68450 Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 

PERSON TO CONTACT FOR INFORMATION: 

Mr. Robert Biersack, Press Officer, 

Telephone (202) 694–1220. 

Mary W. Dove, 

Secretary of the Commission. 

[FR Doc. 05–22565 Filed 11–8–05; 3:31 pm] 

BILLING CODE 6715–01–M 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

[Docket No. 05–17] 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1240] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

RIN 3064–AC97 

Community Reinvestment Act; 

Interagency Questions and Answers 

Regarding Community Reinvestment; 

Notice 

AGENCIES: Office of the Comptroller of 

the Currency, Treasury (OCC); Board of 

Governors of the Federal Reserve 

System (Board); Federal Deposit 

Insurance Corporation (FDIC). 

ACTION: Notice and request for comment. 

SUMMARY: This proposal would revise 

guidance of the staffs of the OCC, Board, 

and FDIC (collectively, ‘‘the agencies’’) 

relating to the Community Reinvestment 

Act (‘‘the Act’’ or ‘‘CRA’’) to address 

topics related to the revisions the 

agencies made to their regulations that 

implement the CRA. After reviewing 

comments on this proposal, these 

questions and answers will be added to 

the Interagency Questions and Answers, 

an existing document that contains 

informal staff guidance for examiners 

and other agency personnel, financial 

institutions, and the public. Public 

comment is invited on the proposed 

guidance, as well as any other 

community reinvestment issues. 

DATES: Comments on the proposed 

questions and answers are requested by 

January 9, 2006. 

ADDRESSES: Comments should be 

directed to: 

OCC: You should include OCC and 

Docket Number 05–17 in your comment. 

You may submit comments by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• OCC Web Site: http:// 

www.occ.treas.gov. Click on ‘‘Contact 

the OCC,’’ scroll down and click on 

‘‘Comments on Proposed Regulations.’’

• E-mail Address: 

regs.comments@occ.treas.gov. 

• Fax: (202) 874–4448. 

• Mail: Office of the Comptroller of 

the Currency, 250 E Street, SW., Mail 

Stop 1–5, Washington, DC 20219. 

• Hand Delivery/Courier: 250 E 

Street, SW., Attn: Public Information 

Room, Mail Stop 1–5, Washington, DC 

20219. 

Instructions: All submissions received 

must include the agency name (OCC) 

and docket number for this notice. In 

general, the OCC will enter all 

comments received into the docket 

without change, including any business 

or personal information that you 

provide. You may review comments and 

other related materials by any of the 

following methods: 

• Viewing Comments Personally: You 

may personally inspect and photocopy 

comments at the OCC’s Public 

Information Room, 250 E Street, SW., 

Washington, DC. You can make an 

appointment to inspect comments by 

calling (202) 874–5043. 

• Viewing Comments Electronically: 

You may request e-mail or CD–ROM 

copies of comments that the OCC has 

received by contacting the OCC’s Public 

Information Room at 

regs.comments@occ.treas.gov. 

• Docket: You may also request 

available background documents and 

project summaries using the methods 

described above. 

Board: You may submit comments, 

identified by Docket No. OP–1240, by 

any of the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• Fax: 202/452–3819 or 202/452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

except as necessary for technical 

reasons. Accordingly, your comments 

will not be edited to remove any 

identifying or contact information. 

Public comments may also be viewed 

electronically or in paper in Room MP–

500 of the Board’s Martin Building (20th 

and C Streets, NW.) between 9 a.m. and 

5 p.m. on weekdays. 

FDIC: You may submit comments, 

identified by RIN number 3064–AC97 

by any of the following methods: 

• Agency Web site: http:// 

www.fdic.gov/regulations/laws/federal/ 

propose.html. Follow instructions for 

submitting comments on the Agency 

Web site. 

• E-mail: Comments@FDIC.gov. 

Include the RIN number in the subject 

line of the message. 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429. 

• Hand Delivery/Courier: Guard 

station at the rear of the 550 17th Street 

Building (located on F Street) on 

business days between 7 a.m. and 5 p.m. 

Instructions: All submissions received 

must include the agency name and RIN 

number. All comments received will be 

posted without change to http:// 

www.fdic.gov/regulations/laws/federal/ 

propose.html including any personal 

information provided. 

FOR FURTHER INFORMATION CONTACT: 

OCC: Margaret Hesse, Special 

Counsel, Community and Consumer 

Law Division, (202) 874–5750; or Karen 

Tucker, National Bank Examiner, 

Compliance Policy Division, (202) 874–

4428, Office of the Comptroller of the 

Currency, 250 E Street, SW., 

Washington, DC 20219. 

