(a) Purpose. The purpose of this subpart is to implement section 109 (12 U.S.C. 1835a) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).

(b) Scope. (1) This subpart applies to any national bank or savings association that has operated a covered interstate branch for a period of at least one year, and any foreign bank or savings association that has operated a covered interstate branch that is a Federal branch for a period of at least one year.

(2) This subpart describes the requirements imposed under 12 U.S.C. 1835a, which requires the appropriate Federal banking agencies (the OCC, the Board of Governors of the Federal Reserve System, and the FDIC) to prescribe uniform rules that prohibit a bank or savings association from using any authority to engage in interstate branching pursuant to the Interstate Act, or any amendment made by the Interstate Act to any other provision of law, primarily for the purpose of deposit production.

For purposes of this subpart, the following definitions apply:

(a) Bank and savings association means, unless the context indicates otherwise:

(1) A national bank or savings association; and

(2) A foreign bank or savings association as that term is defined in 12 U.S.C. 3101(7) and 12 CFR 28.11(i).

(b) Covered interstate branch means:

(1) Any branch of a national bank or savings association, and any Federal branch of a foreign bank or savings association, that:

(i) Is established or acquired outside the bank's or savings association's home State pursuant to the interstate branching authority granted by the Interstate Act or by any amendment made by the Interstate Act to any other provision of law; or

(ii) Could not have been established or acquired outside of the bank's or savings association's home State but for the establishment or acquisition of a branch described in paragraph (b)(1)(i) of this section; and

(2) Any bank or savings association or branch of a bank or savings association controlled by an out-of-State bank or savings association holding company.

(c) Federal branch means Federal branch as that term is defined in 12 U.S.C. 3101(6) and 12 CFR 28.11(h).

(d) Home State means:

(1) With respect to a State bank or savings association, the State that chartered the bank or savings association;

(2) With respect to a national bank or savings association, the State in which the main office of the bank or savings association is located;

(3) With respect to a bank or savings association holding company, the State in which the total deposits of all banking subsidiaries of such company are the largest on the later of:

(i) July 1, 1966; or

(ii) The date on which the company becomes a bank or savings association holding company under the Bank Holding Company Act;

(4) With respect to a foreign bank or savings association:

(i) For purposes of determining whether a U.S. branch of a foreign bank or savings association is a covered interstate branch, the home State of the foreign bank or savings association as determined in accordance with 12 U.S.C. 3103(c) and 12 CFR 28.11(n); and

(ii) For purposes of determining whether a branch of a U.S. bank or savings association controlled by a foreign bank or savings association is a covered interstate branch, the State in which the total deposits of all banking subsidiaries of such foreign bank or savings association are the largest on the later of:

(A) July 1, 1966; or

(B) The date on which the foreign bank or savings association becomes a bank or savings association holding company under the Bank Holding Company Act.

(e) Host State means a State in which a covered interstate branch is established or acquired.

(f) Host state loan-to-deposit ratio generally means, with respect to a particular host state, the ratio of total loans in the host state relative to total deposits from the host state for all banks or savings associations (including institutions covered under the definition of “ bank or savings association” in 12 U.S.C. 1813(a)(1)) that have that state as their home state, as determined and updated periodically by the appropriate Federal banking agencies and made available to the public.

(g) Out-of-State bank or savings association holding company means, with respect to any State, a bank or savings association holding company whose home State is another State.

(h) State means state as that term is defined in 12 U.S.C. 1813(a)(3).

(i) Statewide loan-to-deposit ratio means, with respect to a bank or savings association, the ratio of the bank's or savings association's loans to its deposits in a state in which the bank or savings association has one or more covered interstate branches, as determined by the OCC.

(a) Application of screen. Beginning no earlier than one year after a covered interstate branch is acquired or established, the OCC will consider whether the bank's or savings association's statewide loan-to-deposit ratio is less than 50 percent of the relevant host State loan-to-deposit ratio.

(b) Results of screen. (1) If the OCC determines that the bank's or savings association's statewide loan-to-deposit ratio is 50 percent or more of the host state loan-to-deposit ratio, no further consideration under this subpart is required.

(2) If the OCC determines that the bank's or savings association's statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, or if reasonably available data are insufficient to calculate the bank's or savings association's statewide loan-to-deposit ratio, the OCC will make a credit needs determination for the bank or savings association as provided in § 25.64.

(a) In general. The OCC will review the loan portfolio of the bank or savings association and determine whether the bank or savings association is reasonably helping to meet the credit needs of the communities in the host state that are served by the bank or savings association.

(b) Guidelines. The OCC will use the following considerations as guidelines when making the determination pursuant to paragraph (a) of this section:

(1) Whether covered interstate branches were formerly part of a failed or failing depository institution;

(2) Whether covered interstate branches were acquired under circumstances where there was a low loan-to-deposit ratio because of the nature of the acquired institution's business or loan portfolio;

(3) Whether covered interstate branches have a high concentration of commercial or credit card lending, trust services, or other specialized activities, including the extent to which the covered interstate branches accept deposits in the host state;

(4) The CRA ratings received by the bank or savings association, if any;

(5) Economic conditions, including the level of loan demand, within the communities served by the covered interstate branches;

(6) The safe and sound operation and condition of the bank or savings association; and

(7) The OCC's CRA regulations (subparts A through D of this part) and interpretations of those regulations.

(a) In general. If the OCC determines that a bank or savings association is not reasonably helping to meet the credit needs of the communities served by the bank or savings association in the host state, and that the bank's or savings association's statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, the OCC:

(1) May order that a bank's or savings association's covered interstate branch or branches be closed unless the bank or savings association provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank or savings association has an acceptable plan under which the bank or savings association will reasonably help to meet the credit needs of the communities served by the bank or savings association in the host state; and

(2) Will not permit the bank or savings association to open a new branch in the host state that would be considered to be a covered interstate branch unless the bank or savings association provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank or savings association will reasonably help to meet the credit needs of the community that the new branch will serve.

(b) Notice prior to closure of a covered interstate branch. Before exercising the OCC's authority to order the bank or savings association to close a covered interstate branch, the OCC will issue to the bank or savings association a notice of the OCC's intent to order the closure and will schedule a hearing within 60 days of issuing the notice.

(c) Hearing. The OCC will conduct a hearing scheduled under paragraph (b) of this section in accordance with the provisions of 12 U.S.C. 1818(h) and 12 CFR part 19.

Link to an amendment published at 89 FR 7168, Feb. 1, 2024.

This appendix, based on requirements described in §§ 25.22 and 25.28, includes the following sections:

I. Retail Lending Volume Screen II. Retail Lending Test Distribution Metrics—Scope of Evaluation III. Geographic Distribution Metrics and Benchmarks IV. Borrower Distribution Metrics and Benchmarks V. Supporting Conclusions for Major Product Lines Other Than Automobile Lending VI. Supporting Conclusions for Automobile Lending VII. Retail Lending Test Conclusions—All Major Product Lines VIII. Retail Lending Test Weighting and Conclusions for States, Multistate MSAs, and the Institution I. Retail Lending Volume Screen

The appropriate Federal banking agency calculates the Bank Volume Metric and the Market Volume Benchmark for a facility-based assessment area and determines whether the bank or savings association has met or surpassed the Retail Lending Volume Threshold in that facility-based assessment area.

a. Bank Volume Metric. The appropriate Federal banking agency calculates the Bank Volume Metric for each facility-based assessment area by:

1. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of loans included in the Bank Volume Metric (i.e., volume metric loans). The bank's or savings association's annual dollar volume of volume metric loans is the total dollar amount of all home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans originated or purchased by the bank or savings association in the facility-based assessment area in that year. Automobile loans are included in the bank's or savings association's annual dollar amount of volume metric loans only if automobile loans are a product line for the bank or savings association.

2. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in the facility-based assessment area. For a bank or savings association that reports deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of annual average daily balances of deposits reported by the bank or savings association in counties in the facility-based assessment area for that year. For a bank or savings association that does not report deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of deposits assigned to facilities reported by the bank or savings association in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

3. Dividing the result of paragraph I.a.1 of this appendix by the result of paragraph I.a.2 of this appendix.

Example A-1: The bank has a three-year evaluation period. The bank's annual dollar amounts of volume metric loans are $300,000 (year 1), $300,000 (year 2), and $400,000 (year 3). The sum of the bank's annual dollar amount of volume metric loans in a facility-based assessment area, over the years in the evaluation period, is therefore $1 million. The annual dollar volumes of deposits in the bank located in the facility-based assessment area are $1.7 million (year 1), $1.6 million (year 2), and $1.7 million (year 3). The sum of the annual dollar volume of deposits in the facility-based assessment area, over the years in the evaluation period, is therefore $5 million. The Bank Volume Metric for the facility-based assessment area would be $1 million divided by $5 million, or 0.2 (equivalently, 20 percent).

b. Market Volume Benchmark. The appropriate Federal banking agency calculates the Market Volume Benchmark for the facility-based assessment area. For purposes of calculating the Market Volume Benchmark, a benchmark depository institution for a particular year is a depository institution that, in that year, was subject to reporting pursuant to § 25.42(b)(1), 12 CFR 228.42(b)(1) or 345.42(b)(1), or 12 CFR part 1003, and operated a facility included in the FDIC's Summary of Deposits data in the facility-based assessment area. The appropriate Federal banking agency calculates the Market Volume Benchmark by:

1. Summing, over the years in the evaluation period, the annual dollar volume of volume benchmark loans. The annual dollar volume of volume benchmark loans is the total dollar volume of all home mortgage loans, multifamily loans, small business loans, and small farm loans in the facility-based assessment area in that year that are reported loans originated by benchmark depository institutions.

2. Summing, over the years in the evaluation period, the annual dollar volume of deposits for benchmark depository institutions in the facility-based assessment area. The annual dollar volume of deposits for benchmark depository institutions in the facility-based assessment area is the sum across benchmark depository institutions of: (i) for a benchmark depository institution that reports data pursuant to § 25.42(b)(3) or 12 CFR 228.42(b)(3) or 345.42(b)(3), the total of annual average daily balances of deposits reported by that depository institution in counties in the facility-based assessment area for that year; and (ii) for a benchmark depository institution that does not report data pursuant to § 25.42(b)(3) or 12 CFR 228.42(b)(3) or 345.42(b)(3), the total of deposits assigned to facilities reported by that depository institution in counties in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

3. Dividing the result of paragraph I.b.1 of this appendix by the result of paragraph I.b.2 of this appendix.

Example A-2: With reference to example A-1 to this appendix, the annual dollar volume of volume benchmark loans is $6 million (year 1), $7 million (year 2), and $7 million (year 3). The sum of the annual dollar volume of volume benchmark loans, over the years in the evaluation period, is therefore $20 million. The annual dollar volume of deposits for benchmark depository institutions is $17 million (year 1), $15 million (year 2), and $18 million (year 3). The sum of the annual dollar volume of deposits for benchmark depository institutions, over the years in the evaluation period, is therefore $50 million. The Market Volume Benchmark for that facility-based assessment area would be $20 million divided by $50 million, or 0.4 (equivalently, 40 percent).

c. Retail Lending Volume Threshold. For each facility-based assessment area, the appropriate Federal banking agency calculates a Retail Lending Volume Threshold by multiplying the Market Volume Benchmark for that facility-based assessment area by 0.3 (equivalently, 30 percent). A bank or savings association meets or surpasses the Retail Lending Volume Threshold in a facility-based assessment area if the Bank Volume Metric is equal to or greater than the Retail Lending Volume Threshold.

Example A-3: Based on examples A-1 and A-2 to this appendix, the appropriate Federal banking agency calculates the Retail Lending Volume Threshold by multiplying the Market Volume Benchmark of 40 percent by 0.3, equal to 0.12 (equivalently, 12 percent). The Bank Volume Metric, 0.2 (equivalently, 20 percent), is greater than the Retail Lending Volume Threshold. Accordingly, the bank surpasses the Retail Lending Volume Threshold.

Bank Volume Metric (20%) > Retail Lending Volume Threshold [(40%) × 0.3 = 12%] II. Retail Lending Distribution Metrics—Scope Of Evaluation

a. Retail Lending Test Areas evaluated. A bank's or savings association's major product lines are evaluated in its Retail Lending Test Areas, as provided in § 25.22(d) and as described in paragraphs II.a.1 and 2 of this appendix.

1. Large banks or savings associations exempt from evaluation in retail lending assessment areas. Pursuant to § 25.17(a)(2), a large bank or savings association is not required to delineate retail lending assessment areas in a particular calendar year if the following ratio exceeds 80 percent, based on the combination of loan dollars and loan count as defined in § 25.12:

i. The sum, over the prior two calendar years, of the large bank's or savings association's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the large bank or savings association, originated or purchased in its facility-based assessment areas; divided by

ii. The sum, over the prior two calendar years, of the large bank's or savings association's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the large bank or savings association, originated or purchased overall.

Example A-4: A large bank (for which automobile loans are not a product line) originated or purchased 20,000 closed-end home mortgage loans, small business loans, and small farm loans in the prior two calendar years, representing $6 billion in loan dollars. Of these loans, 18,000 loans, representing $4.5 billion in loan dollars, were originated or purchased in the large bank's facility-based assessment areas. As such, the large bank originated or purchased 75 percent of closed-end home mortgage loans, small business loans, and small farm loans ($4.5 billion/$6 billion) by loan dollars and 90 percent (18,000/20,000) of these loans by loan count within its facility-based assessment areas. The combination of loan dollars and loan count is 82.5 percent, or (75 + 90)/2. Thus, this large bank is not required to delineate retail lending assessment areas pursuant to § 25.17(a)(2) in the current calendar year because the 82.5 percent exceeds the 80 percent threshold.

2. Small banks or savings associations and intermediate banks or savings associations evaluated in outside retail lending areas. Pursuant to § 25.18(a)(2), the appropriate Federal banking agency evaluates the geographic and borrower distributions of the major product lines of an intermediate bank or savings association, or a small bank or savings association that opts to be evaluated under the Retail Lending Test, in the bank's or savings association's outside retail lending area if either:

i. The bank or savings association opts to have its major product lines evaluated in its outside retail lending area; or

ii. The following ratio exceeds 50 percent, based on the combination of loan dollars and loan count as defined in § 25.12:

A. The sum, over the prior two calendar years, of the bank's or savings association's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the bank or savings association, originated or purchased outside of its facility-based assessment areas; divided by

B. The sum, over the prior two calendar years, of the bank's or savings association's home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans if automobile loans are a product line for the bank or savings association, originated or purchased overall.

b. Product lines and major product lines. In each of a bank's or savings association's Retail Lending Test Areas, the appropriate Federal banking agency evaluates each of a bank's or savings association's major product lines, as provided in § 25.22(d)(2) and as described in paragraphs II.b.1 through 3 of this appendix.

1. Major product line standard for facility-based assessment areas and outside retail lending areas. Except as provided in paragraph II.b.1.iii of this appendix, a product line is a major product line in a facility-based assessment area or outside retail lending area if the following ratio is 15 percent or more, based on the combination of loan dollars and loan count as defined in § 25.12:

i. The sum, over the years of the evaluation period, of the bank's or savings association's loans in the product line originated or purchased in the facility-based assessment area or outside retail lending area; divided by

ii. The sum, over the years of the evaluation period, of the bank's or savings association's loans in all product lines originated or purchased in the facility-based assessment area or outside retail lending area.

iii. If a bank or savings association has not collected, maintained, or reported loan data on a product line in a facility-based assessment area or outside retail lending area for one or more years of an evaluation period, the product line is a major product line if the appropriate Federal banking agency determines that the product line is material to the bank's or savings association's business in the facility-based assessment area or outside retail lending area.

2. Major product line standard for retail lending assessment areas. In a retail lending assessment area:

(i) Closed-end home mortgage loans are a major product line in any calendar year in the evaluation period in which the bank or savings association delineates a retail lending assessment area based on its closed-end home mortgage loans as determined by the standard in § 25.17(c)(1); and

(ii) Small business loans are a major product line in any calendar year in the evaluation period in which the bank or savings association delineates a retail lending assessment area based on its small business loans as determined by the standard in § 25.17(c)(2).

3. Banks and savings associations for which automobile loans are a product line.

i. If a bank's or savings association's automobile loans are a product line (either because the bank or savings association is a majority automobile lender or opts to have its automobile loans evaluated pursuant to § 25.22), automobile loans are a product line for the bank or savings association for the entire evaluation period.

ii. A bank or savings association is a majority automobile lender if the following ratio, calculated at the institution level, exceeds 50 percent, based on the combination of loan dollars and loan count as defined in § 25.12:

A. The sum, over the two calendar years preceding the first year of the evaluation period, of the bank's or savings association's automobile loans originated or purchased overall; divided by

B. The sum, over the two calendar years preceding the first year of the evaluation period, of the bank's or savings association's automobile loans, home mortgage loans, multifamily loans, small business loans, and small farm loans originated or purchased overall.

III. Geographic Distribution Metrics and Benchmarks

The appropriate Federal banking agency calculates the Geographic Bank Metric, the Geographic Market Benchmark, and the Geographic Community Benchmark for low-income census tracts and for moderate-income census tracts, respectively, as set forth in this section. For each facility-based assessment area, retail lending assessment area, and component geographic area of the bank's or savings association's outside retail lending area, the appropriate Federal banking agency includes either low-income census tracts or moderate-income census tracts (i.e., designated census tracts) in the numerator of the metrics and benchmarks calculations for a particular year. To evaluate small banks or savings associations and intermediate banks or savings associations without data collection, maintenance and reporting requirements, the appropriate Federal banking agency will use data collected by the bank or savings association in the ordinary course of business or through sampling of bank or savings association loan data.

a. Calculation of Geographic Bank Metric. The appropriate Federal banking agency calculates the Geographic Bank Metric for low-income census tracts and for moderate-income census tracts, respectively, for each major product line in each Retail Lending Test Area. The appropriate Federal banking agency calculates the Geographic Bank Metric by:

1. Summing, over the years in the evaluation period, the bank's or savings association's annual number of originated and purchased loans in the major product line in designated census tracts in the Retail Lending Test Area.

2. Summing, over the years in the evaluation period, the bank's or savings association's annual number of originated and purchased loans in the major product line in the Retail Lending Test Area.

3. Dividing the result of paragraph III.a.1 of this appendix by the result of paragraph III.a.2 of this appendix.

Example A-5: The bank has a three-year evaluation period, and small farm loans are a major product line for the bank in a facility-based assessment area (FBAA-1). The bank's annual numbers of originated and purchased small farm loans (i.e., the bank's originated and purchased small farm loans) are 100 (year 1), 75 (year 2), and 75 (year 3) in FBAA-1. The sum of the annual numbers of originated and purchased small farm loans is therefore 250 in the evaluation period. In the low-income census tracts within FBAA-1, the bank originated and purchased 25 small farm loans (year 1), 15 small farm loans (year 2), and 10 small farm loans (year 3) (a total of 50 small farm loans). In FBAA-1, the Geographic Bank Metric for small farm loans in low-income census tracts would be 50 divided by 250, or 0.2 (equivalently, 20 percent).

In the moderate-income census tracts within FBAA-1, the bank originated and purchased 30 small farm loans (year 1), 20 small farm loans (year 2), and 10 small farm loans (year 3) (a total of 60 small farm loans). In FBAA-1, the Geographic Bank Metric for small farm loans in moderate-income census tracts would be 60 divided by 250, or 0.24 (equivalently, 24 percent).

b. Calculation of Geographic Market Benchmarks for facility-based assessment areas and retail lending assessment areas. For each facility-based assessment area and retail lending assessment area, the appropriate Federal banking agency calculates the Geographic Market Benchmark for designated census tracts for each major product line, excluding automobile loans. The appropriate Federal banking agency calculates the Geographic Market Benchmark by:

1. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line in designated census tracts in the facility-based assessment area or retail lending assessment area originated by all lenders.

2. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line in the facility-based assessment area or retail lending assessment area originated by all lenders.

3. Dividing the result of paragraph III.b.1 of this appendix by the result of paragraph III.b.2 of this appendix.

Example A-6: The Geographic Market Benchmarks for small farm loans in FBAA-1 use a three-year evaluation period. Lenders that report small farm loan data originated 500 small farm loans (year 1), 250 small farm loans (year 2), and 250 small farm loans (year 3) within FBAA-1. The sum of the annual numbers of originated small farm loans is therefore 1,000 in the evaluation period. Lenders that report small farm loan data originated 200 small farm loans (year 1), 100 small farm loans (year 2) and 100 small farm loans (year 3) in low-income census tracts within FBAA-1. The sum of the annual numbers of originated small farm loans in low-income census tracts within FBAA-1 is therefore 400. The Geographic Market Benchmark for small farm loans in low-income census tracts within FBAA-1 would be 400 divided by 1,000, or 0.4 (equivalently, 40 percent).

