Bank Loans (25) - Geographic Bank Metric (20 Yo) 

Bank Loans in Moderate - Income Census Tracts (6) 

Bank Loans (25) 

= Geographic Bank Metric (24%) 

Aggregate Market Loans in Low - Income Census Tracts (40) 

Aggregate Market Loans (100) 

= Geographic Market Benchmark (40%) 

Aggregate Market Loans in Moderate - Income Census Tracts (30) 

Aggregate Market Loans (100) 

= Geographic Market Benchmark (30%) 
34042 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

number of small businesses in the geographic 

area overall. 

iv. For small farm loans, by dividing the 

total number of small farms in low-income 

census tracts and moderate-income census 

tracts, respectively, by the total number of 

small farms in the geographic area overall. 

v. For automobile loans, by dividing the 

total number of households in low-income 

census tracts and moderate-income census 

tracts, respectively, by the total number of 

households in the geographic area overall. 

Example: Assume that there were 4,000 

small business establishments in the 

assessment area, and that 500 of these were 

in low-income census tracts. The Geographic 

Community Benchmark for small business 

loans in low-income census tracts would be 

500 divided by 4,000, or 12.5 percent. 

Assume that an additional 1,000 of these 

were in moderate-income census tracts. The 

Geographic Community Benchmark for small 

business loans in moderate-income census 

tracts would be 1,000 divided by 4,000, or 25 

percent. 

c. Tailored Geographic Market Benchmarks 

in Outside Retail Lending Areas. The 

[Agency] calculates the Tailored Geographic 

Market Benchmark for each of the bank’s 

major product lines, in low-income census 

tracts and moderate-income census tracts 

respectively, in outside retail lending areas. 

The Tailored Geographic Market Benchmark 

is calculated by means of a weighted average 

of the Geographic Market Benchmark from 

every MSA and the nonmetropolitan portion 

of every state, weighted by the percentage, in 

dollars, of the bank’s retail lending outside of 

facility-based assessment areas and retail 

lending assessment areas in each of those 

MSAs and nonmetropolitan portions of 

states. Specifically: 

i. The [Agency] calculates the Geographic 

Market Benchmarks for each major product 

line and income group separately for each 

MSA and for the nonmetropolitan portion of 

each state, following the formula described in 

section III.2.a of this appendix. 

ii. The [Agency] calculates local weights as 

the dollar amount of the bank’s retail lending 

that occurred outside of its facility-based 

assessment areas and retail lending 

assessment areas in each MSA and the 

nonmetropolitan portion of each state, as a 

percentage of the bank’s total dollar amount 

of retail lending in its outside retail lending 

area. 

iii. The [Agency] then calculates the 

Tailored Geographic Market Benchmarks as 

the weighted average of the benchmarks 

calculated in section III.2.c.i of this 

appendix, using the weights calculated in 

section III.2.c.ii. 

For retail lending in outside retail lending 

areas, the [Agency] will use the Tailored 

Geographic Market Benchmark as the 

relevant Geographic Market Benchmark for 

calculating the Performance Ranges 

described in section V of this appendix. 

d. Tailored Geographic Community 

Benchmarks in Outside Retail Lending Areas. 

The [Agency] calculates the Tailored 

Geographic Community Benchmark for each 

of the bank’s major product lines, in lowincome census tracts and moderate-income 

census tracts respectively, in outside retail 

lending areas. The Tailored Geographic 

Community Benchmark is calculated by 

means of a weighted average of the 

Geographic Community Benchmark from 

every MSA and the nonmetropolitan portion 

of every state, weighted by the percentage, in 

dollars, of the bank’s retail lending outside of 

facility-based assessment areas and retail 

lending assessment areas in each of those 

MSAs and nonmetropolitan portions of 

states. Specifically: 

i. The [Agency] calculates the Geographic 

Community Benchmarks for each major 

product line and income group separately for 

each MSA and for the nonmetropolitan 

portion of each state, following the formula 

described in section III.2.b of this appendix. 

ii. The [Agency] calculates local weights as 

the dollar amount of the bank’s retail lending 

that occurred outside of its facility-based 

assessment areas and retail lending 

assessment areas in each MSA and the 

nonmetropolitan portion of each state, as a 

percentage of the bank’s total dollar amount 

of retail lending in outside retail lending 

areas. 

iii. The [Agency] then calculates the 

Tailored Geographic Community 

Benchmarks as the weighted average of the 

benchmarks calculated in section III.2.d.i of 

this appendix, using the weights calculated 

in section III.2.d.ii. 

For retail lending in outside retail lending 

areas, the [Agency] will use the Tailored 

Geographic Community Benchmark as the 

relevant Geographic Community Benchmark 

for calculating the Performance Ranges 

described in section V of this appendix. 

IV. Borrower Distribution Metrics and 

Benchmarks 

For each of the bank’s major product lines, 

excluding multifamily lending, in applicable 

geographic areas, a bank’s borrower 

distribution performance will be measured 

by means of a comparison of the Borrower 

Bank Metric to the Borrower Market 

Benchmark and the Borrower Community 

Benchmark. 

The relevant calculations for applicable 

geographic areas are described below. 

1. Calculation of Borrower Bank Metrics. 

The [Agency] calculates the Borrower Bank 

Metric for each major product line, excluding 

multifamily loans, in an applicable 

geographic area as follows: 

i. For closed-end home mortgage loans, by 

dividing the total number of the bank’s 

originated and purchased closed-end home 

mortgage loans to low-income borrowers or 

moderate-income borrowers, respectively, in 

the geographic area by the total number of 

the bank’s originated and purchased closedend home mortgage loans in that geographic 

area overall. 

ii. For open-end home mortgage loans, by 

dividing the total number of the bank’s 

originated and purchased open-end home 

mortgage loans to low-income borrowers or 

moderate-income borrowers, respectively, in 

the geographic area by the total number of 

the bank’s originated and purchased openend home mortgage loans in that geographic 

area overall. 

iii. For small business loans, by dividing 

the total number of the bank’s originated and 

purchased small business loans to small 

businesses with gross annual revenues of 

$250,000 or less or small businesses with 

gross annual revenues of more than $250,000 

but less than or equal to $1 million, 

respectively, in the geographic area by the 

total number of the bank’s originated and 

purchased small business loans in that 

geographic area overall. (Until such time as 

the data reported under the CFPB’s Section 

1071 Rulemaking is available, the Borrower 

Bank Metric would instead be the total 

number of small business loans to businesses 

with gross annual revenues of less than or 

equal to $1 million divided by the total 

number of small business loans.) 

iv. For small farm loans, by dividing the 

total number of the bank’s originated and 

purchased small farm loans to small farms 

with gross annual revenues of $250,000 or 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.011</GPH>

Small Businesses in Low - Income Census Tracts (500) 

Small Businesses (4,000) 

= Geographic Community Benchmark (12.5%) 

Small Businesses in Moderate - Income Census Tracts (1,000) 

Small Businesses (4,000) 

= Geographic Community Benchmark (25%) 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34043 

less or small farms with gross annual 

revenues of more than $250,000 but less than 

or equal to $1 million, respectively, in the 

geographic area by the total number of the 

bank’s originated and purchased small farm 

loans in that geographic area overall. (Until 

such time as the data reported under the 

CFPB’s Section 1071 Rulemaking is available, 

the Borrower Bank Metric would instead be 

the total number of small farm loans to farms 

with gross annual revenues of less than or 

equal to $1 million divided by the total 

number of small farm loans.) 

v. For automobile loans, by dividing the 

total number of the bank’s originated and 

purchased automobile loans to low-income 

borrowers or moderate-income borrowers, 

respectively, in the geographic area by the 

total number of the bank’s originated and 

purchased automobile loans in that 

geographic area overall. 

Example: Assume that a bank originated 

and purchased 100 closed-end home 

mortgage loans in one of its facility-based 

assessment areas during the evaluation 

period, and that 20 of these went to lowincome borrowers. The Borrower Bank 

Metric for closed-end home mortgage loans to 

low-income borrowers would be 20 divided 

by 100, or 20 percent. Assume that an 

additional 30 of these went to moderateincome borrowers. The Borrower Bank 

Metric for closed-end home mortgage loans to 

moderate-income borrowers would be 30 

divided by 100, or 30 percent. 

2. Calculation of Borrower Market 

Benchmarks and Borrower Community 

Benchmarks. For each of a bank’s major 

product lines in an applicable geographic 

area, the [Agency] compares the bank’s 

borrower distribution of retail lending, 

originated and purchased, in the geographic 

area, as measured by the Borrower Bank 

Metric, to benchmarks set by overall lending 

activity in the area, as well as other 

information. The [Agency] derives Borrower 

Market Benchmarks and Borrower 

Community Benchmarks, as set out below. 

The method for calculating the Borrower 

Market Benchmarks and Borrower 

Community Benchmarks in outside retail 

lending areas includes additional steps to 

tailor the benchmarks to the regions in which 

the bank’s retail lending is concentrated. 

a. Borrower Market Benchmarks in FacilityBased Assessment Areas and Retail Lending 

Assessment Areas. The [Agency] calculates 

the Borrower Market Benchmark for each of 

the bank’s major product lines, excluding 

multifamily loans, for borrowers of each 

applicable income level in an applicable 

geographic area as follows. 

i. For closed-end home mortgage loans, by 

dividing the total number of closed-end 

home mortgage loans to low-income 

borrowers or moderate-income borrowers, 

respectively, in the geographic area overall 

that were originated by all lenders that report 

home mortgage loan data by the total number 

of closed-end home mortgage loans in that 

geographic area overall that were originated 

by all lenders that report home mortgage loan 

data. 

ii. For open-end home mortgage loans, by 

dividing the total number of open-end home 

mortgage loans to low-income borrowers or 

moderate-income borrowers, respectively, in 

the geographic area overall that were 

originated by all lenders that report home 

mortgage loan data by the total number of 

open-end home mortgage loans in that 

geographic area overall that were originated 

by all lenders that report home mortgage loan 

data. 

iii. For small business loans, by dividing 

the total number of small business loans to 

small businesses with gross annual revenues 

of $250,000 or less or small businesses with 

gross annual revenues of more than $250,000 

but less than or equal to $1 million, 

respectively, in the geographic area overall 

that were originated by all lenders that report 

small business loan data by the total number 

of small business loans in that geographic 

area overall that were originated by all 

lenders that report small business loan data. 

(Until such time as the data reported under 

the CFPB’s Section 1071 Rulemaking is 

available, the Borrower Market Benchmark 

would instead be the total number of small 

business loans to businesses with gross 

annual revenues of less than or equal to $1 

million divided by the total number of small 

business loans.) 

iv. For small farm loans, by dividing the 

total number of small farm loans to small 

farms with gross annual revenues of $250,000 

or less or small farms with gross annual 

revenues of more than $250,000 but less than 

or equal to $1 million, respectively, in the 

geographic area overall that were originated 

by all lenders that report small farm loan data 

by the total number of small farm loans in 

that geographic area overall that were 

originated by all lenders that report small 

farm loan data. (Until such time as the data 

reported under the CFPB’s Section 1071 

Rulemaking is available, the Borrower Market 

Benchmark would instead be the total 

number of small farm loans to farms with 

gross annual revenues of less than or equal 

to $1 million divided by the total number of 

small farm loans.) 

v. For automobile loans, by dividing the 

total number of the automobile loans to lowincomer borrowers or moderate-income 

borrowers, respectively, in the geographic 

area overall that were originated by all 

lenders that report automobile loan data by 

the total number of automobile loans in that 

geographic area overall that were originated 

by all lenders that report automobile loan 

data. 

Example: Assume that all lenders that 

report home mortgage loan data originated 

and purchased 1,000 closed-end home 

mortgage loans in the counties that 

encompass the bank’s facility-based 

assessment area during the evaluation period, 

and that 100 of these went to low-income 

borrowers. The Borrower Market Benchmark 

for closed-end home mortgage loans to lowincome borrowers would be 100 divided by 

1,000, or 10 percent. Assume that an 

additional 200 of these went to moderateincome borrowers. The Borrower Market 

Benchmark for closed-end home mortgage 

loans to moderate-income borrowers would 

be 200 divided by 1,000, or 20 percent. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.012</GPH>

Bank Loans to Low - Income Borrowers (ZO) = Borrower Bank Metric (20%) 

Bank Loans (100) 

Bank Loans to Moderate - Income Borrowers (30) = Borrower Bank Metric (30%) 

Bank Loans (100) 
34044 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

b. Borrower Community Benchmarks in 

Facility-Based Assessment Areas and Retail 

Lending Assessment Areas. The [Agency] 

calculates the Borrower Community 

Benchmark for each of the bank’s major 

product lines, excluding multifamily loans, 

in an applicable geographic area as follows. 

i. For closed-end home mortgage loans and 

open-end home mortgage loans, by dividing 

the total number of low-income families or 

moderate-income families, respectively, in 

the geographic area by the total number of 

families in that geographic area overall. 

ii. For small business loans, by dividing 

the total number of small businesses with 

gross annual revenues of $250,000 or less or 

small businesses with gross annual revenues 

of more than $250,000 but less than or equal 

to $1 million, respectively, in the geographic 

area by the total number of small businesses 

in that geographic area overall. (Until such 

time as the data reported under the CFPB’s 

Section 1071 Rulemaking is available, the 

Borrower Community Benchmark would 

instead be the total number of businesses 

with gross annual revenues of less than or 

equal to $1 million divided by the total 

number of small businesses.) 

iii. For small farm loans, by dividing the 

total number of small farms with gross 

annual revenues of $250,000 or less or small 

farms with gross annual revenues of more 

than $250,000 but less than or equal to $1 

million, respectively, in the geographic area 

by the total number of small farms in that 

geographic area overall. (Until such time as 

the data reported under the CFPB’s Section 

1071 Rulemaking is available, the Borrower 

Community Benchmark would instead be the 

total number of farms with gross annual 

revenues of less than or equal to $1 million 

divided by the total number of small farms.) 

iv. For automobile loans, by dividing the 

total number of low-income households or 

moderate-income households, respectively, 

in the geographic area by the total number of 

households in that geographic area overall. 

Example: Assume that there were 4,000 

families in the facility-based assessment area, 

and that 1,000 of these were low-income 

families. The facility-based assessment area 

Borrower Community Benchmark for, 

respectively, closed-end home mortgages and 

open-end home mortgages for low-income 

families would be 1,000 divided by 4,000, or 

25 percent. Assume that an additional 1,200 

of these were moderate-income families. The 

facility-based assessment area Borrower 

Community Benchmark for, respectively, 

closed-end home mortgages and open-end 

home mortgages for moderate-income 

families would be 1,200 divided by 4,000, or 

30 percent. 

c. Tailored Borrower Market Benchmarks 

in Outside Retail Lending Areas. The 

[Agency] calculates the Tailored Borrower 

Market Benchmark for each of the bank’s 

major product lines, excluding multifamily 

loans, to borrowers of different income 

categories respectively, in outside retail 

lending areas. The Tailored Borrower Market 

Benchmark is calculated by means of a 

weighted average of the Borrower Market 

Benchmark from every MSA and the 

nonmetropolitan portion of every state, 

weighted by the percentage, in dollars, of the 

bank’s retail lending outside of facility-based 

assessment areas and retail lending 

assessment areas in each of those MSAs and 

nonmetropolitan portions of states. 

Specifically: 

i. The [Agency] calculates the Borrower 

Market Benchmarks for each major product 

line and income group separately for each 

MSA and for the nonmetropolitan portion of 

each state, following the formula described in 

section IV.2.a of this appendix. 

ii. The [Agency] calculates local weights as 

the dollar amount of the bank’s retail lending 

that occurred in outside retail lending areas 

in each MSA and the nonmetropolitan 

portion of each state, as a percentage of the 

bank’s total dollar amount of retail lending in 

outside retail lending areas. 

iii. The [Agency] then calculates the 

Tailored Borrower Market Benchmarks as the 

weighted average of the Benchmarks 

calculated in section IV.2.c.i of this 

appendix, using the weights calculated in 

section IV.2.c.ii. 

For retail lending in outside retail lending 

areas, the [Agency] will use the Tailored 

Borrower Market Benchmark as the relevant 

Borrower Market Benchmark for calculating 

the Performance Ranges described in section 

V of this appendix. 

d. Tailored Borrower Community 

Benchmarks in Outside Retail Lending Areas. 

The [Agency] calculates the Tailored 

Borrower Community Benchmark for each of 

the bank’s major product lines, except for 

multifamily loans, to borrowers of different 

income categories respectively, in the bank’s 

outside retail lending area. The Tailored 

Borrower Community Benchmark is 

calculated by means of a weighted average of 

the Borrower Community Benchmark from 

every MSA and the nonmetropolitan portion 

of every state, weighted by the percentage, in 

dollars, of the bank’s retail lending outside of 

facility-based assessment areas and retail 

lending assessment areas in each of those 

MSAs and nonmetropolitan portions of 

states. Specifically: 

i. The [Agency] calculates the Borrower 

Community Benchmarks for each major 

product line and income group separately for 

each MSA and for the nonmetropolitan 

portion of each state, following the formula 

described in section IV.2.b of this appendix. 

ii. The [Agency] calculates local weights as 

the dollar amount of the bank’s retail lending 

that occurred in outside retail lending areas 

in each MSA and the nonmetropolitan 

portion of each state, as a percentage of the 

bank’s total dollar amount of retail lending in 

outside retail lending areas. 

iii. The [Agency] then calculates the 

Tailored Borrower Community Benchmarks 

as the weighted average of the Benchmarks 

calculated in section IV.2.d.i of this 

appendix, using the weights calculated in 

section IV.2.d.ii. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP03JN22.013</GPH> EP03JN22.016</GPH>

Aggregate Market Loans to Low - Income Borrowers (100) 

Aggregate Market Loans (1,000) 

= Borrower Market Benchmark (10%) 

Aggregate Loans to Moderate - Income Borrowers (200) 

Aggregate Market Loans (1,000) 

= Borrower Market Benchmark (20%) 

Low - Income Families (1,000) _ . 0 Families (4,000) - Borrower Community Benchmark (25 Yo) 

Moderate - Income Families (1,200) _ . 0 Families (4,000) - Borrower Community Benchmark (30 Yo) 
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34045 

For retail lending in a bank’s outside retail 

lending area, the [Agency] will use the 

Tailored Borrower Community Benchmark as 

the relevant Borrower Community 

Benchmark for calculating the Performance 

Ranges described in section V of this 

appendix. 

V. Recommended Retail Lending Test 

Conclusions 

1. The [Agency] calculates an eligible 

bank’s recommended Retail Lending Test 

performance conclusion in each facilitybased assessment area, excluding the facilitybased assessment areas of a large bank in 

which it failed to meet or surpass the Retail 

Lending Volume Threshold and the [Agency] 

did not find an acceptable basis for that 

failure, and, as applicable, each retail lending 

assessment area, and in its outside retail 

lending area by comparing a bank’s borrower 

and geographic distribution metrics for each 

major product line to a set of performance 

ranges determined by the market and 

community benchmarks. For facility-based 

assessment areas, the [Agency] will then 

consider the additional factors described in 

§ __.22(e) to adjust a bank’s recommended 

Retail Lending Test conclusion in those 

assessment areas, as appropriate. For facilitybased assessment areas of a large bank in 

which it failed to meet the Retail Lending 

Volume Threshold and the [Agency] did not 

find an acceptable basis for that failure, the 

[Agency] will use the recommended 

conclusion developed in this section along 

with other factors to determine whether the 

bank should be assigned a ‘‘Needs to 

Improve’’ or ‘‘Substantial Noncompliance’’ 

conclusion in that facility-based assessment 

area. 