Board: Anjanette M. Kichline, 

Supervisory Consumer Financial 

Services Analyst, (202) 785–6054; 

Catherine M.J. Gates, Senior 

Supervisory Consumer Financial 

Services Analyst, (202) 452–3946; 

Kathleen C. Ryan, Counsel, (202) 452–

3667; or Dan S. Sokolov, Senior 

Attorney, (202) 452–2412, Division of 

Consumer and Community Affairs, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

FDIC: Robert W. Mooney, Chief, (202) 

898–3911, or Pamela Freeman, Policy 

Analyst, (202) 898–6568, CRA and Fair 

Lending Policy Section, Division of 

Supervision and Consumer Protection; 

Richard M. Schwartz, Counsel, Legal 

Division, (202) 898–7424; Susan van 

den Toorn, Counsel, Legal Division, 

(202) 898–8707; Federal Deposit 

Insurance Corporation, 550 17th Street, 

NW., Washington, DC 20429. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 2, 2005, the OCC, Board, 

and FDIC published in the Federal 

Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 68451 

Register a joint final rule revising their 

Community Reinvestment Act 

regulations (70 FR 44256). The joint 

final rule became effective September 1, 

2005. 

The joint final rule addressed 

regulatory burden imposed on small 

banks with an asset size between $250 

million and $1 billion by exempting 

them from CRA loan data collection and 

reporting obligations. It also exempted 

such banks from the large bank lending, 

investment, and service tests, and made 

them eligible for evaluation under the 

small bank lending test and a flexible 

new community development test. 

Holding company affiliation is no longer 

a factor in determining which CRA 

evaluation standards apply to a bank. 

The joint final rule also revised the 

term ‘‘community development’’ to 

include activities to revitalize and 

stabilize distressed or underserved 

nonmetropolitan middle-income areas 

and designated disaster areas. Finally, 

the rule adopted amendments to the 

regulations to address the impact on a 

bank’s CRA rating of evidence of 

discrimination or other credit practices 

that violate an applicable law, rule, or 

regulation. 

To help financial institutions meet 

their responsibilities under the CRA and 

to increase public understanding of the 

CRA regulations, the staffs of the OCC, 

Board, FDIC, and Office of Thrift 

Supervision have previously published 

answers to the most frequently asked 

questions about the community 

reinvestment regulations of the four 

federal financial regulatory agencies. 

This guidance is intended to provide 

informal staff guidance for use by 

examiners and other agency personnel, 

financial institutions, and the public, 

and is supplemented periodically. The 

staffs of the OCC, Board, and FDIC are 

jointly issuing these proposed Questions 

and Answers to provide additional 

guidance specific to the new OCC, 

Board, and FDIC rules issued on August 

2, 2005, that apply to their institutions. 

Just as in the Interagency Questions 

and Answers currently in effect (65 FR 

36620 (July 12, 2001)), the proposed 

questions and answers are grouped by 

the provision of the CRA regulations 

that they discuss and are presented in 

the same order as the regulatory 

provisions. The proposed questions and 

answers employ the same abbreviated 

method to cite to the regulations that the 

agencies used in the Interagency 

Questions and Answers. Because the 

regulations of the three agencies are 

substantially identical, corresponding 

sections of the different regulations 

usually bear the same suffix. Therefore, 

the proposed questions and answers cite 

only to the suffix. For example, the 

small bank performance standards for 

national banks appear at 12 CFR 25.26; 

for Federal Reserve System member 

banks supervised by the Board, they 

appear at 12 CFR 228.26; and for 

nonmember state banks, at 12 CFR 

345.26. Accordingly, the citation in this 

document would be to § l .26. Each 

question is numbered using a system 

that consists of the regulatory citation 

(as described above) and a number, 

connected by a dash. For example, the 

first proposed question addressing 

§ ll.12(g)(4) would be identified as 

§ ll.12(g)(4)–1. 

As a result of technical changes made 

to the agencies’ regulations (70 FR 

15570 (March 28, 2005)) and the recent 

revisions mentioned above, some of the 

numbering in the existing 2001 

Interagency Questions and Answers 

does not correspond to the appropriate 

sections of the revised regulation. 

However, in the proposed questions and 

answers, if a reference is made to an 

existing question and answer, the 

number of the existing question and 

answer, as published in the 2001 

Interagency Questions and Answers, is 

given, even if the old reference does not 

accurately describe the current 

provision in the regulations. When the 

proposed questions and answers are 

adopted as final and the rest of the 

questions and answers are updated to 

reflect the revisions to the regulations 

made by the three agencies, as discussed 

above, the references in the questions 

and answers will be updated. 

Proposed Questions and Answers 

Because the agencies made several 

significant revisions to the regulations, 

new Interagency Questions and 

Answers addressing those revisions are 

necessary. Therefore, thirteen new 

questions and answers addressing the 

new revisions are being published for 

comment. 

Revised ‘‘Community Development’’

Definition 

Of the thirteen proposed new 

questions and answers, seven questions 

and answers address the revised 

definition of ‘‘community 

development,’’ which includes activities 

that revitalize or stabilize a distressed or 

underserved nonmetropolitan middleincome geography or a designated 

disaster area. First, the proposed 

guidance clarifies that the revised 

definition of ‘‘community development’’

applies to all banks, and not only to 

intermediate small banks. It also 

discusses what is meant by a designated 

disaster area. Disaster areas are 

designated by Federal agencies or 

States, and these designations are made 

public. Therefore, the agencies do not 

intend to maintain a separate list of all 

government-designated disaster areas. 