Lenders that report small farm loan data originated 100 small farm loans (year 1), 100 small farm loans (year 2), and 100 small farm loans (year 3) in moderate-income census tracts within FBAA-1. The sum of the annual numbers of originated small farm loans in moderate-income census tracts within FBAA-1 is therefore 300. The Geographic Market Benchmark for small farm loans in moderate-income census tracts within FBAA-1 would be 300 divided by 1,000, or 0.3 (equivalently, 30 percent).

c. Calculation of Geographic Community Benchmarks for facility-based assessment areas and retail lending assessment areas. The appropriate Federal banking agency calculates the Geographic Community Benchmark for designated census tracts for each major product line in each facility-based assessment area or retail lending assessment area.

1. For closed-end home mortgage loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in low-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.1.i of this appendix by the result of paragraph III.c.1.ii of this appendix.

2. For closed-end home mortgage loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in moderate-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of owner-occupied housing units in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.2.i of this appendix by the result of paragraph III.c.2.ii of this appendix.

3. For small business loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses in low-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.3.i of this appendix by the result of paragraph III.c.3.ii of this appendix.

4. For small business loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses in moderate-income census tracts in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph III.c.4.i of this appendix by the result of paragraph III.c.4.ii of this appendix.

5. For small farm loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of farms in low-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.5.i of this appendix by the result of paragraph III.c.5.ii of this appendix.

6. For small farm loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of farms in moderate-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.6.i of this appendix by the result of paragraph III.c.6.ii of this appendix.

7. For automobile loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for low-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of households in low-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.7.i of this appendix by the result of paragraph III.c.7.ii of this appendix.

8. For automobile loans, the appropriate Federal banking agency calculates a Geographic Community Benchmark for moderate-income census tracts by:

i. Summing, over the years in the evaluation period, the annual number of households in moderate-income census tracts in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph III.c.8.i of this appendix by the result of paragraph III.c.8.ii of this appendix.

Example A-7: The Geographic Community Benchmarks for small business loans in FBAA-1 use a three-year evaluation period. There were 1,300 non-farm businesses (year 1), 1,300 non-farm businesses (year 2), and 1,400 non-farm businesses (year 3) in FBAA-1. The sum of the number of non-farm businesses in FBAA-1 is therefore 4,000 in the evaluation period. In low-income census tracts within FBAA-1, there were 200 non-farm businesses (year 1), 150 non-farm businesses (year 2), and 150 non-farm businesses (year 3) (a total of 500 non-farm businesses). The Geographic Community Benchmark for small business loans in low-income census tracts within FBAA-1 would be 500 divided by 4,000, or 0.125 (equivalently, 12.5 percent).

In moderate-income census tracts within FBAA-1, there were 400 non-farm businesses (year 1), 300 non-farm businesses (year 2), and 300 non-farm businesses (year 3) (a total of 1,000 non-farm businesses). The Geographic Community Benchmark for small business loans in moderate-income census tracts within FBAA-1 would be 1,000 divided by 4,000, or 0.25 (equivalently, 25 percent).

d. Calculation of Geographic Market Benchmarks for the outside retail lending area. For a bank's or savings association's outside retail lending area, the appropriate Federal banking agency calculates the Geographic Market Benchmark for each major product line, excluding automobile loans, and for each category of designated census tracts by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated census tracts and each major product line within each component geographic area as described in § 25.18(b) using the formula for the Geographic Market Benchmark described in paragraph III.b of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

2. Calculating the weighting for each component geographic area and major product line as the percentage of the bank's or savings association's loans in the major product line originated or purchased in the outside retail lending area that are within the component geographic area, based on loan count.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph III.d.1 of this appendix and associated weightings in paragraph III.d.2 of this appendix.

e. Calculation of Geographic Community Benchmarks for the outside retail lending area. For a bank's or savings association's outside retail lending area, the appropriate Federal banking agency calculates the Geographic Community Benchmark for each category of designated census tract and for each major product line by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated census tracts and each major product line within each component geographic area as described in § 25.18(b) using the formula for the Geographic Community Benchmark described in paragraph III.c of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

2. Calculating the weighting for each component geographic area and major product line as the percentage of the bank's or savings association's loans in the major product line originated or purchased in the outside retail lending area that are within the component geographic area, based on loan count.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph III.e.1 of this appendix and associated weightings in paragraph III.e.2 of this appendix.

IV. Borrower Distribution Metrics and Benchmarks

The appropriate Federal banking agency calculates the Borrower Bank Metric, the Borrower Market Benchmark, and the Borrower Community Benchmark for each category of borrowers (i.e., designated borrowers), as set forth in this section.

For closed-end home mortgage loans, the appropriate Federal banking agency calculates these metrics and benchmarks for each of the following designated borrowers: (i) low-income borrowers; and (ii) moderate-income borrowers.

For small business loans, the appropriate Federal banking agency calculates these metrics and benchmarks for each of the following designated borrowers: (i) businesses with gross annual revenues of $250,000 or less; and (ii) businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million.

For small farm loans, the appropriate Federal banking agency calculates these metrics and benchmarks for each of the following designated borrowers: (i) farms with gross annual revenues of $250,000 or less; and (ii) farms with gross annual revenues greater than $250,000 but less than or equal to $1 million.

For automobile loans, the appropriate Federal banking agency calculates these metrics and benchmarks for each of the following designated borrowers: (i) low-income borrowers; and (ii) moderate income borrowers.

To evaluate small banks or savings associations and intermediate banks or savings associations without data collection, maintenance and reporting requirements, the appropriate Federal banking agency will use data collected by the bank or savings association in the ordinary course of business or through sampling of bank or savings association loan data.

a. Calculation of Borrower Bank Metric. The appropriate Federal banking agency calculates the Borrower Bank Metric for each major product line and category of designated borrowers in each Retail Lending Test Area by:

1. Summing, over the years in the evaluation period, the bank's or savings association's annual number of originated and purchased loans in the major product line to designated borrowers in the Retail Lending Test Area.

2. Summing, over the years in the evaluation period, the bank's or savings association's annual number of originated and purchased loans in the major product line in the Retail Lending Test Area.

3. Dividing the result of paragraph IV.a.1 of this appendix by the result of paragraph IV.a.2 of this appendix.

Example A-8: The bank has a three-year evaluation period, and closed-end home mortgage loans are a major product line for the bank in FBAA-1. The bank's annual numbers of originated and purchased closed-end home mortgage loans (i.e., the bank's originated and purchased closed-end home mortgage loans) are 30 (year 1), 40 (year 2), and 30 (year 3) in FBAA-1. The sum of the annual numbers of originated and purchased closed-end home mortgage loans is therefore 100 in the evaluation period. In FBAA-1, the bank originated and purchased 10 closed-end home mortgage loans to low-income borrowers (year 1), 3 closed-end home mortgage loans to low-income borrowers (year 2), and 7 closed-end home mortgage loans to low-income borrowers (year 3) (a total of 20 closed-end home mortgage loans to low-income borrowers). In FBAA-1, the Borrower Bank Metric for closed-end home mortgage loans to low-income borrowers would be 20 divided by 100, or 0.2 (equivalently, 20 percent).

In FBAA-1, the bank also originated and purchased 12 closed-end home mortgage loans to moderate-income borrowers (year 1), 5 closed-end home mortgage loans to moderate-income borrowers (year 2), and 13 closed-end home mortgage loans to moderate-income borrowers (year 3) (a total of 30 closed-end home mortgage loans to moderate-income borrowers). In FBAA-1, the Borrower Bank Metric for closed-end home mortgage loans to moderate-income borrowers would be 30 divided by 100, or 0.3 (equivalently, 30 percent).

b. Calculation of Borrower Market Benchmarks for facility-based assessment areas and retail lending assessment areas. For each facility-based assessment area and retail lending assessment area, the appropriate Federal banking agency calculates the Borrower Market Metric for each major product line, excluding automobile loans, and for each category of designated borrowers by:

1. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line to designated borrowers in the facility-based assessment area or retail lending assessment area originated by all lenders.

2. Summing, over the years in the evaluation period, the annual number of reported loans in the major product line in the facility-based assessment area or retail lending assessment area originated by all lenders.

3. Dividing the result of paragraph IV.b.1 of this appendix by the result of paragraph IV.b.2 of this appendix.

Example A-9: The Borrower Market Benchmarks for closed-end home mortgage loans use a three-year evaluation period. Lenders that report closed-end home mortgage loans originated 500 closed-end home mortgage loans (year 1), 275 closed-end home mortgage loans (year 2), and 225 closed-end home mortgage loans (year 3). The sum of the annual numbers of originated closed-end home mortgage loans is therefore 1,000 in the evaluation period. Lenders that report closed-end home mortgage loans originated 50 closed-end home mortgage loans to low-income borrowers (year 1), 20 closed-end home mortgage loans to low-income borrowers (year 2), and 30 closed-end home mortgage loans to low-income borrowers (year 3) in FBAA-1. The sum of the annual numbers of originated closed-end home mortgage loans to low-income borrowers within FBAA-1 is therefore 100. The Borrower Market Benchmark for closed-end home mortgage loans to low-income borrowers would be 100 divided by 1,000, or 0.1 (equivalently, 10 percent).

Lenders that report closed-end home mortgage loans originated 100 loans (year 1), 75 loans (year 2), and 25 loans (year 3) to moderate-income borrowers. The sum of the annual numbers of originated closed-end home mortgage loans to moderate-income borrowers within FBAA-1 is therefore 200. The Borrower Market Benchmark for closed-end home mortgage loans to moderate-income borrowers in FBAA-1 would be 200 divided by 1,000, or 0.2 (equivalently, 20 percent).

c. Calculation of Borrower Community Benchmarks for facility-based assessment areas and retail lending assessment areas. The appropriate Federal banking agency calculates the Borrower Community Benchmark for each category of designated borrowers for each major product line in each facility-based assessment area or retail lending assessment area.

1. For closed-end home mortgage loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for low-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of low-income families in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of families in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.1.i of this appendix by the result of paragraph IV.c.1.ii of this appendix.

2. For closed-end home mortgage loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for moderate-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of moderate-income families in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of families in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.2.i of this appendix by the result of paragraph IV.c.2.ii of this appendix.

3. For small business loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for non-farm businesses with gross annual revenues of $250,000 or less by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses with gross annual revenues of $250,000 or less in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.3.i of this appendix by the result of paragraph IV.c.3.ii of this appendix.

4. For small business loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million by:

i. Summing, over the years in the evaluation period, the annual number of non-farm businesses with gross annual revenues greater than $250,000 but less than or equal to $1 million in the facility-based assessment area or retail lending assessment area.

ii. Summing, over the years in the evaluation period, the annual number of non-farm businesses in the facility-based assessment area or retail lending assessment area.

iii. Dividing the result of paragraph IV.c.4.i of this appendix by the result of paragraph IV.c.1.ii of this appendix.

5. For small farm loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for farms with gross annual revenues of $250,000 or less by:

i. Summing, over the years in the evaluation period, the annual number of farms with gross annual revenues of $250,000 or less in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.5.i of this appendix by the result of paragraph IV.c.5.ii of this appendix.

6. For small farm loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for farms with gross annual revenues greater than $250,000 but less than or equal to $1 million:

i. Summing, over the years in the evaluation period, the annual number of farms with gross annual revenues greater than $250,000 but less than or equal to $1 million in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of farms in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.6.i of this appendix by the result of paragraph IV.c.6.ii of this appendix.

7. For automobile loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for low-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of low-income households in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.7.i of this appendix by the result of paragraph IV.c.7.ii of this appendix.

8. For automobile loans, the appropriate Federal banking agency calculates a Borrower Community Benchmark for moderate-income borrowers by:

i. Summing, over the years in the evaluation period, the annual number of moderate-income households in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the annual number of households in the facility-based assessment area.

iii. Dividing the result of paragraph IV.c.8.i of this appendix by the result of paragraph IV.c.8.ii of this appendix.

Example A-10: The Borrower Community Benchmarks for closed-end home mortgage loans use a three-year evaluation period. There were 1,300 families (year 1), 1,300 families (year 2), and 1,400 families (year 3) in FBAA-1. The sum of the number of families in FBAA-1 is therefore 4,000 in the evaluation period. There were 300 low-income families (year 1), 300 low-income families (year 2), and 400 low-income families (year 3) (a total of 1,000 low-income families). The Borrower Community Benchmark for closed-end home mortgage loans to low-income families within the FBAA-1 would be 1,000 divided by 4,000, or 0.25 (equivalently, 25 percent).

There were 350 moderate-income families (year 1), 400 moderate-income families (year 2), and 450 moderate-income families (year 3) (a total of 1,200 moderate-income families). The Borrower Community Benchmark for closed-end home mortgage loans to moderate-income families in FBAA-1 would be 1,200 divided by 4,000, or 0.3 (equivalently, 30 percent).

d. Calculation of Borrower Market Benchmark for the outside retail lending area. For a bank's or savings association's outside retail lending area, the appropriate Federal banking agency calculates the Borrower Market Benchmark for each major product line, excluding automobile loans, and for each category of designated borrowers by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating a benchmark for each category of designated borrowers and each major product line within each component geographic area as described in § 25.18(b) using the formula for the Borrower Market Benchmark described in section IV.b of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

2. Calculating the weighting for each component geographic area and major product line as the percentage of the bank's or savings association's loans in the major product line originated or purchased in the outside retail lending area that are within the component geographic area, based on loan count.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph IV.d.1 of this appendix and associated weightings in paragraph IV.d.2 of this appendix.

e. Calculation of Borrower Community Benchmarks for the outside retail lending area. For a bank's or savings association's outside retail lending area, the appropriate Federal banking agency calculates the Borrower Community Benchmark for each major product line and for each category of designated borrowers in the bank's or savings association's outside retail lending area by taking a weighted average of benchmarks for each component geographic area as follows:

1. Calculating the benchmark for each category of designated borrowers and each major product line within each component geographic area as described in § 25.18(b) using the formula for the Borrower Community Benchmark described in paragraph IV.c of this appendix with the component geographic area in place of the facility-based assessment area or retail lending assessment area, as applicable.

2. Calculating the weighting for each component geographic area and major product line as the percentage of the bank's or savings association's loans in the major product line originated or purchased in the outside retail lending area that are within the component geographic area, based on loan count.

3. Calculating the weighted average benchmark for the outside retail lending area using the component geographic area benchmarks in paragraph IV.e.1 of this appendix and associated weightings calculated in paragraph IV.e.2 of this appendix.

V. Supporting Conclusions for Major Product Lines Other Than Automobile Lending

The appropriate Federal banking agency evaluates a bank's or savings association's Retail Lending Test performance in each Retail Lending Test Area by comparing the bank's or savings association's distribution metrics to sets of performance ranges determined by, as applicable, the market and community benchmarks, as described in this section.

a. Supporting conclusions for categories of designated census tracts and designated borrowers. For each major product line, excluding automobile lending, the appropriate Federal banking agency develops separate supporting conclusions for each of the categories outlined in table 1 to this appendix.

b. Geographic distribution performance ranges. To evaluate a bank's or savings association's geographic distributions for each major product line, excluding automobile lending, the appropriate Federal banking agency compares the relevant Geographic Bank Metric for each category of designated census tracts to the applicable set of performance ranges. The performance ranges are determined by the values of the Geographic Market Benchmark and the Geographic Community Benchmark, as well as the multipliers associated with each supporting conclusion category, as follows:

1. The performance threshold for an “Outstanding” supporting conclusion is the lesser of either:

i. The product of 1.0 times the Geographic Community Benchmark; or

ii. The product of 1.15 times the Geographic Market Benchmark.

The “Outstanding” performance range is all potential values of the Geographic Bank Metric equal to or above the “Outstanding” performance threshold.

2. The performance threshold for a “High Satisfactory” Retail Lending Test supporting conclusion is the lesser of either:

i. The product of 0.8 times the Geographic Community Benchmark; or

ii. The product of 1.05 times the Geographic Market Benchmark.

The “High Satisfactory” performance range is all potential values of the Geographic Bank Metric equal to or above the “High Satisfactory” performance threshold but below the Outstanding performance threshold.

3. The performance threshold for a “Low Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.6 times the Geographic Community Benchmark; or

ii. The product of the 0.8 times the Geographic Market Benchmark.

The “Low Satisfactory” performance range is all potential values of the Geographic Bank Metric equal to or above the “Low Satisfactory” performance threshold but below the High Satisfactory performance threshold.

4. The performance threshold for a “Needs to Improve” supporting conclusion is the lesser of either:

i. The product of 0.3 times the Geographic Community Benchmark; or

ii. The product of 0.33 times the Geographic Market Benchmark.

The “Needs to Improve” performance range is all potential values of the Geographic Bank Metric equal to or above the “Needs to Improve” performance threshold but below the “Low Satisfactory” performance threshold.

5. The “Substantial Noncompliance” performance range is all potential values of the Geographic Bank Metric below the “Needs to Improve” performance threshold.

c. Geographic distribution supporting conclusions and performance scores. The appropriate Federal banking agency compares each Geographic Bank Metric to the performance ranges provided in paragraphs V.b.1 through V.b.5 of this appendix. The geographic distribution supporting conclusion for each category of designated census tracts is determined by the performance range within which the Geographic Bank Metric falls. Each supporting conclusion is assigned a numerical performance score using the following corresponding points values:

d. Borrower distribution performance ranges. To evaluate a bank's or savings association's borrower distributions for each major product line, excluding automobile lending, the appropriate Federal banking agency compares the relevant Borrower Bank Metric for each category of designated borrowers to the applicable set of performance ranges. The performance ranges are determined by the values of the Borrower Market Benchmark and Borrower Community Benchmark, as well as the multipliers associated with each supporting conclusion category, as follows:

1. The performance threshold for an “Outstanding” supporting conclusion is the lesser of either:

i. The product of 1.0 times the Borrower Community Benchmark; or

ii. The product of 1.15 times the Borrower Market Benchmark.

The “Outstanding” performance range is all potential values of the Borrower Bank Metric equal to or above the “Outstanding” performance threshold.

2. The performance threshold for a “High Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.8 times the Borrower Community Benchmark; or

ii. The product of 1.05 times the Borrower Market Benchmark.

The “High Satisfactory” performance range is all potential values of the Borrower Bank Metric equal to or above the “High Satisfactory” performance threshold but below the Outstanding performance threshold.

3. The performance threshold for a “Low Satisfactory” supporting conclusion is the lesser of either:

i. The product of 0.6 times the Borrower Community Benchmark; or

ii. The product of 0.8 times the Borrower Market Benchmark.

The “Low Satisfactory” performance range is all potential values of the Borrower Bank Metric equal to or above the “Low Satisfactory” performance threshold but below the High Satisfactory performance threshold.

4. The performance threshold for a “Needs to Improve” supporting conclusion is the lesser of either:

i. The product of 0.3 times the Borrower Community Benchmark; or

ii. The product of 0.33 times the Borrower Market Benchmark.

The “Needs to Improve” performance range is all potential values of the Borrower Bank Metric equal to or above the “Needs to Improve” performance threshold but below the “Low Satisfactory” performance threshold.