2. In evaluating a bank’s Retail Lending 

Test performance in any applicable 

geographic area: 

a. For each major product line, the 

[Agency] will develop separate supporting 

conclusions for each of the categories 

outlined below regarding retail lending 

performance in the geographic area. These 

conclusions are based upon a comparison of 

the bank’s performance to the applicable set 

of performance ranges. Each supporting 

conclusion in the categories outlined below 

will receive a Performance Score: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

TABLE 1 TO APPENDIX A—RETAIL LENDING TEST CONCLUSION CATEGORIES

Major product line Lending in numerator of bank geographic 

metric Lending in numerator of bank borrower metric 

Closed-End Home Mortgage Loans ........... Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Open-End Home Mortgage Loans ............. Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Multifamily Loans ........................................ Low-Income Census Tracts ...................... N/A. 

Moderate-Income Census Tracts ............. N/A. 

Home Mortgage Loans ............................... Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Small Business Loans ................................ Low-Income Census Tracts ...................... Small Businesses with Gross Annual Revenues of 

$250,000 or Less. 

Moderate-Income Census Tracts ............. Small Businesses with Gross Annual Revenues of 

More than $250,000 but Less Than or Equal to $1 

million. 

Small Farm Loans ...................................... Low-Income Census Tracts ...................... Small Farms with Gross Annual Revenues of $250,000 

or Less. 

Moderate-Income Census Tracts ............. Small Farms with Gross Annual Revenues of More 

than $250,000 but Less Than or Equal to $1 million. 

Automobile Loans ....................................... Low-Income Census Tracts ...................... Low-Income Households. 

Moderate-Income Census Tracts ............. Moderate-Income Households. 

b. Geographic Distribution Performance 

Ranges. For assessing geographic 

distribution, for each major product line the 

[Agency] will compare the bank’s 

performance as measured by the relevant 

Geographic Bank Metrics in connection with, 

as applicable, lending in low-income census 

tracts and moderate-income census tracts to 

a set of Geographic Performance Ranges 

associated with each potential recommended 

Retail Lending Test conclusion for that 

income level. 

The Geographic Performance Ranges are 

each defined by the minimum Geographic 

Performance Threshold that the Geographic 

Bank Metric must meet or surpass to fall 

within a given Geographic Performance 

Range. The Geographic Performance 

Thresholds are determined by the values of 

the Geographic Market Benchmark and 

Geographic Community Benchmark, as well 

as set of Market Multipliers and Community 

Multipliers associated with each conclusion 

category. The [Agency] will calculate the 

Geographic Performance Thresholds and the 

resulting Geographic Performance Ranges in 

any applicable geographic area as follows: 

i. The Geographic Performance Threshold 

for a recommended ‘‘Outstanding’’ Retail 

Lending Test conclusion is the minimum of 

either: 

A. The product of 1.0 times the Geographic 

Community Benchmark; or 

B. The product of 1.25 times the 

Geographic Market Benchmark. 

The Outstanding Geographic Performance 

Range is all potential values of the 

Geographic Bank Metric equal to or above the 

Outstanding Geographic Performance 

Threshold. 

ii. The Geographic Performance Threshold 

for a recommended ‘‘High Satisfactory’’ 

Retail Lending Test conclusion is the 

minimum of either: 

A. The product of 0.9 times the Geographic 

Community Benchmark; or 

B. The product of 1.1 times the Geographic 

Market Benchmark. 

The High Satisfactory Geographic 

Performance Range is all potential values of 

the Geographic Bank Metric equal to or above 

the High Satisfactory Geographic 

Performance Threshold but below the 

Outstanding Geographic Performance 

Threshold. 

iii. The Geographic Performance Threshold 

for a recommended ‘‘Low Satisfactory’’ Retail 

Lending Test conclusion is the minimum of 

either: 

A. The product of 0.65 times the 

Geographic Community Benchmark; or 

B. The product of the 0.8 times the 

Geographic Market Benchmark. 

The Low Satisfactory Geographic 

Performance Range is all potential values of 

the Geographic Bank Metric equal to or above 

the Low Satisfactory Geographic Performance 

Threshold but below the High Satisfactory 

Geographic Performance Threshold. 

iv. The Geographic Performance Threshold 

for a recommended ‘‘Needs to Improve’’ 

Retail Lending Test conclusion is the 

minimum of either: 

A. The product of 0.33 times the 

Geographic Community Benchmark; or 

B. The product of 0.33 times the 

Geographic Market Benchmark. 

The Needs to Improve Geographic 

Performance Range is all potential values of 

the Geographic Bank Metric equal to or above 

the Needs to Improve Geographic 

Performance Threshold but below the Low 

Satisfactory Geographic Performance 

Threshold. 

v. The Substantial Noncompliance 

Geographic Performance Range is all 


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34046 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

potential values of the Geographic Bank 

Metric below the Needs to Improve 

Geographic Performance Threshold. 

c. Geographic Distribution Recommended 

Retail Lending Test Conclusions and 

Performance Scores. The [Agency] will 

compare the Geographic Bank Metric to the 

Geographic Performance Ranges described in 

paragraphs V.2.b.i through V.2.b.v of this 

appendix. The recommended Retail Lending 

Test conclusion for the geographic 

distribution performance will be the 

Geographic Performance Range the 

Geographic Bank Metric falls within. Based 

on this recommended Retail Lending Test 

conclusion, geographic performance for the 

product and income group is assigned a 

numerical performances score using the 

following points values: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points). 

d. Borrower Distribution Performance 

Ranges. For assessing borrower distribution, 

for each major product line, apart from 

multifamily lending, the [Agency] will 

compare the bank’s performance as measured 

by the relevant Borrower Bank Metrics in 

connection with, as applicable, lending to 

low-income borrowers, moderate-income 

borrowers, small businesses with annual 

revenues of $250,000 or less and small 

businesses with annual revenues of more 

than $250,000 but less than or equal to $1 

million, and small farms with annual 

revenues of $250,000 or less and small farms 

with annual revenues of more than $250,000 

but less than or equal to $1 million, to a set 

of Borrower Performance Ranges associated 

with each potential recommended Retail 

Lending Test conclusion for that borrower 

segment. 

The Borrower Performance ranges are each 

defined by the minimum Borrower 

Performance Threshold that the Borrower 

Bank Metric must meet or surpass to fall 

within a given Borrower Performance Range. 

The Borrower Performance Thresholds are 

determined by the values of the Borrower 

Market Benchmark and Borrower Community 

Benchmark, as well as the set of Market 

Multipliers and Community Multipliers 

associated with each conclusion category. 

The [Agency] will calculate the Borrower 

Performance Thresholds and the resulting 

Borrower Performance Ranges in any 

applicable geographic area, as follows: 

i. The Borrower Performance Threshold for 

a recommended ‘‘Outstanding’’ Retail 

Lending Test conclusion is the minimum of 

either: 

A. The product of 1.0 times the Borrower 

Community Benchmark; or 

B. The product of 1.25 times the Borrower 

Market Benchmark. 

The Outstanding Borrower Performance 

Range is all potential values of the Borrower 

Bank Metric equal to or above the 

Outstanding Borrower Performance 

Threshold. 

ii. The Borrower Performance Threshold 

for a recommended ‘‘High Satisfactory’’ 

Retail Lending Test conclusion is the 

minimum of either: 

A. The product of 0.9 times the Borrower 

Community Benchmark; or 

B. The product of 1.1 times the Borrower 

Market Benchmark. 

The High Satisfactory Borrower 

Performance Range is all potential values of 

the Borrower Bank Metric equal to or above 

the High Satisfactory Borrower Performance 

Threshold but below the Outstanding 

Borrower Performance Threshold. 

iii. The Borrower Performance Threshold 

for a recommended ‘‘Low Satisfactory’’ Retail 

Lending Test conclusion is the minimum of 

either: 

A. The product of 0.65 times the Borrower 

Community Benchmark; or 

B. The product of 0.8 times the Borrower 

Market Benchmark. 

The Low Satisfactory Borrower 

Performance Range is all potential values of 

the Borrower Bank Metric equal to or above 

the Low Satisfactory Borrower Performance 

Threshold but below the High Satisfactory 

Borrower Performance Threshold. 

iv. The Borrower Performance Threshold 

for a recommended ‘‘Needs to Improve’’ 

Retail Lending Test conclusion is the 

minimum of either: 

A. The product of 0.33 times the Borrower 

Community Benchmark; or 

B. The product of 0.33 times the Borrower 

Market Benchmark. 

The Needs to Improve Borrower 

Performance Range is all potential values of 

the Borrower Bank Metric equal to or above 

the Needs to Improve Borrower Performance 

Threshold but below the Low Satisfactory 

Borrower Performance Threshold. 

v. The Substantial Noncompliance 

Borrower Performance Range is all potential 

values of the Borrower Bank Metric below 

the Needs to Improve Borrower Performance 

Threshold. 

e. Borrower Distribution Recommended 

Conclusions and Performance Scores. The 

[Agency] will compare the Borrower Bank 

Metric to the Borrower Performance Ranges 

described in V.2.d.i through V.2.d.v above. 

The recommended Retail Lending Test 

conclusion for the borrower distribution 

performance, for each product and income 

group, will be that of the Borrower 

Performance Range the Borrower Bank Metric 

falls within. Based on this recommended 

Retail Lending Test conclusion, borrower 

performance for the product and income 

group is assigned a numerical performance 

score using the following points values: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

3. To determine a bank’s recommended 

Retail Lending Test conclusion for an 

applicable geography, the [Agency] utilizes a 

weighted average of a bank’s performance for 

the following categories with regard to each 

major product line: 

TABLE 2 TO APPENDIX A—RETAIL LENDING TEST MAJOR PRODUCT LINE WEIGHTING

Major product line Lending in numerator of bank 

geographic metric Lending in numerator of bank borrower metric 

Closed-End Home Mortgage Loans ........... Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Open-End Home Mortgage Loans ............. Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Multifamily Loans ........................................ Low-Income Census Tracts ...................... N/A. 

Moderate-Income Census Tracts ............. N/A. 

Home Mortgage Loans ............................... Low-Income Census Tracts ...................... Low-Income Borrowers. 

Moderate-Income Census Tracts ............. Moderate-Income Borrowers. 

Small Business Loans ................................ Low-Income Census Tracts ...................... Small Businesses with Gross Annual Revenues of 

$250,000 or Less. 

Moderate-Income Census Tracts ............. Small Businesses with Gross Annual Revenues of 

More Than $250,000 but Less Than or Equal to $1 

million. 

Small Farm Loans ...................................... Low-Income Census Tracts ...................... Small Farms with Gross Annual Revenues of $250,000 

or Less. 

Moderate-Income Census Tracts ............. Small Farms with Gross Annual Revenues of More 

than $250,000 but Less than or Equal to $1 million. 

Automobile Loans ....................................... Low-Income Census Tracts ...................... Low-Income Households. 

Moderate-Income Census Tracts ............. Moderate-Income Households. 


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a. The [Agency] follows the below steps to 

create a weighted average performance score 

for each major product line. 

i. First, for each major product line, the 

[Agency] creates a geographic income 

average of the bank’s Geographic 

Performance Scores and a borrower income 

average of the bank’s Borrower Performance 

Scores. 

ii. For the geographic income average of 

each major product line, the relevant 

Community Benchmark is used to weight 

together the bank’s Geographic Performance 

Scores. These benchmarks are outlined in the 

following table: 

TABLE 3 TO APPENDIX A—RETAIL LENDING TEST COMMUNITY BENCHMARK USED TO WEIGHT TOGETHER BANK’S

GEOGRAPHIC PERFORMANCE SCORES

Major product line Geographic distribution performance 

score component Geographic community benchmark weight 

Closed-End Home Mortgage and Open 

End Home Mortgage Loans.

Low-Income Census Tracts ...................... Percentage of Owner-Occupied Units in Low-Income 

Census Tracts. 

Moderate-Income Census Tracts ............. Percentage of Owner-Occupied Units in Moderate-Income Census Tracts. 

Multifamily Loans ........................................ Low-Income Census Tracts ...................... Percentage of Multifamily Units in Low-Income Census 

Tracts. 

Moderate-Income Census Tracts ............. Percentage of Multifamily Units in Moderate-Income 

Census Tracts. 

Small Business Loans ................................ Low-Income Census Tracts ...................... Percentage of Small Businesses in Low-Income Census Tracts. 

Moderate-Income Census Tracts ............. Percentage of Small Businesses in Moderate-Income 

Census Tracts. 

Small Farm Loans ...................................... Low-Income Census Tracts ...................... Percentage of Small Farms in Low-Income Census 

Tracts. 

Moderate-Income Census Tracts ............. Percentage of Small Farms in Moderate-Income Census Tracts. 

Automobile Loans ....................................... Low-Income Census Tracts ...................... Percentage of Households in Low-Income Census 

Tracts. 

Moderate-Income Census Tracts ............. Percentage of Households in Moderate-Income Census 

Tracts. 

iii. For the borrower income average of 

each major product line, excluding 

multifamily lending, the relevant Community 

Benchmark is used to weight together the 

bank’s Borrower Performance Scores. These 

benchmarks are outlined in the following 

table: 

TABLE 4 TO APPENDIX A—RETAIL LENDING TEST COMMUNITY BENCHMARK USED TO WEIGHT TOGETHER BANK’S

BORROWER PERFORMANCE SCORES

Major product line Borrower distribution performance 

score component Borrower community benchmark 

Closed-End Home Mortgage and 

Open-End Home Mortgage Loans.

Low-Income Borrowers ........................................... Percentage of Low-Income Families. 

Moderate-Income Borrowers ................................... Percentage of Moderate-Income Families. 

Multifamily Loans ................................. N/A .......................................................................... N/A. 

N/A .......................................................................... N/A. 

Small Business Loans .......................... Small Businesses with Gross Annual Revenues of 

$250,000 or Less.

Percentage of Small Businesses with Gross Annual Revenues of $250,000 or Less. 

Small Businesses with Gross Annual Revenues of 

More Than $250,000 and Less Than or Equal to 

$1 Million.

Percentage of Small Businesses with Gross Annual Revenues of More Than $250,00 and Less 

Than or Equal to $1 Million. 

Small Farm Loans ................................ Small Farms with Gross Annual Revenues of 

$250,000 or Less.

Percentage of Small Farms with Gross Annual 

Revenues of $250,000 or Less. 

Small Farms with Gross Annual Revenues of 

More Than $250,000 and Less Than or Equal to 

$1 Million.

Percentage of Small Farms with Gross Annual 

Revenues of More Than $250,00 and Less 

Than or Equal to $1 Million. 

Automobile Loans ................................ Low-Income Borrowers ........................................... Percentage of Low-Income Households. 

Moderate-Income Borrowers ................................... Percentage of Moderate-Income Households. 

In the case of an assessment area that 

contains no low-income census tracts and no 

moderate-income census tracts, the bank will 

not receive a geographic income average for 

that assessment area 

Example: Suppose that a bank originates 

and purchases closed-end home mortgage 

loans in a facility-based assessment area. 

Assume that owner-occupied housing in 

moderate-income census tracts represent 80 

percent of all owner-occupied units in lowand moderate-income census tracts 

combined, and accordingly closed-end home 

mortgage loans in moderate-income census 

tracts receive an 80 percent weight and 

closed-end home mortgage loans in lowincome census tracts receive a 20 percent 

weight. Additionally, assume that for closedend home mortgage loans, the bank’s 

geographic distribution conclusion in 

connection with low-income census tracts 

was ‘‘High Satisfactory’’ (Performance Score 

of 7 points) and its geographic distribution 

conclusion in connection with moderateincome census tracts was ‘‘Needs to 

Improve’’ (Performance Score of 3 points). 

For geographic distribution: The bank’s 

geographic income average for closed-end 

home mortgage loans would be 3.8 [(7 points 


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34048 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

× 0.2 weight = 1.4) + (3 points × 0.8 weight 

= 2.4)]. 

Assume also that low-income families 

account for 70 percent of the total low- and 

moderate-income families in the assessment 

area, and that accordingly closed-end home 

mortgage lending to low-income families 

receives a 70 percent weight and closed-end 

home mortgage lending to moderate-income 

families receives a 30 percent weight. 

Additionally assume that the bank’s borrower 

distribution conclusion in connection with 

low-income borrowers was ‘‘Outstanding’’ 

(Performance Score of 10 points) and its 

borrower distribution conclusion in 

connection with moderate-income borrowers 

was ‘‘Low Satisfactory’’ (Performance Score 

of 6 points). 

For borrower distribution: The bank’s 

borrower income average for closed-end 

home mortgage loans would be 8.8 [(10 

points × 0.7 weight = 7.0) + (6 points × 0.3 

weight = 1.8)]. 

b. Second, for each major product line, the 

[Agency] then uses the simple mean of the 

geographic income average and the borrower 

income average to develop a product line 

average. For multifamily lending, banks do 

not receive borrower income performance 

conclusions so the product line average is set 

equal to the geographic income average. If a 

bank has no geographic income average for 

a product (due to the absence of both lowincome census tracts and moderate-income 

census tracts in the geographic area), then the 

product line average is set equal to the 

borrower income average. 

Example: Based on the illustration above: 

For closed-end home mortgage loans: The 

bank’s product line average for closed-end 

home mortgage loans would be 6.3 [(3.8 

geographic income average × 0.5 weight = 

1.9) + (8.8 borrower income average × 0.5 

weight = 4.4)]. 

c. Third, the [Agency] uses the volume of 

retail lending (measured in dollars of 

originations and purchases) that the bank 

made in each major product line in a relevant 

geographic area to assign a weight to that 

major product line. A weighted average taken 

across products then produces a geographic 

product average. 

Example: Suppose that, in addition to the 

closed-end home mortgage lending described 

in the illustration above, the example bank 

also engaged in small business lending in its 

assessment area. Assume that, among major 

product lines, 60 percent of the banks loans 

in that assessment area were closed-end 

home mortgages and 40 percent were small 

business loans (by dollar volume). 

Accordingly, closed-end home mortgage 

lending would receive a 60 percent weight 

and small business lending would receive a 

40 percent weight. Assume further that, 

based on steps V.3.a.i-iii, the bank’s product 

line average for small business lending in the 

assessment area was 4.2. 

For all retail loans: The bank’s geographic 

product average for all retail lending is 5.46 

[(6.3 closed-end home mortgage product line 

average × 0.6 weight = 3.78) + (4.2 small 

business product line average × 0.4 weight = 

1.68)]. 

d. Fourth, the [Agency] takes the 

geographic product average and translates it 

into a recommended Retail Lending Test 

conclusion for the relevant geographic area 

by rounding to the nearest conclusion score 

using the following points values: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). The 

rounding procedure works as follows: 

i. A geographic product average of less 

than 1.5 results in a conclusion of 

‘‘Substantial Noncompliance’’; 

ii. A geographic product average of 1.5 or 

more but less than 4.5 results in a conclusion 

of ‘‘Needs to Improve’’; 

iii. A geographic product average of 4.5 or 

more but less than 6.5 results in a conclusion 

of ‘‘Low Satisfactory’’; 

iv. A geographic product average of 6.5 or 

more but less than 8.5 results in a conclusion 

of ‘‘High Satisfactory’’; 

v. A geographic product average of 8.5 or 

more results in a conclusion of 

‘‘Outstanding.’’ 

For small banks evaluated pursuant to the 

Retail Lending Test, recommended Retail 

Lending Test conclusions of ‘‘High 

Satisfactory’’ and ‘‘Low Satisfactory’’ both 

result in a recommended Retail Lending Test 

conclusion of ‘‘Satisfactory’’ in any 

applicable state, multistate MSA, or at the 

institution level. 

Example: Based on the illustration above, 

the bank’s geographic product average of 

5.46 is closest to the conclusion score (6) 

associated with a ‘‘Low Satisfactory,’’ so the 

bank’s recommended Retail Lending Test 

conclusion is ‘‘Low Satisfactory’’ for the 

assessment area. Finally, the [Agency] will 

review additional factors in described in § _

_.22(e) to determine whether and how to 

adjust a bank’s recommended Retail Lending 

Test conclusion in this facility-based 

assessment area. 

