beyond their physical footprint. at the other end of the spectrum, online banks employ business models that reach customers across much or all of america without relying on branches. although these online banks may provide the same retail products and services as a traditional bank with a branch network, because they have only one location, they are evaluated for cra purposes in the area around that location, rather than in the many areas where they have customers. still other banks offer a limited set of credit products or wholesale services. take, for instance, the example of industrial loan companies ( ilcs ), which have cra obligations as state - chartered insured depository institutions. ilcs are owned by corporations rather than bank holding companies and are typically chartered to provide credit cards or other forms of financing related to their parent company ’ s business. many large ilcs are chartered in utah and are evaluated on their cra performance in salt lake city, even though they lend nationally. the result is a saturated market for community development lending and investment in salt lake city. at the same time, other areas in utah and beyond have important community development opportunities that may go unmet. at a minimum, revised cra regulations should allow banks with this type of business model to expand cra activities beyond the area surrounding its branch so that the community and economic development needs of more underserved communities can be met. branches are important vehicles for reaching small business customers and low - income consumers, but they are not the only way. in considering ways to revise the cra regulations, the agencies should be thoughtful about how to make the areas in which we evaluate cra performance more meaningful to both banks and low - and moderate - income communities. for community banks that rely on branches to serve their customers, the current assessment area approach may need only small adjustments. for banks that serve their customers through a variety of approaches, assessing their broader deposit - taking and loan - making footprint might make sense. for large wholesale banks, it might make sense to evaluate cra activity in a broader area and to encourage them to spread their investments and services to underserved areas. the cra regulations should be updated in a way that is appropriate for different business models. to the extent that banks are able to serve the needs in low - and moderate - income communities through additional channels, it is important they receive due consideration, while cra revisions should also continue to recognize the importance of sustaining branches in communities where they are needed. opportunities in underserved

david dodge : summary of the latest monetary policy report update opening statement by mr david dodge, governor of the bank of canada, at a press conference following the release of the monetary policy report update, ottawa, 24 january 2008. * * * good morning. i'm pleased to be here with you today, for my final press conference as governor of the bank of canada, to discuss our january monetary policy report update. the canadian economy continues to operate above its production capacity, despite some slowing in growth and inflation in the fourth quarter of 2007. financial conditions have deteriorated since october, leading to tighter credit conditions in industrialized countries. given this, and a deeper and more prolonged decline in the u. s. housing sector, the outlook for the u. s. economy in 2008 is now significantly weaker than at the time of the october mpr. the weaker u. s. economy will lead to additional downward pressure on canada's export growth. despite tighter credit conditions, domestic demand in canada is expected to remain strong, supported by continued income growth associated with the increase in commodity prices seen since october. overall, the bank now projects that the canadian economy will expand by 1. 8 per cent in 2008 and 2. 8 per cent in 2009. this growth profile implies that the economy will move into excess supply in the second quarter of this year, and then return to balance in early 2010. inflation is projected to fall below 1 1 / 2 per cent by the middle of this year before returning to 2 per cent by the end of 2009. this reflects a price - level adjustment related to increased competitive pressures in the retail sector stemming from the level of the canadian dollar, as well as the recent reduction in the gst. excluding the impact of the gst reduction, total cpi inflation is projected to average close to the 2 per cent target throughout 2008 and 2009. of course, there are a number of upside and downside risks to the bank's base - case projection for inflation. but overall, we judge these risks to be roughly balanced. on 4 december and on 22 january, the bank lowered its target for the overnight rate by onequarter of one percentage point, bringing it to 4 per cent. further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance, and to return inflation to target over the medium term.