The guidance also proposes a oneyear ‘‘lag period’’ during which a bank 

may continue to receive consideration 

for activities in a disaster area for which 

the Federal or state designation has 

expired. The lag will help promote 

investments that may take an extended 

period of time to arrange and that have 

extended periods of duration that may 

continue to provide meaningful benefits 

to the community after the government 

designation has ended. During the 

proposed lag period, community 

development activities will continue to 

receive consideration just as they would 

have if the area were still designated as 

a disaster area. Comment is specifically 

requested on the appropriateness of a 

one-year lag period. Is one extra year 

generally long enough for a bank to 

finish the preparations for a community 

development project investment or loan, 

the development of which was 

commenced while the area was still a 

designated disaster area? Should a 

longer or shorter period be selected? If 

so, how long and why? 

Comment is also requested on the 

appropriate description of a disaster 

designation’s duration. The proposed 

guidance would recognize the 

revitalization and stabilization efforts in 

disaster areas during such time that 

Federal, State, or local governments 

have determined that the area continues 

to be affected by the disaster event, and 

provides a one-year period after the 

expiration of the disaster designation in 

which revitalization and stabilization 

activities targeted to those areas will 

receive favorable recognition. The 

agencies specifically seek comment on 

this aspect of the proposal. In particular, 

the agencies seek comment on whether 

the period starting with ‘‘designation’’

and ending with ‘‘expiration’’ of the 

designation is the most appropriate and 

meaningful way to describe the duration 

of the effect of the disaster for CRA 

purposes. Or, should the guidance be 

more broadly worded to reflect other 

relevant governmental measures of the 

duration of a disaster event? For 

example, should the guidance also refer 

to ‘‘periods of assistance,’’ ‘‘registration 

periods,’’ or other relevant timeframes? 

The proposed guidance next explains 

that all revitalization activities in 

designated disaster areas are not 

considered equally—those that are most 

responsive to community needs, 

including the needs of low- or 

moderate-income individuals, may be 

given more weight than other 

revitalization and stabilization activities 

68452 Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 

in designated disaster areas. Bank 

activities to revitalize and stabilize a 

designated disaster area will be 

evaluated, as appropriate, based on the 

particular circumstances and needs of 

the area. The guidance also includes a 

statement regarding loans to individuals 

displaced by a disaster and refers to 

relevant existing guidance. 

The proposed guidance also describes 

the criteria that the agencies use to 

identify distressed or underserved 

nonmetropolitan middle-income 

geographies and states that the list of 

such geographies will be reviewed and 

updated annually. Additional detail 

about the data sources used in 

developing the list of distressed and 

underserved geographies will be posted 

on the FFIEC Web site (http:// 

www.ffiec.gov) with the list. 

Similar to the ‘‘lag period’’ proposed 

in connection with activities in 

designated disaster areas, a one-year lag 

period also is proposed during which a 

bank may continue to receive 

consideration for activities in a 

distressed or underserved middleincome nonmetropolitan area that has 

been removed from the list. Because 

some community development projects 

take an extended amount of time to 

arrange and fund, the staffs of the 

agencies believe that it is important to 

lessen the impact on a bank’s 

investment planning and 

implementation that will occur once a 

distressed or underserved geography has 

been removed from the designated list. 

During the proposed lag period, 

community development activities will 

continue to receive consideration just as 

they would have if the geography were 

still designated as a distressed or 

underserved area. Comment is 

specifically requested on the 

appropriateness of a one-year lag period. 

Is one extra year generally long enough 

for a bank to finish the preparations for 

a community development project 

investment or loan, the development of 

which was commenced while the 

geography was a designated distressed 

or underserved geography? Should a 

longer period be selected? If so, how 

long and why? 

The proposed guidance also clarifies 

that revitalization and stabilization 

activities in middle-income 

nonmetropolitan distressed geographies 

are evaluated differently than those in 

middle-income nonmetropolitan 

underserved geographies. Generally, a 

revitalization or stabilization activity in 

a distressed middle-income 

nonmetropolitan geography that helps 

to attract and retain businesses and 

residents or is part of a bona fide 

revitalization or stabilization plan will 

receive positive consideration. In 

contrast, in an underserved middleincome nonmetropolitan area, 

revitalization or stabilization activities 

are activities that facilitate the 

construction, expansion, improvement, 

maintenance, or operation of essential 

infrastructure or facilities for health 

services, education, public safety, 

public services, industrial parks, or 

affordable housing. These activities 

generally will be considered to meet 

essential community needs and qualify 

for consideration as a community 

development activity, so long as the 

infrastructure, facility, or affordable 

housing serves low- and moderateincome individuals. 

Finally, the proposed guidance 

explains when housing for middle- and 

upper-income persons in distressed or 

underserved nonmetropolitan middleincome geographies or designated 

disaster areas may be considered as a 

community development activity. 

Community development test applicable 

to intermediate small banks 

Three questions and answers are 

proposed to address the community 

development test applicable to 

intermediate small banks and how these 

banks will be evaluated under it. First, 

the proposed guidance discusses what 

examiners will consider when they 

review the responsiveness of an 

intermediate small bank’s community 

development activities to the 

community development needs of the 

area. Next, the proposed guidance 

addresses how the community 

development test for intermediate small 

banks will be applied flexibly so that 

banks can address community 

development needs in their assessment 

areas in the most responsive manner. 

Finally, the proposed guidance includes 

a question and answer that explains 

what examiners will consider when 

evaluating the provision of community 

development services by an 

intermediate small bank in the 

community development test. 