VI. Retail Lending Test and Retail Services 

and Products Test Weighting and 

Conclusions in States, Multistate MSAS, and 

at the Institution Level 

1. Retail Lending Test conclusions in states 

and multistate MSAs are based on Retail 

Lending Test conclusions for facility-based 

assessment areas and, as applicable, retail 

lending assessment areas. 

Facility-based assessment area and retail 

lending assessment area conclusions are 

translated into numerical performance scores 

using the following mapping: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). The [Agency] 

takes a weighted average of these 

performance scores across assessment areas. 

Each assessment area is weighted by the 

simple average of: 

a. The dollars of deposits the bank draws 

from that assessment area, measured as a 

percentage of all dollars of deposits that the 

bank draws from assessment areas in the 

relevant geographic area (i.e., state where the 

bank has a branch, multistate MSA where the 

bank has a branch in two or more states of 

the multistate MSA, and nationwide at the 

institution level); and 

b. The dollars of retail loans the bank made 

in that assessment area over the evaluation 

period, measured as a percentage of all of the 

retail loans that the bank made in assessment 

areas in the relevant geographic area over the 

evaluation period. 

For banks that collect and maintain 

deposits data as provided in § __.42, the 

dollars of deposits in each assessment area 

are the annual average daily balance of 

deposits as provided in bank statements (for 

example, monthly, quarterly) for the bank’s 

deposits associated with an address in that 

assessment area over the evaluation period. 

For banks that do not collect and maintain 

deposits data as provided in § __.42, the 

[Agency] measures the dollars of deposits in 

each assessment area as the annual average 

of deposits assigned to branches that the 

bank operates in its assessment area, as 

reported in the FDIC’s Summary of Deposits. 

The [Agency] calculates the weighted 

average of facility-based assessment area 

performance scores and, as applicable, retail 

lending assessment area performance scores 

to produce the Retail Lending Test 

performance score for each state, multistate 

MSA, and at the institution level. The 

[Agency] assigns a conclusion corresponding 

with the conclusion category that is nearest 

to the performance score, as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). For 

performance scores at the exact mid-point 

between two conclusions categories, the 

[Agency] rounds up to assign the conclusion 

(i.e., a performance score of 8.5 is 

‘‘Outstanding’’). These performance scores 

are then each rounded to the nearest 

conclusion score to produce a Retail Lending 

Test conclusion for each state, multistate 

MSA, and at the institution level using the 

following corresponding points values: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

2. The Retail Lending Test conclusion at 

the institution level is based on Retail 

Lending Test conclusions for all facilitybased assessment areas and, as applicable, 

retail lending assessment areas and in 

outside retail lending areas. Facility-based 

assessment area, retail lending assessment 

area, and outside retail lending area 

conclusions are translated into numerical 

performance scores using the following 

mapping: ‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

The [Agency] takes a weighted average of 

these performance scores across facilitybased assessment areas and, as applicable, 

retail lending areas and outside retail lending 

areas. Each assessment area and the outside 

retail lending area is weighted by the simple 

average of: 

a. The dollars of deposits the bank draws 

from that assessment area or outside retail 

lending area, measured as a percentage of all 

of the bank’s dollars of deposits; and 

b. The dollars of retail loans the bank made 

in that assessment area or outside retail 

lending area over the evaluation period, 

measured as a percentage of all the retail 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34049 

loans the bank made over the evaluation 

period. 

For banks that collect and maintain 

deposits data as provided in § __.42, the 

dollars of deposits in each geographic area 

are the annual average daily balance of 

deposits as provided in bank statements (for 

example, monthly, quarterly) for the bank’s 

deposits associated with an address in that 

assessment area or outside retail lending area 

over the evaluation period. For banks that do 

not collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits in each geographic 

area as the annual average of deposits 

assigned to branches the bank operates in its 

assessment area, as reported in the FDIC’s 

Summary of Deposits. 

The [Agency] calculates the weighted 

average of facility-based assessment area 

performance scores and, as applicable, retail 

lending assessment area performance scores 

and outside retail lending area performance 

scores to produce the Retail Lending Test 

performance score for bank at the institution 

level. This institution-level performance 

score is then rounded to the nearest 

conclusion score to produce a Retail Lending 

Test conclusion for the institution using the 

following points values: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points). 

Example 1: Assume that a large bank 

operates in one state only, and has two 

facility-based assessment areas and one retail 

lending assessment area in that state, and 

also engages in retail lending activity in an 

outside retail lending area. 

Assume also that: 

i. In facility-based assessment area 1, the 

bank received a ‘‘Needs to Improve’’ (3 

points) Retail Lending Test conclusion, and 

that it is associated with 75 percent of the 

bank’s deposits and 10 percent of the bank’s 

retail loans (both, by dollar amount); 

ii. In facility-based assessment area 2, the 

bank received a ‘‘Low Satisfactory’’ (6 points) 

Retail Lending Test conclusion, and that it is 

associated with 15 percent of the bank’s 

deposits and 20 percent of the bank’s retail 

loans; 

iii. In its retail lending assessment area, the 

bank received an ‘‘Outstanding’’ (10 points) 

Retail Lending Test conclusion, and that it is 

associated with 8 percent of the bank’s 

deposits and 68 percent of the bank’s retail 

loans; and 

iv. In the outside retail lending area, the 

bank received a ‘‘High Satisfactory’’ (7 

points) Retail Lending Test conclusion, and 

that these areas are associated with 2 percent 

of the bank’s deposits and 2 percent of the 

bank’s retail loans. 

Calculating Weights 

i. For facility-based assessment area 1: 

weight = 42.5 percent [(75 percent of deposits 

+ 10 percent of retail loans)/2]; 

ii. For facility-based assessment area 2: 

weight = 17.5 percent [(15 percent of deposits 

+ 20 percent of retail loans)/2]; 

iii. For the retail lending assessment area: 

weight = 38 percent [(8 percent of deposits 

+ 68 percent of retail loans)/2]; and 

iv. For the outside retail lending area: 

weight = 2 percent [(2 percent of deposits + 

2 percent of loans)/2]. 

Institution Retail Lending Test Score and 

Recommended Retail Lending Test 

Conclusion: Using the relevant points 

values—‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points)— 

and based on the illustration above, the 

bank’s recommended Retail Lending Test 

performance score at the institution level is 

6.3 [(0.425 weight × 3 points in facility-based 

assessment area 1) + (0.175 weight × 6 points 

in facility-based assessment area 2) + (0.38 

weight × 10 points in retail lending 

assessment area) + (0.02 weight 7 points in 

outside retail lending area)]. 

A performance score of 6.3 is closest to the 

conclusion score (6) associated with ‘‘Low 

Satisfactory,’’ so the bank’s recommended 

Retail Lending Test conclusion at the 

institution level is ‘‘Low Satisfactory.’’ 

Example 2: Assume that an intermediate 

bank operates in one state only, and has two 

facility-based assessment areas, and also 

engages in retail lending activity in an 

outside retail lending area, having originated 

or purchased over 50 percent of its retail 

loans outside of its facility-based assessment 

areas. 

Assume also that: 

i. In facility-based assessment area 1, the 

bank received an ‘‘Outstanding’’ (10 points) 

Retail Lending Test conclusion, and that it is 

associated with 60 percent of the bank’s 

deposits and 30 percent of the bank’s retail 

loans (both, by dollar amount); 

ii. In facility-based assessment area 2, the 

bank received a ‘‘High Satisfactory’’ (7 

points) Retail Lending Test conclusion, and 

that it is associated with 40 percent of the 

bank’s deposits and 10 percent of the bank’s 

retail loans; and 

iii. In the outside retail lending area, the 

bank received a ‘‘Needs to Improve’’ (3 

points) Retail Lending Test conclusion, and 

that these areas are associated with 0 percent 

of the bank’s deposits (as the bank did not 

voluntarily collect and maintain depositor 

location data, so deposit location is based on 

branch assignment and all branches are 

necessarily located within facility-based 

assessment areas) and 60 percent of the 

bank’s retail loans. 

Calculating weights: 

i. For facility-based assessment area 1: 

weight = 45 percent [(60 percent of deposits 

+ 30 percent of retail loans)/2]; 

ii. For facility-based assessment area 2: 

weight = 25 percent [(40 percent of deposits 

+ 10 percent of retail loans)/2]; and 

iii. For the outside retail lending area: 

weight = 30 percent [(0 percent of deposits 

+ 60 percent of loans)/2]. 

Institution Retail Lending Test Score and 

Recommended Retail Lending Test 

Conclusion: Using the relevant points 

values—‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points)— 

and based on the illustration above, the 

bank’s recommended Retail Lending Test 

performance score at the institution level is 

7.2 [(0.45 weight × 10 points in facility-based 

assessment area 1) + (0.25 weight × 7 points 

in facility-based assessment area 2) + (0.3 

weight × 3 points in outside retail lending 

area)]. 

A performance score of 7.2 is closest to the 

conclusion score (7) associated with ‘‘High 

Satisfactory,’’ so the bank’s recommended 

Retail Lending Test conclusion at the 

institution level is ‘‘High Satisfactory.’’ 

VII. Retail Services and Products Test 

Weighting and Conclusions in States, 

Multistate MSAS, and at the Institution Level 

1. State and multistate MSA. Retail 

Services and Products Test conclusions in a 

state or multistate MSA are based on Services 

and Products Test conclusions for facilitybased assessment areas in the relevant state 

or multistate MSA. Facility-based assessment 

area conclusions are translated into 

numerical performance scores using the 

following mapping: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points). 

The [Agency] then calculates a weighted 

average of these performance scores across 

assessment areas in each relevant state or 

multistate MSA. Each facility-based 

assessment area is weighted by the simple 

average of: 

a. The dollars of deposits the bank draws 

from that assessment area, measured as a 

percentage of all dollars of deposits that the 

bank draws from facility-based assessment 

areas in the relevant state or multistate MSA; 

and 

b. The dollars of retail loans the bank made 

in that assessment area over the evaluation 

period, measured as a percentage of all of the 

retail loans that the bank made in facilitybased assessment areas in the relevant state 

or multistate MSA over the evaluation 

period. 

For banks that collect and maintain 

deposits data as provided in § __.42, the 

dollars of deposits in each assessment area 

are the annual average daily balance of 

deposits as provided in bank statements (for 

example, monthly, quarterly) for the bank’s 

deposits associated with an address in that 

assessment area over the evaluation period. 

For banks that do not collect and maintain 

deposits data as provided in § __.42, the 

[Agency] measures the dollars of deposits in 

each assessment area as the annual average 

of deposits assigned to branches the bank 

operates in its assessment area, as reported in 

the FDIC’s Summary of Deposits. 

The raw number resulting from the 

weighted average calculation is the bank’s 

performance score for its Retail Services and 

Products Test performance in a state or 

multistate MSA. The [Agency] assigns a 

conclusion corresponding with the 

conclusion category that is nearest to the 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). For performance 

scores at the exact mid-point between two 

conclusions categories, the [Agency] rounds 

up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 


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Example: Assume that a large bank 

operates two facility-based assessment areas 

in a particular state. 

Assume also that: 

i. In facility-based assessment area 1, the 

bank received a ‘‘Low Satisfactory’’ (6 points) 

Retail Services and Products Test conclusion, 

and that it is associated with 75 percent of 

the bank’s deposits and 80 percent of the 

bank’s retail loans (both, by dollar amount) 

in its facility-based assessment areas in the 

state; 

ii. In facility-based assessment area 2, the 

bank received a ‘‘Needs to Improve’’ (3 

points) Retail Services and Products Test 

conclusion, and that it is associated with 25 

percent of the bank’s deposits and 20 percent 

of the bank’s retail loans in its facility-based 

assessment areas the state 

Calculating weights: 

i. For facility-based assessment area 1: 

Weight = 77.5 percent [(75 percent of 

deposits + 80 percent of retail loans)/2]; 

ii. For facility-based assessment area 2: 

Weight = 22.5 percent [(25 percent of 

deposits + 20 percent of retail loans)/2]. 

State-Level Performance Score and 

Conclusion for the Retail Services and 

Products Test: Using the relevant points 

values—‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points)— 

and based on the illustration above, the 

bank’s weighted average of facility-based 

assessment area conclusions at the state level 

is 5.325 [(0.775 weight × 6 points in facilitybased assessment area 1) + (0.225 weight × 

3 points in facility-based assessment area 2).] 

A performance score of 5.325 is closest to 

the conclusion score (6) associated with 

‘‘Low Satisfactory,’’ so the bank’s Retail 

Services and Products Test conclusion at the 

state level is ‘‘Low Satisfactory.’’ 

2. Institution. The Retail Services and 

Products Test conclusion at the institution 

level is based on a combined assessment of 

the bank’s delivery systems performance 

under § __.23(b) and its credit and deposit 

products performance under § __.23(c). The 

delivery systems evaluation comprises two 

parts: 

a. The weighted average of a bank’s Retail 

Services and Products Test performances 

scores for its conclusions in all of its facilitybased assessment areas, calculated in 

accordance with section VII.1 but including 

all of the bank’s facility-based assessment 

areas; and 

b. As applicable, the bank’s performance 

regarding digital and other delivery systems 

under § __.23(b)(3). 

Based on an evaluation of the components 

of the bank’s delivery systems performance 

and the credit and deposit products 

performance, as applicable, the [Agency] 

assigns a Retail Services and Products Test 

conclusion for the bank at the institution 

level. The institution-level conclusion is 

translated into a numerical performance 

score using the following mapping: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

Appendix B to Part __—Calculations for 

the Community Development Tests 

Appendix B includes information and 

calculations for metrics, benchmarks, 

combining test elements to derive 

performance scores and conclusions, and 

weighting conclusions for, as applicable, the 

Community Development Financing Test as 

provided in § __.24, the Community 

Development Services Test as provided in § _

_.25, and the Community Development 

Financing Test for Wholesale or Limited 

Purpose Banks as provided in § __.26. 

1. Community development loans and 

community development investments 

included in the community development 

financing metrics and benchmarks—in 

general. The community development 

financing metrics and benchmarks in § __.24 

are based on annual community development 

financing activity. Community development 

financing activity for each calendar year in 

an evaluation period comprises the 

following: 

a. The dollar amount of all community 

development loans originated and 

community development investments made 

in that year; 

b. The dollar amount of any increase in an 

existing community development loan that is 

renewed or modified in that year; and 

c. The outstanding value of community 

development loans originated or purchased 

and community development investments 

made in previous years that remain on the 

bank’s balance sheet on the last day of each 

quarter of the year, averaged across the four 

quarters of the year. 

To calculate the community development 

financing metric for an evaluation period, the 

[Agency] uses the annual average of 

community development financing activity 

for each year, and the annual average of bank 

deposits over the evaluation period. 

For the facility-based assessment area, 

state, and multistate MSA, and nationwide 

area community development financing 

metrics in § __.24(c), all community 

development financing activities that are 

attributed to the specific facility-based 

assessment area, state, multistate MSA, or 

nationwide area, respectively, are included. 

See section 13 of this appendix for an 

explanation of how the [Agency] allocates 

community development financing dollars to 

a facility-based assessment area, state, 

multistate MSA, or nationwide area, 

respectively. 

2. Bank Assessment Area Community 

Development Financing Metric. Section __

.24(b)(1) provides that, to assist the [Agency] 

in evaluating a bank’s community 

development financing activity in a facilitybased assessment area, the [Agency] 

considers a Bank Assessment Area 

Community Development Financing Metric. 

The Bank Assessment Area Community 

Development Financing Metric for a facilitybased assessment area for the evaluation 

period is calculated by dividing the annual 

average of the bank’s community 

development financing activity for each year, 

over the evaluation period, by the annual 

average dollar value of deposits from the 

bank’s deposit accounts in the facility-based 

assessment area over the evaluation period. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits in each 

assessment area are the annual average of 

deposits over the evaluation period. For a 

bank that does not collect and maintain 

deposits data as provided in § __.42, the 

[Agency] measures the dollars of deposits in 

each assessment area as the annual average 

of deposits assigned to branches that the 

bank operates in its assessment area, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

Example: Assume that the annual average 

dollar amount of a bank’s community 

development financing activity in a facilitybased assessment area over the bank’s threeyear evaluation period is $100,000. Assume 

further that the annual average dollar value 

of deposits from the bank’s deposit accounts 

located in the facility-based assessment, 

reported each year by the bank as the average 

of monthly deposit statements, is $10 

million. The Bank Assessment Area 

Community Development Financing Metric 

for that facility-based assessment area would 

be $100,000 divided by $10 million, or 0.01 

(equivalently, 1 percent). 

3. Assessment Area Community 

Development Financing Benchmark. Section 

__.24(b)(2)(i) provides that the [Agency] uses 

an Assessment Area Community 

Development Financing Benchmark for 

evaluating a bank’s community development 

financing activity in each facility-based 

assessment area. The Assessment Area 

Community Development Financing 

Benchmark is calculated by dividing the total 

annual community development financing 

activity for all large banks in the facilitybased assessment area for each year, averaged 

over the years of the evaluation period, by 

the total dollar value of all large bank deposit 

accounts in that facility-based assessment 

area, averaged over the years of the 

evaluation period. 

The deposits in the facility-based 

assessment area are the sum of: (i) The 

annual average of deposits in counties in the 

facility-based assessment area reported by all 

large banks with assets of over $10 billion 

over the evaluation period; and (ii) the 

annual average of deposits assigned to 

branches in the facility-based assessment 

area by all large banks with assets of $10 

billion or less, according to the FDIC’s 

Summary of Deposits, over the evaluation 

period. 

Example: Assume that the total dollar 

amount of all large banks’ community 

development financing activity in the 

facility-based assessment area, average 

annually over the years of the evaluation 

period is $10 million. Assume further that 

the total reported dollar value of all large 

bank deposit accounts in that facility-based 

assessment, averaged annually over the years 

of the evaluation period, is $1 billion. The 

Assessment Area Community Development 

Financing Benchmark for the facility-based 

assessment area would be $10 million 

divided by $1 billion, or 0.01 (equivalently, 

1 percent). 


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4. Metropolitan and Nonmetropolitan 

Nationwide Community Development 

Financing Benchmarks. Section __

.24(b)(2)(ii) provides that the [Agency] uses 

Nationwide Community Development 

Financing Benchmarks for evaluating a 

bank’s community development financing 

activity in each facility-based assessment 

area. The [Agency] calculates a Metropolitan 

Nationwide Community Development 

Financing Benchmark for metropolitan areas 

when the relevant facility-based assessment 

area is in a metropolitan area. The [Agency] 

calculates a Nonmetropolitan Nationwide 

Community Development Financing 

Benchmark for nonmetropolitan areas when 

the relevant facility-based assessment area is 

in a nonmetropolitan area. 

i. Metropolitan Nationwide Community 

Development Financing Benchmark. The 

Metropolitan Nationwide Community 

Development Financing Benchmark is 

derived by dividing the total dollar amount 

of all large banks’ annual community 

development financing activity in all 

metropolitan areas in a nationwide area for 

each year, averaged over the years of the 

evaluation period, by the total dollar amount 

of all deposits from large bank deposit 

accounts in all metropolitan areas in a 

nationwide area, averaged over the years of 

the evaluation period. 

The deposits in all metropolitan areas in a 

nationwide area is the sum of: (i) The annual 

average of deposits in counties in all 

metropolitan areas in a nationwide area 

reported by all large banks with assets of over 

$10 billion over the evaluation period; and 

(ii) the annual average of deposits assigned 

to branches in all metropolitan areas in a 

nationwide area by all large banks with assets 

of $10 billion or less, according to the FDIC’s 

Summary of Deposits, over the evaluation 

period. 