5. The “Substantial Noncompliance” performance range is all potential values of the Borrower Bank Metric below the “Needs to Improve” performance threshold.

e. Borrower distribution supporting conclusions and performance scores. The appropriate Federal banking agency compares each Borrower Bank Metric to the performance ranges provided in paragraphs V.d.1 through V.d.5 of this appendix. The borrower distribution supporting conclusion for each category of designated borrowers is determined by the performance range within which the Borrower Bank Metric falls. Each supporting conclusion is assigned a numerical performance score using the following corresponding point values:

VI. Supporting Conclusions for Automobile Lending

a. Supporting conclusions for categories of designated census tracts and designated borrowers. For any bank or savings association for which automobile lending is evaluated under § 25.22, the appropriate Federal banking agency develops separate supporting conclusions for each of the categories outlined in table 2 to this appendix.

b. Geographic distribution. The appropriate Federal banking agency develops the supporting conclusion for a bank's or savings association's geographic distribution for automobile lending based on a comparison of the Geographic Bank Metric for automobile lending in each category of designated census tracts to the corresponding Geographic Community Benchmark.

c. Borrower distribution. The appropriate Federal banking agency develops the supporting conclusion for a bank's or savings association's borrower distribution for automobile lending based on a comparison of the Borrower Bank Metric for automobile lending in each category of designated borrowers to the corresponding Borrower Community Benchmark.

d. Performance scores. Each supporting conclusion is assigned a numerical performance score using the following corresponding point values:

VII. Retail Lending Test Conclusions—All Major Product Lines

a. The appropriate Federal banking agency determines a bank's or savings association's Retail Lending Test performance conclusion for a major product line in a Retail Lending Test Area by calculating a weighted performance score for each major product line:

1. The appropriate Federal banking agency develops a weighted average performance score for each major product line in each Retail Lending Test Area as follows:

i. The appropriate Federal banking agency creates a weighted average performance score across the categories of designated census tracts (i.e., geographic distribution average) and a weighted average performance score across the categories of designated borrowers (i.e., borrower distribution average).

ii. For the geographic distribution average of each major product line, the weighting assigned to each category of designated census tracts is based on the demographics of the Retail Testing Area as outlined in the following table:

In the case of a Retail Lending Test Area that contains no low-income census tracts and no moderate-income census tracts, the bank or savings association will not receive a geographic distribution average for that assessment area.

Example A-11: A large bank's closed-end home mortgage loans constitute a major product line for the bank in a facility-based assessment area. The bank's geographic distribution supporting conclusions for closed-end home mortgage loans in this facility-based assessment area are “High Satisfactory” (performance score of 7 points) for low-income census tracts and “Needs to Improve” (performance score of 3 points) for moderate-income census tracts. Owner-occupied housing units in moderate-income census tracts represents 20 percent of all owner-occupied housing units in the facility-based assessment area, and owner-occupied housing units in low-income census tracts represents 5 percent of all owner-occupied housing units in the facility-based assessment area. Accordingly, the weight assigned to the moderate-income geographic distribution performance score is 80 percent [20 percent/(20 percent + 5 percent) = 80 percent] and the weight assigned to the low-income geographic distribution performance score is 20 percent [5 percent/(20 percent + 5 percent) = 20 percent]. The bank's geographic distribution average for closed-end home mortgage loans in this facility-based assessment area is 3.8 [(7 points × 0.2 weight = 1.4) + (3 points × 0.8 weight = 2.4)].

iii. For the borrower distribution average of each major product line, the weighting assigned to each category of designated borrowers is based on the demographics of the Retail Lending Test Area as outlined in the following table:

Example A-12: Building on example A-11 to this appendix, the bank's borrower distribution supporting conclusions for closed-end home mortgage loans in this facility-based assessment area are “Outstanding” (performance score of 10 points) for low-income borrowers and “Low Satisfactory” (performance score of 6 points) for moderate-income borrowers. Low-income families represent 14 percent of all families in the facility-based assessment area and moderate-income families represent 6 percent of all families in the facility-based assessment area. Accordingly, the weight assigned to the low-income borrower distribution performance score is 70 percent [14 percent/(14 percent + 6 percent) = 70 percent] and the weight assigned to the moderate-income borrower distribution performance score is 30 percent [6 percent/(14 percent + 6 percent) = 30 percent]. The bank's borrower distribution average for closed-end home mortgage loans in this facility-based assessment area is 8.8 [(10 points × 0.7 weight = 7.0) + (6 points × 0.3 weight = 1.8)].

2. For each major product line, the appropriate Federal banking agency calculates the average of the geographic distribution average and the borrower distribution average (i.e., product line score). If a bank or savings association has no geographic distribution average for a product (due to the absence of both low-income census tracts and moderate-income census tracts in the geographic area), the product line score is the borrower distribution average.

Example A-13: Based on examples A-11 and A-12 to this appendix, the bank's product line score for closed-end home mortgage loans is 6.3 [(3.8 geographic distribution average × 0.5 weight = 1.9) + (8.8 borrower distribution average × 0.5 weight = 4.4)].

b. For each Retail Lending Test Area, the appropriate Federal banking agency calculates a weighted average of product line scores across all major product lines (i.e., Retail Lending Test Area Score). For each Retail Lending Test Area, the appropriate Federal banking agency uses a ratio of the bank's or savings association's loan originations and purchases in each major product line to its loan originations and purchases in all major product lines during the evaluation period, based on the combination of loan dollars and loan count as defined in § 25.12, as weights in the weighted average.

Example A-14: In addition to the product line score of 6.3 for closed-end home mortgage loans in example A-13 to this appendix, the bank has a product line score of 4.2 for small business lending in the same facility-based assessment area. Among major product lines, 60 percent of the bank's loans in the facility-based assessment area are closed-end home mortgages and 40 percent are small business loans based upon the combination of loan dollars and loan count. Accordingly, the weight assigned to the closed-end home mortgage product line score is 60 percent and the weight assigned to the small business product line score is 40 percent. The bank's Retail Lending Test Area Score for this facility-based assessment area is 5.46 [(6.3 closed-end home mortgage loan product line score × 0.6 weight = 3.78) + (4.2 small business loan product line score × 0.4 weight = 1.68)].

c. The appropriate Federal banking agency then develops a Retail Lending Test recommended conclusion corresponding with the conclusion category that is nearest to the Retail Lending Test Area Score, as follows:

Example A-15: Based on example A-14 to this appendix, the bank's Retail Lending Test Area Score is associated with a “Low Satisfactory” conclusion, so the bank's Retail Lending Test recommended conclusion for this facility-based assessment area is “Low Satisfactory.”

d. Once a recommended conclusion is determined for a Retail Lending Test Area, the performance context information provided in § 25.21(d) and the additional factors provided in § 25.22(g) inform the appropriate Federal banking agency's determination of the Retail Lending Test conclusion for the Retail Lending Test Area. The agency assigns a Retail Lending Test conclusion for the Retail Lending Test Area of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

VIII. Retail Lending Test Weighting and Conclusions for States, Multistate MSAs, and the Institution

The appropriate Federal banking agency develops the Retail Lending Test conclusions for States, multistate MSAs, and the institution as described in this section.

a. The appropriate Federal banking agency translates Retail Lending Test conclusions for facility-based assessment areas, retail lending assessment areas, and as applicable, the outside retail lending area into numerical performance scores, as follows:

b. The appropriate Federal banking agency calculates the weighted average of Retail Lending Test Area performance scores for a State or multistate MSA, as applicable, and for the institution (i.e., performance score for the Retail Lending Test). For the weighted average for a State or multistate MSA, the appropriate Federal banking agency considers facility-based assessment areas and retail lending assessment areas in the State or multistate MSA pursuant to § 25.28(c). For the weighted average for the institution, the appropriate Federal banking agency considers all of the bank's or savings association's facility-based assessment areas and retail lending assessment areas and, as applicable, the bank's or savings association's outside retail lending area. Each Retail Lending Test Area performance score is weighted by the average of the following two ratios:

1. The ratio measuring the share of the bank's or savings association's deposits in the Retail Lending Test Area, calculated by:

i. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in the Retail Lending Test Area.

ii. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in all Retail Lending Test Areas in the State, in the multistate MSA, or for the institution, as applicable.

iii. Dividing the result of paragraph VIII.b.1.i of this appendix by the result of paragraph VIII.b.1.ii of this appendix.

For a bank or savings association that reports deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a Retail Lending Test Area is the total of annual average daily balances of deposits reported by the bank or savings association in counties in the Retail Lending Test Area for that year. For a bank or savings association that does not report deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a Retail Lending Test Area is the total of deposits assigned to facilities reported by the bank or savings association in the Retail Lending Test Area in the FDIC's Summary of Deposits for that year.

2. The ratio measuring the share of the bank's or savings association's loans in the Retail Lending Test Area, based on the combination of loan dollars and loan count, as defined in § 25.12, calculated by dividing:

i. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in the Retail Lending Test Area originated or purchased during the evaluation period; by

ii. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in all Retail Lending Test Areas in the State, in the multistate MSA, or for the institution, as applicable, originated or purchased during the evaluation period.

c. The appropriate Federal banking agency develops a conclusion corresponding to the conclusion category that is nearest to the performance score for the Retail Lending Test for the State, the multistate MSA, or the institution, as applicable, as follows:

d. The agency considers relevant performance context information provided in § 25.21(d) to inform the appropriate Federal banking agency's determination of the bank's or savings association's Retail Lending Test conclusion for the State, the multistate MSA, or the institution, as applicable.

Example A-16: 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 closed-end home mortgage lending, small business lending, and small farm lending (but not automobile lending, as it is not a product line for the bank) in its outside retail lending area.

Additionally:

i. Facility-based assessment area 1 (FBAA-1) is associated with 75 percent of the deposits in all of the Retail Lending Test Areas of the bank (based on dollar amount) and 10 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 25.12). The bank received a “Needs to Improve” (3 points) Retail Lending Test conclusion in FBAA-1;

ii. Facility-based assessment area 2 (FBAA-2) is associated with 15 percent of the deposits in all of the Retail Lending Test Areas of the bank and 20 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 25.12). The bank received a “Low Satisfactory” (6 points) Retail Lending Test conclusion in FBAA-2;

iii. The Retail lending assessment area is associated with 8 percent of the deposits in all of the Retail Lending Test Areas of the bank and 68 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 25.12). The bank received an “Outstanding” (10 points) Retail Lending Test conclusion in the retail lending assessment area; and

iv. The bank's outside retail lending area, is associated with 2 percent of the deposits in all of the Retail Lending Test Areas of the bank and 2 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans (based on the combination of loan dollars and loan count as defined in § 25.12). The bank received a “High Satisfactory” (7 points) Retail Lending Test conclusion in the outside retail lending area.

Calculating weights:

i. For facility-based assessment area 1: weight = 42.5 percent [(75 percent of deposits + 10 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

ii. For facility-based assessment area 2: weight = 17.5 percent [(15 percent of deposits + 20 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

iii. For the retail lending assessment area: weight = 38 percent [(8 percent of deposits + 68 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2]; and

iv. For the outside retail lending area: weight = 2 percent [(2 percent of deposits + 2 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2].

Institution Retail Lending Test Performance Score and 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 in this example A-16, the bank's Retail Lending Test performance score for the institution 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 the outside retail lending area)].

A performance score of 6.3 corresponds with the conclusion category “Low Satisfactory,” so the bank's Retail Lending Test recommended conclusion at the institution level is “Low Satisfactory.” Relevant performance context information provided in § 25.21(d) may inform the appropriate Federal banking agency's determination of the bank's conclusion at the institution level.

Example A-17: An intermediate bank operates in a single State, has two facility-based assessment areas, and also engages in closed-end home mortgage lending, small business lending, and small farm lending (but not automobile lending, as automobile lending is not a product line for the bank) in its outside retail lending area.

Additionally:

i. Facility-based assessment area 1 (FBAA-1) is associated with 60 percent of the deposits in all of the Retail Lending Test Areas of the bank and 30 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received an “Outstanding” (10 points) Retail Lending Test conclusion in FBAA-1;

ii. Facility-based assessment area 2 (FBAA-2 is) associated with 40 percent of the deposits in all of the Retail Lending Test Areas of the bank and 10 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received a “High Satisfactory” (7 points) Retail Lending Test conclusion in FBAA-2; and

iii. The bank's outside retail lending area is associated with 0 percent of the deposits in all of the Retail Lending Test Areas of the bank (the bank did not voluntarily collect and maintain depositor location data, so all deposits in the bank are attributed to its branches within facility-based assessment areas) and 60 percent of the bank's closed-end home mortgage loans, small business loans, and small farm loans. The bank received a “Needs to Improve” (3 points) Retail Lending Test conclusion in the outside retail lending area.

Calculating weights:

i. For FBAA-1: weight = 45 percent [(60 percent of deposits + 30 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2];

ii. For FBAA-2: weight = 25 percent [(40 percent of deposits + 10 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2]; and

iii. For the outside retail lending area: weight = 30 percent [(0 percent of deposits + 60 percent of closed-end home mortgage loans, small business loans, and small farm loans)/2].

Institution Retail Lending Test Performance Score and 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 in this example A-17, the bank's recommended Retail Lending Test performance score at the institution level is 7.2 [(0.45 weight × 10 points in FBAA-1) + (0.25 weight × 7 points in FBAA-2) + (0.3 weight × 3 points in the outside retail lending area)].

A performance score of 7.2 corresponds with the conclusion category “High Satisfactory,” so the bank's Retail Lending Test recommended conclusion at the institution level is “High Satisfactory.” Relevant performance context information provided in § 25.21(d) may inform the appropriate Federal banking agency's determination of the bank's conclusion at the institution level.

[89 FR 7165, Feb. 1, 2024, as amended at 89 FR 7168, Feb. 1, 2024]

This appendix, based on requirements described in §§ 25.24 through 25.26 and 25.28, includes the following sections:

I. Community Development Financing Tests—Calculation Components and Allocation of Community Development Loans and Community Development Investments II. Community Development Financing Test in § 25.24—Calculations for Metrics, Benchmarks, and Combining Performance Scores III. Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26—Calculations for Metrics and Benchmarks IV. Weighting of Conclusions I. Community Development Financing Tests—Calculation Components and Allocation of Community Development Loans and Community Development Investments

For purposes of the Community Development Financing Test in § 25.24 and Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26, the appropriate Federal banking agency identifies the community development loans and community development investments included in the numerator of the metrics and benchmarks and the deposits or assets included in the denominator of the metrics and benchmarks, as applicable, pursuant to paragraph I.a of this appendix. The appropriate Federal banking agency determines whether to include a community development loan or community development investment in the numerator for a particular metric or benchmark pursuant to the allocation provisions in paragraph I.b of this appendix.

a. Community development loans and community development investments, deposits, and assets included in the community development financing metrics and benchmarks—in general. The appropriate Federal banking agency calculates the community development financing metrics and benchmarks in §§ 25.24 and 25.26 using community development loans and community development investments and deposits or assets, as follows:

1. Numerator—i. Community development loans and community development investments considered. The appropriate Federal banking agency includes community development loans and community development investments originated, purchased, refinanced, or renewed by a depository institution or attributed to a depository institution pursuant to § 25.21(b) and (c) (e.g., an affiliate community development loan) in the numerator of the metrics and benchmarks. The appropriate Federal banking agency calculates the annual dollar volume of community development loans and community development investments by summing the dollar volume of the following community development loans and community development investments for each calendar year in an evaluation period (i.e., annual dollar volume of community development loans and community development investments):

A. The dollar volume of all community development loans originated or purchased and community development investments made, including legally binding commitments to extend credit or legally binding commitments to invest, 1 in that calendar year;

1 The dollar volume of a legally binding commitment to extend credit or legally binding commitment to invest in any given year is: (1) the full dollar volume committed; or (2) if drawn upon, the combined dollar volume of the outstanding commitment and any drawn portion of the commitment.

B. The dollar volume of any increase in the calendar year to an existing community development loan that is refinanced or renewed and in an existing community development investment that is renewed;

C. The outstanding dollar volume of community development loans originated or purchased in previous calendar years and community development investments made in previous calendar years, as of December 31 for each calendar year that the loan or investment remains on the depository institution's balance sheet; and

D. The outstanding dollar volume, less any increase reported in paragraph I.a.1.B of this appendix in the same calendar year, of a community development loan the depository institution refinanced or renewed in a calendar year subsequent to the calendar year of origination or purchase, as of December 31 for each calendar year that the loan remains on the depository institution's balance sheet, and an existing community development investment renewed in a calendar year subsequent to the calendar year of the investment, as of December 31 for each calendar year that the investment remains on the depository institution's balance sheet.

ii. Community development loan and community development investment allocation. To calculate the metrics and benchmarks provided in §§ 25.24 and 25.26, the appropriate Federal banking agency includes all community development loans and community development investments that are allocated to the specific facility-based assessment area, State, multistate MSA, or nationwide area, respectively, in the numerator for the metric and benchmarks applicable to that geographic area. See paragraph I.b of this appendix for the community development financing allocation provisions.

2. Denominator. i. Annual dollar volume of deposits. For purposes of metrics and benchmarks in § 25.24, the appropriate Federal banking agency calculates an annual dollar volume of deposits in a depository institution that is specific to each metric or benchmark for each calendar year in the evaluation period (i.e., annual dollar volume of deposits). For a depository institution that collects, maintains, and reports deposits data as provided in § 25.42 or 12 CFR 228.42 or 345.42, the annual dollar volume of deposits is determined using the annual average daily balance of deposits in the depository institution as provided in statements (e.g., monthly or quarterly statements) based on the deposit location. For a depository institution that does not collect, maintain, and report deposits data as provided in § 25.42 or 12 CFR 228.42 or 345.42, the annual dollar volume of deposits is determined using the deposits assigned to each facility pursuant to the FDIC's Summary of Deposits.

ii. Annual dollar volume of assets. For purposes of the metrics and benchmarks in § 25.26, the appropriate Federal banking agency calculates an annual dollar volume of assets for each calendar year in the evaluation period (i.e., the annual dollar volume of assets). The annual dollar volume of assets is calculated by averaging the assets for each quarter end in the calendar year.

b. Allocation of community development loans and community development investments. 1. In general. For the Community Development Financing Test in § 25.24 and the Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26, the appropriate Federal banking agency considers community development loans and community development investments in the evaluation of a bank's or savings association's performance in a facility-based assessment area, State and multistate MSA, as applicable, and the nationwide area, based on the data provided by the bank or savings association pursuant to § __.42(a)(5)(ii)(E) and the specific location, if available, pursuant to § 25.42(a)(5)(ii)(D). As appropriate, the appropriate Federal banking agency may also consider publicly available information and information provided by government or community sources that demonstrates that a community development loan or community development investment benefits or serves a facility-based assessment area, State, or multistate MSA, or the nationwide area.

2. A bank or savings association may allocate a community development loan or community development investment as follows:

i. A community development loan or community development investment that benefits or serves only one county, and not any areas beyond that one county, would have the full dollar amount of the activity allocated to that county.

ii. A community development loan or community development investment that benefits or serves multiple counties, a State, a multistate MSA, multiple States, multiple multistate MSAs, or the nationwide area is allocated according to either specific documentation that the bank or savings association can provide regarding the dollar amount allocated to each county or based on the geographic scope of the activity, as follows:

A. Allocation approach if specific documentation is available. A bank or savings association may allocate a community development loan or community development investment or portion of a loan or investment based on documentation that specifies the appropriate dollar volume to assign to each county, such as specific addresses and dollar volumes associated with each address, or other information that indicates the specific dollar volume of the loan or investment that benefits or serves each county.

B. Allocation approach based on geographic scope of a community development loan or community development investment. 2 In the absence of specific documentation, the appropriate Federal banking agency will allocate a community development loan or community development investment based on the geographic scope of the loan or investment as follows:

2 For the purposes of allocating community development loans and community development investments, the appropriate Federal banking agency considers low- or moderate-income families to be located in a State or multistate MSA, as applicable, consistent with § 25.28(c).

1. Allocate at the county level for a loan or investment with a geographic scope of one county;

2. Allocate at the county level based on the proportion of low- and moderate-income families in each county for a loan or investment with a geographic scope of less than an entire State or multistate MSA;

3. Allocate at the State or multistate MSA level for a loan or investment with a geographic scope of the entire State or multistate MSA, as applicable;

4. Allocate at the State or multistate MSA level, as applicable, based on the proportion of low- and moderate-income families in each State or multistate MSA for a loan or investment with a geographic scope of one or more State(s) or multistate MSA(s), but not the entire nation; and

5. Allocate at the nationwide area level for a loan or investment with a geographic scope of the entire Nation.

II. Community Development Financing Test in § 25.24—Calculations for Metrics, Benchmarks, and Combining Performance Scores

The calculations for metrics, benchmarks, and combination of performance scores for Community Development Financing Test in § 25.24 are provided in this section. Additional information regarding relevant calculation components is set forth in paragraph I.a of this appendix.

a. Bank Assessment Area Community Development Financing Metric. The appropriate Federal banking agency calculates the Bank Assessment Area Community Development Financing Metric in § 25.24(b)(1) by:

1. Summing the bank's or savings association's annual dollar volume of community development loans and community development investments that benefit or serve the facility-based assessment area for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of deposits located in the facility-based assessment area for each year in the evaluation period.