Treatment of Small Banks’ Affiliates’

Activities 

The proposed guidance clarifies that 

any small bank (including an 

intermediate small bank) may request 

that activities of an affiliate in the small 

bank’s assessment area(s) be considered 

in its performance evaluation. Those 

activities will be considered in the small 

bank’s performance evaluation subject 

to the same constraints that apply to 

large institutions’ affiliate activities, 

including that the activities have not 

also been considered in the CRA 

evaluation of another institution. 

Small Bank Asset Threshold 

Adjustments 

One question and answer is proposed 

that explains that the asset size 

thresholds for ‘‘small bank’’ and 

‘‘intermediate small bank’’ will be 

adjusted annually based on changes to 

the Consumer Price Index. Any changes 

in the asset size thresholds will be 

published in the Federal Register. 

Consideration of Prior-Period Qualified 

Investments 

A new question and answer is 

proposed that would apply to banks of 

all sizes. It explains how examiners 

evaluate qualified investments that were 

made during the prior evaluation period 

but that are still outstanding during the 

current evaluation period. 

Revisions to Existing Guidance 

Three revisions to existing questions 

and answers are also proposed. The first 

proposed revision adds a bullet to the 

existing question and answer that 

provides examples of community 

development services (existing 

§§ l_.12(j) & 563e.12(i)–3). The new 

bullet clarifies that the provision of 

financial services to low- and moderateincome individuals through branches 

and other facilities located in low- and 

moderate-income areas is a community 

development service, unless the 

provision of such services has been 

considered in the evaluation of a bank’s 

retail banking services under the service 

test. 

The second proposed revision is 

consistent with guidance the agencies 

provided in a letter responding to a 

question from a member of Congress. 

This revision would add another new 

bullet to the existing question and 

answer providing examples of 

community development services 

(existing §§ ll.12(j) & 563e.12(i)–3) 

that states that a community 

development service may include 

‘‘providing international remittances 

services that increase access to financial 

services by low- and moderate-income 

persons (for example, by offering 

reasonably priced international 

remittances services in connection with 

a low-cost account).’’

The last proposed revision would 

revise the existing question and answer 

that provides examples of qualified 

investments (existing §§ ll.12(s) & 

563e.12(r)–4) to also include banks’

investments in Rural Business 

Investment Companies (RBICs). The 

Rural Business Investment Program 

(RBIP), which is a joint initiative 

between the U.S. Small Business 

Administration and the U.S. Department 

Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 68453 

of Agriculture, is intended to promote 

economic development by financing 

small businesses located primarily in 

rural areas. 

General Comments 

Public comment is invited on the new 

and revised questions and answers. 

Public comment is also invited on a 

continuing basis on any issues raised by 

the CRA and the Interagency Questions 

and Answers. If, after reading this 

proposed guidance and the existing 

Interagency Questions and Answers, 

banks, examiners, community 

organizations, or other interested parties 

have unanswered questions or 

comments about the agencies’

community reinvestment regulations, 

they should submit them to the 

agencies. Staffs of the agencies will 

consider addressing such questions in 

future revisions to the Interagency 

Questions and Answers. 

Solicitation of Comments Regarding the 

Use of ‘‘Plain Language’’

Section 722 of the Gramm-LeachBliley Act of 1999, 12 U.S.C. 4809, 

requires the agencies to use ‘‘plain 

language’’ in all proposed and final 

rules published after January 1, 2000. 

Although this proposed guidance is not 

a proposed rule, comments are 

nevertheless invited on whether the 

proposed interagency questions and 

answers are stated clearly and 

effectively organized, and how the 

guidance might be revised to make it 

easier to read. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

The SBREFA requires an agency, for 

each rule for which it prepares a final 

regulatory flexibility analysis, to publish 

one or more compliance guides to help 

small entities understand how to 

comply with the rule. 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act, the OCC and 

FDIC certified that their proposed CRA 

rule would not have a significant 

economic impact on a substantial 

number of small entities and invited 

comments on that determination. The 

Board did not so certify, and requested 

comments in several areas. See 70 FR 

12148, 12154 (March 11, 2005). In 

connection with the joint final rule, the 

FDIC and OCC certified that the joint 

final rule would not have a significant 

impact on a substantial number of small 

entities. In response to public comments 

it received, the Board prepared a final 

regulatory flexibility analysis and 

described how the final rule minimizes 

the economic impact on small entities 

by making the twelve affected state 

member banks eligible for the 

streamlined CRA process. See 70 FR at 

44264–65 (August 2, 2005). 

In accordance with section 212 of the 

SBREFA and the agencies’ continuing 

efforts to provide clear, understandable 

regulations, staffs of the agencies have 

compiled the Interagency Questions and 

Answers. The Interagency Questions 

and Answers serve the same purpose as 

the compliance guide described in the 

SBREFA by providing guidance on a 

variety of issues of particular concern to 

small banks. 

The text of the proposed Interagency 

Questions and Answers Regarding 

Community Reinvestment follows: 

§ ll.12(g)(4) Activities That 

Revitalize or Stabilize—

§ ll.12(g)(4)–1 (proposed): Is the 

revised definition of community 

development, effective September 1, 

2005, applicable to all banks or only to 

intermediate small banks? 