Example: Assume that the total dollar 

amount of all large banks’ community 

development financing activity in 

metropolitan areas, averaged over the years of 

the evaluation period, is $100 billion. 

Assume further that the total dollar value of 

all large bank deposit accounts in 

metropolitan areas in the nation as reported 

by those banks, averaged over the years of the 

evaluation period, is $5 trillion. The 

Metropolitan Nationwide Community 

Development Financing Benchmark would 

be $100 billion divided by $5 trillion, or 0.02 

(equivalently, 2 percent). 

ii. Nonmetropolitan Nationwide 

Community Development Financing 

Benchmark. The Nonmetropolitan 

Nationwide Community Development 

Financing Benchmark is derived by dividing 

the total dollar amount of all large banks’ 

annual community development financing 

activity in all nonmetropolitan areas in the 

nationwide area for each year, averaged over 

the years of the evaluation period, by the 

reported total dollar amount of all deposits 

from large bank deposit accounts in all 

nonmetropolitan areas in a nationwide area, 

averaged over the years of the evaluation 

period. 

The deposits in all nonmetropolitan areas 

in a nationwide area is the sum of: (i) The 

annual average of deposits in counties in all 

nonmetropolitan areas in a nationwide area 

reported by all large banks with assets of over 

$10 billion over the evaluation period; and 

(ii) the annual average of deposits assigned 

to branches in all nonmetropolitan areas in 

a nationwide area by all large banks with 

assets of $10 billion or less, according to the 

FDIC’s Summary of Deposits, over the 

evaluation period. 

Example: Assume that the average annual 

dollar amount of all large banks’ community 

development financing activity in 

nonmetropolitan areas over the evaluation 

period is $10 billion. Assume further that the 

total dollar value of all large bank deposit 

accounts in nonmetropolitan areas, averaged 

over the years of the evaluation period, is $1 

trillion. The Nonmetropolitan Nationwide 

Community Development Financing 

Benchmark would be $10 billion divided by 

$1 trillion, or 0.01 (equivalently, 1 percent). 

5. Bank State Community Development 

Financing Metric. Section __.24(c)(2)(ii)(A) 

provides that, to assist the [Agency] in 

evaluating a bank’s community development 

financing activity in each state, the [Agency] 

considers a Bank State Community 

Development Financing Metric. For each 

state, the [Agency] calculates a Bank State 

Community Development Financing Metric 

for that state for the evaluation period. The 

Bank State Community Development 

Financing Metric is calculated by dividing a 

bank’s total community development 

financing activity within an state for each 

year, averaged over the years of the 

evaluation period, including all activities 

within the bank’s facility-based assessment 

areas and outside of its facility-based 

assessment areas but within the state, by the 

total dollar amount of deposits from the 

bank’s deposit accounts in the state at the 

end of each calendar year, averaged over the 

years of the evaluation period. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in the state. For a bank that does not 

collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in the state, as reported in the 

FDIC’s Summary of Deposits, over the 

evaluation period. 

Example: Assume that the bank’s total 

community development financing activity 

within a state, averaged over the years of its 

evaluation period is $50 million. Assume 

further that the total dollar amount of 

deposits from the bank’s deposit accounts in 

the state for each calendar year, averaged 

over the years of the evaluation period, is $5 

billion. The Bank State Community 

Development Financing Metric would be $50 

million divided by $5 billion, or 0.01 

(equivalently, 1 percent). 

6. State Community Development 

Financing Benchmark. Section __

.24(c)(2)(ii)(B)(1) provides that the [Agency] 

uses a State Community Development 

Financing Benchmark for evaluating a bank’s 

community development financing activity 

in each state. The State Community 

Development Financing Benchmark is 

calculated by dividing the total community 

development financing activity in a state by 

all large banks for each year, averaged over 

the years of the evaluation period, by the 

total dollar amount of all deposits from large 

bank deposit accounts in the state at the end 

of each calendar year, averaged over the years 

of the evaluation period. 

The deposits in the state is the sum of: (i) 

The annual average of deposits in counties in 

the state reported by all large banks with 

assets of over $10 billion over the evaluation 

period; and (ii) the annual average of 

deposits assigned to branches in the state by 

all large banks with assets of $10 billion or 

less, according to the FDIC’s Summary of 

Deposits, over the evaluation period. 

Example: Assume that the total dollar 

amount of all large banks’ community 

development financing activity in a state, 

averaged over the years of the evaluation 

period, is $75 million. Assume further that 

the total dollar value of all large bank deposit 

accounts in the state at the end of each 

calendar year, averaged over the years of the 

evaluation period, is $500 billion. The State 

Community Development Financing 

Benchmark for the facility-based assessment 

area would be $75 billion divided by $500 

billion, or 0.015 (equivalently, 1.5 percent). 

7. State Weighted Assessment Area 

Community Development Financing 

Benchmark. Section __.24(c)(2)(ii)(B)(2) 

provides that the [Agency] uses a State 

Weighted Assessment Area Community 

Development Financing Benchmark for 

evaluating a bank’s community development 

financing activity in each state. The State 

Weighted Assessment Area Community 

Development Financing Benchmark is 

calculated by averaging all of the bank’s 

Assessment Area Community Development 

Financing Benchmarks (see section 3) in a 

state, after weighting each in accordance with 

section 17 of this appendix B. 

Example: Assume that a bank has two 

facility-based assessment areas in a state. 

(Whether the bank also has retail lending 

assessment areas or lending activity outside 

of its assessment areas in the state has no 

bearing on this benchmark.) 

Assume also that: 

a. In facility-based assessment area 1, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 3 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with either of the two assessment areas in the 

state, this assessment area is associated with 

70 percent of the bank’s deposits and 60 

percent of the bank’s retail loans (both, by 

dollar amount); 

b. In facility-based assessment area 2, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 5 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with either of the two assessment areas in the 

state, this assessment area is associated with 

30 percent of the bank’s deposits and 40 

percent of the bank’s retail loans (both, by 

dollar amount). 

Calculating weights: 

a. For facility-based assessment area 1: 

weight = 65 percent [(70 percent of deposits 

+ 60 percent of retail loans)/2]; 

b. For facility-based assessment area 2: 

weight = 35 percent [(30 percent of deposits 

+ 40 percent of retail loans)/2]. 


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State Weighted Assessment Area 

Community Development Financing 

Benchmark: The bank’s State Weighted 

Assessment Area Community Development 

Financing Benchmark is 3.7 percent [(0.65 

weight × 3 percent in facility-based 

assessment area 1) + (0.35 weight × 5 percent 

in facility-based assessment area 2)]. 

8. Bank Multistate MSA Community 

Development Financing Metric. Section __

.24(c)(3)(ii)(A) provides that, to assist the 

[Agency] in evaluating a bank’s community 

development financing activity in a 

multistate MSA, the [Agency] considers a 

Bank Multistate MSA Community 

Development Financing Metric. For each 

multistate MSA, the [Agency] calculates a 

Bank Multistate MSA Community 

Development Financing Metric for that 

multistate MSA for the evaluation period. 

The Bank Multistate MSA Community 

Development Financing Metric is calculated 

by dividing the total community 

development financing activity within the 

multistate MSA for each year, averaged 

together over the years of the evaluation 

period, including all activities within the 

bank’s facility-based assessment areas and 

outside of its facility-based assessment areas 

but within the multistate MSA, by the total 

dollar amount of deposits from the bank’s 

deposit accounts in the multistate MSA, 

averaged together over the years of the 

evaluation period. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in the multistate MSA. For a bank that 

does not collect and maintain deposits data 

as provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in the multistate MSA, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

Example: Assume that the bank’s total 

community development financing activity 

within a multistate MSA, averaged over the 

years of its evaluation period, is $150 

million. Assume further that the total dollar 

amount of deposits from the bank’s deposit 

accounts in the multistate MSA, averaged 

over the years of the evaluation period, is $10 

billion. The Bank Multistate MSA 

Community Development Financing Metric 

for that multistate MSA would be $150 

million divided by $10 billion, or 0.015 

(equivalently, 1.5 percent). 

9. Multistate MSA Community 

Development Financing Benchmark. Section 

__.24(c)(3)(ii)(B)(1) provides that the 

[Agency] uses a Multistate MSA Community 

Development Financing Benchmark for 

evaluating a bank’s community development 

financing activity in each multistate MSA. 

The Multistate MSA Community 

Development Financing Benchmark is 

calculated by dividing the total community 

development financing activity in the 

multistate MSA by all large banks for each 

year, averaged over the years of the 

evaluation period, by the total dollar amount 

of all deposits from large bank deposit 

accounts in the multistate MSA, averaged 

over the years of the evaluation period. 

The deposits in the multistate MSA is the 

sum of: (i) The annual average of deposits in 

counties in the multistate MSA reported by 

all large banks with assets of over $10 billion 

over the evaluation period; and (ii) the 

annual average of deposits assigned to 

branches in the multistate MSA by all large 

banks with assets of $10 billion or less, 

according to the FDIC’s Summary of 

Deposits, over the evaluation period. 

Example: Assume that the total dollar 

amount of all large banks’ community 

development financing activity in a 

multistate MSA, averaged over the years of 

the evaluation period, is $125 million. 

Assume further that the total dollar value of 

all large bank deposit accounts in the 

multistate MSA, averaged over the years of 

the evaluation period, is $1.5 billion. The 

Multistate MSA Community Development 

Financing Benchmark for the facility-based 

assessment area would be $125 million 

divided by $1.5 billion, or 0.083 

(equivalently, 8.3 percent). 

10. Multistate MSA Weighted Assessment 

Area Community Development Financing 

Benchmark. Section __.24 (c)(3)(ii)(B)(2) 

provides that the [Agency] uses a Multistate 

MSA Weighted Assessment Area Community 

Development Financing Benchmark for 

evaluating a bank’s community development 

financing activity in each multistate MSA. 

The Multistate MSA Weighted Assessment 

Area Community Development Financing 

Benchmark is calculated by averaging all of 

the bank’s Assessment Area Community 

Development Financing Benchmarks (see 

section 3) in a multistate MSA, after 

weighting each in accordance with section 17 

of this appendix. 

Example: Assume that a bank has two 

facility-based assessment areas in a 

multistate MSA. (Whether the bank also has 

retail lending assessment areas or lending 

activity outside of its assessment areas in the 

multistate MSA has no bearing on this 

benchmark.) 

Assume also that: 

a. In facility-based assessment area 1, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 3 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with either of the two assessment areas in the 

multistate MSA, this assessment area is 

associated with 70 percent of the bank’s 

deposits and 60 percent of the bank’s retail 

loans (both, by dollar amount); 

b. In facility-based assessment area 2, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 5 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with either of the two assessment areas in the 

multistate MSA, this assessment area is 

associated with 30 percent of the bank’s 

deposits and 40 percent of the bank’s retail 

loans (both, by dollar amount). 

Calculating weights: 

a. For facility-based assessment area 1: 

Weight = 65 percent [(70 percent of deposits 

+ 60 percent of retail loans)/2]; 

b. For facility-based assessment area 2: 

Weight = 35 percent [(30 percent of deposits 

+ 40 percent of retail loans)/2]. 

Multistate MSA Weighted Assessment Area 

Community Development Financing 

Benchmark: The bank’s Multistate MSA 

Weighted Assessment Area Community 

Development Financing Benchmark is 3.7 

percent [(0.65 weight × 3 percent in facilitybased assessment area 1) + (0.35 weight × 5 

percent in facility-based assessment area 2)]. 

11. Bank Nationwide Community 

Development Financing Metric. Section __

.24(c)(4)(ii)(A) provides that the [Agency] 

uses a Bank Nationwide Community 

Development Financing Metric for evaluating 

a bank’s community development financing 

activity in a nationwide area. The Bank 

Nationwide Community Development 

Financing Metric is calculated by dividing 

the bank’s total community development 

financing activity in a nationwide area for 

each year, averaged over the years of the 

evaluation period, by the total dollar amount 

of deposits from bank deposit accounts in a 

nationwide area, averaged over the years of 

the evaluation period. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in the nationwide area. For a bank 

that does not collect and maintain deposits 

data as provided in § __.42, the [Agency] 

measures the dollars of deposits as the 

annual average of deposits assigned to 

branches that the bank operates in the 

nationwide area, as reported in the FDIC’s 

Summary of Deposits, over the evaluation 

period. 

Example: Assume that the bank’s total 

community development financing activity 

nationwide, averaged over the years of the 

evaluation period, is $200 million. Assume 

further that the total dollar amount of 

deposits from the bank’s deposit accounts 

nationwide for each calendar year, averaged 

over the years of the evaluation period, is $8 

billion. The Bank Nationwide Community 

Development Financing Metric would be 

$200 million divided by $8 billion, or 0.025 

(equivalently, 2.5 percent). 

12. Nationwide Community Development 

Financing Benchmark. Section __

.24(c)(4)(ii)(B)(1) provides that the [Agency] 

uses a Nationwide Community Development 

Financing Benchmark for evaluating a bank’s 

total community development financing 

activity. The Nationwide Community 

Development Financing Benchmark is 

calculated by dividing the total community 

development financing activity for all large 

banks in a nationwide area for each year, 

averaged over the years of the evaluation 

period, by the total dollar amount of all 

deposits from large bank deposit accounts in 

a nationwide area, averaged over the years of 

the evaluation period. 

The deposits in a nationwide area is the 

sum of: (i) The annual average of deposits in 

counties in a nationwide area reported by all 

large banks with assets of over $10 billion 

over the evaluation period; and (ii) the 

annual average of deposits assigned to 

branches in a nationwide area by all large 

banks with assets of $10 billion or less, 

according to the FDIC’s Summary of 

Deposits, over the evaluation period. 

Example: Assume that the total dollar 

amount of all large banks’ community 

development financing activity nationwide, 


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averaged over the years of the evaluation 

period, is $110 billion. Assume further that 

the total dollar value of all large bank deposit 

accounts nationwide, averaged over the years 

of the evaluation period, is $6 trillion. The 

Nationwide Community Development 

Financing Benchmark would be $110 billion 

divided by $6 trillion, or 0.0183 

(equivalently, 1.83 percent). 

13. Nationwide Weighted Assessment Area 

Community Development Financing 

Benchmark. Section __.24(c)(4)(ii)(B)(2) 

provides that the [Agency] uses a Nationwide 

Weighted Assessment Area Community 

Development Financing Benchmark for 

evaluating a bank’s community development 

financing activity in a nationwide area. The 

Nationwide Weighted Assessment Area 

Community Development Financing 

Benchmark is calculated by averaging all of 

the bank’s Assessment Area Community 

Development Financing Benchmarks (see 

section 3) in a nationwide area, after 

weighting each in accordance with section 17 

of this appendix. 

Example: Assume that a bank has three 

facility-based assessment areas nationwide. 

(Whether the bank also has retail lending 

assessment areas or lending activity outside 

of its assessment areas in the nationwide has 

no bearing on this benchmark.) 

Assume also that: 

a. In facility-based assessment area 1, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 2 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with any of the three facility-based 

assessment areas nationwide, this assessment 

area is associated with 60 percent of the 

bank’s deposits and 50 percent of the bank’s 

retail loans (both, by dollar amount); 

b. In facility-based assessment area 2, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 3 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with any of the three facility-based 

assessment areas nationwide, this assessment 

area is associated with 30 percent of the 

bank’s deposits and 40 percent of the bank’s 

retail loans (both, by dollar amount); 

c. In facility-based assessment area 3, the 

bank’s Assessment Area Community 

Development Financing Benchmark is 4 

percent. Out of the total of the bank’s 

deposits and retail loans that are associated 

with any of the three facility-based 

assessment areas nationwide, this assessment 

area is associated with 10 percent of the 

bank’s deposits and 10 percent of the bank’s 

retail loans (both, by dollar amount). 

Calculating weights: 

a. For facility-based assessment area 1: 

Weight = 55 percent [(60 percent of deposits 

+ 50 percent of retail loans)/2]; 

b. For facility-based assessment area 2: 

Weight = 35 percent [(30 percent of deposits 

+ 40 percent of retail loans)/2]; 

c. For facility-based assessment area 3: 

Weight = 10 percent [(10 percent of deposits 

+ 10 percent of retail loans)/2]. 

Nationwide Weighted Assessment Area 

Community Development Financing 

Benchmark: The bank’s Nationwide 

Weighted Assessment Area Community 

Development Financing Benchmark is 2.55 

percent [(0.55 weight × 2 percent in facilitybased assessment area 1) + (0.35 weight × 3 

percent in facility-based assessment area 2) + 

(0.10 weight × 4 percent in facility-based 

assessment area 3)]. 

14. Allocation of community development 

financing dollars. In developing conclusions 

for a bank’s performance under the 

Community Development Financing Test in 

§§ __.24 and __.26, the [Agency] allocates 

community development financing dollars to 

a facility-based assessment area, state, 

multistate MSA, or nationwide area as 

follows: 

Activities that provide a benefit to only one 

county, and not to any areas beyond that one 

county, would have the full dollar amount of 

the activity allocated to that county. 

Activities that benefit multiple counties 

will be allocated according to the geographic 

scope of the activity and any documentation 

that the bank can provide regarding the 

dollar amount allocated to each county, as 

follows: 

a. A bank may opt to produce 

documentation for an activity specifying the 

appropriate dollar amount to assign to each 

county, such as specific addresses and dollar 

amounts associated with projects at each 

address, or other accounting information that 

indicates the specific dollar amount of the 

activity that benefitted each county. The 

activity will then be allocated accordingly. 

b. If a bank does not produce such 

documentation for an activity, then: 

i. An activity with a geographic scope of 

less than an entire state will be allocated to 

the county level based on the proportion of 

low- and moderate-income families in each 

county; 

ii. Activities with a scope of one or more 

entire states, but not the entire nation, will 

be allocated to the state level based on the 

proportion of low- and moderate-income 

families in each state; and 

iii. Activities with a scope of the entire 

nation would be allocated to the institution 

level. 

TABLE 1 TO APPENDIX B—COMMUNITY DEVELOPMENT FINANCING ALLOCATION

Documentation ties activity 

to counties with specific $ 

amounts 

No documentation to indicate specific $ amounts for 

each county 

Serving or benefitting one county ..................................... Allocate to county ............... NA. 

Serving or benefitting multi-county, part of one state ...... Allocate to counties ............ Allocate to counties proportionate to the number of lowand moderate-income families. 

Serving or benefitting multi-county, part of multiple 

states.

Allocate to counties ............ Allocate to counties proportionate to the number of lowand moderate-income families. 

Entire statewide area ........................................................ Allocate to counties ............ Allocate to state.

Multiple entire states ......................................................... Allocate to counties ............ Allocate to states proportionate to the number of lowand moderate-income families. 

Entire nation ...................................................................... Allocate to counties ............ Allocate to nationwide area. 

15. Combined score for assessment area 

conclusions and metrics analysis/impact 

review. As described in § __.24(c), the 

[Agency] assigns a conclusion for a bank’s 

performance under the Community 

Development Financing Test in a state, 

multistate MSA, and nationwide area, 

respectively and as applicable, based on a 

score combining the following: 

i. Weighted average of the bank’s facilitybased assessment area conclusions. For each 

state, multistate MSA, and nationwide area, 

respectively, the [Agency] derives a weighted 

average of the conclusions for facility-based 

assessment areas in each respective state, 

multistate MSA, or nationwide areas, 

calculated in accordance with section 16 of 

this appendix. 

ii. Bank score for metrics and benchmark 

analysis and impact review. For each state, 

multistate MSA, and nationwide area, 

respectively, the [Agency] determines a score 

by considering the metrics and benchmarks 

and the impact review, corresponding with 

the following conclusion categories: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

iii. Combined score. The [Agency] derives 

a performance score, which is then 

associated with a conclusion category, by 

calculating a weight for each of components 

described in sections 15.i and 15.ii, and 

adding the two weighted results together. 