3. Dividing the result of paragraph II.a.1 of this appendix by the result of paragraph II.a.2 of this appendix.

Example B-1: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development loans and community development investments that benefit or serve a facility-based assessment area are $35,000 (year 1), $25,000 (year 2), and $40,000 (year 3). The sum of the bank's annual dollar volumes of community development loans and community development investments that benefit or serve a facility-based assessment area is therefore $100,000. The bank's annual dollar volumes of deposits located in the facility-based assessment area are $3.1 million (year 1), $3.3 million (year 2), and $3.6 million (year 3). The sum of the bank's annual dollar volumes of deposits located in the facility-based assessment is therefore $10 million. For the evaluation period, the Bank Assessment Area Community Development Financing Metric would be $100,000 divided by $10 million, or 0.01 (equivalently, 1 percent).

b. Assessment Area Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Assessment Area Community Development Financing Benchmark in § 25.24(b)(2)(i) for each facility-based assessment area by:

1. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve the facility-based assessment area for each year in the evaluation period.

2. Summing all large depository institutions' annual dollar volume of deposits located in the facility-based assessment area for each year in the evaluation period.

3. Dividing the result of paragraph II.b.1 of this appendix by the result of paragraph II.b.2 of this appendix.

Example B-2: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve a facility-based assessment area for all large depository institutions are $3.25 million (year 1), $3 million (year 2), and $3.75 million (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve the facility-based assessment area conducted by all large depository institutions is therefore $10 million. The annual dollar volumes of deposits located in the facility-based assessment area in all large depository institutions are $330 million (year 1), $330 million (year 2), and $340 million (year 3). The sum of the annual dollar volumes of deposits located in the facility-based assessment area in all large depository institutions is therefore $1 billion. For the evaluation period, 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).

c. MSA and Nonmetropolitan Nationwide Community Development Financing Benchmarks. The appropriate Federal banking agency calculates an MSA Nationwide Community Development Financing Benchmark to be used for each MSA in which the bank or savings association has a facility-based assessment area in the MSA. The appropriate Federal banking agency calculates a Nonmetropolitan Nationwide Community Development Financing Benchmark to be used for each nonmetropolitan area in which the bank or savings association has a facility-based assessment area in the nonmetropolitan area.

1. MSA Nationwide Community Development Financing Benchmark. The appropriate Federal banking agency calculates the MSA Nationwide Community Development Financing Benchmark in § 25.24(b)(2)(ii)(A) by:

i. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve metropolitan areas in the nationwide area for each year in the evaluation period.

ii. Summing all large depository institutions' annual dollar volume of deposits located in metropolitan areas in the nationwide area for each year in the evaluation period.

iii. Dividing the result of paragraph II.c.1.i of this appendix by the result of paragraph II.c.1.ii of this appendix.

Example B-3: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve metropolitan areas in the nationwide area conducted by all large depository institutions are $98 billion (year 1), $100 billion (year 2), and $102 billion (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve metropolitan areas in the nationwide area conducted by all large depository institutions is therefore $300 billion. The annual dollar volumes of deposits located in metropolitan areas in the nationwide area in all large depository institutions are $14.9 trillion (year 1), $15 trillion (year 2), and $15.1 trillion (year 3). The sum of the annual dollar volumes of deposits located in metropolitan areas in the nationwide area in all large depository institutions is therefore $45 trillion. For the evaluation period, the Metropolitan Nationwide Community Development Financing Benchmark would be $300 billion divided by $45 trillion, or 0.007 (equivalently, 0.7 percent).

2. Nonmetropolitan Nationwide Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Nonmetropolitan Nationwide Community Development Financing Benchmark in § 25.24(b)(2)(ii)(B) by:

i. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve nonmetropolitan areas in the nationwide area for each year in the evaluation period.

ii. Summing all large depository institutions' annual dollar volume of deposits located in nonmetropolitan areas in the nationwide area for each year in the evaluation period.

iii. Dividing the result of paragraph II.c.2.i of this appendix by the result of paragraph II.c.2.ii of this appendix.

Example B-4: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve nonmetropolitan areas in the nationwide area conducted by all large depository institutions are $3 billion (year 1), $3.2 billion (year 2), and $3.8 billion (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve nonmetropolitan areas in the nationwide area conducted by all large depository institutions is therefore $10 billion. The annual dollar volumes of deposits located in nonmetropolitan areas in all large depository institutions are $330 billion (year 1), $334 billion (year 2), and $336 billion (year 3). The sum of the annual dollar volumes of deposits located in nonmetropolitan areas in the nationwide area in all large depository institutions is therefore $1 trillion. For the evaluation period, the Nonmetropolitan Nationwide Community Development Financing Benchmark would be $10 billion divided by $1 trillion, or 0.01 (equivalently, 1 percent).

d. Bank State Community Development Financing Metric. The appropriate Federal banking agency calculates the Bank State Community Development Financing Metric in § 25.24(c)(2)(i) for each State in which the bank or savings association has a facility-based assessment area by:

1. Summing the bank's or savings association's annual dollar volume of community development loans and community development investments that benefit or serve a State (which includes all activities within the bank's or savings association's facility-based assessment areas and outside of its facility-based assessment areas but within the State) for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of deposits located in a State for each year in the evaluation period.

3. Dividing the result of paragraphs II.d.1 of this appendix by the result of paragraph II.d.2 of this appendix.

Example B-5: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development loans and community development investments that benefit or serve the State are $15 million (year 1), $17 million (year 2), and $18 million (year 3). The sum of the bank's annual dollar volumes of community development loans and community development investments that benefit or serve the State conducted by a bank is therefore $50 million. The bank's annual dollar volumes of deposits located in the State are $1.5 billion (year 1), $1.6 billion (year 2), and $1.9 billion (year 3). The sum of the bank's annual dollar volumes of deposits located in the State is therefore $5 billion. For the evaluation period, the Bank State Community Development Financing Metric would be $50 million divided by $5 billion, or 0.01 (equivalently, 1 percent).

e. State Community Development Financing Benchmark. The appropriate Federal banking agency calculates the State Community Development Financing Benchmark in § 25.24(c)(2)(ii)(A) by:

1. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve all or part of a State for each year in the evaluation period.

2. Summing all large depository institutions' annual dollar volume of deposits located in the State for each year in the evaluation period.

3. Dividing the result of paragraph II.e.1 of this appendix by the result of paragraph II.e.2 of this appendix.

Example B-6: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve the State conducted by all large depository institutions are $2.3 billion (year 1), $2.5 billion (year 2), and $2.7 billion (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve the State conducted by all large depository institutions is therefore $7.5 billion. The annual dollar volumes of deposits located in the State in all large depository institutions are $160 billion (year 1), $170 billion (year 2), and $170 billion (year 3). The sum of the annual dollar volumes of deposits located in the State in all large depository institutions is therefore $500 billion. For the evaluation period, the State Community Development Financing Benchmark would be $7.5 billion divided by $500 billion, or 0.015 (equivalently, 1.5 percent).

f. State Weighted Assessment Area Community Development Financing Benchmark. The appropriate Federal banking agency calculates the State Weighted Assessment Area Community Development Financing Benchmark in § 25.24(c)(2)(ii)(B) by averaging all of the applicable Assessment Area Community Development Financing Benchmarks (see paragraph II.b of this appendix) in a State for the evaluation period, after weighting each pursuant to paragraph II.o of this appendix.

Example B-7: The bank has two facility-based assessment areas (FBAAs) in a State (FBAA-1 and FBAA-2). The appropriate Federal banking agency does not evaluate the bank's automobile lending.

• In FBAA-1, the Assessment Area Community Development Financing Benchmark is 3.0 percent. FBAA-1 represents 70 percent of the combined dollar volume of the deposits in the bank in FBAA-1 and FBAA-2. FBAA-1 represents 65 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2. FBAA-1 represents 55 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2;

• In FBAA-2, the Assessment Area Community Development Financing Benchmark is 5.0 percent. FBAA-2 represents 30 percent of the combined dollar volume of the deposits in the bank in FBAA-1 and FBAA-2. FBAA-2 represents 35 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2. FBAA-2 represents 45 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2.

• Calculating weights for FBAA-1:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-1 is 60 percent.

○ The weight for FBAA-1 is 65 percent.

• Calculating weights for FBAA-2:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, for FBAA-2 is 40 percent.

○ The weight for FBAA-2 is 35 percent.

• Applying the calculated weights for FBAA-1 and FBAA-2:

o The bank's State Weighted Assessment Area Community Development Financing Benchmark is 3.7 percent.

(Weight for FBAA-1 (0.65) × Benchmark in FBAA-1 (3%)) + (Weight for FBAA-2 (0.35) × Benchmark in FBAA-2 (5%)) = State Weighted Assessment Area Community Development Financing Benchmark (3.7%)

g. Bank Multistate MSA Community Development Financing Metric. The appropriate Federal banking agency calculates the Bank Multistate MSA Community Development Financing Metric in § 25.24(d)(2)(i) for each multistate MSA in which the bank or savings association has a facility-based assessment area by:

1. Summing the bank's or savings association's annual dollar volume of community development loans and community development investments that benefit or serve a multistate MSA (which includes all activities within the bank's or savings association's facility-based assessment areas and outside of its facility-based assessment areas but within the multistate MSA) for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of deposits located in the multistate MSA for each year in the evaluation period.

3. Dividing the result of paragraph II.g.1 of this appendix by the result of paragraph II.g.2 of this appendix.

Example B-8: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development loans and community development investments that benefit or serve a multistate MSA are $47 million (year 1), $51 million (year 2), and $52 million (year 3). The sum of the bank's annual dollar volumes of community development loans and community development investments that benefit or serve a multistate MSA conducted by the bank is therefore $150 million. The bank's annual dollar volumes of deposits located in the multistate MSA are $3.1 billion (year 1), $3.3 billion (year 2), and $3.6 billion (year 3). The sum of the bank's annual dollar volumes of deposits located in the multistate MSA is therefore $10 billion. For the evaluation period, the Bank Multistate MSA Community Development Financing Metric would be $150 million divided by $10 billion, or 0.015 (equivalently, 1.5 percent).

h. Multistate MSA Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Multistate MSA Community Development Financing Benchmark in § 25.24(d)(2)(ii)(A) by:

1. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve all or part of a multistate MSA for each year in the evaluation period.

2. Summing all large depository institutions' annual dollar volume of deposits located in the multistate MSA for each year in the evaluation period.

3. Dividing the result of paragraph II.h.1 of this appendix by the result of paragraph II.h.2 of this appendix.

Example B-9: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve a multistate MSA for all large depository institutions are $135 million (year 1), $140 million (year 2), and $145 million (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve a multistate MSA conducted by all large depository institutions is therefore $420 million. The annual dollar volumes of deposits located in the multistate MSA in all large depository institutions are $4 billion (year 1), $5 billion (year 2), and $6 billion (year 3). The sum of the annual dollar volume of deposits located in the multistate MSA in all large depository institutions is therefore $15 billion. For the evaluation period, the Multistate MSA Community Development Financing Benchmark would be $420 million divided by $15 billion, or 0.028 (equivalently, 2.8 percent).

i. Multistate MSA Weighted Assessment Area Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Multistate MSA Weighted Assessment Area Community Development Financing Benchmark in § 25.24(c)(3)(ii)(B)(2) by averaging all of the bank's or savings association's Assessment Area Community Development Financing Benchmarks (see paragraph II.b of this appendix) in a multistate MSA for the evaluation period, after weighting each pursuant to paragraph II.o of this appendix.

Example B-10: The bank has two facility-based assessment areas in a multistate MSA (FBAA-1 and FBAA-2). The appropriate Federal banking agency does not evaluate the bank's automobile lending.

• In FBAA-1, the bank's Assessment Area Community Development Financing Benchmark is 3.0 percent. FBAA-1 represents 70 percent of the total dollar volume of the deposits in the bank in FBAA-1 and FBAA-2. FBAA-1 represents 65 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2. FBAA-1 represents 55 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2;

• In FBAA-2, the bank's Assessment Area Community Development Financing Benchmark is 5.0 percent. FBAA-2 represents 30 percent of the total dollar volume of the deposits in the bank in FBAA-1 and FBAA-2. FBAA-2 represents 35 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2. FBAA-2 represents 45 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1 and FBAA-2.

• Calculating weights for FBAA-1:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-1 is 60 percent.

○ The weight for FBAA-1 is 65 percent.

• Calculating weights for FBAA-2:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-2 is 40 percent.

○ The weight for FBAA-2 is 35 percent.

• Applying the calculated weights from FBAA-1 and FBAA-2:

○ The bank's Multistate MSA Weighted Assessment Area Community Development Financing Benchmark is 3.7 percent.

(Weight of FBAA-1 (0.65) × Benchmark in FBAA-1 (3%)) + (weight of FBAA-2 (0.35) × benchmark in FBAA-2 (5%)) = Multistate MSA Weighted Assessment Area Community Development Financing Benchmark (3.7%)

j. Bank Nationwide Community Development Financing Metric. The appropriate Federal banking agency calculates the Bank Nationwide Community Development Financing Metric in § 25.24(e)(2)(i) for the nationwide area by:

1. Summing the bank's or savings association's annual dollar volume of community development loans and community development investments that benefit or serve the nationwide area (which includes all activities within the bank's or savings association's facility-based assessment areas and outside of its facility-based assessment areas within the nationwide area) for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of deposits located in the nationwide area for each year in the evaluation period.

3. Dividing the results of paragraph II.j.1 of this appendix by the results of paragraph II.j.2 of this appendix.

Example B-11: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development loans and community development investments that benefit or serve the nationwide area are $60 million (year 1), $65 million (year 2), and $75 million (year 3). The sum of the bank's annual dollar volumes of community development loans and community development investments that benefit or serve the nationwide area conducted by the bank is therefore $200 million. The bank's annual dollar volumes of deposits located in the nationwide area are $2.5 billion (year 1), $2.7 billion (year 2), and $2.8 billion (year 3). The sum of the bank's annual dollar volumes of deposits located in the nationwide area is therefore $8 billion. For the evaluation period, the Bank Nationwide Community Development Financing Metric would be $200 million divided by $8 billion, or 0.025 (equivalently, 2.5 percent).

k. Nationwide Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Nationwide Community Development Financing Benchmark in § 25.24(e)(2)(ii)(A) by:

1. Summing all large depository institutions' annual dollar volume of community development loans and community development investments that benefit or serve all or part of the nationwide area for each year in the evaluation period.

2. Summing all depository institutions' annual dollar volume of deposits located in the nationwide area for each year in the evaluation period.

3. Dividing the result of paragraph II.k.1 of this appendix by the result of paragraph II.k.2 of this appendix.

Example B-12: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development loans and community development investments that benefit or serve the nationwide area for all large depository institutions are $100 billion (year 1), $103 billion (year 2), and $107 billion (year 3). The sum of the annual dollar volumes of community development loans and community development investments that benefit or serve the nationwide area conducted by all large depository institutions is therefore $310 billion. The annual dollar volumes of deposits located in the nationwide area in all large depository institutions are $15.2 trillion (year 1), $15.3 trillion (year 2), and $15.5 trillion (year 3). The sum of the annual dollar volumes of deposits located in the nationwide area in all large depository institutions is $46 trillion. For the evaluation period, the Nationwide Community Development Financing Benchmark would be $310 billion divided by $46 trillion, or 0.0067 (equivalently, 0.67 percent).

l. Nationwide Weighted Assessment Area Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Nationwide Weighted Assessment Area Community Development Financing Benchmark in § 25.24(e)(2)(ii)(B) by averaging all of the bank's or savings association's Assessment Area Community Development Financing Benchmarks (see paragraph II.b of this appendix) in the nationwide area, after weighting each pursuant to paragraph II.o of this appendix.

Example B-13: The bank has three facility-based assessment areas in the nationwide area (FBAA-1, FBAA-2, and FBAA-3).

• In FBAA-1, the bank's Assessment Area Community Development Financing Benchmark is 2.0 percent. FBAA-1 represents 60 percent of the combined dollar volume of the deposits in the bank in FBAA-1, FBAA-2, and FBAA-3. FBAA-1 represents 40 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3. FBAA-1 represents 60 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3.

• In FBAA-2, the bank's Assessment Area Community Development Financing Benchmark is 3.0 percent. FBAA-2 represents 30 percent of the combined dollar volume of the deposits in the bank in FBAA-1, FBAA-2, and FBAA-3. FBAA-2 represents 45 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3. FBAA-2 represents 35 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3.

• In FBAA-3, the bank's Assessment Area Community Development Financing Benchmark is 4.0 percent. FBAA-3 represents 10 percent of the combined dollar volume of the deposits in the bank in FBAA-1, FBAA-2, and FBAA-3. FBAA-3 represents 15 percent of the bank's combined dollar volume of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3. FBAA-3 represents 5 percent of the bank's number of originated and purchased closed-end home mortgage loans, small business loans, and small farm loans in FBAA-1, FBAA-2, and FBAA-3.

• Calculating weights for FBAA-1:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-1 is 50 percent.

○ The weight for FBAA-1 is 55 percent.

• Calculating weights for FBAA-2:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-2 is 40 percent.

○ The weight for FBAA-2 is 35 percent.

• Calculating weights for FBAA-3:

○ The percent of originated and purchased closed-end home mortgage lending, small business lending, and small farm lending, based on the combination of loan dollars and loan count, as defined in § 25.12, for FBAA-3 is 10 percent.

○ The weight for FBAA-3 is 10 percent.

• Applying the calculated weights from FBAA-1, FBAA-2, and FBAA-3:

○ The bank's Nationwide Weighted Assessment Area Community Development Financing Benchmark is 2.55 percent.

(Weight of FBAA-1(0.55) × Benchmark in FBAA-1 (2%)) + (Weight of FBAA-2 (0.35) × Benchmark FBAA-2 (3%)) + (Weight of FBAA-3 (0.10) × Benchmark in FBAA-3 (4%)) = Nationwide Weighted Assessment Area Community Development Financing Benchmark (2.55%)

m. Bank Nationwide Community Development Investment Metric. The appropriate Federal banking agency calculates the Bank Nationwide Community Development Investment Metric in § 25.24(e)(2)(iii) for the nationwide area by:

1. Summing the bank's or savings association's annual dollar volume of community development investments, excluding mortgage-backed securities, that benefit or serve the nationwide area (which includes all activities within the bank's or savings association's facility-based assessment areas and outside of its facility-based assessment areas within the nationwide area) for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of deposits located in the nationwide area for each year in the evaluation period.

3. Dividing the results of paragraph II.m.1 of this appendix by the results of paragraph II.m.2 of this appendix.

Example B-14: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area are $600 million (year 1), $680 million (year 2), and $720 million (year 3). The sum of the bank's annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area conducted by the bank is therefore $2 billion. The bank's annual dollar volumes of deposits located in the nationwide area are $24 billion (year 1), $27 billion (year 2), and $29 billion (year 3). The sum of the bank's annual dollar volumes of deposits located in the nationwide area is therefore $80 billion. For the evaluation period, the Bank Nationwide Community Development Investment Metric would be $2 billion divided by $80 billion, or 0.025 (equivalently, 2.5 percent).

n. Nationwide Community Development Investment Benchmark. The appropriate Federal banking agency calculates the Nationwide Community Development Investment Benchmark in § 25.24(e)(2)(iv) by:

1. Summing the annual dollar volume of community development investments that benefit or serve all or part of the nationwide area, excluding mortgage-backed securities, for each year in the evaluation period for all large depository institutions that had assets greater than $10 billion as of December 31 in both of the prior two calendar years.

2. Summing the annual dollar volume of deposits in the nationwide area for each year in the evaluation period for all large depository institutions that had assets greater than $10 billion as of December 31 in both of the prior two calendar years.