A1 (proposed): The revised 

definition of community development is 

applicable to all banks. 

§ ll.12(g)(4)–2 (proposed): When do 

activities that provide housing for 

middle-income and upper-income 

persons qualify for favorable 

consideration as community 

development activities when they help 

to revitalize or stabilize designated 

distressed or underserved middleincome nonmetropolitan geographies or 

designated disaster areas? 

A2 (proposed): A bank activity that 

provides housing, but not necessarily 

for low- or moderate-income 

individuals, may qualify as an activity 

that revitalizes or stabilizes a designated 

distressed nonmetropolitan middleincome geography or a designated 

disaster area if the housing helps to 

revitalize or stabilize the community by 

attracting and retaining businesses and 

residents, providing benefits to the 

entire community, including to lowand moderate-income individuals and 

neighborhoods. For example, a bank 

activity that provides housing for 

middle- or upper-income individuals in 

a designated distressed 

nonmetropolitan, middle-income 

geography or disaster area that is part of 

a bona fide plan to revitalize or stabilize 

the community by attracting a major 

new employer that will offer significant 

long-term employment opportunities, 

including to low- and moderate-income 

individuals, qualifies as community 

development. See existing Q&As 

§§ ll.12(h)(4) & 563e.12(g)(4)–1 and 

§§ ll.12(i) & 563e.12(h)–4. 

In underserved middle-income 

nonmetropolitan geographies, activities 

that provide housing for middle- and 

upper-income individuals may also 

qualify as activities that revitalize or 

stabilize such underserved areas if the 

activities also provide housing for lowor moderate-income individuals. For 

example, a loan to build a mixedincome housing development that 

provides housing for middle- and 

upper-income individuals in an 

underserved, middle-income, 

nonmetropolitan geography would 

receive positive consideration if it also 

provides housing for low- or moderateincome individuals. 

§ ll.12(g)(4)(ii) Activities That 

Revitalize or Stabilize Designated 

Disaster Areas 

§ ll.12(g)(4)(ii)–1 (proposed): What 

is a ‘‘designated disaster area’’? 

A1 (proposed): A ‘‘designated 

disaster area’’ is a disaster area 

designated by federal or state 

government. Such designations include, 

for example, Major Disaster Declarations 

administered by the Federal Emergency 

Management Agency (http:// 

www.fema.gov). 

When a disaster area’s designation 

expires pursuant to the applicable law 

under which it was declared, the 

agencies will adopt a one-year ‘‘lag 

period.’’ This lag period will be in effect 

for the twelve months immediately 

following the expiration of the disaster 

area declaration. Revitalization or 

stabilization activities undertaken 

during the lag period will receive 

consideration as community 

development activities if they would 

have been considered to have a primary 

purpose of community development if 

the area in which they were located 

were still designated as a disaster area. 

§ ll.12(g)(4)(ii)–2 (proposed): How 

are revitalization activities in a 

designated disaster area considered? 

A2 (proposed): A bank’s 

revitalization or stabilization activities 

in a designated disaster area will be 

evaluated in the same way such 

activities are evaluated in a low- or 

moderate-income area or in a 

nonmetropolitan middle-income 

distressed geography. Examiners will 

determine whether the activities have a 

primary purpose of community 

development by helping to attract and 

retain residents and businesses 

(including by providing jobs) or are part 

of a bona fide plan to revitalize or 

stabilize the geography. The agencies 

will consider all activities that revitalize 

or stabilize a designated disaster area, 

68454 Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 

but will give greater weight to those 

activities that are most responsive to 

community needs, including those of 

low- or moderate-income individuals or 

neighborhoods. (Investments in entities 

that provide community services for, 

and direct loans and financial services 

provided to, individuals in designated 

disaster areas and to individuals who 

are displaced by disasters also receive 

consideration under the CRA (see, e.g., 

existing Q&As § ll.12(j) & 563e.12(i)–

3; § ll.12(s) & 563e.12(r)–4; 

§ ll.22(b)(2) & (3)–4; § ll.22(b)(2) & 

(3)–5; and § ll.24(d)(3)–1)). 

§ ll.12(g)(4)(iii) Activities That 

Revitalize or Stablize Distressed or 

Underserved Nonmetropolitan MiddleIncome Geographies 

§ ll.12(g)(4)(iii)–1 (proposed): What 

criteria are used to identify distressed or 

underserved nonmetropolitan, middleincome geographies? 

A1 (proposed): Eligible 

nonmetropolitan middle-income 

geographies are those designated by the 

agencies as being in distress or that 

could have difficulty meeting essential 

community needs (underserved). A 

particular geography could be 

designated as both distressed and 

underserved. 

A middle-income, nonmetropolitan 

geography will be designated as 

distressed if it is in a county that meets 

one or more of the following triggers: (1) 

An unemployment rate of at least 1.5 

times the national average, (2) a poverty 

rate of 20 percent or more, or (3) 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 fiveyear period preceding the most recent 

census. 