The weights for each component are 

determined by calculating the simple average 

of the bank’s share of deposits associated 

with facility-based assessment areas out of all 

of the bank’s deposits in the state, multistate 

MSA, or nationwide area, respectively, and 

the bank’s share of retail loans in facilitybased assessment areas out of all of the banks 

retail loans in the state, multistate MSA, or 

nationwide area, respectively. 

A. If the average of the bank’s share of 

loans and deposits in facility-based 

assessment areas is 80 percent to 100 percent, 


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then the component in section 15.i receives 

a 50 percent weight and the component in 

section 15.ii receives a 50 percent weight. 

B. If the average of bank’s share of loans 

and deposits in facility-based assessment 

areas is at least as much as 60 percent but 

less than 80 percent, then the component in 

section 15.i receives a 40 percent weight and 

the component in section 15.ii receives a 60 

percent weight. 

C. If the average of the bank’s share of 

loans and deposits in facility-based 

assessment areas is at least as much as 40 

percent but less than 60 percent, then the 

component in section 15.i receives a 30 

percent weight and the component in section 

15.ii receives a 70 percent weight. 

D. If the average of the bank’s share of 

loans and deposits in facility-based 

assessment areas is at least as much as 20 

percent but less than 40 percent, then the 

component in section 15.i receives a 20 

percent weight and the component in section 

15.ii receives an 80 percent weight. 

E. If the average of the bank’s share of loans 

and deposits in facility-based assessment 

areas is below 20 percent, then the 

component in section 15.i receives a 10 

percent weight and the component in section 

15.ii receives a 90 percent weight. 

Example: Assume that the weighted 

average of the bank’s facility-based 

assessment area conclusions nationwide 

(section 15.i) is 7.5. Assume further that the 

bank score for metrics and benchmark 

analysis and impact review nationwide 

(section 15.ii) is 6. 

Assume further that 95 percent of the 

bank’s deposits, and 75 percent of the bank’s 

retail loans (both, by dollar amount) are 

associated with its facility-based assessment 

areas, with the remaining 5 percent of the 

bank’s deposits, and 25 percent of retail 

loans, associated with areas outside of the 

bank’s facility-based assessment areas. 

Calculating weights: 

The weights for each component are 

assigned based on the bank’s share of 

deposits and loans that are associated with 

its facility-based assessment areas, which 

falls in the range of 80 percent—100 percent, 

corresponding to weights of 50 percent for 

the first component, and 50 percent for the 

second component: [(95 percent of deposits 

+ 75 percent of retail loans)/2 = 85 percent, 

which is between 80 percent and 100 

percent]. Thus, the weighted average of the 

bank’s facility-based assessment area 

conclusions nationwide (section 15.i) 

receives a weight of 50 percent, and the bank 

score for metrics and benchmark analysis and 

impact review nationwide (section 15.ii) 

receives a weight of 50 percent. 

Institution Community Development 

Financing Test Conclusion: Using the 

relevant point values—‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points)—and based on the example above, 

the bank’s Community Development 

Financing Test conclusion at the institution 

level is a ‘‘High Satisfactory’’: [(0.50 weight 

× 7.5 points for the weighted average of the 

bank’s facility-based assessment area 

conclusions nationwide) + (0.50 weight × 6 

points for the bank score for metrics and 

benchmark analysis and impact review 

nationwide)] results in a performance score 

of 6.75, which is closest to the point value 

(7) associated with ‘‘High Satisfactory.’’ 

16. Weighting of conclusions. In 

developing conclusions for a bank’s 

performance under the Community 

Development Financing Test in § __.24 and 

the Community Development Services Test 

in § __.25, the [Agency] weights conclusions 

in a state, multistate MSA, and nationwide 

area as follows: 

i. State. In a state, the [Agency] weights the 

bank’s performance test conclusion in each 

facility-based assessment area using the 

simple average of the percentages of, 

respectively, statewide bank deposits 

associated with the facility-based assessment 

area and statewide retail loans that the bank 

originated or purchased in the facility-based 

assessment area. The statewide percentages 

of deposits and retail loans associated with 

each facility-based assessment area will be 

based upon, respectively, the dollar volumes 

of deposits and loans in each facility-based 

assessment area compared with, respectively, 

the statewide dollar totals of deposits and 

loans within facility-based assessment areas 

of that state. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and state. For a bank that does not collect 

and maintain deposits data as provided in § _

_.42, the [Agency] measures the dollars of 

deposits as the annual average of deposits 

assigned to branches that the bank operates 

in each facility-based assessment area and 

state, as reported in the FDIC’s Summary of 

Deposits, over the evaluation period. 

ii. Multistate MSA. In a multistate MSA, 

the [Agency] weights the bank’s performance 

test conclusion in each facility-based 

assessment area using the simple average of 

the percentages of, respectively, multistate 

MSA bank deposits associated with the 

facility-based assessment area and multistate 

MSA bank retail loans originated or 

purchased in the facility-based assessment 

area. The multistate MSA percentages of 

deposits and loans associated with each 

facility-based assessment area will be based 

upon, respectively, the dollar volumes of 

deposits and loans in each facility-based 

assessment area compared with, respectively, 

the multistate MSA dollar totals of deposits 

and loans within facility-based assessment 

areas of that multistate MSA. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and multistate MSA. For a bank that does not 

collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in each facility-based 

assessment area and multistate MSA, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

iii. Institution. At the institution level, the 

[Agency] weights the bank’s performance test 

conclusion in each facility-based assessment 

area using the simple average of the 

percentages of, respectively, nationwide bank 

deposits associated with the facility-based 

assessment area and nationwide bank retail 

loans originated or purchased in the facilitybased assessment area. The nationwide 

percentages of deposits and loans associated 

with each facility-based assessment area will 

be based upon, respectively, the dollar 

volumes of deposits and loans in each 

facility-based assessment area compared 

with, respectively, the nationwide dollar 

totals of deposits and loans within facilitybased assessment areas of the nationwide 

area. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and nationwide area. For a bank that does not 

collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in each facility-based 

assessment area and nationwide area, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

17. Weighting of benchmarks. In 

developing benchmarks for assessing a bank’s 

performance under the Community 

Development Financing Test in § __.24 the 

[Agency] calculates a weighted average of the 

Assessment Area Community Development 

Financing Benchmarks pertaining to a bank’s 

facility-based assessment areas in a state, 

multistate MSA, and nationwide area as 

follows: 

i. State Weighted Assessment Area 

Community Development Financing 

Benchmark. To calculate the State Weighted 

Assessment Area Community Development 

Financing Benchmark for a state, the 

[Agency] weights the bank’s Assessment Area 

Community Development Financing 

Benchmark in each facility-based assessment 

area using the simple average of the 

percentages of, respectively, statewide bank 

deposits associated with the facility-based 

assessment area and statewide retail loans 

that the bank originated or purchased in the 

facility-based assessment area. The statewide 

percentages of deposits and retail loans 

associated with each facility-based 

assessment area will be based upon, 

respectively, the dollar volumes of deposits 

and loans in each facility-based assessment 

area compared with, respectively, the 

statewide dollar totals of deposits and loans 

within facility-based assessment areas of that 

state. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and state. For a bank that does not collect 

and maintain deposits data as provided in § _

_.42, the [Agency] measures the dollars of 

deposits as the annual average of deposits 

assigned to branches that the bank operates 

in each facility-based assessment area and 

state, as reported in the FDIC’s Summary of 

Deposits, over the evaluation period. 


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ii. Multistate MSA Weighted Assessment 

Area Community Development Financing 

Benchmark. To calculate the Multistate MSA 

Weighted Assessment Area Community 

Development Financing Benchmark for a 

Multistate MSA, the [Agency] weights the 

bank’s Assessment Area Community 

Development Financing Benchmark in each 

facility-based assessment area using the 

simple average of the percentages of, 

respectively, multistate MSA bank deposits 

associated with the facility-based assessment 

area and multistate MSA bank retail loans 

originated or purchased in the facility-based 

assessment area. The multistate MSA 

percentages of deposits and loans associated 

with each facility-based assessment area will 

be based upon, respectively, the dollar 

volumes of deposits and loans in each 

facility-based assessment area compared 

with, respectively, the multistate MSA dollar 

totals of deposits and loans within facilitybased assessment areas of that multistate 

MSA. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and multistate MSA. For a bank that does not 

collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in each facility-based 

assessment area and multistate MSA, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

iii. Nationwide Weighted Assessment Area 

Community Development Financing 

Benchmark. To calculate the Nationwide 

Weighted Assessment Area Community 

Development Financing Benchmark for a 

nationwide area, the [Agency] weights the 

bank’s Assessment Area Community 

Development Financing Benchmark in each 

facility-based assessment area using the 

simple average of the percentages of, 

respectively, nationwide bank deposits 

associated with the facility-based assessment 

area and nationwide bank retail loans 

originated or purchased in the facility-based 

assessment area. The nationwide percentages 

of deposits and loans associated with each 

facility-based assessment area will be based 

upon, respectively, the dollar volumes of 

deposits and loans in each facility-based 

assessment area compared with, respectively, 

the nationwide dollar totals of deposits and 

loans within facility-based assessment areas 

of the nationwide area. 

For a bank that collects and maintains 

deposits data as provided in § __.42, the 

dollar amount of its deposits is the annual 

average of deposits over the evaluation 

period in each facility-based assessment area 

and nationwide area. For a bank that does not 

collect and maintain deposits data as 

provided in § __.42, the [Agency] measures 

the dollars of deposits as the annual average 

of deposits assigned to branches that the 

bank operates in each facility-based 

assessment area and nationwide area, as 

reported in the FDIC’s Summary of Deposits, 

over the evaluation period. 

18. Wholesale or Limited Purpose Bank 

Community Development Financing Metric. 

Section __.26(f) provides that, to assist the 

[Agency] in evaluating a wholesale or limited 

purpose bank’s community development 

financing activity in a nationwide area, the 

[Agency] considers a Wholesale or Limited 

Purpose Bank Community Development 

Financing Metric. The Wholesale or Limited 

Purpose Bank Community Development 

Financing Metric is calculated as follows: 

i. The [Agency] calculates the annual 

average of the bank’s community 

development financing activity of the bank 

over the years of the evaluation period. 

ii. The [Agency] calculates the quarterly 

average of the bank’s total assets for the same 

years for which the annual average of the 

bank’s community development financing 

activity is calculated under section 18.i of 

this appendix. 

iii. The [Agency] divides the annual 

average of the bank’s community 

development financing activity calculated 

under section 18.i of this appendix by the 

quarterly average of the bank’s total assets 

calculated under section 18.ii of this 

appendix. 

Appendix C to Part __—Performance 

Test Conclusions 

a. Performance test conclusions in general. 

The [Agency] assigns conclusions for a 

bank’s performance under, as applicable, the 

Retail Lending Test, the Retail Services and 

Products Test, the Community Development 

Financing Test, the Community Development 

Services Test, and the Community 

Development Financing Test for Wholesale 

or Limited Purpose Banks. 

b. Retail Lending Test conclusions. The 

[Agency] assigns conclusions for a bank’s 

Retail Lending Test performance in, as 

applicable, facility-based assessment areas, 

retail lending assessment areas, and its 

outside retail lending area. Conclusions 

assigned for a bank’s performance in facilitybased assessment areas and, as applicable, 

retail lending assessment areas are the basis 

for assigned conclusions at the state, 

multistate MSA, and institution levels, as 

provided in paragraphs (b)(3) and (b)(4) 

below. As applicable, pursuant to § __.22(a) 

a bank’s performance conclusion at the 

institution level is also informed by the 

bank’s retail lending activities in its outside 

retail lending area. 

1. Facility-based assessment area. i. Failure 

to meet retail lending volume threshold 

without an acceptable basis for such failure. 

A. For each facility-based assessment area in 

which a bank fails to meet the retail lending 

volume threshold provided in § __.22 and is 

not deemed to have an acceptable basis for 

failing to meet the threshold, the [Agency] 

develops a Retail Lending Test conclusion 

based on the bank’s geographic distribution 

metrics, borrower distribution metrics, and 

performance ranges as provided in § __.22 

and calculated in sections III, IV, and V of 

appendix A of this part and the applicable 

additional factors described in § __.22(e). 

B. For large banks, in each such facilitybased assessment area, the [Agency] assigns 

one of the following Retail Lending Test 

conclusions and corresponding performance 

score: ‘‘Needs to Improve’’ (3 points) or 

‘‘Substantial Noncompliance’’ (0 points). 

C. For intermediate banks, in each such 

facility-based assessment area, the [Agency] 

assigns one of the following Retail Lending 

Test conclusions and corresponding 

performance score: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory,’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); or ‘‘Substantial Noncompliance’’ 

(0 points). 

ii. Meeting the retail lending volume 

threshold or having an acceptable basis for 

not meeting such threshold. A. For each 

facility-based assessment area in which a 

bank meets the retail lending volume 

threshold provided in § __.22 or is deemed to 

have an acceptable basis for failing to meet 

the threshold, the [Agency] develops a Retail 

Lending Test conclusion based on the bank’s 

geographic distribution metrics, borrower 

distribution metrics, and performance ranges 

provided in § __.22 and calculated in 

accordance with sections III, IV, and V of 

appendix A of this part and the additional 

factors described in § __.22(e). 

B. For the bank’s performance in each such 

facility-based assessment area, the [Agency] 

assigns one of the following Retail Lending 

Test conclusions and corresponding 

performance score: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory,’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); or ‘‘Substantial Noncompliance’’ 

(0 points). 

2. Retail lending assessment area. i. For 

each retail lending assessment area, the 

[Agency] develops a Retail Lending Test 

conclusion based on the bank’s geographic 

distribution metrics, borrower distribution 

metrics, and performance ranges provided in 

§ __.22 and calculated in accordance with 

sections III, IV, and V of appendix A of this 

part. 

ii. For the bank’s performance in each 

retail lending assessment area, the [Agency] 

assigns one of the following Retail Lending 

Test conclusions and corresponding 

performance score: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory,’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); or ‘‘Substantial Noncompliance’’ 

(0 points). 

3. Outside retail lending area. i. For each 

outside retail lending area, the [Agency] 

develops a Retail Lending Test conclusion 

based on the bank’s geographic distribution 

metrics, borrower distribution metrics, and 

performance ranges provided in § __.22 and 

calculated in accordance with sections III, IV, 

and V of appendix A of this part. 

ii. For the bank’s performance in each 

outside retail lending area, the [Agency] 

assigns one of the following Retail Lending 

Test conclusions and corresponding 

performance score: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory,’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); or ‘‘Substantial Noncompliance’’ 

(0 points). 

4. State or multistate MSA. i. For each state 

or multistate MSA, the [Agency] develops a 

Retail Lending Test conclusion for a bank’s 

performance based on a bank’s Retail 

Lending Test conclusions for its facilitybased assessment areas and, as applicable, 

retail lending assessment areas in each 

respective state or multistate MSA. The 


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[Agency] calculates a weighted average of the 

performance scores associated with the 

conclusions in accordance with section VI of 

appendix A of this part. The resulting raw 

number is the performance score for the 

bank’s Retail Lending Test performance in a 

state or multistate MSA. 

ii. For the bank’s performance in each state 

or multistate MSA, the [Agency] assigns a 

conclusion corresponding with the 

conclusion category that is nearest to the 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). For performance 

scores at the exact mid-point between two 

conclusion categories, the [Agency] rounds 

up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 

5. Institution. i. For an institution overall, 

the [Agency] develops a Retail Lending Test 

conclusion for a bank’s performance based on 

all of a bank’s Retail Lending Test 

conclusions for its facility-based assessment 

areas and, as applicable, retail lending 

assessment areas. For large banks and certain 

intermediate banks as provided in § __

.22(a)(3), the [Agency] also bases the 

institution-level conclusion on the bank’s 

Retail Lending Test conclusion in its outside 

retail lending area. The [Agency] calculates a 

weighted average of the performance test 

conclusions for the assessment areas and 

outside retail lending area in accordance 

with section VI of appendix A of this part. 

The resulting raw number is the performance 

score for the bank’s Retail Lending Test 

performance at the institution level. 

ii. For the bank’s performance at the 

institution level, the [Agency] assigns a 

conclusion corresponding with the 

conclusion category that is nearest to the 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). For performance 

scores at the exact mid-point between two 

conclusion categories, the [Agency] rounds 

up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 

c. Retail Services and Products Test 

conclusions. The [Agency] assigns Retail 

Services and Products Test conclusions in a 

bank’s facility-based assessment areas and, as 

applicable, at the state, multistate MSA, and 

institution levels. Conclusions assigned for a 

bank’s performance in a bank’s facility-based 

assessment areas are the basis for conclusions 

at the state, multistate MSA, and institution 

levels. As applicable, a bank’s performance 

conclusion at the institution level is also 

informed by bank’s performance regarding 

digital and other delivery systems under § __

.23(b)(3) and retail credit and deposit 

products under § __.23(c). 

1. Facility-based assessment area. i. Retail 

Services and Products Test conclusions for a 

bank’s performance in a facility-based 

assessment area are based on an evaluation 

of the bank’s delivery systems, as described 

in § __.23(b)(1) and (b)(2). 

ii. For each facility-based assessment area, 

the [Agency] assigns one of the following 

Retail Services and Products Test 

conclusions and corresponding performance 

score: ‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory,’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); or 

‘‘Substantial Noncompliance’’ (0 points). 

2. State or multistate MSA. For each state 

and multistate MSA, as applicable, the 

[Agency] develops a Retail Services and 

Products Test conclusion for a bank’s 

performance based on a bank’s Retail 

Services and Products Test conclusions for 

its facility-based assessment areas in each 

respective state or multistate MSA. The 

[Agency] calculates a weighted average of the 

performance test conclusions for facilitybased assessment areas in accordance with 

section VII of appendix A of this part. The 

resulting raw number is the performance 

score for the bank’s Retail Services and 

Products Test performance in a state or 

multistate MSA. The [Agency] assigns a 

conclusion corresponding with the 

conclusion category that is nearest to the 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). For performance 

scores at the exact mid-point between two 

conclusion categories, the [Agency] rounds 

up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 

3. Institution. i. For an institution overall, 

the [Agency] assigns a Retail Services and 

Products Test conclusion for a bank’s 

performance based on a combined 

assessment of the bank’s delivery systems 

performance and its credit and deposit 

products performance, as applicable, as 

follows: 

A. Delivery systems evaluation. 1. The 

weighted average of a bank’s Retail Services 

and Products Test performances scores for its 

conclusions in all of its facility-based 

assessment areas, calculated in accordance 

with section VII of appendix A of this part; 

and 

2. The bank’s performance regarding digital 

and other delivery systems under § __

.23(b)(3). 

B. Credit and deposit products evaluation. 

The bank’s performance regarding credit and 

deposit products under § __.23(c), as 

applicable. 

ii. On the basis of paragraph c.3.i of this 

section, the [Agency] assigns a Retail 

Services and Products Test conclusion for the 

bank at the institution level. The institutionlevel conclusion is translated into a 

numerical performance score using the 

following mapping: ‘‘Outstanding’’ (10 

points); ‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points). 

d. Community Development Financing Test 

conclusions. The [Agency] assigns 

Community Development Financing Test 

conclusions in facility-based assessment 

areas and, as applicable, in states, multistate 

MSAs, and in nationwide areas. Conclusions 

assigned for a bank’s performance in a bank’s 

facility-based assessment areas are the basis 

for conclusions at the state, multistate MSA, 

and institution levels, combined with an 

evaluation of applicable metrics and 

benchmarks for the bank’s community 

development financing activity at those 

levels, as well as a review of the impact and 

responsiveness of those activities. 