3. Dividing the result of paragraph II.n.1 of this appendix by the result of paragraph II.n.2 of this appendix.

Example B-15: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area for all large depository institutions are $350 billion (year 1), $360 billion (year 2), and $390 billion (year 3). The sum of the annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area conducted by all large depository institutions is therefore $1.1 trillion. The annual dollar volumes of deposits located in the nationwide area in all large depository institutions are $21.9 trillion (year 1), $22 trillion (year 2), and $22.1 trillion (year 3). The sum of the annual dollar volumes of deposits located in the nationwide area in all large depository institutions is therefore $66 trillion. For the evaluation period, the Nationwide Community Development Investment Benchmark would be $1.1 trillion divided by $66 trillion, or 0.0167 (equivalently, 1.67 percent).

o. Weighting of benchmarks. The appropriate Federal banking agency calculates a weighted average of the Assessment Area Community Development Financing Benchmarks for a bank's or savings association's facility-based assessment areas in each State or multistate MSA, as applicable, or the nationwide area. For the weighted average for a State or multistate MSA, the appropriate Federal banking agency considers Assessment Area Community Development Financing Benchmarks for facility-based assessment areas in the State or multistate MSA pursuant to § 25.28(c). For the weighted average for the nationwide area, the appropriate Federal banking agency considers Assessment Area Community Development Financing Benchmarks for all of the bank's or savings association's facility-based assessment areas. Each Assessment Area Community Development Financing Benchmark is weighted by the average of the following two ratios:

1. The ratio measuring the share of the deposits in the bank or savings association in the facility-based assessment area, calculated by:

i. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in all facility-based assessment areas in the State, multistate MSA, or nationwide area, as applicable.

iii. Dividing the result of paragraph II.o.1.i of this appendix by the result of paragraph II.o.1.ii of this appendix.

For a bank or savings association that reports deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of annual average daily balances of deposits reported by the bank or savings association in counties in the facility-based assessment area for that year. For a bank or savings association that does not report deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of deposits assigned to facilities reported by the bank or savings association in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

2. The ratio measuring the share of the bank's or savings association's loans in the facility-based assessment area, based on the combination of loan dollars and loan count, as defined in § 25.12, calculated by dividing:

i. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in the facility-based assessment area originated or purchased during the evaluation period; by

ii. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in all facility-based assessment areas in the State, multistate MSA, or nationwide area, as applicable, originated or purchased during the evaluation period.

p. Combined score for facility-based assessment area conclusions and the metrics and benchmarks analyses and the impact and responsiveness reviews. 1. As described in § 25.24(c) through (e), the appropriate Federal banking agency assigns a conclusion corresponding to the conclusion category that is nearest to the performance score calculated in paragraph p.2.iii of this appendix for a bank's or savings association's performance under the Community Development Financing Test in each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution as follows:

2. The appropriate Federal banking agency bases a Community Development Financing Test combined performance score on the following:

i. Component one—Weighted average of the bank's or savings association's performance scores corresponding to facility-based assessment area conclusions. The appropriate Federal banking agency derives a performance score based on a weighted average of the performance scores corresponding to conclusions for facility-based assessment areas in each State or multistate MSA, as applicable, and the nationwide area, calculated pursuant to section IV of this appendix.

ii. Component two— Bank and savings association score for metric and benchmarks analyses and the impact and responsiveness reviews. For each State or multistate MSA, as applicable, and the nationwide area, the appropriate Federal banking agency determines a performance score (as shown in paragraph IV.a of this appendix) corresponding to a conclusion category by considering the relevant metric and benchmarks and a review of the impact and responsiveness of the bank's or savings association's community development loans and community development investments. In the nationwide area, for large banks or savings associations that had assets greater than $10 billion as of December 31 in both of the prior two calendar years, the appropriate Federal banking agency also considers whether the bank's or savings association's performance under the Nationwide Community Development Investment Metric, compared to the Community Development Investment Benchmark, contributes positively to the bank's or savings association's Community Development Financing Test conclusion.

iii. Combined score. The appropriate Federal banking agency associates the performance score calculated pursuant to this paragraph II.p.2.iii with a conclusion category. The appropriate Federal banking agency derives the combined performance score corresponding to a conclusion category as follows:

A. The appropriate Federal banking agency calculates the average of two components to determine weighting:

1. The percentage, calculated using the combination of loan dollars and loan count, as defined in § 25.12, of the bank's or savings association's total originated and purchased closed-end home mortgage lending, small business lending, small farm lending, and automobile lending, as applicable, in its facility-based assessment areas out of all of the bank's or savings association's originated and purchased closed-end home mortgage lending, small business lending, small farm lending, and automobile lending, as applicable, in the State or multistate MSA, as applicable, or the nationwide area during the evaluation period; and

2. The percentage of the total dollar volume of deposits in its facility-based assessment areas out of all of the deposits in the bank or savings association in the State or multistate MSA, as applicable, or the nationwide area during the evaluation period. For purposes of this paragraph II.p.2.iii.A.2, “deposits” excludes deposits reported under § 25.42(b)(3)(ii).

B. If the average is:

1. At least 80 percent, then component one receives a 50 percent weight and component two receives a 50 percent weight.

2. At least 60 percent but less than 80 percent, then component one receives a 40 percent weight and component two receives a 60 percent weight.

3. At least 40 percent but less than 60 percent, then component one receives a 30 percent weight and component two receives a 70 percent weight.

4. At least 20 percent but less than 40 percent, then component one receives a 20 percent weight and component two receives an 80 percent weight.

5. Below 20 percent, then component one receives a 10 percent weight and component two receives a 90 percent weight.

Example B-16:

• Assume that the weighted average of the bank's performance scores corresponding to its facility-based assessment area conclusions nationwide is 7.5. Assume further that the bank score for the metrics and benchmarks analysis and the review of the impact and responsiveness of the bank's community development loans and community development investments nationwide is 6.

• Assume further that 95 percent of the deposits in the bank and 75 percent of the bank's originated and purchased closed-end home mortgage lending, small business lending, small farm lending, and automobile loans (calculated using the combination of loan dollars and loan count, as defined in § 25.12) during the evaluation period are associated with its facility-based assessment areas.

• The appropriate Federal banking agency assigns weights for component one and component two based on the share of deposits in the bank and the share of the bank's originated and purchased closed-end home mortgage lending, small business lending, small farm lending, and automobile lending, calculated using the combination of loan dollars and loan count, as defined in § 25.12, associated with its facility-based assessment areas: (95 percent of deposits + 75 percent of originated and purchased closed-end home mortgage lending, small business lending, small farm lending, and automobile lending, based on the combination of loan dollars and loan count)/2 = 85 percent, which is between 80 percent and 100 percent.

• Thus, the weighted average of the bank's facility-based assessment area conclusions in the nationwide area (component one—paragraph II.p.2.i of this appendix) receives a weight of 50 percent, and the metrics and benchmarks analysis and the review of the impact and responsiveness of the bank's community development loans and community development investments in the nationwide area (component two—paragraph II.p.2.ii of this appendix) receives a weight of 50 percent.

• Using the point values—“Outstanding” (10 points); “High Satisfactory” (7 points); “Low Satisfactory” (6 points); “Needs to Improve” (3 points); “Substantial Noncompliance” (0 points)—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 performance scores corresponding to the bank's facility-based assessment area conclusions nationwide) + (0.50 weight × 6 points for the bank score for metrics and benchmarks analysis and review of the impact and responsiveness of the bank's community development loans and community development investments nationwide) results in a performance score of 6.75, which is closest to the point value (7) associated with “High Satisfactory.”

III. Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26—Calculations for Metrics and Benchmarks

The calculations for metrics and benchmarks for Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26 are provided in this section. Additional information regarding relevant calculation components is set forth in paragraph I.a of this appendix.

a. Limited Purpose Bank Community Development Financing Metric. The appropriate Federal banking agency calculates the Limited Purpose Bank Community Development Financing Metric provided in § 25.26 by:

1. Summing the bank's or savings association's annual dollar volume of community development loans and community development investments that benefit or serve the nationwide area for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of the assets for each year in the evaluation period.

3. Dividing the result of paragraph III.a.1 of this appendix by the result of paragraph III.a.2 of this appendix.

b. Nationwide Limited Purpose Bank Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Nationwide Limited Purpose Bank Community Development Financing Benchmark by:

1. Summing the annual dollar volume of community development loans and community development investments of depository institutions designated as limited purpose banks or savings associations or savings associations pursuant to § 25.26(a) or designated as limited purpose banks or savings associations pursuant to 12 CFR 228.26(a) or 345.26(a) reported pursuant to § 25.42(b) or 12 CFR 228.42(b) or 345.42(b) that benefit or serve all or part of the nationwide area for each year in the evaluation period.

2. Summing the annual dollar volume of assets of depository institutions designated as limited purpose banks or savings associations or savings associations pursuant to § 25.26(a) or designated as limited purpose banks or savings associations pursuant to 12 CFR 228.26(a) or 345.26(a) that reported community development loans and community development investments pursuant to § 25.42(b) or 12 CFR 228.42(b) or 345.42(b) for each year in the evaluation period.

3. Dividing the result of paragraph III.b.1 of this appendix by the result of paragraph III.b.2 of this appendix.

c. Nationwide Asset-Based Community Development Financing Benchmark. The appropriate Federal banking agency calculates the Nationwide Asset-Based Community Development Financing Benchmark by:

1. Summing the annual dollar volume of community development loans and community development investments of all depository institutions that reported pursuant to § 25.42(b) or 12 CFR 228.42(b) or 345.42(b) that benefit or serve all or part of the nationwide area for each year in the evaluation period.

2. Summing the annual dollar volume of assets of all depository institutions that reported community development loans and community development investments pursuant to § 25.42(b) or 12 CFR 228.42(b) or 345.42(b) for each year in the evaluation period.

3. Dividing the result of paragraph III.c.1 of this appendix by the result of paragraph III.c.2 of this appendix.

d. Limited Purpose Bank and savings association Community Development Investment Metric. The appropriate Federal banking agency calculates the Limited Purpose Bank Nationwide Community Development Investment Metric, provided in § 25.26(f)(2)(iii), for the nationwide area by:

1. Summing the bank's or savings association's annual dollar volume of community development investments, excluding mortgage-backed securities, that benefit or serve the nationwide area for each year in the evaluation period.

2. Summing the bank's or savings association's annual dollar volume of assets for each year in the evaluation period.

3. Dividing the results of paragraph III.d.1 of this appendix by the results of paragraph III.d.2 of this appendix.

Example B-17: The bank has a three-year evaluation period. The bank's annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area are $62 million (year 1), $65 million (year 2), and $73 million (year 3). The sum of the bank's annual dollar volumes of community development investments that benefit or serve the nationwide area conducted by the bank is therefore $200 million. The bank's annual dollar volumes of assets in the bank are $2.4 billion (year 1), $2.7 billion (year 2), and $2.9 billion (year 3). The sum of the bank's annual dollar volumes of assets in the bank over the evaluation period is therefore $8 billion. For the evaluation period, the Bank Nationwide Community Development Investment Metric would be $200 million divided by $8 billion, or 0.025 (equivalently, 2.5 percent).

e. Nationwide Asset-Based Community Development Investment Benchmark. The appropriate Federal banking agency calculates the Nationwide Asset-Based Community Development Investment Benchmark, provided in § 25.26(f)(2)(iv), by:

1. Summing the annual dollar volume of community development investments, excluding mortgage-backed securities, of all depository institutions that had assets greater than $10 billion, as of December 31 in both of the prior two calendar years, that benefit or serve all or part of the nationwide area for each year in the evaluation period.

2. Summing the annual dollar volume of assets of all depository institutions that had assets greater than $10 billion, as of December 31 in both of the prior two calendar years, for each year in the evaluation period.

3. Dividing the result of paragraph III.e.1 of this appendix by the result of paragraph III.e.2 of this appendix.

Example B-18: The applicable benchmark uses a three-year evaluation period. The annual dollar volumes of community development investments (excluding mortgage-backed securities) that benefit or serve the nationwide area for all depository institutions that had assets greater than $10 billion are $35 billion (year 1), $37 million (year 2), and $38 billion (year 3). The sum of the annual dollar volumes of community development investments that benefit or serve the nationwide area conducted by all depository institutions that had assets greater than $10 billion is therefore $110 billion. The annual dollar volumes of assets in all depository institutions that had assets greater than $10 billion are $1.8 trillion (year 1), $2.1 trillion (year 2), and $2.1 trillion (year 3). The sum of the annual dollar volumes of assets in all depository institutions that had assets greater than $10 billion is therefore $6 trillion. For the evaluation period, the Nationwide Asset-Based Community Development Investment Benchmark would be $110 billion divided by $6 trillion, or 0.0183 (equivalently, 1.83 percent).

IV. Weighting of Conclusions

The appropriate Federal banking agency calculates component one of the combined performance score, as set forth in paragraph II.p.2.i of this appendix, for the Community Development Financing Test in § 25.24 and a performance score for the Community Development Services Test in § 25.25 in each State, multistate MSA, and the nationwide area, as applicable, as described in this section.

a. The appropriate Federal banking agency translates the Community Development Financing Test and the Community Development Services Test conclusions for facility-based assessment areas into numerical performance scores, as follows:

b. The appropriate Federal banking agency calculates the weighted average of facility-based assessment area performance scores for a State or multistate MSA, as applicable, and for the institution. For the weighted average for a State or multistate MSA, the appropriate Federal banking agency considers facility-based assessment areas in the State or multistate MSA pursuant to § 25.28(c). For the weighted average for the institution, the appropriate Federal banking agency considers all of the bank's or savings association's facility-based assessment areas. Each facility-based assessment area performance score is weighted by the average the following two ratios:

1. The ratio measuring the share of the deposits in the bank or savings association in the facility-based assessment area, calculated by:

i. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in the facility-based assessment area.

ii. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in all facility-based assessment areas in the State, in the multistate MSA, or for the nationwide area, as applicable.

iii. Dividing the result of paragraph IV.b.1.i of this appendix by the result of paragraph IV.b.1.ii of this appendix.

For a bank or savings association that reports deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of annual average daily balances of deposits reported by the bank or savings association in counties in the facility-based assessment area for that year. For a bank or savings association that does not report deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of deposits assigned to facilities reported by the bank or savings association in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

2. The ratio measuring the share of the bank's or savings association's loans in the facility-based assessment area, based on the combination of loan dollars and loan count, as defined in § 25.12, calculated by dividing:

i. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in the facility-based assessment area originated or purchased during the evaluation period; by

ii. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in all facility-based assessment areas in the State, in the multistate MSA, or for the nationwide area, as applicable, originated or purchased during the evaluation period.

[89 FR 7165, Feb. 1, 2024, as amended at 89 FR 7171, Feb. 1, 2024] Editorial Note:At 89 FR 7171, Feb. 1, 2024, appendix B to part 25 was amended by removing “BANKS” from the heading and adding “BANKS AND SAVINGS ASSOCIATIONS” in its place; however, the amendment could not be incorporated due to inaccurate amendatory instruction.

a. Performance test conclusions, in general. For a bank or savings association evaluated under, as applicable, the Retail Lending Test in § 25.22, the Retail Services and Products Test in § 25.23, the Community Development Financing Test in § 25.24, the Community Development Services Test in § 25.25, and the Community Development Financing Test for Limited Purpose Banks and Savings Associations in § 25.26, the appropriate Federal banking agency assigns conclusions for the bank's or savings association's CRA performance pursuant to these tests and this appendix. In assigning conclusions, the appropriate Federal banking agency may consider performance context information as provided in § 25.21(d).

b. Retail Lending Test conclusions. The appropriate Federal banking agency assigns Retail Lending Test conclusions for each applicable Retail Lending Test Area, each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

1. Retail Lending Test Area. For each applicable Retail Lending Test Area, the appropriate Federal banking agency assigns a Retail Lending Test conclusion and corresponding performance score pursuant to § 25.22(h)(1), as follows:

2. State, multistate MSA, and institution. The appropriate Federal banking agency assigns the Retail Lending Test conclusions for a bank's or savings association's performance in each State or multistate MSA, as applicable, and for the institution, as set forth in section VIII of appendix A to this part.

c. Retail Services and Products Test conclusions. The appropriate Federal banking agency assigns Retail Services and Products Test conclusions for each facility-based assessment area, for each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution. For a bank or savings association that does not operate any branches, a main office described in § 25.23(a)(2), or remote service facilities, the appropriate Federal banking agency assigns the bank's or savings association's digital delivery systems and other delivery systems conclusion as the Retail Services and Product Test conclusion for the State or multistate MSA, as applicable.

1. Facility-based assessment area. The appropriate Federal banking agency assigns a Retail Services and Products Test conclusion for a bank's or savings association's performance in a facility-based assessment area based on an evaluation of the bank's or savings association's branch availability and services and remote services facilities availability, if applicable, pursuant to § 25.23(b)(2) and (3), respectively.

2. State, multistate MSA, and institution. The appropriate Federal banking agency develops the Retail Services and Products Test conclusions for States, multistate MSAs, and the institution as described in this paragraph c.2.

i. The appropriate Federal banking agency translates Retail Services and Products Test conclusions for facility-based assessment areas into numerical performance scores as follows:

ii. The appropriate Federal banking agency calculates the weighted average of facility-based assessment area performance scores for a State or multistate MSA, as applicable, and for the institution. For the weighted average for a State or multistate MSA, the appropriate Federal banking agency considers facility-based assessment areas in the State or multistate MSA pursuant to § 25.28(c). For the weighted average for the institution, the appropriate Federal banking agency considers all of the bank's or savings association's facility-based assessment areas. Each facility-based assessment area performance score is weighted by the average the following two ratios:

A. The ratio measuring the share of the bank's or savings association's deposits in the facility-based assessment area, calculated by:

1. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in the facility-based assessment area.

2. Summing, over the years in the evaluation period, the bank's or savings association's annual dollar volume of deposits in all facility-based assessment areas in the State, in the multistate MSA, or for the institution, as applicable.

3. Dividing the result of paragraph c.2.ii.A.1 of this appendix by the result of paragraph c.2.ii.A.2 of this appendix.

For a bank or savings association that reports deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of annual average daily balances of deposits reported by the bank or savings association in counties in the facility-based assessment area for that year. For a bank or savings association that does not report deposits data pursuant to § 25.42(b)(3), the bank's or savings association's annual dollar volume of deposits in a facility-based assessment area is the total of deposits assigned to facilities reported by the bank or savings association in the facility-based assessment area in the FDIC's Summary of Deposits for that year.

B. The ratio measuring the share of the bank's or savings association's loans in the facility-based assessment area, based on the combination of loan dollars and loan count, as defined in § 25.12, calculated by dividing:

1. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in the facility-based assessment area originated or purchased during the evaluation period; by

2. The bank's or savings association's closed-end home mortgage loans, small business loans, small farm loans, and, if a product line for the bank or savings association, automobile loans in all facility-based assessment areas in the State, in the multistate MSA, or for the institution, as applicable, originated or purchased during the evaluation period.

iii. For a State or multistate MSA, as applicable, the appropriate Federal banking agency assigns a Retail Services and Products Test conclusion corresponding to the conclusion category that is nearest to the weighted average for the State or multistate MSA calculated pursuant to paragraph c.2.ii of this appendix (i.e., the performance score for the Retail Services and Products Test for the State or multistate MSA).

iv. For the institution, the appropriate Federal banking agency assigns a Retail Services and Products Test conclusion based on the bank's or savings association's combined retail banking services conclusion, developed pursuant to paragraph c.2.iv.A of this appendix, and an evaluation of the bank's or savings association's retail banking products, pursuant to paragraph c.2.iv.B of this appendix. The appropriate Federal banking agency translates the Retail Services and Products Test conclusion for the institution into a numerical performance score, as follows:

A. Combined retail banking services conclusion. 1. In general. The appropriate Federal banking agency evaluates the bank's or savings association's retail banking services, as applicable, and assigns a combined retail banking services conclusion based the weighted average for the institution calculated pursuant to paragraph c.2.ii of this appendix and a digital and other delivery systems conclusion, assigned pursuant to paragraph c.2.iv.A.1 of this appendix. For a large bank or savings association without branches, a main office described in § 25.23(a)(2), or remote service facilities, the appropriate Federal banking agency assigns a combined retail banking services conclusion based only on a digital delivery systems and other delivery systems conclusion, assigned pursuant to paragraph c.2.iv.A.1 of this appendix.

2. Digital delivery systems and other delivery systems conclusion. The appropriate Federal banking agency assigns a digital delivery systems and other delivery systems conclusion based on an evaluation of a bank's or savings association's digital delivery systems and other delivery systems pursuant to § 25.23(b)(4).