A middle-income, nonmetropolitan 

geography will be designated as 

underserved if it meets 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 tract is 

likely to have difficulty financing the 

fixed costs of meeting essential 

community needs. The agencies will use 

as the basis for these designations the 

‘‘urban influence codes,’’ numbered 

‘‘7,’’ ‘‘10,’’ ‘‘11,’’ and ‘‘12,’’ maintained 

by the Economic Research Service of the 

United States Department of 

Agriculture. 

The agencies will publish data source 

information along with the list of 

eligible rural census tracts on the 

Federal Financial Institutions 

Examination Council Web site (http:// 

www.ffiec.gov). 

§ ll.12(g)(4)(iii)–2 (proposed): 

How often will the agencies update the 

list of designated distressed and 

underserved middle-income, 

nonmetropolitan geographies? 

A2 (proposed): The agencies will 

review and update the list annually. The 

list will be published on the Federal 

Financial Institutions Examination 

Council Web site (http://www.ffiec.gov). 

To the extent that changes to the 

designated census tracts occur, the 

agencies will adopt a one-year ‘‘lag 

period.’’ This lag period will be in effect 

for the twelve months immediately 

following the date when a census tract 

that was designated as distressed or 

underserved is removed from the 

designated list. Revitalization or 

stabilization activities undertaken 

during the lag period will receive 

consideration as community 

development activities if they would 

have been considered to have a primary 

purpose of community development if 

the census tract in which they were 

located were still designated as 

distressed or underserved. 

§ ll.12(g)(4)(iii)–3 (proposed): 

How are ‘‘revitalization or stabilization’’

activities in middle-income, 

nonmetropolitan, distressed geographies 

and in middle-income, 

nonmetropolitan, underserved 

geographies evaluated? 

A3 (proposed): A bank’s 

revitalization or stabilization activities 

in a middle-income, nonmetropolitan, 

distressed geography will be evaluated 

in the same way such activities are 

evaluated in a low- or moderate-income 

area. For activities in a middle-income, 

nonmetropolitan, distressed geography, 

examiners will determine whether the 

activities have a primary purpose of 

community development by helping to 

attract and retain residents and 

businesses (including by providing jobs) 

or are part of a bona fide plan to 

revitalize or stabilize the geography. The 

activities must have a long-term direct 

benefit to the entire community, 

including low- and moderate-income 

individuals and neighborhoods. See 

existing Q&As §§ ll.12(h)(4) & 

563e.12(g)(4)–1 and §§ ll.12(i) and 

563e.12(h)–4. 

In a middle-income, nonmetropolitan, 

underserved geography, however, bank 

activities that facilitate the construction, 

expansion, improvement, maintenance, 

or operation of essential infrastructure 

or facilities for health services, 

education, public safety, public 

services, industrial parks, or affordable 

housing generally will be considered to 

meet essential community needs and 

qualify for consideration as a 

community development activity, so 

long as the infrastructure, facility, or 

affordable housing serves low- and 

moderate-income individuals. Examples 

of the types of projects that meet 

essential community needs and serve 

low- or moderate-income individuals 

could be a new or expanded hospital 

that serves the entire county, including 

low- and moderate-income residents; an 

industrial park for businesses whose 

employees include low- or moderateincome individuals; a new or 

rehabilitated sewer line that serves 

community residents, including low- or 

moderate-income residents; a mixedincome housing development that 

includes affordable housing for low- and 

moderate-income families; or a 

renovated elementary school that serves 

children from the community, including 

children from low- and moderateincome families. Other bank activities in 

the area, such as financing a project to 

build a sewer line spur to connect 

services to a housing development 

affordable only to middle- and upperincome residents, generally would not 

qualify for revitalization or stabilization 

consideration in geographies designated 

as underserved. However, if an 

underserved geography is also 

designated as distressed, such activities 

are considered to revitalize and stabilize 

the geography if the activity helps to 

attract and retain residents and 

businesses, or are part of a bona fide 

revitalization or stabilization plan as 

further explained in existing Q&A 

§§ ll.12(h)(4) & 563e.12(g)(4)–1. 

§ ll.12(i) Community Development 

Service 

§ ll.12(i)–3 (existing Q&A 

§ ll.12(j) & 563e.12(i)–3 proposed 

revision): What are examples of 

community development services? 

A3 (proposed revision): Examples of 

community development services 

include, but are not limited to, the 

following: 

• Providing financial services to lowand moderate-income individuals 

through branches and other facilities 

located in low- and moderate-income 

areas, unless the provision of such 

services has been considered in the 

evaluation of a bank’s retail banking 

services under § ll.24(d); 

• Providing technical assistance on 

financial matters to nonprofit, tribal or 

government organizations serving lowand moderate-income housing or 

economic revitalization and 

development needs; 

• Providing technical assistance on 

financial matters to small businesses or 

community development organizations, 

including organizations and individuals 

Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 68455 

who apply for loans or grants under the 

Federal Home Loan Banks’ Affordable 

Housing Program; 

• Lending employees to provide 

financial services for organizations 

facilitating affordable housing 

construction and rehabilitation or 

development of affordable housing; 

• Providing credit counseling, homebuyer and home-maintenance 

counseling, financial planning or other 

financial services education to promote 

community development and affordable 

housing; 

• Establishing school savings 

programs and developing or teaching 

financial education curricula for low- or 

moderate-income individuals; 

• Providing electronic benefits 

transfer and point of sale terminal 

systems to improve access to financial 

services, such as by decreasing costs, for 

low- or moderate-income individuals; 

• Providing international remittances 

services that increase access to financial 

services by low- and moderate-income 

persons (for example, by offering 

reasonably priced international 

remittances services in connection with 

a low-cost account); and 

• Providing other financial services 

with the primary purpose of community 

development, such as low-cost bank 

accounts, including ‘‘Electronic Transfer 

Accounts’’ provided pursuant to the 

Debt Collection Improvement Act of 

1996, or free government check cashing 

that increases access to financial 

services for low- or moderate-income 

individuals. 