1. Facility-based assessment area. (i) For 

each facility-based assessment area, the 

[Agency] develops a Community 

Development Financing Test conclusion 

based on the metric and benchmarks in § __

.24 and a review of the impact and 

responsiveness of a bank’s activities under 

§ __.15. The facility-based conclusion is 

translated into a numerical performance 

score, as follows: ‘‘Outstanding’’ (10 points); 

‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); ‘‘Needs to Improve’’ 

(3 points); ‘‘Substantial Noncompliance’’ (0 

points). 

2. State, multistate MSA, or nationwide 

area. Community Development Financing 

Test conclusions for a bank’s performance in 

a state, multistate MSA, or nationwide area 

are derived as set forth in section 15 of 

appendix B of this part. 

e. Community Development Services Test 

conclusions. The [Agency] assigns 

Community Development Services Test 

conclusions in facility-based assessment 

areas and, as applicable, in states, multistate 

MSAs, and in nationwide areas. Conclusions 

assigned for a bank’s performance in a bank’s 

facility-based assessment areas are the basis 

of conclusions for state, multistate MSA, and 

nationwide area performance, with a possible 

upward adjustment based on the [Agency]’s 

review of the impact and responsiveness of 

the bank’s community development services 

activities in those areas, respectively. 

1. Facility-based assessment area. For each 

facility-based assessment area, the [Agency] 

develops a Community Development 

Services Test conclusion based on, as 

applicable, an assessment of the Bank 

Assessment Area Community Development 

Service Hours Metric and other data set forth 

in § __.25(b)(1) and a review of the impact 

and responsiveness of a bank’s activities 

under § __.15. The facility-based assessment 

area conclusion is translated into a numerical 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 

Noncompliance’’ (0 points). 

2. State, multistate MSA, or nationwide 

area. For each state, multistate MSA, and for 

a nationwide area, as applicable, the 

[Agency] develops a Community 

Development Services Test for a bank’s 

performance, as follows: 

i. For each such state, multistate MSA, and 

for a nationwide area, the [Agency] calculates 

a weighted average of the performance test 

conclusions in accordance with section 15 of 

appendix B of this part. The resulting raw 

number is the performance score for the 

bank’s Community Development Services 

Test performance in a state, multistate MSA, 

or nationwide area. Subject to paragraph 

(e)(2)(ii) of this appendix, the [Agency] 

assigns a conclusion corresponding with the 

conclusion category that is nearest to the 

performance score, as follows: ‘‘Outstanding’’ 

(10 points); ‘‘High Satisfactory’’ (7 points); 

‘‘Low Satisfactory’’ (6 points); ‘‘Needs to 

Improve’’ (3 points); ‘‘Substantial 


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Noncompliance’’ (0 points). For performance 

scores at the exact mid-point between two 

conclusion categories, the [Agency] rounds 

up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 

ii. The [Agency] may adjust upward the 

performance score derived under paragraph 

(e)(2)(i) of this appendix, based on the 

[Agency]’s review of the impact and 

responsiveness of the bank’s Community 

Development Services Test activities outside 

of facility-based assessment areas in each 

state, multistate MSA, or nationwide area 

under § __.15 to a performance score 

associated with one of the following 

conclusions: ‘‘Outstanding’’ (10 points); 

‘‘High Satisfactory’’ (7 points); ‘‘Low 

Satisfactory’’ (6 points); or ‘‘Needs to 

Improve’’ (3 points). 

f. Community Development Financing Test 

for Wholesale or Limited Purpose Banks 

conclusions. The [Agency] assigns 

conclusions for a wholesale or limited 

purpose bank under the Community 

Development Financing Test for Wholesale 

or Limited Purpose Banks in facility-based 

assessment areas and, as applicable, in states, 

multistate MSAs, and in a nationwide area. 

Conclusions assigned for a bank’s 

performance in a bank’s facility-based 

assessment areas inform conclusions for 

state, multistate MSA, and nationwide area 

performance, along with the [Agency’s] 

review of the volume, impact, and 

responsiveness of the bank’s activities in 

those areas, respectively. 

1. Facility-based assessment area. For each 

facility-based assessment area, the [Agency] 

assigns one of the following Community 

Development Financing Test conclusions 

based on consideration of the dollar value of 

a bank’s community development loans and 

community development investments that 

serve the facility-based assessment area 

during the evaluation period, and a review of 

the impact and responsiveness of the bank’s 

activities in the facility-based assessment 

area under § __.15: ‘‘Outstanding;’’ ‘‘High 

Satisfactory;’’ ‘‘Low Satisfactory;’’ ‘‘Needs to 

Improve;’’ ‘‘Substantial Noncompliance.’’ 

2. State or multistate MSA. For each state 

or multistate MSA, the [Agency] assigns a 

Community Development Financing Test 

conclusion of ‘‘Outstanding,’’ ‘‘High 

Satisfactory,’’ ‘‘Low Satisfactory,’’ ‘‘Needs to 

Improve,’’ or ‘‘Substantial Noncompliance’’ 

based on the following: 

i. The bank’s facility-based assessment area 

performance test conclusions in each state or 

multistate MSA, respectively; and 

ii. The dollar value of a bank’s community 

development loans and community 

development investments that serve the state 

or multistate MSA during the evaluation 

period, and a review of the impact and 

responsiveness of the bank’s activities in the 

state or multistate MSA under § __.15. 

3. Nationwide area. For a nationwide area, 

the [Agency] assigns a Community 

Development Financing Test conclusion of 

‘‘Outstanding,’’ ‘‘High Satisfactory,’’ ‘‘Low 

Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance’’ based on the 

following: 

i. The bank’s community development 

financing performance in all of its facilitybased assessment areas; and 

ii. The bank’s Wholesale or Limited 

Purpose Bank Community Development 

Financing Metric and a review of the impact 

and responsiveness of the bank’s activities in 

a nationwide area under § __.15. 

Appendix D to Part__—Ratings 

a. Ratings in general. In assigning a rating, 

the [Agency] evaluates a bank’s performance 

under the applicable performance criteria in 

this part, in accordance with §§ __.21 and _

_.28, including consideration of evidence of 

discriminatory or other illegal practices. The 

[Agency] assigns a rating of ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance’’ for the bank’s 

performance at the state, multistate MSA, 

and institution levels. 

b. Large bank ratings at the state, 

multistate MSA, and institution levels. 1. 

State and multistate MSA. Subject to 

paragraph (g) of this appendix, the [Agency] 

combines a large bank’s raw performance 

scores for its state or multistate MSA 

performance under the Retail Lending Test, 

Retail Services and Products Test, 

Community Development Financing Test, 

and Community Development Services Test 

to determine the bank’s rating at the state or 

multistate MSA level. 

i. The [Agency] weights the performance 

scores as follows: Retail Lending Test (45 

percent); Retail Services and Products Test 

(15 percent); Community Development 

Financing Test (30 percent); and Community 

Development Services Test (10 percent). The 

[Agency] multiplies each of these weights by 

the bank’s performance score on the 

respective performance test, and then adds 

the resulting values together to develop a 

state or multistate MSA performance score. 

ii. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the state or multistate MSA 

performance score, as follows: 

A. A state or multistate MSA performance 

score of less than 1.5 results in a state or 

multistate MSA rating of ‘‘Substantial 

Noncompliance;’’ 

B. A state or multistate MSA performance 

score of 1.5 or more but less than 4.5 results 

in a state or multistate MSA rating of ‘‘Needs 

to Improve;’’ 

C. A state or multistate MSA performance 

score of 4.5 or more but less than 8.5 results 

in a state or multistate MSA rating of 

‘‘Satisfactory;’’ 

D. A state or multistate MSA performance 

score of 8.5 or more results in a state or 

multistate MSA rating of ‘‘Outstanding.’’ 

Example: Assume that a large bank 

received the following performance scores 

and conclusions in a state: 

1. On the Retail Lending Test, the bank 

received a 7.3 performance score and a 

corresponding conclusion of ‘‘High 

Satisfactory;’’ 

2. On the Retail Services and Products 

Test, the bank received a 6.0 performance 

score and a corresponding conclusion of 

‘‘Low Satisfactory;’’ 

3. On the Community Development 

Financing Test, the bank received a 5.7 

performance score and a corresponding 

conclusion of ‘‘Low Satisfactory;’’ and 

4. On the Community Development 

Services Test, the bank received a 3.0 

performance score and a corresponding 

conclusion of ‘‘Needs to Improve.’’ 

Calculating weights: 

1. For the Retail Lending Test, the weight 

is 45 percent (or 0.45); 

2. For the Retail Services and Products 

Test, the weight is 15 percent (or 0.15); 

3. For the Community Development 

Financing Test, the weight is 30 percent (or 

0.3); and 

4. For the Community Development 

Services Test, the weight is 10 percent (or 

0.1). 

State Performance Score and Rating: Based 

on the illustration above, the bank’s state 

performance score is 6.2. 

(0.45 weight × 7.3 performance score on 

the Retail Lending Test = 3.29) + (0.15 weight 

× 6.0 performance score on the Retail 

Services and Products Test = 0.9) + (0.3 

weight × 5.7 performance score on the 

Community Development Financing Test = 

1.7) + (0.1 weight × 3.0 performance score on 

the Community Development Services Test = 

0.3). 

A state performance score of 6.2 is greater 

than or equal to 4.5 but less than 8.5, 

resulting in a rating of ‘‘Satisfactory.’’ 

2. Institution. Subject to paragraph g. of 

this appendix, the [Agency] combines a large 

bank’s raw performance scores for its 

institution-level performance under the 

Retail Lending Test, Retail Services and 

Products Test, Community Development 

Financing Test, and Community 

Development Services Test to determine the 

bank’s rating at the institution level. 

i. The [Agency] weights the performance 

scores as follows: Retail Lending Test (45 

percent); Retail Services and Products Test 

(15 percent); Community Development 

Financing Test (30 percent); and Community 

Development Services Test (10 percent). The 

[Agency] multiplies each of these weights by 

the bank’s performance score on the 

respective performance test, and then adds 

the resulting values together to develop an 

institution performance score. 

ii. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the institution performance score, 

as follows: 

A. An institution performance score of less 

than 1.5 results in an institution rating of 

‘‘Substantial Noncompliance;’’ 

B. An institution performance score of 1.5 

or more but less than 4.5 results in an 

institution rating of ‘‘Needs to Improve;’’ 

C. An institution performance score of 4.5 

or more but less than 8.5 results in an 

institution rating of ‘‘Satisfactory;’’ 

D. An institution performance score of 8.5 

or more results in an institution rating of 

‘‘Outstanding.’’ 

Example: Assume that a large bank 

received the following performance scores 

and conclusions at the institution level: 

A. On the Retail Lending Test, the bank 

received a 6.2 performance score and a 

corresponding conclusion of ‘‘Low 

Satisfactory;’’ 

B. On the Retail Services and Products 

Test, the bank received a 7 performance score 

and a corresponding conclusion of ‘‘High 

Satisfactory;’’ 

C. On the Community Development 

Financing Test, the bank received a 6.4 


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34058 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

performance score and a corresponding 

conclusion of ‘‘Low Satisfactory;’’ and 

D. On the Community Development 

Services Test, the bank received a 2.5 

performance score and a corresponding 

conclusion of ‘‘Needs to Improve.’’ 

Calculating weights: 

A. For the Retail Lending Test, the weight 

is 45 percent (or 0.45); 

B. For the Retail Services and Products 

Test, the weight is 15 percent (or 0.15); 

C. For the Community Development 

Financing Test, the weight is 30 percent (or 

0.3); and 

D. For the Community Development 

Services Test, the weight is 10 percent (or 

0.1). 

Institution Performance Score and Rating: 

Based on the illustration above, the bank’s 

institution performance score is 6.01. 

(0.45 weight × 6.2 performance score on 

the Retail Lending Test = 2.79) + (0.15 weight 

× 7.0 performance score on the Retail 

Services and Products Test = 1.05) + (0.3 

weight × 6.4 performance score on the 

Community Development Financing Test = 

1.92) + (0.1 weight × 2.5 performance score 

on the Community Development Services 

Test = 0.25). 

An institution performance score of 6.012 

is greater than or equal to 4.5 but less than 

8.5, resulting in an overall institution rating 

of ‘‘Satisfactory.’’ 

c. Intermediate bank ratings. 1. 

Intermediate banks evaluated under the 

Retail Lending Test and the Community 

Development Financing Test. i. State or 

multistate MSA. Subject to paragraph (g) of 

this appendix, the [Agency] combines an 

intermediate bank’s raw performance scores 

for its state or multistate MSA performance 

under Retail Lending Test and Community 

Development Financing Test to determine 

the bank’s rating at the state or multistate 

MSA level. 

A. The [Agency] weights the performance 

scores as follows: Retail Lending Test (50 

percent) and Community Development 

Financing Test (50 percent). The [Agency] 

multiplies each of these weights by the 

bank’s corresponding performance score on 

the respective performance test, and then 

adds the resulting values together to develop 

a state or multistate MSA performance score. 

B. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the state or multistate MSA 

performance score, as follows: 

1. A state or multistate MSA performance 

score of less than 1.5 results in a state or 

multistate MSA rating of ‘‘Substantial 

Noncompliance;’’ 

2. A state or multistate MSA performance 

score of 1.5 or more but less than 4.5 results 

in a state or multistate MSA rating of ‘‘Needs 

to Improve;’’ 

3. A state or multistate MSA performance 

score of 4.5 or more but less than 8.5 results 

in a state or multistate MSA rating of 

‘‘Satisfactory;’’ 

4. A state or multistate MSA performance 

score of 8.5 or more results in a state or 

multistate MSA rating of ‘‘Outstanding.’’ 

ii. Institution. Subject to paragraph g. of 

this appendix, the [Agency] combines an 

intermediate bank’s raw performance scores 

for its institution-level performance under 

Retail Lending Test and Community 

Development Financing Test to determine 

the bank’s rating at the institution level. 

A. The [Agency] weights the performance 

test conclusions as follows: Retail Lending 

Test (50 percent) and Community 

Development Financing Test (50 percent). 

The [Agency] multiplies each of these 

weights by the bank’s corresponding 

performance score on the respective 

performance test, and then adds the resulting 

values together to develop an institution 

performance score. 

B. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the institution performance score, 

as follows: 

1. An institution performance score of less 

than 1.5 results in an institution rating of 

‘‘Substantial Noncompliance;’’ 

2. An institution performance score of 1.5 

or more but less than 4.5 results in an 

institution rating of ‘‘Needs to Improve;’’ 

3. An institution performance score of 4.5 

or more but less than 8.5 results in an 

institution rating of ‘‘Satisfactory;’’ 

4. An institution performance score of 8.5 

or more results in an institution rating of 

‘‘Outstanding.’’ 

C. The [Agency] may adjust an 

intermediate bank’s institution rating from 

‘‘Satisfactory’’ to ‘‘Outstanding’’ where the 

bank has requested and received sufficient 

additional consideration for activities that 

qualify under the Retail Services and 

Products Test, the Community Development 

Services Test, or both. 

2. Intermediate banks evaluated under the 

Retail Lending Test and the intermediate 

bank community development evaluation in 

§ __.29(b). (i) State or multistate MSA. The 

[Agency] combines an intermediate bank’s 

raw performance scores for its state or 

multistate MSA conclusions under Retail 

Lending Test and the intermediate bank 

community development evaluation in § __

.29(b) to determine the bank’s rating at the 

state or multistate MSA level. 

A. The [Agency] weights the performance 

scores as follows: Retail Lending Test (50 

percent) and intermediate bank community 

development evaluation (50 percent). The 

[Agency] multiplies each of these weights by 

the bank’s corresponding performance score 

on the respective performance test and 

performance evaluation, and then adds the 

resulting values together to develop a state or 

multistate MSA performance score. For 

purposes of this paragraph, the performance 

score for the intermediate bank community 

development evaluation corresponds to the 

conclusion assigned, as follows: 

‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). 

B. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the state or multistate MSA 

performance score, as follows: 

1. A state or multistate MSA performance 

score of less than 1.5 results in a state or 

multistate MSA rating of ‘‘Substantial 

Noncompliance;’’ 

2. A state or multistate MSA performance 

score of 1.5 or more but less than 4.5 results 

in a state or multistate MSA rating of ‘‘Needs 

to Improve;’’ 

3. A state or multistate MSA performance 

score of 4.5 or more but less than 8.5 results 

in a state or multistate MSA rating of 

‘‘Satisfactory;’’ 

4. A state or multistate MSA performance 

score of 8.5 or more results in a state or 

multistate MSA rating of ‘‘Outstanding.’’ 

iii. Institution. The [Agency] combines an 

intermediate bank’s raw performance scores 

for its institution-level conclusions under 

Retail Lending Test and intermediate bank 

community development evaluation to 

determine the bank’s rating at the institution 

level. 

A. The [Agency] weights the performance 

test conclusions as follows: Retail Lending 

Test (50 percent) and intermediate bank 

community development evaluation (50 

percent). The [Agency] multiplies each of 

these weights by the bank’s corresponding 

performance score on the respective 

performance test and performance 

evaluation, and then adds the resulting 

values together to develop an institution 

performance score. 

B. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the institution performance score, 

as follows: 

1. An institution performance score of less 

than 1.5 results in an institution rating of 

‘‘Substantial Noncompliance;’’ 

2. An institution performance score of 1.5 

or more but less than 4.5 results in an 

institution rating of ‘‘Needs to Improve;’’ 

3. An institution performance score of 4.5 

or more but less than 8.5 results in an 

institution rating of ‘‘Satisfactory;’’ 

4. An institution performance score of 8.5 

or more results in an institution rating of 

‘‘Outstanding.’’ 

d. Ratings for small banks evaluated under 

the Retail Lending Test. The [Agency] 

determines a small bank’s state, multistate 

MSA, or institution rating based on the raw 

performance score for its Retail Lending Test 

conclusions at the state, multistate MSA, or 

institution level, respectively. 

1. The [Agency] assigns a rating 

corresponding with the rating category that is 

nearest to the state, multistate MSA, or 

institution performance score, as follows: 

i. A state, multistate MSA, or institution 

performance score of less than 1.5 results in 

a state, multistate MSA, or institution rating 

of ‘‘Substantial Noncompliance;’’ 

ii. A state, multistate MSA, or institution 

performance score of 1.5 or more but less 

than 4.5 results in a state, multistate MSA, 

or institution rating of ‘‘Needs to Improve;’’ 

iii. A state, multistate MSA, or institution 

performance score of 4.5 or more but less 

than 8.5 results in a state, multistate MSA, 

or institution rating of ‘‘Satisfactory;’’ 

iv. A state, multistate MSA, or institution 

performance score of 8.5 or more results in 

a state, multistate MSA, or institution rating 

of ‘‘Outstanding.’’ 

2. The [Agency] may adjust a small bank’s 

institution rating from ‘‘Satisfactory’’ to 

‘‘Outstanding’’ where the bank has requested 

and received sufficient additional 

consideration for activities that qualify for its 

performance in making community 


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development investments and services and 

its performance in providing branches and 

other services and delivery systems that 

enhance credit availability in its facilitybased assessment areas. 

e. Wholesale or limited purpose banks. 1. 

The [Agency] determines a wholesale or 

limited purpose bank’s state, multistate MSA, 

or institution level rating based on its 

Community Development Financing Test for 

Wholesale or Limited Purpose Banks 

conclusion at the state, multistate MSA, or 

nationwide area, respectively. 

2. The [Agency] assigns a rating according 

to the category of the conclusion assigned: 

‘‘Outstanding;’’ ‘‘High Satisfactory;’’ ‘‘Low 

Satisfactory;’’ or ‘‘Needs to Improve;’’ or 

‘‘Substantial Noncompliance.’’ A conclusion 

of either ‘‘Low Satisfactory’’ or ‘‘High 

Satisfactory’’ corresponds to a rating of 

‘‘Satisfactory.’’ 