B. Retail banking products evaluation. The appropriate Federal banking agency evaluates the bank's or savings association's retail banking products offered in the bank's or savings association's facility-based assessment areas and nationwide, as applicable, as follows:

1. Credit products and programs. The appropriate Federal banking agency evaluates the bank's or savings association's performance regarding its credit products and programs pursuant to § 25.23(c)(2) and determines whether the bank's or savings association's performance contributes positively to the bank's or savings association's Retail Services and Products Test conclusion that would have resulted based solely on the retail banking services conclusion pursuant to paragraph c.2.iv.A of this appendix.

2. Deposit products. The appropriate Federal banking agency evaluates the bank's or savings association's performance regarding its deposit products pursuant to § 25.23(c)(3), as applicable, and determines whether the bank's or savings association's performance contributes positively to the bank's or savings association's Retail Services and Products Test conclusion that would have resulted based solely on the combined retail banking services conclusion pursuant to paragraph c.2.iv.A of this appendix.

3. Impact of retail banking products on Retail Services and Products Test conclusion. The bank's or savings association's retail banking products evaluated pursuant to § 25.23(c) may positively impact the bank's or savings association's Retail Services and Products Test conclusion. The bank's or savings association's lack of responsive retail banking products does not adversely affect the bank's or savings association's Retail Services and Products Test performance conclusion.

d. Community Development Financing Test conclusions. The appropriate Federal banking agency assigns Community Development Financing Test conclusions for each facility-based assessment area, each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

1. Facility-based assessment area. For each facility-based assessment area, the appropriate Federal banking agency assigns a Community Development Financing Test conclusion and corresponding performance score based on the metric and benchmarks as provided in § 25.24 and a review of the impact and responsiveness of a bank's or savings association's activities as provided in § 25.15 as follows:

2. State, multistate MSA, and institution. The appropriate Federal banking agency assigns Community Development Financing Test conclusions for a bank's or savings association's performance in each State and multistate MSA, as applicable pursuant to § 25.28(c), and for the institution as set forth in paragraph II.p of appendix B to this part.

e. Community Development Services Test conclusions. The appropriate Federal banking agency assigns Community Development Services Test conclusions for each facility-based assessment area, each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

1. Facility-based assessment area. For each facility-based assessment area, the appropriate Federal banking agency develops a Community Development Services Test conclusion based on the extent to which a bank or savings association provided community development services, considering the factors in § 25.25(b). The appropriate Federal banking agency translates the conclusion for each facility-based assessment area into a numerical performance score as follows:

2. State, multistate MSA, or nationwide area. For each State or multistate MSA, as applicable pursuant to § 25.28(c), and the nationwide area, the appropriate Federal banking agency develops a Community Development Services Test conclusion as follows:

i. The appropriate Federal banking agency calculates a weighted average of the performance scores corresponding to the performance test conclusions pursuant to section IV of appendix B to this part. The resulting number is the Community Development Services Test performance score for a State, multistate MSA, or the institution. Subject to paragraph e.2.ii of this appendix, the appropriate Federal banking agency assigns a Community Development Services Test conclusion corresponding to the conclusion category that is nearest to the performance score for the Community Development Services Test as follows:

ii. The appropriate Federal banking agency may adjust upwards the Community Development Services Test conclusion assigned under paragraph e.2.i of this appendix, based on Community Development Services Test activities performed outside of facility-based assessment areas as provided in § 25.19. If there is no upward adjustment, the performance score used for the ratings calculations described in paragraph b.1 of appendix D to this part is the Community Development Services Test performance score discussed in paragraph e.2.i of this appendix. If there is an upward adjustment, the appropriate Federal banking agency translates the Community Development Services Test conclusion into a numerical performance score, which will be used for the ratings calculations described in paragraph b.1 of appendix D to this part, as follows:

f. Community Development Financing Test for Limited Purpose Banks and Savings Associations conclusions. The appropriate Federal banking agency assigns conclusions for each facility-based assessment area, each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

1. Facility-based assessment area. For each facility-based assessment area, the appropriate Federal banking agency assigns one of the following Community Development Financing Test for Limited Purpose Banks and Savings Associations conclusions based on consideration of the dollar volume of a bank's or savings association's community development loans and community development investments that benefit or serve the facility-based assessment area over the evaluation period, and a review of the impact and responsiveness of the bank's or savings association's activities in the facility-based assessment area as provided in § 25.15: “Outstanding”; “High Satisfactory”; “Low Satisfactory”; “Needs to Improve”; or “Substantial Noncompliance.”

2. State or multistate MSA. For each State or multistate MSA, as applicable pursuant to § 25.28(c), the appropriate Federal banking agency assigns a Community Development Financing Test for Limited Purpose Banks and Savings Associations conclusion of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance” based on the following:

i. The bank's or savings association's facility-based assessment area performance test conclusions in each State or multistate MSA, as applicable;

ii. The dollar volume of a bank's or savings association's community development loans and community development investments that benefit or serve the State or multistate MSAs, as applicable, over the evaluation period; and

iii. A review of the impact and responsiveness of the bank's or savings association's activities in the State or multistate MSAs, as provided in § 25.15.

3. Institution. For the institution, the appropriate Federal banking agency assigns a Community Development Financing Test for Limited Purpose Banks and Savings Associations conclusion of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance” based on the following:

i. The bank's or savings association's community development financing performance in all of its facility-based assessment areas;

ii. The appropriate Federal banking agency's comparison of the bank's or savings association's Limited Purpose Bank Community Development Financing Metric to both the Nationwide Limited Purpose Bank Community Development Financing Benchmark and the Nationwide Asset-Based Community Development Financing Benchmark;

iii. The appropriate Federal banking agency's comparison of the bank's or savings association's Limited Purpose Bank Community Development Investment Metric to the Nationwide Asset-Based Community Development Investment Benchmark; and

iv. A review of the impact and responsiveness of the bank's or savings association's activities in a nationwide area as provided in § 25.15.

g. Strategic Plan conclusions. The appropriate Federal banking agency assigns conclusions for a bank or savings association that operates under an approved plan in facility-based assessment areas, retail lending assessment areas, outside retail lending areas, State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution. The appropriate Federal banking agency assigns conclusions consistent with the methodology set forth by the bank or savings association in its plan. For elements of the plan that correspond to performance tests that would apply to the bank or savings association in the absence of an approved plan, the plan should include a conclusion methodology that is generally consistent with paragraphs b through f of this appendix.

[89 FR 7165, Feb. 1, 2024]

a. Ratings, in general. In assigning a rating, the appropriate Federal banking agency evaluates a bank's or savings association's performance under the applicable performance criteria in this part, pursuant to §§ 25.21 and 25.28. The agency calculates an overall performance score for each State and multistate MSA, as applicable pursuant to § 25.28(c), and for the institution. The appropriate Federal banking agency assigns a rating of “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance” for the bank's or savings association's performance in each State and multistate MSA, as applicable pursuant to § 25.28(c), and for the institution that is nearest to the overall performance score, as follows:

The appropriate Federal banking agency also considers any evidence of discriminatory or other illegal credit practices pursuant to § 25.28(d) and the bank's or savings association's past performance pursuant to § 25.28(e).

b. Large bank or savings association ratings at the State, multistate MSA, and institution levels. Subject to paragraph g of this appendix, the appropriate Federal banking agency combines a large bank's or savings association's performance scores for its State, multistate MSA, or institution-level performance under the Retail Lending Test in § 25.22, Retail Services and Products Test in § 25.23, Community Development Financing Test in § 25.24, and Community Development Services Test in § 25.25 to determine the bank's or savings association's rating in each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

1. The appropriate Federal banking agency weights the performance scores as follows: Retail Lending Test (40 percent); Retail Services and Products Test (10 percent); Community Development Financing Test (40 percent); and Community Development Services Test (10 percent). The appropriate Federal banking agency multiplies each of these weights by the bank's or savings association's performance score on the respective performance test, and then adds the resulting values together to develop a State, multistate MSA, or institution-level performance score.

2. The appropriate Federal banking agency assigns a rating corresponding with the rating category that is nearest to the State, multistate MSA, or institution performance score using the table in paragraph a of this appendix.

Example D-1: A large bank received the following performance scores and conclusions in a State:

• On the Retail Lending Test, the bank received a 7.3 performance score and a corresponding conclusion of “High Satisfactory;”

• On the Retail Services and Products Test, the bank received a 6.0 performance score and a corresponding conclusion of “Low Satisfactory;”

• On the Community Development Financing Test, the bank received a 5.7 performance score and a corresponding conclusion of “Low Satisfactory;” and

• On the Community Development Services Test, the bank received a 3.0 performance score and a corresponding conclusion of “Needs to Improve.”

Calculating weights:

• For the Retail Lending Test, the weight is 40 percent (or 0.4);

• For the Retail Services and Products Test, the weight is 10 percent (or 0.1);

• For the Community Development Financing Test, the weight is 40 percent (or 0.4); and

• For the Community Development Services Test, the weight is 10 percent (or 0.1).

State Performance Score: Based on the illustration in this example D-1, the bank's State performance score is 6.1.

(0.4 weight × 7.3 performance score on the Retail Lending Test = 2.92) + (0.1 weight × 6.0 performance score on the Retail Services and Products Test = 0.6) + (0.4 weight × 5.7 performance score on the Community Development Financing Test = 2.28) + (0.1 weight × 3.0 performance score on the Community Development Services Test = 0.3).

State Rating: A State performance score of 6.1 is greater than 4.5 but less than 8.5, resulting in a rating of “Satisfactory.”

c. Intermediate bank or savings association ratings. 1. Intermediate banks or savings associations evaluated pursuant to the Retail Lending Test and the Community Development Financing Test. Subject to paragraph g of this appendix, the appropriate Federal banking agency combines an intermediate bank's or savings association's performance scores for its State, multistate MSA, or institution performance under the Retail Lending Test and the Community Development Financing Test to determine the bank's or savings association's rating in each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

i. The appropriate Federal banking agency weights the performance scores as follows: Retail Lending Test (50 percent) and Community Development Financing Test (50 percent). The appropriate Federal banking agency multiplies each of these weights by the bank's or savings association's corresponding performance score on the respective performance test, and then adds the resulting values together to develop a State, multistate MSA, or institution performance score.

ii. The appropriate Federal banking agency assigns a rating corresponding with the rating category that is nearest to the State, multistate MSA, or institution performance score, using the table in paragraph a of this appendix.

iii. The appropriate Federal banking agency may adjust an intermediate bank's or savings association's institution rating where the bank or savings association has requested and received sufficient additional consideration pursuant to § 25.30(b)(2) and (3).

2. Intermediate banks or savings associations evaluated pursuant to the Retail Lending Test and the Intermediate Bank and Savings Association Community Development Test in § 25.30(a)(2). The appropriate Federal banking agency combines an intermediate bank's or savings association's performance scores for its State, multistate MSA, or institution conclusions under the Retail Lending Test and the Intermediate Bank and Savings Association Community Development Test in § 25.30(a)(2) to determine the bank's or savings association's rating in each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution.

i. The appropriate Federal banking agency weights the performance scores as follows: Retail Lending Test (50 percent) and Intermediate Bank and Savings Association Community Development Test (50 percent). The appropriate Federal banking agency multiplies each of these weights by the bank's or savings association's corresponding performance score on the respective performance test, and then adds the resulting values together to develop a State, multistate MSA, or institution performance score. For purposes of this paragraph c.2.i, the performance score for the Intermediate Bank and Savings Association Community Development Test corresponds to the conclusion assigned, as follows:

ii. The appropriate Federal banking agency assigns a rating corresponding with the rating category that is nearest to the State, multistate MSA, or institution performance score using the table in paragraph a of this appendix.

iii. The appropriate Federal banking agency may adjust an intermediate bank's or savings association's institution rating where the bank or savings association has requested and received sufficient additional consideration pursuant to § 25.30(b)(1) and (3).

d. Small bank or savings association ratings. 1. Ratings for small banks or savings associations that opt to be evaluated pursuant to the Retail Lending Test in § 25.22. The appropriate Federal banking agency determines a small bank's or savings association's rating for each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution based on the performance score for its Retail Lending Test conclusions for the State, multistate MSA or institution, respectively.

i. The appropriate Federal banking agency assigns a rating corresponding with the rating category that is nearest to the State, multistate MSA, or institution performance score using the table in paragraph a of this appendix.

ii. The appropriate Federal banking agency may adjust a small bank's or savings association's institution rating where the bank or savings association has requested and received sufficient additional consideration pursuant to § 25.29(b)(2) and (3).

2. Ratings for small banks or savings associations evaluated under the Small Bank and Savings Association Lending Test pursuant to § 25.29(a)(2). The appropriate Federal banking agency assigns a rating for small banks or savings associations evaluated under the Small Bank and Savings Association Lending Test pursuant to § 25.29(a)(2) as provided in appendix E to this part.

e. Limited purpose banks or savings associations. The appropriate Federal banking agency determines a limited purpose bank's or savings association's rating for each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution based on the performance score for its Community Development Financing Test for Limited Purpose Banks and Savings Associations conclusion for the State, multistate MSA, or the institution, respectively.

1. The appropriate Federal banking agency assigns a rating corresponding with the rating category that is nearest to the State, multistate MSA, or institution performance score, respectively, using the table in paragraph a of this appendix.

2. The appropriate Federal banking agency may adjust a limited purpose bank's or savings association's institution rating where the bank or savings association has requested and received sufficient additional consideration pursuant to § 25.26(b)(2).

f. Ratings for banks or savings associations operating under an approved strategic plan. The appropriate Federal banking agency evaluates the performance of a bank or savings association operating under an approved plan consistent with the rating methodology that is specified in the plan pursuant to § 25.27(g)(6). The appropriate Federal banking agency assigns a rating according to the category assigned under the rating methodology specified in the plan: “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

g. Minimum performance test conclusion requirements. 1. Retail Lending Test minimum conclusion. An intermediate bank or savings association or a large bank or savings association 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 conclusion for 60 percent of facility-based assessment areas and retail lending assessment areas. i. Except as provided in § 25.51(e), a large bank or savings association with a combined total of 10 or more facility-based assessment areas and retail lending assessment areas in any State, multistate MSA, or for the institution, as applicable, may not receive a rating of “Satisfactory” or “Outstanding” in that State, multistate MSA, or for the institution unless the bank or savings association received an overall conclusion of at least “Low Satisfactory” in 60 percent or more of the total number of its facility-based assessment areas and retail lending assessment areas in that State or multistate MSA or for the institution, as applicable.

ii. Overall conclusion in facility-based assessment areas and retail lending assessment areas. For purposes of the requirement in paragraph g.2 of this appendix:

A. The appropriate Federal banking agency calculates an overall conclusion in a facility-based assessment area by combining a large bank's or savings association's performance scores for its conclusions in the facility-based assessment area pursuant to the Retail Lending Test in § 25.22, Retail Services and Products Test in § 25.23, Community Development Financing Test in § 25.24, and Community Development Services Test in § 25.25.

The appropriate Federal banking agency weights the performance scores as follows: Retail Lending Test (40 percent); Retail Services and Products Test (10 percent); Community Development Financing Test (40 percent); and Community Development Services Test (10 percent). The appropriate Federal banking agency multiplies each of these weights by the bank's or savings association's performance score on the respective performance test, and then adds the resulting values together to develop a facility-based assessment area performance score.

The appropriate Federal banking agency assigns a conclusion corresponding with the conclusion category that is nearest to the performance score, as follows:

B. An overall conclusion in a retail lending assessment area is the retail lending assessment area conclusion assigned pursuant to the Retail Lending Test in § 25.22 as provided in appendix C to this part.

[89 FR 7165, Feb. 1, 2024]

a. Small banks or savings associations evaluated under the small bank or savings association performance evaluation. 1. Small Bank and Savings Association Lending Test conclusions. Unless a small bank or savings association opts to be evaluated pursuant to the Retail Lending Test in § 25.22, the appropriate Federal banking agency assigns conclusions for a small bank's or savings association's performance pursuant to the Small Bank and Savings Association Lending Test in § 25.29(a)(2) for each facility-based assessment area, in each State or multistate MSA, as applicable pursuant to § 25.28(c), and for the institution of “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

i. Eligibility for a “Satisfactory” Small Bank and Savings Association Lending Test conclusion. The appropriate Federal banking agency assigns a small bank's or savings association's performance pursuant to the Small Bank and Savings Association Lending Test a conclusion of “Satisfactory” if, in general, the bank or savings association demonstrates:

A. A reasonable loan-to-deposit ratio (considering seasonal variations) given the bank's or savings association'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, 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 or savings association's facility-based assessment areas;

D. A reasonable geographic distribution of loans among census tracts of different income levels in the bank's or savings association's facility-based assessment areas; and

E. A record of taking appropriate action, when warranted, in response to written complaints, if any, about the bank's or savings association's performance in helping to meet the credit needs of its facility-based assessment areas.

ii. Eligibility for an “Outstanding” Small Bank and Savings Association Lending Test conclusion. A small bank or savings association that meets each of the standards for a “Satisfactory” conclusion under this paragraph a.1.ii. 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” Small Bank and Savings Association Lending Test conclusions. A small bank or savings association 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 or savings association ratings. Unless a small bank or savings association opts to be evaluated pursuant to the Retail Lending Test in § 25.22, the appropriate Federal banking agency determines a small bank's or savings association's rating for each State and multistate MSA, as applicable pursuant to § 25.28(c), and for the institution based on its Small Bank and Savings Association Lending Test conclusions at the State, multistate MSA, and institution level, respectively.

i. The appropriate Federal banking agency assigns a rating based on the lending evaluation conclusion according to the category of the conclusion assigned: “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

ii. The appropriate Federal banking agency may adjust a small bank's or savings association's institution rating where the bank or savings association has requested and received sufficient additional consideration pursuant to § 25.29(b)(1) and (3).

iii. The appropriate Federal banking agency also considers any evidence of discriminatory or other illegal credit practices pursuant to § 25.28(d) and the bank's or savings association's past performance pursuant to § 25.28(e).

3. The appropriate Federal banking agency assigns a rating for small banks or savings associations evaluated pursuant to the Retail Lending Test in § 25.22 as provided in appendix D to this part.

b. Intermediate banks or savings associations evaluated pursuant to the Intermediate Bank and Savings Association Community Development Test in § 25.30. Unless an intermediate bank or savings association opts to be evaluated pursuant to the Community Development Financing Test in § 25.24, the appropriate Federal banking agency assigns conclusions for an intermediate bank's or savings association's performance pursuant to the Intermediate Bank and Savings Association Community Development Test in § 25.30 for each State and multistate MSA, as applicable pursuant to § 25.28(c), and for the institution of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

1. Intermediate Bank and Savings Association Community Development Test conclusions. i. Eligibility for a “Satisfactory” Intermediate Bank and Savings Association Community Development Test conclusion. The appropriate Federal banking agency assigns an intermediate bank's or savings association's community development performance a “Low Satisfactory” conclusion if the bank or savings association demonstrates adequate responsiveness, and a “High Satisfactory” conclusion if the bank or savings association demonstrates good responsiveness, to the community development needs of its facility-based assessment areas and, as applicable, nationwide area through community development loans, community development investments, and community development services. The adequacy of the bank's or savings association's response will depend on its capacity for such community development activities, the need for such community development activities, and the availability of community development opportunities.

ii. Eligibility for an “Outstanding” Intermediate Bank and Savings Association Community Development Test conclusion. The appropriate Federal banking agency assigns an intermediate bank's or savings association's community development performance an “Outstanding” conclusion if the bank or savings association demonstrates excellent responsiveness to community development needs in its facility-based assessment areas and, as applicable, nationwide area through community development loans, community development investments, and community development services. The adequacy of the bank's or savings association's response will depend on its capacity for such community development activities, the need for such community development activities, and the availability of community development opportunities.

iii. “Needs to Improve” or “Substantial Noncompliance” Intermediate Bank and Savings Association Community Development Test conclusions. The appropriate Federal banking agency assigns an intermediate bank's or savings association'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 or savings association ratings. The appropriate Federal banking agency rates an intermediate bank's or savings association's performance as provided in appendix D to this part.

[89 FR 7165, Feb. 1, 2024, as amended at 89 FR 7171, Feb. 1, 2024]

(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.

At least 30 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 [email protected] 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 30 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 [email protected] 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.]

[89 FR 7171, Feb. 1, 2024]

Note:

The content of this appendix reproduces part 25 implementing the Community Reinvestment Act as of March 31, 2024. Cross-references to CFR parts (as well as to included sections, subparts, and appendices) in this appendix are to those provisions as contained within this appendix and the CFR as of March 31, 2024.

Subpart A—General

§ 25.11 Authority, purposes, and scope.