Examples of technical assistance 

activities that might be provided to 

community development organizations 

include: 

• Serving on a loan review 

committee; 

• Developing loan application and 

underwriting standards; 

• Developing loan processing 

systems; 

• Developing secondary market 

vehicles or programs; 

• Assisting in marketing financial 

services, including development of 

advertising and promotions, 

publications, workshops and 

conferences; 

• Furnishing financial services 

training for staff and management; 

• Contributing accounting/ 

bookkeeping services; and 

• Assisting in fund raising, including 

soliciting or arranging investments. 

§ ll.12(t) Qualified Investment 

§ ll.12(t)–1 (proposed): When 

evaluating a qualified investment, what 

consideration will be given for priorperiod investments? 

A1 (proposed): When evaluating a 

bank’s qualified investment record, 

examiners will consider investments 

that were made prior to the current 

examination, but that are still 

outstanding. Qualitative factors will 

affect the weighting given to both 

current period and outstanding priorperiod qualified investments. For 

example, a prior-period outstanding 

investment with a multi-year impact 

that addresses assessment area 

community development needs may 

receive more consideration than a 

current period investment of a 

comparable amount that is less 

responsive to area community 

development needs. 

§ ll.12(t)–4 (existing Q&A 

§§ ll.12(s) & 563e.12(r)–4 proposed 

revision): What are examples of 

qualified investments? 

A4 (proposed revision). Examples of 

qualified investments include, but are 

not limited to, investments, grants, 

deposits or shares in or to: 

• Financial intermediaries (including, 

Community Development Financial 

Institutions (CDFIs), Community 

Development Corporations (CDCs), 

minority- and women-owned financial 

institutions, community loan funds, and 

low-income or community development 

credit unions) that primarily lend or 

facilitate lending in low- or moderateincome areas or to low- and moderateincome individuals in order to promote 

community development, such as a 

CDFI that promotes economic 

development on an Indian reservation; 

• Organizations engaged in affordable 

housing rehabilitation and construction, 

including multifamily rental housing; 

• Organizations, including for 

example, Small Business Investment 

Companies (SBICs), specialized SBICs, 

and Rural Business Investment 

Companies (RBICs), that promote 

economic development by financing 

small businesses; 

• Facilities that promote community 

development in low- and moderateincome areas for low- and moderateincome individuals, such as youth 

programs, homeless centers, soup 

kitchens, health care facilities, battered 

women’s centers, and alcohol and drug 

recovery centers; 

• Projects eligible for low-income 

housing tax credits; 

• State and municipal obligations, 

such as revenue bonds, that specifically 

support affordable housing or other 

community development; 

• Not-for-profit organizations serving 

low- and moderate-income housing or 

other community development needs, 

such as counseling for credit, homeownership, home maintenance, and 

other financial services education; and 

• Organizations supporting activities 

essential to the capacity of low- and 

moderate-income individuals or 

geographies to utilize credit or to 

sustain economic development, such as, 

for example, day care operations and job 

training programs that enable people to 

work. 

§ ll.12(u)(2): Small Bank 

Adjustment 

§ ll.12(u)(2)–1 (proposed): How 

often will the asset size thresholds for 

small banks and intermediate small 

banks be changed, and how will these 

adjustments be communicated? 

A1 (proposed): The asset size 

thresholds for ‘‘small bank’’ and 

‘‘intermediate small bank’’ will be 

adjusted annually based on changes to 

the Consumer Price Index. More 

specifically, the dollar thresholds will 

be adjusted annually based on the yearto-year change in the average of the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers, not 

seasonally adjusted for each twelvemonth period ending in November, with 

rounding to the nearest million. Any 

changes in the asset size thresholds will 

be published in the Federal Register. 

§ ll.26 Small Bank Performance 

Standards 

§ ll.26–1 (proposed): When 

evaluating a small or intermediate small 

bank’s performance, will examiners 

consider, at the institution’s request, 

retail and community development 

loans, qualified investments, or 

community development services 

originated or purchased by affiliates? 

A1 (proposed): Yes. However, a 

small institution that elects to have 

examiners consider affiliate activities 

must maintain sufficient information 

that the examiners may evaluate these 

activities under the appropriate 

performance criteria and ensure that the 

activities are not claimed by another 

institution. The constraints applicable 

to affiliate activities claimed by large 

institutions also apply to small and 

intermediate small institutions. See 

existing Q&A § ll.22(c)(2) and related 

guidance provided to large institutions 

regarding affiliate activities. Examiners 

will not include affiliate lending in 

calculating the percentage of loans and, 

as appropriate, other lending-related 

activities located in a bank’s assessment 

area. 