3. The [Agency] may adjust a wholesale or 

limited purpose bank’s institution-level 

rating from ‘‘Satisfactory’’ to ‘‘Outstanding’’ 

where the bank has requested and received 

sufficient additional consideration for 

activities that qualify for consideration under 

the Community Development Services Test. 

f. Ratings for banks operating under an 

approved strategic plan. 1. Satisfactory goals. 

The [Agency] approves as ‘‘Satisfactory’’ 

measurable goals that adequately help to 

meet the credit needs of the bank’s 

assessment areas. 

2. ‘‘Outstanding’’ goals. If the plan 

identifies a separate group of measurable 

goals that substantially exceed the levels 

approved as ‘‘Satisfactory,’’ the [Agency] will 

approve those goals as ‘‘Outstanding.’’ 

3. Rating. The [Agency] 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 [Agency] 

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 Board 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 

[Agency] 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 § __.27(f)(6). 

g. Minimum performance test conclusion 

requirements. 1. Retail lending test minimum 

conclusion. An intermediate or large bank 

must receive at least a ‘‘Low Satisfactory’’ 

Retail Lending Test conclusion at, 

respectively, the state, multistate MSA, or 

institution level to receive an overall state, 

multistate MSA, or institution rating of 

‘‘Satisfactory’’ or ‘‘Outstanding.’’ 

2. Minimum of ‘‘low satisfactory’’ overall 

assessment area conclusion for 60 percent of 

assessment areas. i. A large bank with a total 

of 10 or more facility-based and retail lending 

assessment areas in any state or multistate 

MSA, or nationwide, as applicable, may not 

receive a rating of ‘‘Satisfactory’’ or 

‘‘Outstanding’’ in that state or multistate 

MSA, or for the institution unless the bank 

received an overall assessment area 

conclusion of at least ‘‘Low Satisfactory’’ in 

60 percent or more of the total number of its 

assessment areas in that state or multistate 

MSA, or nationwide, as applicable. 

ii. Overall assessment area conclusion. For 

purposes of the requirement in paragraph 

(g)(2)(i) of this appendix: 

A. An overall assessment area conclusion 

in a retail lending assessment area is the 

retail lending assessment area conclusion 

derived under the Retail Lending Test in 

accordance with appendix C of this part. 

B. An overall assessment area conclusion 

in a facility-based assessment area is 

calculated by combining a large bank’s raw 

performance scores for its conclusions in the 

facility-based assessment area under the 

Retail Lending Test, Retail Services and 

Products Test, Community Development 

Financing Test, and Community 

Development Services Test. 

C. The [Agency] weights the performance 

scores as follows: Retail Lending Test (45 

percent); Retail Services and Products Test 

(15 percent); Community Development 

Financing Test (30 percent); and Community 

Development Services Test (10 percent). The 

[Agency] multiplies each of these weights by 

the bank’s performance score on the 

respective performance test, and then adds 

the resulting values together to develop a 

facility-based assessment area performance 

score. 

D. The [Agency] assigns a conclusion 

corresponding with the conclusion category 

that is nearest to the performance score, as 

follows: ‘‘Outstanding’’ (10 points); ‘‘High 

Satisfactory’’ (7 points); ‘‘Low Satisfactory’’ 

(6 points); ‘‘Needs to Improve’’ (3 points); 

‘‘Substantial Noncompliance’’ (0 points). For 

performance scores at the midpoint between 

two conclusion categories, the [Agency] 

rounds up to assign the conclusion (i.e., a 

performance score of 8.5 is ‘‘Outstanding’’). 

Appendix E to Part __—Small Bank 

Conclusions and Ratings and 

Intermediate Bank Community 

Development Evaluation Conclusions 

a. Small banks evaluated under the small 

bank performance standards—1. Lending 

evaluation conclusions. Unless a small bank 

has opted to be evaluated pursuant to the 

Retail Lending Test, the [Agency] assigns 

conclusions for a small bank’s lending test 

performance under § __.29 of ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance.’’ 

i. Eligibility for a ‘‘Satisfactory’’ lending 

evaluation conclusion. The [Agency] assigns 

a small bank’s lending performance a 

conclusion of ‘‘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 facility-based assessment areas, 

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 

community development investments; 

B. A majority of its loans and, as 

appropriate, other lending-related activities, 

are in its facility-based assessment areas; 

C. A distribution of retail lending 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 facility-based 

assessment areas; 

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 facility-based assessment areas; 

and 

E. A reasonable geographic distribution of 

loans given the bank’s facility-based 

assessment areas. 

ii. Eligibility for an ‘‘Outstanding’’ lending 

evaluation conclusion. A small bank that 

meets each of the standards for a 

‘‘Satisfactory’’ conclusion under this 

paragraph and exceeds some or all of those 

standards may warrant consideration for a 

lending evaluation conclusion of 

‘‘Outstanding.’’ 

iii. ‘‘Needs to Improve’’ or ‘‘Substantial 

Noncompliance’’ lending evaluation 

conclusions. A small bank may also receive 

a lending evaluation conclusion of ‘‘Needs to 

Improve’’ or ‘‘Substantial Noncompliance’’ 

depending on the degree to which its 

performance has failed to meet the standard 

for a ‘‘Satisfactory’’ conclusion. 

2. Small bank ratings. Unless a small bank 

has opted to be evaluated pursuant to the 

Retail Lending Test, the [Agency] assigns a 

small bank rating of ‘‘Outstanding,’’ 

‘‘Satisfactory,’’ ‘‘Needs to Improve,’’ or 

‘‘Substantial Noncompliance’’ based on § __

.29 and consideration of evidence of 

discriminatory or other illegal practices as 

described in § __.28. 

i. ‘‘Outstanding’’ overall small bank rating. 

A small bank that meets each of the 

standards for a ‘‘Satisfactory’’ rating under 

the lending evaluation and exceeds some or 

all of those standards may warrant 

consideration for an overall bank rating of 

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

performance is ‘‘Outstanding,’’ the [Agency] 

considers the extent to which the bank 

exceeds each of the performance standards 

for a ‘‘Satisfactory’’ rating and its 

performance in making community 

development investments and services and 

its performance in providing branches and 

other services and delivery systems that 

enhance credit availability in its facilitybased assessment areas. 

ii. ‘‘Needs to Improve’’ or ‘‘Substantial 

Noncompliance’’ overall bank ratings. A 

small bank may also receive an overall bank 

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. 

b. Intermediate banks evaluated under the 

community development performance 

standards in § __.29. Unless an intermediate 

bank has opted to be evaluated pursuant to 

the Community Development Financing Test, 

the [Agency] assigns conclusions for an 

intermediate bank’s community development 


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performance under § __.29 of ‘‘Outstanding,’’ 

‘‘High Satisfactory,’’ ‘‘Low Satisfactory,’’ 

‘‘Needs to Improve,’’ or ‘‘Substantial 

Noncompliance.’’ 

1. Community development evaluation 

conclusions. i. A. Eligibility for a 

‘‘Satisfactory’’ community development 

evaluation conclusion. The [Agency] assigns 

an intermediate bank’s community 

development performance a ‘‘Low 

Satisfactory’’ conclusion if the bank 

demonstrates adequate responsiveness, and a 

‘‘High Satisfactory’’ conclusion if the bank 

demonstrates good responsiveness, to the 

community development needs of its facilitybased assessment areas through community 

development loans, community development 

investments, and community development 

services. The adequacy of the bank’s 

response will depend on its capacity for such 

community development activities, its 

facility-based assessment areas’ need for such 

community development activities, and the 

availability of such opportunities for 

community development in the bank’s 

facility-based assessment areas. 

B. The [Agency] considers an intermediate 

bank’s retail banking services and products 

activities as community development 

services if they provide benefit to low- and 

moderate-income individuals. 

ii. Eligibility for an ‘‘Outstanding’’ 

community development evaluation 

conclusion. The [Agency] assigns an 

intermediate bank’s community development 

performance an ‘‘Outstanding’’ conclusion if 

the bank demonstrates excellent 

responsiveness to community development 

needs in its facility-based assessment areas 

through community development loans, 

community development 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 facility-based assessment areas. 

iii. ‘‘Needs to Improve’’ or ‘‘Substantial 

Noncompliance’’ community development 

evaluation conclusions. The [Agency] assigns 

an intermediate bank’s community 

development performance a ‘‘Needs to 

Improve’’ or ‘‘Substantial Noncompliance’’ 

conclusion depending on the degree to which 

its performance has failed to meet the 

standards for a ‘‘Satisfactory’’ conclusion. 

2. Intermediate bank ratings. The [Agency] 

rates an intermediate bank’s performance as 

described in appendix D of this part. 

Appendix F to Part __[RESERVED] 

End of Common Proposed Rule Text 

List of Subjects 

12 CFR Part 25 

Community development, Credit, 

Investments, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

12 CFR Part 228 

Banks, banking, Community 

development, Credit, Investments, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 345 

Banks, Banking, Community 

development, Credit, Investments, 

Reporting and recordkeeping 

requirements. 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Chapter I 

Authority and Issuance 

For the reasons set forth in the 

common preamble and under the 

authority of 12 U.S.C. 93a and 2905, the 

Office of the Comptroller of the 

Currency proposes to amend part 25 of 

chapter I of title 12, Code of Federal 

Regulations as follows: 

PART 25—COMMUNITY 

REINVESTMENT ACT AND 

INTERSTATE DEPOSIT PRODUCTION 

REGULATIONS 

■ 1. The authority citation for part 25 is 

revised to read as follows: 

Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 

93a, 161, 215, 215a, 481, 1462a, 1463, 1464, 

1814, 1816, 1828(c), 1835a, 2901 through 

2908, 3101 through 3111, and 5412(b)(2)(B). 

Subpart E—[Redesignated] 

■ 2. Redesignate subpart E as subpart F. 

■ 3. Amend part 25 by revising subparts 

A though D, adding a new subpart E, 

revising appendices A and B and adding 

appendices C through F to read as set 

forth at the end of the common 

preamble. 

■ 4. In part 25 amend subparts A 

through E and appendices A through E 

by: 

■ a. Removing ‘‘[Agency]’’ wherever it 

appears and adding ‘‘appropriate 

Federal banking agency’’ in its place; 

■ b. Removing ‘‘bank’’, ‘‘bank’’, 

‘‘banks’’, ‘‘banks’’, ‘‘bank’s’’, and 

‘‘bank’s’’, wherever they appear and 

adding ‘‘bank or savings association’’, 

‘‘bank or savings association’’, ‘‘banks 

or savings associations’’, ‘‘banks or 

savings associations’’, bank’s or savings 

association’s’’, or ‘‘bank’s or savings 

association’s’’ in their places, 

respectively; 

■ c. Removing ‘‘Bank’’, ‘‘Bank’’, 

‘‘Banks’’, and ‘‘Banks’’ wherever they 

appear and adding ‘‘Bank and savings 

association’’, ‘‘Bank and savings 

association’’, ‘‘Banks and savings 

associations’’, or ‘‘Banks and savings 

associations’’ in their places, 

respectively; 

■ d. Removing ‘‘[operations subsidiary 

or operating subsidiary]’’ wherever it 

appears and adding ‘‘operating 

subsidiary’’ in its place; 

■ e. Removing ‘‘[operations subsidiaries 

or operating subsidiaries]’’ wherever it 

appears and adding ‘‘operating 

subsidiaries’’ in its place; and 

■ f. Removing ‘‘[operations subsidiaries 

or operating subsidiaries]’’ wherever it 

appears and adding ‘‘operating 

subsidiaries’’ in its place. 

■ 5. Amend § 25.11 by revising 

paragraphs (a) and (c) to read as follows: 

§ 25.11 Authority, purposes, and scope. 

(a) Authority. The authority for this 

part is 12 U.S.C. 21, 22, 26, 27, 30, 36, 

93a, 161, 215, 215a, 481, 1462a, 1463, 

1464, 1814, 1816, 1828(c), 1835a, 2901 

through 2908, 3101 through 3111, and 

5412(b)(2)(B). 

* * * * * 

(c) Scope—(1) General. (i) Subparts A, 

B, C, D, and E and appendices A, B, C, 

D, E, and F apply to all banks and 

savings associations except as provided 

in paragraphs (c)(2) and (3) of this 

section. Subpart F only applies to banks. 

(ii) With respect to subparts A, B, C, 

D, and E and appendices A, B, C, D, E, 

and F: 

(A) The OCC has the authority to 

prescribe these regulations for national 

banks, Federal savings associations, and 

State savings associations and has the 

authority to enforce these regulations for 

national banks and Federal savings 

associations; and 

(B) The FDIC has the authority to 

enforce these regulations for State 

savings associations. 

(iii) With respect to subparts A 

(except in the definition of Minority 

depository institution in § 25.12), B, C, 

D, and E and appendices A, B, C, D, E, 

and F, references to appropriate Federal 

banking agency will mean the OCC 

when the institution is a national bank 

or Federal savings association and the 

FDIC when the institution is a State 

savings association. 

(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 and 

savings associations. This part does not 

apply to special purpose banks or 

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 


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specialized operations. These banks or 

savings associations include banker’s 

banks, as defined in 12 U.S.C. 24 

(Seventh), and banks or savings 

associations that engage only in one or 

more of the following activities: 

Providing cash management controlled 

disbursement services or serving as 

correspondent banks or savings 

associations, trust companies, or 

clearing agents. 

■ 6. In § 25.12: 

■ a. Add the definition of ‘‘Bank’’; 

■ b. Remove the definitions of ‘‘Bank 

and savings association’’ and 

‘‘[Operations subsidiary or operating 

subsidiary]’’; and 

■ c. Add the definitions of ‘‘Operating 

subsidiary’’, and ‘‘Savings association’’. 

The additions read as follows: 

§ 25.12 Definitions. 

* * * * * 

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). 

* * * * * 

Operating subsidiary means an 

operating subsidiary as described in 12 

CFR 5.34 in the case of an operating 

subsidiary of a national bank or an 

operating subsidiary as described in 12 

CFR 5.38 in the case of a savings 

association. 

* * * * * 

Savings association means a Federal 

savings association or a State savings 

association. 

* * * * * 

■ 7. Add § 25.31 to read as follows: 

§ 25.31 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 bank or savings association, 

and for applications under 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: 

(i) A domestic branch for insured 

national banks; or 

(ii) A domestic branch or other facility 

that would be authorized to take 

deposits for savings associations; 

(2) The relocation of the main office 

or a branch; 

(3) The merger or consolidation with 

or the acquisition of assets or 

assumption of liabilities of an insured 

depository institution requiring 

approval under the Bank Merger Act (12 

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

(4) The conversion of an insured 

depository institution to a national bank 

or Federal savings association charter; 

and 

(5) Acquisitions subject to section 

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

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

(b) Charter application. (1) 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. 

(2) An applicant for a Federal savings 

association 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 bank’s or 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 

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

1813. 

§ 25.42 [Amended] 

■ 8. In § 25.42 amend paragraph (i) by 

removing ‘‘[other Agencies]’’ and adding 

in its place the phrase ‘‘Board of 

Governors of the Federal Reserve 

System and FDIC or OCC, as 

appropriate’’. 

§ 25.43 [Amended] 

■ 9. In § 25.43 amend paragraph (b)(2) 

by removing ‘‘[operations subsidiaries’ 

or operating subsidiaries’]’’ and adding 

‘‘operating subsidiaries’’’ in its place. 

§ 25.46 [Amended] 

■ 10. In § 25.46 amend paragraph (b) by 

removing ‘‘[Agency contact 

information]’’ and adding in its place 

‘‘CRAComments@occ.treas.gov for 

banks and Federal savings associations 

or CRACommentCollector@fdic.gov for 

State savings associations’’. 

■ 11. Revise paragraph (c)(2) of § 25.51 

to read as follows: 

§ 25.51 Applicability dates, and transition 

provisions. 

* * * * * 

(c) * * * 

(2) Existing plans. A strategic plan in 

effect as of [DATE OF PUBLICATION IN 

THE FEDERAL REGISTER] remains in 

effect until the expiration date of the 

plan except for provisions that were not 

permissible under this part as of January 

1, 2022. 

■ 12. Revise the heading of Appendix A 

to read as follows: 

Appendix A to Part 25—Calculations 

for the Retail Tests 

■ 13. Revise the heading of Appendix B 

to read as follows: 

Appendix B to Part 25—Calculations 

for the Community Development Tests 

■ 14. Revise the heading of Appendix C 

to read as follows: 

Appendix C to Part 25—Performance 

Test Conclusions 

■ 15. Revise the heading of Appendix D 

to read as follows: 

Appendix D to Part 25—Ratings 

■ 16. Revise the heading of Appendix E 

to read as follows: 

Appendix E to Part 25— Small Bank 

Conclusions and Ratings and 

Intermediate Bank Community 

Development Evaluation Conclusions 

■ 17. Add Appendix F to read as 

follows: 

Appendix F 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 [Office of the 

Comptroller of the Currency (OCC) or Federal 

Deposit Insurance Corporation (FDIC), as 

appropriate] evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The [OCC or FDIC, as appropriate] 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, as appropriate]; 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. 


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34062 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

At least 60 days before the beginning of 

each calendar quarter, the [OCC or FDIC, as 

appropriate] publishes a list of the banks that 

are scheduled for CRA examination by the 

[OCC or FDIC, as appropriate] for the next 

two quarters. This list is available through 

the [OCC’s or FDIC’s, as appropriate] website 

at [OCC.gov or FDIC.gov, as appropriate]. 

You may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at bank), (title of responsible official), to the 

[OCC or FDIC Regional Director, as 

appropriate, (address)]. You may also submit 

comments electronically to the [OCC at 

CRAComments@occ.treas.gov or FDIC 

through the FDIC’s website at FDIC.gov/ 

regulations/cra, as appropriate]. Your written 

comments, together with any response by us, 

will be considered by the [OCC or FDIC, as 

appropriate] in evaluating our CRA 

performance and may be made public. 

You may ask to look at any comments 

received by the [OCC or FDIC Regional 

Director, as appropriate]. You may also 

request from the [OCC or FDIC Regional 

Director, as appropriate] an announcement of 

our applications covered by the CRA filed 

with the [OCC or FDIC, as appropriate]. [We 

are an affiliate of (name of holding company), 

a bank holding company. You may request 

from (title of responsible official), Federal 

Reserve Bank of (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 [Office of the 

Comptroller of the Currency (OCC) or Federal 

Deposit Insurance Corporation (FDIC), as 

appropriate] evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The [OCC or FDIC, as appropriate] 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 

Performance Evaluation, prepared by the 

[OCC or FDIC, as appropriate], 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 facility-based 

assessment area containing this branch, 

which is the area in which the [OCC or FDIC, 

as appropriate] evaluates our CRA 

performance in this community; 

(2) Information about our branches in this 

facility-based assessment area; 

(3) A list of services we provide at those 

locations; 

(4) Data on our lending performance in this 

facility-based assessment area; and 

(5) Copies of all written comments received 

by us that specifically relate to our CRA 

performance in this facility-based 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 on our website 

(website address) and at (name of office 

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

At least 60 days before the beginning of 

each calendar quarter, the [OCC or FDIC, as 

appropriate] publishes a list of the banks that 

are scheduled for CRA examination by the 

[OCC or FDIC, as appropriate] for the next 

two quarters. This list is available through 

the [OCC’s or FDIC’s, as appropriate] website 

at [OCC.gov or FDIC.gov, as appropriate]. 

You may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at bank), (title of responsible official), to the 

[OCC or FDIC Regional Director, as 

appropriate (address)]. You may also submit 

comments electronically to the [OCC at 

CRAComments@occ.treas.gov or FDIC 

through the FDIC’s website at FDIC.gov/ 

regulations/cra, as appropriate]. Your written 

comment, together with any response by us, 

will be considered by the [OCC or FDIC, as 

appropriate] in evaluating our CRA 

performance and may be made public. 