(a) Authority and OMspan control number—(1) Authority. The authority for subparts A, span, C, D, and E 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)(span).

(2) OMspan control number. The information collection requirements contained in this part were approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMspan control number 1557-0160.

(b) Purposes. In enacting the Community Reinvestment Act (CRA), the Congress required each appropriate Federal financial supervisory agency to assess an institution's record of helping to meet the credit needs of the local communities in which the institution is chartered, consistent with the safe and sound operation of the institution, and to take this record into account in the agency's evaluation of an application for a deposit facility by the institution. This part is intended to carry out the purposes of the CRA by:

(1) Establishing the framework and criteria by which the Office of the Comptroller of the Currency (OCC) or the Federal Deposit Insurance Corporation (FDIC), as appropriate, assesses a bank's or savings association's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank or savings association; and

(2) Providing that the OCC takes that record into account in considering certain applications.

(c) Scope—(1) General. (i) Subparts A, span, C, and D, and Appendices A and span, apply to all banks and savings associations except as provided in paragraphs (c)(2) and (3) of this section. Subpart E only applies to banks.

(ii) With respect to subparts A, span, C, and D, and Appendices A and span—

(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.

(span) The FDIC has the authority to enforce these regulations for State savings associations.

(iii) With respect to subparts A, span, C, and D, and appendix A, 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 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.

§ 25.12 Definitions.

For purposes of subparts A, span, C, and D, and appendices A and span, of this part, the following definitions apply:

(a) Affiliate means any company that controls, is controlled by, or is under common control with another company. The term “control” has the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company is under common control with another company if both companies are directly or indirectly controlled by the same company.

(b) Area median income means:

(1) The median family income for the MSA, if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions; or

(2) The statewide nonmetropolitan median family income, if a person or geography is located outside an MSA.

(c) Assessment area means a geographic area delineated in accordance with § 25.41.

(d) Automated teller machine (ATM) means an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank or savings association at which deposits are received, cash dispersed, or money lent.

(e)(1) Bank or savings association means, except as provided in § 25.11(c), a national bank (including a Federal branch as defined in part 28 of this chapter) with Federally insured deposits or a savings association;

(2) Bank and savings association means, except as provided in § 25.11(c), a national bank (including a Federal branch as defined in part 28 of this chapter) with Federally insured deposits and a savings association.

(f) Branch means a staffed banking facility authorized as a branch, whether shared or unshared, including, for example, a mini-branch in a grocery store or a branch operated in conjunction with any other local business or nonprofit organization.

(g) Community development means:

(1) Affordable housing (including multifamily rental housing) for low- or moderate-income individuals;

(2) Community services targeted to low- or moderate-income individuals;

(3) Activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration's Development Company or Small Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or

(4) Activities that revitalize or stabilize—

(i) Low-or moderate-income geographies;

(ii) Designated disaster areas; or

(iii) Distressed or underserved nonmetropolitan middle-income geographies designated by the Board of Governors of the Federal Reserve System, FDIC, and the OCC, based on—

(A) Rates of poverty, unemployment, and population loss; or

(span) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals.

(h) Community development loan means a loan that:

(1) Has as its primary purpose community development; and

(2) Except in the case of a wholesale or limited purpose bank or savings association:

(i) Has not been reported or collected by the bank or savings association or an affiliate for consideration in the bank's or savings association's assessment as a home mortgage, small business, small farm, or consumer loan, unless the loan is for a multifamily dwelling (as defined in § 1003.2(n) of this title); and

(ii) Benefits the bank's or savings association's assessment area(s) or a broader statewide or regional area(s) that includes the bank's or savings association's assessment area(s).

(i) Community development service means a service that:

(1) Has as its primary purpose community development;

(2) Is related to the provision of financial services; and

(3) Has not been considered in the evaluation of the bank's or savings association's retail banking services under § 25.24(d).

(j) Consumer loan means a loan to one or more individuals for household, family, or other personal expenditures. A consumer loan does not include a home mortgage, small business, or small farm loan. Consumer loans include the following categories of loans:

(1) Motor vehicle loan, which is a consumer loan extended for the purchase of and secured by a motor vehicle;

(2) Credit card loan, which is a line of credit for household, family, or other personal expenditures that is accessed by a borrower's use of a “credit card,” as this term is defined in § 1026.2 of this title;

(3) Other secured consumer loan, which is a secured consumer loan that is not included in one of the other categories of consumer loans; and

(4) Other unsecured consumer loan, which is an unsecured consumer loan that is not included in one of the other categories of consumer loans.

(k) Geography means a census tract delineated by the United States Bureau of the Census in the most recent decennial census.

(l) Home mortgage loan means a closed-end mortgage loan or an open-end line of credit as these terms are defined under § 1003.2 of this title, and that is not an excluded transaction under § 1003.3(c)(1) through (10) and (13) of this title.

(m) Income level includes:

(1) Low-income, which means an individual income that is less than 50 percent of the area median income, or a median family income that is less than 50 percent, in the case of a geography.

(2) Moderate-income, which means an individual income that is at least 50 percent and less than 80 percent of the area median income, or a median family income that is at least 50 and less than 80 percent, in the case of a geography.

(3) Middle-income, which means an individual income that is at least 80 percent and less than 120 percent of the area median income, or a median family income that is at least 80 and less than 120 percent, in the case of a geography.

(4) Upper-income, which means an individual income that is 120 percent or more of the area median income, or a median family income that is 120 percent or more, in the case of a geography.

(n) Limited purpose bank or savings association means a bank or savings association that offers only a narrow product line (such as credit card or motor vehicle loans) to a regional or broader market and for which a designation as a limited purpose bank or savings association is in effect, in accordance with § 25.25(b).

(o) Loan location. A loan is located as follows:

(1) A consumer loan is located in the geography where the borrower resides;

(2) A home mortgage loan is located in the geography where the property to which the loan relates is located; and

(3) A small business or small farm loan is located in the geography where the main business facility or farm is located or where the loan proceeds otherwise will be applied, as indicated by the borrower.

(p) Loan production office means a staffed facility, other than a branch, that is open to the public and that provides lending-related services, such as loan information and applications.

(q) Metropolitan division means a metropolitan division as defined by the Director of the Office of Management and Budget.

(r) MSA means a metropolitan statistical area as defined by the Director of the Office of Management and Budget.

(s) Nonmetropolitan area means any area that is not located in an MSA.

(t) Qualified investment means a lawful investment, deposit, membership share, or grant that has as its primary purpose community development.

(u) Small bank or savings association—(1) Definition. Small bank or savings association means a bank or savings association that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion. Intermediate small bank or savings association means a small bank or savings association with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years.

(2) Adjustment. The dollar figures in paragraph (u)(1) of this section shall be adjusted annually and published by the appropriate Federal banking 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 twelve-month period ending in November, with rounding to the nearest million.

(v) Small business loan means a loan included in “loans to small businesses” as defined in the instructions for preparation of the Consolidated Report of Condition and Income.

(w) Small farm loan means a loan included in “loans to small farms” as defined in the instructions for preparation of the Consolidated Report of Condition and Income.

(x) Wholesale bank or savings association means a bank or savings association that is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers, and for which a designation as a wholesale bank or savings association is in effect, in accordance with § 25.25(b).

Subpart span—Standards for Assessing Performance

§ 25.21 Performance tests, standards, and ratings, in general.

(a) Performance tests and standards. The appropriate Federal banking agency assesses the CRA performance of a bank or savings association in an examination as follows:

(1) Lending, investment, and service tests. The appropriate Federal banking agency applies the lending, investment, and service tests, as provided in §§ 25.22 through 25.24, in evaluating the performance of a bank or savings association, except as provided in paragraphs (a)(2), (3), and (4) of this section.

(2) Community development test for wholesale or limited purpose banks and savings associations. The appropriate Federal banking agency applies the community development test for a wholesale or limited purpose bank or savings association, as provided in § 25.25, except as provided in paragraph (a)(4) of this section.

(3) Small bank and savings association performance standards. The appropriate Federal banking agency applies the small bank or savings association performance standards as provided in § 25.26 in evaluating the performance of a small bank or savings association or a bank or savings association that was a small bank or savings association during the prior calendar year, unless the bank or savings association elects to be assessed as provided in paragraphs (a)(1), (2), or (4) of this section. The bank or savings association may elect to be assessed as provided in paragraph (a)(1) of this section only if it collects and reports the data required for other banks or savings associations under § 25.42.

(4) Strategic plan. The appropriate Federal banking agency evaluates the performance of a bank or savings association under a strategic plan if the bank or savings association submits, and the appropriate Federal banking agency approves, a strategic plan as provided in § 25.27.

(b) Performance context. The appropriate Federal banking agency applies the tests and standards in paragraph (a) of this section and also considers whether to approve a proposed strategic plan in the context of:

(1) Demographic data on median income levels, distribution of household income, nature of housing stock, housing costs, and other relevant data pertaining to a bank's or savings association's assessment area(s);

(2) Any information about lending, investment, and service opportunities in the bank's or savings association's assessment area(s) maintained by the bank or savings association or obtained from community organizations, state, local, and tribal governments, economic development agencies, or other sources;

(3) The bank's or savings association's product offerings and business strategy as determined from data provided by the bank or savings association;

(4) Institutional capacity and constraints, including the size and financial condition of the bank or savings association, the economic climate (national, regional, and local), safety and soundness limitations, and any other factors that significantly affect the bank's or savings association's ability to provide lending, investments, or services in its assessment area(s);

(5) The bank's or savings association's past performance and the performance of similarly situated lenders;

(6) The bank's or savings association's public file, as described in § 25.43, and any written comments about the bank's or savings association's CRA performance submitted to the bank or savings association or the appropriate Federal banking agency; and

(7) Any other information deemed relevant by the appropriate Federal banking agency.

(c) Assigned ratings. The appropriate Federal banking agency assigns to a bank or savings association one of the following four ratings pursuant to § 25.28 and appendix A of this part: “outstanding”; “satisfactory”; “needs to improve”; or “substantial noncompliance” as provided in 12 U.S.C. 2906(b)(2). The rating assigned by the appropriate Federal banking agency reflects the bank's or savings association's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank or savings association.

(d) Safe and sound operations. This part and the CRA do not require a bank or savings association to make loans or investments or to provide services that are inconsistent with safe and sound operations. To the contrary, the appropriate Federal banking agency anticipates banks and savings associations can meet the standards of this part with safe and sound loans, investments, and services on which the banks and savings associations expect to make a profit. Banks and savings associations are permitted and encouraged to develop and apply flexible underwriting standards for loans that benefit low- or moderate-income geographies or individuals, only if consistent with safe and sound operations.

(e) Low-cost education loans provided to low-income borrowers. In assessing and taking into account the record of a bank or savings association under this part, the appropriate Federal banking agency considers, as a factor, low-cost education loans originated by the bank or savings association to borrowers, particularly in its assessment area(s), who have an individual income that is less than 50 percent of the area median income. For purposes of this paragraph, “low-cost education loans” means any education loan, as defined in section 140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7)) (including a loan under a State or local education loan program), originated by the bank or savings association for a student at an “institution of higher education,” as that term is generally defined in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing regulations published by the U.S. Department of Education, with interest rates and fees no greater than those of comparable education loans offered directly by the U.S. Department of Education. Such rates and fees are specified in section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e).

(f) Activities in cooperation with minority- or women-owned financial institutions and low-income credit unions. In assessing and taking into account the record of a nonminority-owned and nonwomen-owned bank or savings association under this part, the appropriate Federal banking agency considers as a factor capital investment, loan participation, and other ventures undertaken by the bank or savings association in cooperation with minority- and women-owned financial institutions and low-income credit unions. Such activities must help meet the credit needs of local communities in which the minority- and women-owned financial institutions and low-income credit unions are chartered. To be considered, such activities need not also benefit the bank's or savings association's assessment area(s) or the broader statewide or regional area(s) that includes the bank's or savings association's assessment area(s).

§ 25.22 Lending test.

(a) Scope of test. (1) The lending test evaluates a bank's or savings association's record of helping to meet the credit needs of its assessment area(s) through its lending activities by considering a bank's or savings association's home mortgage, small business, small farm, and community development lending. If consumer lending constitutes a substantial majority of a bank's or savings association's business, the appropriate Federal banking agency will evaluate the bank's or savings association's consumer lending in one or more of the following categories: motor vehicle, credit card, other secured, and other unsecured loans. In addition, at a bank's or savings association's option, the appropriate Federal banking agency will evaluate one or more categories of consumer lending, if the bank or savings association has collected and maintained, as required in § 25.42(c)(1), the data for each category that the bank or savings association elects to have the appropriate Federal banking agency evaluate.

(2) The appropriate Federal banking agency considers originations and purchases of loans. The appropriate Federal banking agency will also consider any other loan data the bank or savings association may choose to provide, including data on loans outstanding, commitments and letters of credit.

(3) A bank or savings association may ask the appropriate Federal banking agency to consider loans originated or purchased by consortia in which the bank or savings association participates or by third parties in which the bank or savings association has invested only if the loans meet the definition of community development loans and only in accordance with paragraph (d) of this section. The appropriate Federal banking agency will not consider these loans under any criterion of the lending test except the community development lending criterion.

(b) Performance criteria. The appropriate Federal banking agency evaluates a bank's or savings association's lending performance pursuant to the following criteria:

(1) Lending activity. The number and amount of the bank's or savings association's home mortgage, small business, small farm, and consumer loans, if applicable, in the bank's or savings association's assessment area(s);

(2) Geographic distribution. The geographic distribution of the bank's or savings association's home mortgage, small business, small farm, and consumer loans, if applicable, based on the loan location, including:

(i) The proportion of the bank's or savings association's lending in the bank's or savings association's assessment area(s);

(ii) The dispersion of lending in the bank's or savings association's assessment area(s); and

(iii) The number and amount of loans in low-, moderate-, middle-, and upper-income geographies in the bank's or savings association's assessment area(s);

(3) Borrower characteristics. The distribution, particularly in the bank's or savings association's assessment area(s), of the bank's or savings association's home mortgage, small business, small farm, and consumer loans, if applicable, based on borrower characteristics, including the number and amount of:

(i) Home mortgage loans to low-, moderate-, middle-, and upper-income individuals;

(ii) Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;

(iii) Small business and small farm loans by loan amount at origination; and

(iv) Consumer loans, if applicable, to low-, moderate-, middle-, and upper-income individuals;

(4) Community development lending. The bank's or savings association's community development lending, including the number and amount of community development loans, and their complexity and innovativeness; and

(5) Innovative or flexible lending practices. The bank's or savings association's use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies.

(c) Affiliate lending. (1) At a bank's or savings association's option, the appropriate Federal banking agency will consider loans by an affiliate of the bank or savings association, if the bank or savings association provides data on the affiliate's loans pursuant to § 25.42.

(2) The appropriate Federal banking agency considers affiliate lending subject to the following constraints:

(i) No affiliate may claim a loan origination or loan purchase if another institution claims the same loan origination or purchase; and

(ii) If a bank or savings association elects to have the appropriate Federal banking agency consider loans within a particular lending category made by one or more of the bank's or savings association's affiliates in a particular assessment area, the bank or savings association shall elect to have the appropriate Federal banking agency consider, in accordance with paragraph (c)(1) of this section, all the loans within that lending category in that particular assessment area made by all of the bank's or savings association's affiliates.

(3) The appropriate Federal banking agency does not consider affiliate lending in assessing a bank's or savings association's performance under paragraph (b)(2)(i) of this section.

(d) Lending by a consortium or a third party. Community development loans originated or purchased by a consortium in which the bank or savings association participates or by a third party in which the bank or savings association has invested:

(1) Will be considered, at the bank's or savings association's option, if the bank or savings association reports the data pertaining to these loans under § 25.42(b)(2); and

(2) May be allocated among participants or investors, as they choose, for purposes of the lending test, except that no participant or investor:

(i) May claim a loan origination or loan purchase if another participant or investor claims the same loan origination or purchase; or

(ii) May claim loans accounting for more than its percentage share (based on the level of its participation or investment) of the total loans originated by the consortium or third party.

(e) Lending performance rating. The appropriate Federal banking agency rates a bank's or savings association's lending performance as provided in appendix A of this part.

§ 25.23 Investment test.

(a) Scope of test. The investment test evaluates a bank's or savings association's record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader statewide or regional area that includes the bank's or savings association's assessment area(s).

(b) Exclusion. Activities considered under the lending or service tests may not be considered under the investment test.

(c) Affiliate investment. At a bank's or savings association's option, the appropriate Federal banking agency will consider, in its assessment of a bank's or savings association's investment performance, a qualified investment made by an affiliate of the bank or savings association, if the qualified investment is not claimed by any other institution.

(d) Disposition of branch premises. Donating, selling on favorable terms, or making available on a rent-free basis a branch of the bank or savings association that is located in a predominantly minority neighborhood to a minority depository institution or women's depository institution (as these terms are defined in 12 U.S.C. 2907(b)) will be considered as a qualified investment.

(e) Performance criteria. The appropriate Federal banking agency evaluates the investment performance of a bank or savings association pursuant to the following criteria:

(1) The dollar amount of qualified investments;

(2) The innovativeness or complexity of qualified investments;

(3) The responsiveness of qualified investments to credit and community development needs; and

(4) The degree to which the qualified investments are not routinely provided by private investors.

(f) Investment performance rating. The appropriate Federal banking agency rates a bank's or savings association's investment performance as provided in appendix A of this part.

§ 25.24 Service test.

(a) Scope of test. The service test evaluates a bank's or savings association's record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of a bank's or savings association's systems for delivering retail banking services and the extent and innovativeness of its community development services.

(b) Area(s) benefitted. Community development services must benefit a bank's or savings association's assessment area(s) or a broader statewide or regional area that includes the bank's or savings association's assessment area(s).

(c) Affiliate service. At a bank's or savings association's option, the appropriate Federal banking agency will consider, in its assessment of a bank's or savings association's service performance, a community development service provided by an affiliate of the bank or savings association, if the community development service is not claimed by any other institution.

(d) Performance criteria—retail banking services. The appropriate Federal banking agency evaluates the availability and effectiveness of a bank's or savings association's systems for delivering retail banking services, pursuant to the following criteria:

(1) The current distribution of the bank's or savings association's branches among low-, moderate-, middle-, and upper-income geographies;

(2) In the context of its current distribution of the bank's or savings association's branches, the bank's or savings association's record of opening and closing branches, particularly branches located in low- or moderate-income geographies or primarily serving low- or moderate-income individuals;

(3) The availability and effectiveness of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank or savings association, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs) in low- and moderate-income geographies and to low- and moderate-income individuals; and

(4) The range of services provided in low-, moderate-, middle-, and upper-income geographies and the degree to which the services are tailored to meet the needs of those geographies.

(e) Performance criteria—community development services. The appropriate Federal banking agency evaluates community development services pursuant to the following criteria:

(1) The extent to which the bank or savings association provides community development services; and

(2) The innovativeness and responsiveness of community development services.

(f) Service performance rating. The appropriate Federal banking agency rates a bank's or savings association's service performance as provided in appendix A of this part.

§ 25.25 Community development test for wholesale or limited purpose banks and savings associations.

(a) Scope of test. The appropriate Federal banking agency assesses a wholesale or limited purpose bank's or savings association's record of helping to meet the credit needs of its assessment area(s) under the community development test through its community development lending, qualified investments, or community development services.

(b) Designation as a wholesale or limited purpose bank or savings association. In order to receive a designation as a wholesale or limited purpose bank or savings association, a bank or savings association shall file a request, in writing, with the appropriate Federal banking agency, at least three months prior to the proposed effective date of the designation. If the appropriate Federal banking agency approves the designation, it remains in effect until the bank or savings association requests revocation of the designation or until one year after the appropriate Federal banking agency notifies the bank or savings association that it has revoked the designation on its own initiative.

(c) Performance criteria. The appropriate Federal banking agency evaluates the community development performance of a wholesale or limited purpose bank or savings association pursuant to the following criteria:

(1) The number and amount of community development loans (including originations and purchases of loans and other community development loan data provided by the bank or savings association, such as data on loans outstanding, commitments, and letters of credit), qualified investments, or community development services;

(2) The use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and

(3) The bank's or savings association's responsiveness to credit and community development needs.