68456 Federal Register / Vol. 70, No. 217 / Thursday, November 10, 2005 / Notices 

§ ll.26(c) Intermediate Small Bank 

Community Development Test 

§ ll.26(c)–1 (proposed): How will 

the community development test be 

applied flexibly for intermediate small 

banks? 

A1 (proposed): Generally, 

intermediate small banks engage in a 

combination of community 

development loans, qualified 

investments, and community 

development services. 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. Instead, based on 

the bank’s assessment of community 

development needs in its assessment 

area(s), it may engage in different 

categories of community development 

activities that are responsive to those 

needs and consistent with the bank’s 

capacity. 

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. Appropriate 

levels of each of these activities would 

depend on the capacity and business 

strategy of the bank, community needs, 

and number and types of opportunities 

for community development. 

§ ll.26(c)(3) Community 

Development Services under 

Intermediate Small Bank Community 

Development Test 

§ ll.26(c)(3)–1 (proposed): What will 

examiners consider when evaluating the 

provision of community development 

services by an intermediate small bank? 

A1 (proposed): Examiners will 

consider not only the types of services 

provided to benefit low- and moderateincome individuals, such as low-cost 

bank checking accounts and low-cost 

remittance services, but also the 

provision and availability of services to 

low- and moderate-income individuals, 

including through branches and other 

facilities located in low- and moderateincome areas. 

§ ll.26(c)(4) Responsiveness to 

Community Development Needs under 

Intermediate Small Bank Community 

Development Test 

§ ll.26(c)(4)–1 (proposed): When 

evaluating an Intermediate Small Bank’s 

community development record, what 

will examiners consider when 

reviewing the responsiveness of 

community development lending, 

qualified investments, and community 

development services to the community 

development needs of the area? 

A1 (proposed): When evaluating an 

Intermediate Small Bank’s community 

development record, examiners will 

consider not only quantitative measures 

of performance, such as the number and 

amount of community development 

loans, qualified investments, and 

community development services, but 

also qualitative aspects of performance. 

In particular, examiners will evaluate 

the responsiveness of the bank’s 

community development activities in 

light of the bank’s capacity, business 

strategy, the needs of the community, 

and the number and types of 

opportunities for each type of 

community development activity (its 

performance context). Examiners also 

will consider the results of any 

assessment by the institution of 

community development needs, and 

how the bank’s activities respond to 

those needs. 

An evaluation of the degree of 

responsiveness considers the following 

factors: the volume, mix, and qualitative 

aspects of community development 

loans, qualified investments, and 

community development services. 

Consideration of the qualitative aspects 

of performance recognizes that 

community development activities 

sometimes require special expertise or 

effort on the part of the institution or 

provide a benefit to the community that 

would not otherwise be made available. 

(However, ‘‘innovativeness’’ and 

‘‘complexity,’’ factors examiners 

consider when evaluating a large bank 

under the lending, investment, and 

service tests, are not criteria in the 

intermediate small banks’ community 

development test.) In some cases, a 

smaller loan may have more qualitative 

benefit to a community than a larger 

loan. Activities are considered 

particularly responsive to community 

development needs if they benefit lowand moderate-income individuals in 

low- or moderate-income geographies, 

designated disaster areas, or distressed 

or underserved middle-income 

nonmetropolitan geographies. Activities 

are also considered particularly 

responsive to community development 

needs if they benefit low- or moderateincome geographies. 

This concludes the text of the 

proposed Interagency Questions and 

Answers Regarding Community 

Reinvestment. 

Dated: October 31, 2005. 

John C. Dugan, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, November 4, 2005. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this third day of 

November, 2005. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 05–22468 Filed 11–9–05; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P 

GENERAL SERVICES 

ADMINISTRATION 

Notice of Availability of the Draft 

Environmental Impact Statement for 

Improvements to the Andrade Port of 

Entry, Andrade, California 

AGENCY: Public Buildings Service, GSA. 

ACTION: Notice of Availability and 

Public Hearing. 

SUMMARY: The General Services 

Administration (GSA) announces the 

availability of the Draft Environmental 

Impact Statement (EIS) for 

Improvements to the Andrade Port of 

Entry, Andrade, California, for public 

review and comment. The EIS provides 

GSA and its stakeholders an analysis of 

the environmental impacts resulting 

from ongoing operations as well as 

reasonable alternatives for new 

operations and facilities at the Andrade 

Port of Entry, located in southeastern 

California, and a potential new Port of 

Entry west of Yuma, Arizona. 

DATES: Written comments on the Draft 

EIS are invited from the public and may 

be submitted through the end of the 

comment period, which ends January 9, 

2006 (see ADDRESSES section for more 

details). Comments must be postmarked 

by January 9, 2006, to ensure 

consideration; late comments will be 

considered to the extent practicable. 

The GSA will use the comments 

received to help prepare the final 

version of the Andrade Port of Entry 

EIS. A public hearing on the Draft EIS 

will be held on Wednesday, November 

16, 2005, from 3:00 pm to 6:00 pm, at 

the Shilo Inn, Yuma Conference Room, 

1550 South Castle Dome Road, Yuma, 

AZ.