You may ask to look at any comments 

received by the [OCC or FDIC Regional 

Director, as appropriate]. You may also 

request from the [OCC or FDIC Regional 

Director, as appropriate] an announcement of 

our applications covered by the CRA filed 

with the [OCC or FDIC, as appropriate]. [We 

are an affiliate of (name of holding company), 

a bank holding company. You may request 

from (title of responsible official), Federal 

Reserve Bank of (address) an announcement 

of applications covered by the CRA filed by 

bank holding companies.] 

FEDERAL RESERVE SYSTEM 

12 CFR Chapter II 

Authority and Issuance 

For the reasons discussed in the 

common preamble section, the Board of 

Governors of the Federal Reserve 

System proposes to amend part 228 of 

chapter II of title 12 of the Code of 

Federal Regulations as follows: 

PART 228—COMMUNITY 

REINVESTMENT (REGULATION BB) 

■ 18. The authority citation for part 228 

continues to read as follows: 

Authority: 12 U.S.C. 321, 325, 1828(c), 

1842, 1843, 1844, and 2901 et seq. 

■ 19. Revise part 228 as set forth at the 

end of the common preamble. 

■ 20. Amend newly revised part 228 by: 

■ a. Removing ‘‘[Agency]’’ wherever it 

appears and adding ‘‘Board’’ in its 

place; 

■ b. Removing the words ‘‘[operations 

subsidiary or operating subsidiary]’’ 

wherever they appear and adding, in 

their place, the words ‘‘operations 

subsidiary’’; 

c. Removing the words ‘‘[operations 

subsidiaries or operating subsidiaries]’’, 

‘‘[operations subsidiaries or operating 

subsidiaries]’’ wherever they appear and 

adding in their place, ‘‘operations 

subsidiaries’’ ‘‘operations subsidiaries’’, 

respectively. 

■ 21. Amend § 228.11 by revising 

paragraphs (a) and (c) to read as follows: 

§ 228.11 Authority, purposes and scope. 

(a) Authority. The Board of Governors 

of the Federal Reserve System (the 

Board) issues this part to implement the 

Community Reinvestment Act (12 

U.S.C. 2901 et seq.) (CRA). The 

regulations comprising this part are 

issued under the authority of the CRA 

and under the provisions of the United 

States Code authorizing the Federal 

Reserve: 

(1) To conduct examinations of statechartered banks that are members of the 

Federal Reserve System (12 U.S.C. 325); 

(2) To conduct examinations of bank 

holding companies and their 

subsidiaries (12 U.S.C. 1844) and 

savings and loan holding companies 

and their subsidiaries (12 U.S.C. 1467a); 

and 

(3) To consider applications for: 

(i) Domestic branches by state 

member banks (12 U.S.C. 321); 

(ii) Mergers in which the resulting 

bank would be a state member bank (12 

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

(iii) Formations of, acquisitions of 

banks by, and mergers of, bank holding 

companies (12 U.S.C. 1842); 

(iv) The acquisition of savings 

associations by bank holding companies 

(12 U.S.C. 1843); and 

(v) Formations of, acquisitions of 

savings associations by, conversions of, 

and mergers of, savings and loan 

holding companies (12 U.S.C. 1467a). 

* * * * * 

(c) Scope. (1) General. This part 

applies to all banks except as provided 

in paragraph (c)(3) of this section. 

(2) Foreign bank acquisitions. This 

part also applies to an uninsured state 

branch (other than a limited branch) of 

a foreign bank 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)). The terms ‘‘state 

branch’’ and ‘‘foreign bank’’ have the 

same meanings as given to those terms 

in section 1(b) of the International 

Banking Act of 1978 (12 U.S.C. 3101 et 

seq.); the term ‘‘uninsured state branch’’ 

means a state branch the deposits of 

which are not insured by the Federal 

Deposit Insurance Corporation; the term 

‘‘limited branch’’ means a state branch 

that accepts only deposits that are 

permissible for a corporation organized 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34063 

under section 25A of the Federal 

Reserve Act (12 U.S.C. 611 et seq.). 

(3) Certain exempt banks. This part 

does not apply to 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 and done on an 

accommodation basis. These banks 

include bankers’ 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. 

§ 228.11 [Amended] 

■ 22. In § 228.11 amend paragraph (b) 

by removing the words ‘‘Community 

Reinvestment Act (12 U.S.C. 2901 et 

seq.) (CRA)’’ and adding, in their place, 

‘‘CRA’’. 

■ 23. In § 228.12: 

■ a. Revise the definition of ‘‘Affiliate’’. 

■ b. Remove the definition of 

‘‘[Operations subsidiary or operating 

subsidiary]’’ and add, in its place, the 

definition of ‘‘Operations subsidiary’’. 

The revision and addition read as 

follows: 

§ 228.12 Definitions. 

* * * * * 

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), as implemented by the Board 

in 12 CFR part 225, and a company is 

under common control with another 

company if both companies are directly 

or indirectly controlled by the same 

company. 

* * * * * 

Operations subsidiary means an 

organization designed to serve, in effect, 

as a separately incorporated department 

of the bank, performing, at locations at 

which the bank is authorized to engage 

in business, functions that the bank is 

empowered to perform directly. 

■ 24. Add § 228.31 to read as follows: 

§ 228.31 Effect of CRA performance on 

applications. 

(a) CRA performance. Among other 

factors, the Board takes into account the 

record of performance under the CRA 

of: 

(1) Each applicant bank for the: 

(i) Establishment of a domestic branch 

by a State member bank; and 

(ii) Merger, consolidation, acquisition 

of assets, or assumption of liabilities 

requiring approval under the Bank 

Merger Act (12 U.S.C. 1828(c)) if the 

acquiring, assuming, or resulting bank is 

to be a State member bank; and 

(2) Each insured depository 

institution (as defined in 12 U.S.C. 

1813) controlled by an applicant and 

subsidiary bank or savings association 

proposed to be controlled by an 

applicant: 

(i) To become a bank holding 

company in a transaction that requires 

approval under section 3 of the Bank 

Holding Company Act (12 U.S.C. 1842); 

(ii) To acquire ownership or control of 

shares or all or substantially all of the 

assets of a bank, to cause a bank to 

become a subsidiary of a bank holding 

company, or to merge or consolidate a 

bank holding company with any other 

bank holding company in a transaction 

that requires approval under section 3 of 

the Bank Holding Company Act (12 

U.S.C. 1842); 

(iii) To own, control or operate a 

savings association in a transaction that 

requires approval under section 4 of the 

Bank Holding Company Act (12 U.S.C. 

1843); 

(iv) To become a savings and loan 

holding company in a transaction that 

requires approval under section 10 of 

the Home Owners’ Loan Act (12 U.S.C. 

1467a); and 

(v) To acquire ownership or control of 

shares or all or substantially all of the 

assets of a savings association, to cause 

a savings association to become a 

subsidiary of a savings and loan holding 

company, or to merge or consolidate a 

savings and loan holding company with 

any other savings and loan holding 

company in a transaction that requires 

approval under section 10 of the Home 

Owners’ Loan Act (12 U.S.C. 1467a). 

(b) Interested parties. In considering 

CRA performance in an application 

described in paragraph (a) of this 

section, the Board takes into account 

any views expressed by interested 

parties that are submitted in accordance 

with the Board’s Rules of Procedure set 

forth in part 262 of this chapter. 

(c) Denial or conditional approval of 

application. A bank or 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. 

(d) Definitions. For purposes of 

paragraphs (a)(2)(i)–(iii) of this section, 

‘‘bank,’’ ‘‘bank holding company,’’ 

‘‘subsidiary,’’ and ‘‘savings association’’ 

have the same meanings given to those 

terms in section 2 of the Bank Holding 

Company Act (12 U.S.C. 1841). For 

purposes of paragraphs (a)(2)(iv) and (v) 

of this section, ‘‘savings and loan 

holding company’’ and ‘‘subsidiary’’ 

have the same meaning given to those 

terms in section 10 of the Home 

Owners’ Loan Act (12 U.S.C. 1467a). 

§ 228.42 [Amended] 

■ 25. In § 228.42 amend paragraph (i) by 

removing the words ‘‘[other Agencies]’’ 

and adding in their place, the words 

‘‘FDIC and OCC’’. 

§ 228.43 [Amended] 

■ 26. In § 228.43 amend paragraph (b)(2) 

by removing the words ‘‘[operations 

subsidiaries’ or operating subsidiaries’]’’ 

and add in their place, the words 

‘‘operations subsidiaries’ ’’. 

§ 228.46 [Amended] 

■ 27. In § 228.46 amend paragraph (b) 

by removing the words ‘‘[Agency 

contact information]’’ and adding in 

their place, the words ‘‘at Staff Group: 

Community Reinvestment Act at https:// 

federalreserve.gov/apps/contactus/ 

feedback.aspx?Submit=Submit, by mail 

to Secretary of the Board, Board of 

Governors of the Federal Reserve 

System, 20th Street and Constitution 

Avenue NW, Washington, DC 20551, or 

by facsimile at (202) 452–3819’’. 

■ 28. Revise the heading of Appendix A 

to read as follows: 

Appendix A to Part 228—Calculations 

for the Retail Tests 

■ 29. Revise the heading of Appendix B 

to read as follows: 

Appendix B to Part 228—Calculations 

for the Community Development Tests 

■ 30. Revise the heading of Appendix C 

to read as follows: 

Appendix C to Part 228—Performance 

Test Conclusions 

■ 31. Revise the heading of Appendix D 

to read as follows: 

Appendix D to Part 228—Ratings 

■ 32. Revise the heading of Appendix E 

to read as follows: 

Appendix E to Part 228—Small Bank 

Conclusions and Ratings and 

Intermediate Bank Community 

Development Evaluation Conclusions 

■ 33. Add Appendix F to read as 

follows: 

Appendix F to Part 228—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 Federal Reserve 

Board (Board) evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The Board also takes this record into account 

when deciding on certain applications 

submitted by us. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
34064 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

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 

Federal Reserve Bank of ll(Reserve Bank); 

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 60 days before the beginning of 

each calendar quarter, the Federal Reserve 

System publishes a list of the banks that are 

scheduled for CRA examination by the 

Reserve Bank for the next two quarters. This 

list is available from (title of responsible 

official), Federal Reserve Bank of 

ll(address), or through the Board’s website 

at federalreserve.gov. 

You may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at bank) and (title of responsible official), 

Federal Reserve Bank of ll(address), or 

through the Board’s website at 

federalreserve.gov. Your letter, together with 

any response by us, will be considered by the 

Federal Reserve System in evaluating our 

CRA performance and may be made public. 

You may ask to look at any comments 

received by the Reserve Bank. You may also 

request from the Reserve Bank an 

announcement of our applications covered 

by the CRA filed with the Reserve Bank. [We 

are an affiliate of (name of holding company), 

a bank holding company. You may request 

from (title of responsible official), Federal 

Reserve Bank of ll(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 Federal Reserve 

Board (Board) evaluates our record of helping 

to meet the credit needs of this community 

consistent with safe and sound operations. 

The Board 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 Federal Reserve 

Bank of ll(address), 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 Board 

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 60 days before the beginning of 

each calendar quarter, the Federal Reserve 

System publishes a list of the banks that are 

scheduled for CRA examination by the 

Reserve Bank for the next two quarters. This 

list is available from (title of responsible 

official), Federal Reserve Bank of 

ll(address), or through the Board’s website 

at federalreserve.gov. 

You may send written comments about our 

performance in helping to meet community 

credit needs to (name and address of official 

at bank) and (title of responsible official), 

Federal Reserve Bank of ll(address), or 

through the Board’s website at 

federalreserve.gov. Your letter, together with 

any response by us, will be considered by the 

Federal Reserve System in evaluating our 

CRA performance and may be made public. 

You may ask to look at any comments 

received by the Reserve Bank. You may also 

request from the Reserve Bank an 

announcement of our applications covered 

by the CRA filed with the Reserve Bank. [We 

are an affiliate of (name of holding company), 

a bank holding company. You may request 

from (title of responsible official), Federal 

Reserve Bank of ll(address) an 

announcement of applications covered by the 

CRA filed by bank holding companies.] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Chapter III 

Authority and Issuance 

For the reasons discussed in the 

preamble, the Federal Deposit Insurance 

Corporation proposes to revise part 345 

of chapter III of title 12 of the Code of 

Federal Regulations to read as follows: 

PART 345—COMMUNITY 

REINVESTMENT 

■ 34. Revise the authority citation for 

part 345 to read as follows: 

Authority: 12 U.S.C. 1814–1817, 1819– 

1820, 1828, 1831u, 2901–2908, 3103–3104, 

and 3108(a). 

■ 35. Revise part 345 to read as set forth 

at the end of the common preamble. 

■ 36. Amend newly revised part 345 by: 

■ a. Removing the word ‘‘[Agency]’’ 

wherever it appears and adding ‘‘FDIC’’ 

in its place; 

■ b. Removing the phrase ‘‘[operations 

subsidiary or operating subsidiary]’’ 

wherever it appears and adding 

‘‘operating subsidiary’’ in its place; 

■ c. Removing the phrase ‘‘[operations 

subsidiaries or operating subsidiaries]’’ 

wherever it appears and adding 

‘‘operating subsidiaries’’ in its place; 

■ d. Removing the phrase ‘‘[operations 

subsidiaries or operating subsidiaries]’’ 

wherever it appears and adding 

‘‘operating subsidiaries’’ in its place. 

■ 37. Revise paragraphs (a) and (c) of 

§ 345.11 to read as follows: 

§ 345.11 Authority, purposes, and scope. 

(a) Authority. The authority for this 

part is 12 U.S.C. 1814–1817, 1819–1820, 

1828, 1831u, 2901–2908, 3103–3104, 

and 3108(a). 

* * * * * 

(c) Scope. (1) General. Except for 

certain special purpose banks described 

in paragraph (c)(3) of this section, this 

part applies to all insured State 

nonmember banks, including insured 

State branches as described in 

paragraph (c)(2) and any uninsured 

State branch 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)). 

(2) Insured State branches. Insured 

State branches are branches of a foreign 

bank established and operating under 

the laws of any State, the deposits of 

which are insured in accordance with 

the provisions of the Federal Deposit 

Insurance Act. In the case of insured 

State branches, references in this part to 

main office mean the principal branch 

within the United States and the term 

branch or branches refers to any insured 

State branch or branches located within 

the United States. The assessment area 

of an insured State branch is the 

community or communities located 

within the United States served by the 

branch as described in § 345.41. 

(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. 

■ 38. Amend § 345.12 as follows: 

■ a. Revise the definition of ‘‘Bank’’. 

■ b. Remove the definition of 

‘‘[Operations subsidiary or operating 

subsidiary]’’ and add in its place the 

definition of ‘‘Operating subsidiary’’. 

The revision and addition read as 

follows: 

§ 345.12 Definitions. 

* * * * * 

Bank means a State nonmember bank, 

as that term is defined in section 3(e)(2) 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 34065 

of the Federal Deposit Insurance Act 

(FDIA) (12 U.S.C. 1813(e)(2)), with 

Federally insured deposits, except as 

defined in § 345.11(c)). The term bank 

also includes an insured State branch as 

defined in § 345.11(c)). 

* * * * * 

Operating subsidiary, for purposes of 

this part, means an operating subsidiary 

as described in 12 CFR 5.34. 

■ 39. Add § 345.31 to read as follows: 

§ 345.31 Effect of CRA performance on 

applications. 

(a) CRA performance. Among other 

factors, the FDIC takes into account the 

record of performance under the CRA of 

each applicant bank in considering an 

application for approval of: 

(1) The establishment of a domestic 

branch or other facility with the ability 

to accept deposits; 

(2) The relocation of the bank’s main 

office or a branch; 

(3) The merger, consolidation, 

acquisition of assets, or assumption of 

liabilities; and 

(4) Deposit insurance for a newly 

chartered financial institution. 

(b) New financial institutions. A 

newly chartered financial institution 

shall submit with its application for 

deposit insurance a description of how 

it will meet its CRA objectives. The 

FDIC takes the description into account 

in considering the application and may 

deny or condition approval on that 

basis. 

(c) Interested parties. The FDIC takes 

into account any views expressed by 

interested parties that are submitted in 

accordance with the FDIC’s procedures 

set forth in part 303 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. 

§ 345.42 [Amended] 

■ 40. In § 345.42 amend paragraph (i) by 

removing ‘‘[other Agencies]’’ and 

adding, in its place, the phrase ‘‘Federal 

Reserve and OCC’’. 

§ 345.43 [Amended] 

■ 41. In § 345.43 amend paragraph (b)(2) 

by removing ‘‘[operations subsidiaries’ 

or operating subsidiaries’]’’ and adding 

‘‘operating subsidiaries’ ’’ in its place. 

§ 345.46 [Amended] 

■ 42. In § 345.46 amend paragraph (b) 

by removing ‘‘[Agency contact 

information]’’ and adding in its place 

‘‘at CRACommentCollector@fdic.gov’’. 

■ 43. Revise the heading of Appendix A 

to read as follows: 

Appendix A to Part 345—Calculations 

for the Retail Lending Test 

■ 44. Revise the heading of Appendix B 

to read as follows: 

Appendix B to Part 345—Calculations 

for the Community Development Tests 

■ 45. Revise the heading of Appendix C 

to read as follows: 

Appendix C to Part 345—Performance 

Test Conclusions 

■ 46. Revise the heading of Appendix D 

to read as follows: 

Appendix D to Part 345—Ratings 

■ 47. Revise the heading of Appendix E 

to read as follows: 

Appendix E to Part 345—Small Bank 

Conclusions and Ratings and 

Intermediate Bank Conclusions 

■ 48. Add Appendix F to read as 

follows: 

Appendix F to Part 345—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 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 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 

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 60 days before the beginning of 

each calendar quarter, the FDIC publishes a 

nationwide list of the banks that are 

scheduled for CRA examination for the next 

two quarters. This list is available from the 

Regional Director, FDIC (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 FDIC Regional Director. You 

may also submit comments electronically 

through the FDIC’s website at www.fdic.gov/ 

regulations/cra. Your letter, together with 

any response by us, will be considered by the 

FDIC in evaluating our CRA performance and 

may be made public. 

You may ask to look at any comments 

received by the FDIC Regional Director. You 

may also request from the FDIC Regional 

Director an announcement of our 

applications covered by the CRA filed with 

the FDIC. [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 

ll(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 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 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 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 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 bank is available at (name of office 

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


khammond on DSKJM1Z7X2PROD with PROPOSALS2
34066 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Proposed Rules 

At least 60 days before the beginning of 

each calendar quarter, the FDIC publishes a 

nationwide list of the banks that are 

scheduled for CRA examination for the next 

two quarters. This list is available from the 

Regional Director, FDIC (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 the FDIC Regional Director. You 

may also submit comments electronically 

through the FDIC’s website at www.fdic.gov/ 

regulations/cra. Your letter, together with 

any response by us, will be considered by the 

FDIC in evaluating our CRA performance and 

may be made public. 

You may ask to look at any comments 

received by the FDIC Regional Director. You 

may also request from the FDIC Regional 

Director an announcement of our 

applications covered by the CRA filed with 

the FDIC. [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 

ll(address) an announcement of 

applications covered by the CRA filed by 

bank holding companies.] 

Michael J. Hsu, 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann E. Misback, 

Secretary of the Board. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on May 5, 2022. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2022–10111 Filed 6–2–22; 8:45 am] 

BILLING CODE 6210–01–P; 6714–01–P; 4810–33–P 


khammond on DSKJM1Z7X2PROD with PROPOSALS2