(d) Indirect activities. At a bank's or savings association's option, the appropriate Federal banking agency will consider in its community development performance assessment:

(1) Qualified investments or community development services provided by an affiliate of the bank or savings association, if the investments or services are not claimed by any other institution; and

(2) Community development lending by affiliates, consortia and third parties, subject to the requirements and limitations in § 25.22(c) and (d).

(e) Benefit to assessment area(s)—(1) Benefit inside assessment area(s). The appropriate Federal banking agency considers all qualified investments, community development loans, and community development services that benefit areas within the bank's or savings association's assessment area(s) or a broader statewide or regional area that includes the bank's or savings association's assessment area(s).

(2) Benefit outside assessment area(s). The appropriate Federal banking agency considers the qualified investments, community development loans, and community development services that benefit areas outside the bank's or savings association's assessment area(s), if the bank or savings association has adequately addressed the needs of its assessment area(s).

(f) Community development performance rating. The appropriate Federal banking agency rates a bank's or savings association's community development performance as provided in appendix A of this part.

§ 25.26 Small bank and savings association performance standards.

(a) Performance criteria—(1) Small banks and savings associations that are not intermediate small banks or savings associations. The appropriate Federal banking agency evaluates the record of a small bank or savings association that is not, or that was not during the prior calendar year, an intermediate small bank or savings association, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraph (b) of this section.

(2) Intermediate small banks and savings associations. The appropriate Federal banking agency evaluates the record of a small bank or savings association that is, or that was during the prior calendar year, an intermediate small bank or savings association, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraphs (b) and (c) of this section.

(b) Lending test. A small bank's or savings association's lending performance is evaluated pursuant to the following criteria:

(1) The bank's or savings association's loan-to-deposit ratio, adjusted for seasonal variation, and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans, or qualified investments;

(2) The percentage of loans and, as appropriate, other lending-related activities located in the bank's or savings association's assessment area(s);

(3) The bank's or savings association's record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes;

(4) The geographic distribution of the bank's or savings association's loans; and

(5) The bank's or savings association's record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s).

(c) Community development test. An intermediate small bank's or savings association's community development performance also is evaluated pursuant to the following criteria:

(1) The number and amount of community development loans;

(2) The number and amount of qualified investments;

(3) The extent to which the bank or savings association provides community development services; and

(4) The bank's or savings association's responsiveness through such activities to community development lending, investment, and services needs.

(d) Small bank or savings association performance rating. The appropriate Federal banking agency rates the performance of a bank or savings association evaluated under this section as provided in appendix A of this part.

§ 25.27 Strategic plan.

(a) Alternative election. The appropriate Federal banking agency will assess a bank's or savings association's record of helping to meet the credit needs of its assessment area(s) under a strategic plan if:

(1) The bank or savings association has submitted the plan to the appropriate Federal banking agency as provided for in this section;

(2) The appropriate Federal banking agency has approved the plan;

(3) The plan is in effect; and

(4) The bank or savings association has been operating under an approved plan for at least one year.

(b) Data reporting. The appropriate Federal banking agency's approval of a plan does not affect the bank's or savings association's obligation, if any, to report data as required by § 25.42.

(c) Plans in general—(1) Term. A plan may have a term of no more than five years, and any multi-year plan must include annual interim measurable goals under which the appropriate Federal banking agency will evaluate the bank's or savings association's performance.

(2) Multiple assessment areas. A bank or savings association with more than one assessment area may prepare a single plan for all of its assessment areas or one or more plans for one or more of its assessment areas.

(3) Treatment of affiliates. Affiliated institutions may prepare a joint plan if the plan provides measurable goals for each institution. Activities may be allocated among institutions at the institutions' option, provided that the same activities are not considered for more than one institution.

(d) Public participation in plan development. Before submitting a plan to the appropriate Federal banking agency for approval, a bank or savings association shall:

(1) Informally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan;

(2) Once the bank or savings association has developed a plan, formally solicit public comment on the plan for at least 30 days by publishing notice in at least one newspaper of general circulation in each assessment area covered by the plan; and

(3) During the period of formal public comment, make copies of the plan available for review by the public at no cost at all offices of the bank or savings association in any assessment area covered by the plan and provide copies of the plan upon request for a reasonable fee to cover copying and mailing, if applicable.

(e) Submission of plan. The bank or savings association shall submit its plan to the appropriate Federal banking agency at least three months prior to the proposed effective date of the plan. The bank or savings association shall also submit with its plan a description of its informal efforts to seek suggestions from members of the public, any written public comment received, and, if the plan was revised in light of the comment received, the initial plan as released for public comment.

(f) Plan content—(1) Measurable goals. (i) A bank or savings association shall specify in its plan measurable goals for helping to meet the credit needs of each assessment area covered by the plan, particularly the needs of low- and moderate-income geographies and low- and moderate-income individuals, through lending, investment, and services, as appropriate.

(ii) A bank or savings association shall address in its plan all three performance categories and, unless the bank or savings association has been designated as a wholesale or limited purpose bank or savings association, shall emphasize lending and lending-related activities. Nevertheless, a different emphasis, including a focus on one or more performance categories, may be appropriate if responsive to the characteristics and credit needs of its assessment area(s), considering public comment and the bank's or savings association's capacity and constraints, product offerings, and business strategy.

(2) Confidential information. A bank or savings association may submit additional information to the appropriate Federal banking agency on a confidential basis, but the goals stated in the plan must be sufficiently specific to enable the public and the appropriate Federal banking agency to judge the merits of the plan.

(3) Satisfactory and outstanding goals. A bank or savings association shall specify in its plan measurable goals that constitute “satisfactory” performance. A plan may specify measurable goals that constitute “outstanding” performance. If a bank or savings association submits, and the appropriate Federal banking agency approves, both “satisfactory” and “outstanding” performance goals, the appropriate Federal banking agency will consider the bank or savings association eligible for an “outstanding” performance rating.

(4) Election if satisfactory goals not substantially met. A bank or savings association may elect in its plan that, if the bank or savings association fails to meet substantially its plan goals for a satisfactory rating, the appropriate Federal banking agency will evaluate the bank's or savings association's performance under the lending, investment, and service tests, the community development test, or the small bank or savings association performance standards, as appropriate.

(g) Plan approval—(1) Timing. The appropriate Federal banking agency will act upon a plan within 60 calendar days after the appropriate Federal banking agency receives the complete plan and other material required under paragraph (e) of this section. If the appropriate Federal banking agency fails to act within this time period, the plan shall be deemed approved unless the appropriate Federal banking agency extends the review period for good cause.

(2) Public participation. In evaluating the plan's goals, the appropriate Federal banking agency considers the public's involvement in formulating the plan, written public comment on the plan, and any response by the bank or savings association to public comment on the plan.

(3) Criteria for evaluating plan. The appropriate Federal banking agency evaluates a plan's measurable goals using the following criteria, as appropriate:

(i) The extent and breadth of lending or lending-related activities, including, as appropriate, the distribution of loans among different geographies, businesses and farms of different sizes, and individuals of different income levels, the extent of community development lending, and the use of innovative or flexible lending practices to address credit needs;

(ii) The amount and innovativeness, complexity, and responsiveness of the bank's or savings association's qualified investments; and

(iii) The availability and effectiveness of the bank's or savings association's systems for delivering retail banking services and the extent and innovativeness of the bank's or savings association's community development services.

(h) Plan amendment. During the term of a plan, a bank or savings association may request the appropriate Federal banking agency to approve an amendment to the plan on grounds that there has been a material change in circumstances. The bank or savings association shall develop an amendment to a previously approved plan in accordance with the public participation requirements of paragraph (d) of this section.

(i) Plan assessment. The appropriate Federal banking agency approves the goals and assesses performance under a plan as provided for in appendix A of this part.

§ 25.28 Assigned ratings.

(a) Ratings in general. Subject to paragraphs (b) and (c) of this section, the appropriate Federal banking agency assigns to a bank or savings association a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial noncompliance” based on the bank's or savings association's performance under the lending, investment and service tests, the community development test, the small bank or savings association performance standards, or an approved strategic plan, as applicable.

(b) Lending, investment, and service tests. The appropriate Federal banking agency assigns a rating for a bank or savings association assessed under the lending, investment, and service tests in accordance with the following principles:

(1) A bank or savings association that receives an “outstanding” rating on the lending test receives an assigned rating of at least “satisfactory”;

(2) A bank or savings association that receives an “outstanding” rating on both the service test and the investment test and a rating of at least “high satisfactory” on the lending test receives an assigned rating of “outstanding”; and

(3) No bank or savings association may receive an assigned rating of “satisfactory” or higher unless it receives a rating of at least “low satisfactory” on the lending test.

(c) Effect of evidence of discriminatory or other illegal credit practices. (1) The appropriate Federal banking agency's evaluation of a bank's or savings association's CRA performance is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the bank or savings association or in any assessment area by any affiliate whose loans have been considered as part of the bank's or savings association's lending performance. In connection with any type of lending activity described in § 25.22(a), evidence of discriminatory or other credit practices that violate an applicable law, rule, or regulation includes, but is not limited to:

(i) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act;

(ii) Violations of the Home Ownership and Equity Protection Act;

(iii) Violations of section 5 of the Federal Trade Commission Act;

(iv) Violations of section 8 of the Real Estate Settlement Procedures Act; and

(v) Violations of the Truth in Lending Act provisions regarding a consumer's right of rescission.

(2) In determining the effect of evidence of practices described in paragraph (c)(1) of this section on the bank's or savings association's assigned rating, the appropriate Federal banking agency considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the bank or savings association (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the bank or savings association (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from self-assessment; and any other relevant information.

§ 25.29 Effect of CRA performance on applications.

(a) CRA performance. Among other factors, the appropriate Federal banking agency takes into account the record of performance under the CRA of each applicant 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)); and

(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.

Subpart C—Records, Reporting, and Disclosure Requirements

§ 25.41 Assessment area delineation.

(a) In general. A bank or savings association shall delineate one or more assessment areas within which the appropriate Federal banking agency evaluates the bank's or savings association's record of helping to meet the credit needs of its community. The appropriate Federal banking agency does not evaluate the bank's or savings association's delineation of its assessment area(s) as a separate performance criterion, but the appropriate Federal banking agency reviews the delineation for compliance with the requirements of this section.

(b) Geographic area(s) for wholesale or limited purpose banks or savings associations. The assessment area(s) for a wholesale or limited purpose bank or savings association must consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns, in which the bank or savings association has its main office, branches, and deposit-taking ATMs.

(c) Geographic area(s) for other banks and savings association. The assessment area(s) for a bank or savings association other than a wholesale or limited purpose bank or savings association must:

(1) Consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns; and

(2) Include the geographies in which the bank or savings association has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding geographies in which the bank or savings association has originated or purchased a substantial portion of its loans (including home mortgage loans, small business and small farm loans, and any other loans the bank or savings association chooses, such as those consumer loans on which the bank or savings association elects to have its performance assessed).

(d) Adjustments to geographic area(s). A bank or savings association may adjust the boundaries of its assessment area(s) to include only the portion of a political subdivision that it reasonably can be expected to serve. An adjustment is particularly appropriate in the case of an assessment area that otherwise would be extremely large, of unusual configuration, or divided by significant geographic barriers.

(e) Limitations on the delineation of an assessment area. Each bank's or savings associations assessment area(s):

(1) Must consist only of whole geographies;

(2) May not reflect illegal discrimination;

(3) May not arbitrarily exclude low- or moderate-income geographies, taking into account the bank's or savings association's size and financial condition; and

(4) May not extend substantially beyond an MSA boundary or beyond a state boundary unless the assessment area is located in a multistate MSA. If a bank or savings association serves a geographic area that extends substantially beyond a state boundary, the bank or savings association shall delineate separate assessment areas for the areas in each state. If a bank or savings association serves a geographic area that extends substantially beyond an MSA boundary, the bank or savings association shall delineate separate assessment areas for the areas inside and outside the MSA.

(f) Banks and savings association serving military personnel. Notwithstanding the requirements of this section, a bank or savings association whose business predominantly consists of serving the needs of military personnel or their dependents who are not located within a defined geographic area may delineate its entire deposit customer base as its assessment area.

(g) Use of assessment area(s). The appropriate Federal banking agency uses the assessment area(s) delineated by a bank or savings association in its evaluation of the bank's or savings association's CRA performance unless the appropriate Federal banking agency determines that the assessment area(s) do not comply with the requirements of this section.

§ 25.42 Data collection, reporting, and disclosure.

(a) Loan information required to be collected and maintained. A bank or savings association, except a small bank or savings association, shall collect, and maintain in machine readable form (as prescribed by the appropriate Federal banking agency) until the completion of its next CRA examination, the following data for each small business or small farm loan originated or purchased by the bank or savings association:

(1) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file;

(2) The loan amount at origination;

(3) The loan location; and

(4) An indicator whether the loan was to a business or farm with gross annual revenues of $1 million or less.

(b) Loan information required to be reported. A bank or savings association, except a small bank or savings association or a bank or savings association that was a small bank or savings association during the prior calendar year, shall report annually by March 1 to the appropriate Federal banking agency in machine readable form (as prescribed by the appropriate Federal banking agency) the following data for the prior calendar year:

(1) Small business and small farm loan data. For each geography in which the bank or savings association originated or purchased a small business or small farm loan, the aggregate number and amount of loans:

(i) With an amount at origination of $100,000 or less;

(ii) With amount at origination of more than $100,000 but less than or equal to $250,000;

(iii) With an amount at origination of more than $250,000; and

(iv) To businesses and farms with gross annual revenues of $1 million or less (using the revenues that the bank or savings association considered in making its credit decision);

(2) Community development loan data. The aggregate number and aggregate amount of community development loans originated or purchased; and

(3) Home mortgage loans. If the bank or savings association is subject to reporting under part 1003 of this title, the location of each home mortgage loan application, origination, or purchase outside the MSAs in which the bank or savings association has a home or branch office (or outside any MSA) in accordance with the requirements of part 1003 of this title.

(c) Optional data collection and maintenance—(1) Consumer loans. A bank or savings association may collect and maintain in machine readable form (as prescribed by the appropriate Federal banking agency) data for consumer loans originated or purchased by the bank or savings association for consideration under the lending test. A bank or savings association may maintain data for one or more of the following categories of consumer loans: Motor vehicle, credit card, other secured, and other unsecured. If the bank or savings association maintains data for loans in a certain category, it shall maintain data for all loans originated or purchased within that category. The bank or savings association shall maintain data separately for each category, including for each loan:

(i) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file;

(ii) The loan amount at origination or purchase;

(iii) The loan location; and

(iv) The gross annual income of the borrower that the bank or savings association considered in making its credit decision.

(2) Other loan data. At its option, a bank or savings association may provide other information concerning its lending performance, including additional loan distribution data.

(d) Data on affiliate lending. A bank or savings association that elects to have the appropriate Federal banking agency consider loans by an affiliate, for purposes of the lending or community development test or an approved strategic plan, shall collect, maintain, and report for those loans the data that the bank or savings association would have collected, maintained, and reported pursuant to paragraphs (a), (b), and (c) of this section had the loans been originated or purchased by the bank or savings association. For home mortgage loans, the bank or savings association shall also be prepared to identify the home mortgage loans reported under part 1003 of this title by the affiliate.

(e) Data on lending by a consortium or a third party. A bank or savings association that elects to have the appropriate Federal banking agency consider community development loans by a consortium or third party, for purposes of the lending or community development tests or an approved strategic plan, shall report for those loans the data that the bank or savings association would have reported under paragraph (b)(2) of this section had the loans been originated or purchased by the bank or savings association.

(f) Small banks and savings associations electing evaluation under the lending, investment, and service tests. A bank or savings association that qualifies for evaluation under the small bank or savings association performance standards but elects evaluation under the lending, investment, and service tests shall collect, maintain, and report the data required for other banks or savings association pursuant to paragraphs (a) and (b) of this section.

(g) Assessment area data. A bank or savings association, except a small bank or savings association or a bank or savings association that was a small bank or savings association during the prior calendar year, shall collect and report to the appropriate Federal banking agency by March 1 of each year a list for each assessment area showing the geographies within the area.

(h) CRA Disclosure Statement. The appropriate Federal banking agency prepares annually for each bank or savings association that reports data pursuant to this section a CRA Disclosure Statement that contains, on a state-by-state basis:

(1) For each county (and for each assessment area smaller than a county) with a population of 500,000 persons or fewer in which the bank or savings association reported a small business or small farm loan:

(i) The number and amount of small business and small farm loans reported as originated or purchased located in low-, moderate-, middle-, and upper-income geographies;

(ii) A list grouping each geography according to whether the geography is low-, moderate-, middle-, or upper-income;

(iii) A list showing each geography in which the bank or savings association reported a small business or small farm loan; and

(iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;

(2) For each county (and for each assessment area smaller than a county) with a population in excess of 500,000 persons in which the bank or savings association reported a small business or small farm loan:

(i) The number and amount of small business and small farm loans reported as originated or purchased located in geographies with median income relative to the area median income of less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more;

(ii) A list grouping each geography in the county or assessment area according to whether the median income in the geography relative to the area median income is less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more;

(iii) A list showing each geography in which the bank or savings association reported a small business or small farm loan; and

(iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;

(3) The number and amount of small business and small farm loans located inside each assessment area reported by the bank or savings association and the number and amount of small business and small farm loans located outside the assessment area(s) reported by the bank or savings association; and

(4) The number and amount of community development loans reported as originated or purchased.

(i) Aggregate disclosure statements. The OCC, in conjunction with the Board of Governors of the Federal Reserve System and the FDIC, prepares annually, for each MSA or metropolitan division (including an MSA or metropolitan division that crosses a state boundary) and the nonmetropolitan portion of each state, an aggregate disclosure statement of small business and small farm lending by all institutions subject to reporting under this part or parts 228 or 345 of this title. These disclosure statements indicate, for each geography, the number and amount of all small business and small farm loans originated or purchased by reporting institutions, except that the appropriate Federal banking agency may adjust the form of the disclosure if necessary, because of special circumstances, to protect the privacy of a borrower or the competitive position of an institution.

(j) Central data depositories. The appropriate Federal banking agency makes the aggregate disclosure statements, described in paragraph (i) of this section, and the individual bank or savings association CRA Disclosure Statements, described in paragraph (h) of this section, available to the public at central data depositories. The appropriate Federal banking agency publishes a list of the depositories at which the statements are available.

§ 25.43 Content and availability of public file.

(a) Information available to the public. A bank or savings association shall maintain a public file that includes the following information:

(1) All written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the bank's or savings association's performance in helping to meet community credit needs, and any response to the comments by the bank or savings association, 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 savings association or publication of which would violate specific provisions of law;

(2) A copy of the public section of the bank's or savings association's most recent CRA Performance Evaluation prepared by the appropriate Federal banking agency. The bank or savings association shall place this copy in the public file within 30 business days after its receipt from the appropriate Federal banking agency;

(3) A list of the bank's or savings association's branches, their street addresses, and geographies;

(4) A list of branches opened or closed by the bank or savings association during the current year and each of the prior two calendar years, their street addresses, and geographies;

(5) A list of services (including hours of operation, available loan and deposit products, and transaction fees) generally offered at the bank's or savings association's branches and descriptions of material differences in the availability or cost of services at particular branches, if any. At its option, a bank or savings association may include information regarding the availability of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank or savings association, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs);

(6) A map of each assessment area showing the boundaries of the area and identifying the geographies contained within the area, either on the map or in a separate list; and

(7) Any other information the bank or savings association chooses.

(b) Additional information available to the public—(1) Banks and savings associations other than small banks or savings associations. A bank or savings association, except a small bank or savings association or a bank or savings association that was a small bank or savings association during the prior calendar year, shall include in its public file the following information pertaining to the bank or savings association and its affiliates, if applicable, for each of the prior two calendar years:

(i) If the bank or savings association has elected to have one or more categories of its consumer loans considered under the lending test, for each of these categories, the number and amount of loans:

(A) To low-, moderate-, middle-, and upper-income individuals;

(span) Located in low-, moderate-, middle-, and upper-income census tracts; and

(C) Located inside the bank's or savings association's assessment area(s) and outside the bank's or savings association's assessment area(s); and

(ii) The bank's or savings association's CRA Disclosure Statement. The bank or savings association shall place the statement in the public file within three business days of its receipt from the appropriate Federal banking agency.

(2) Banks and savings associations required to report Home Mortgage Disclosure Act (HMDA) data. A bank or savings association required to report home mortgage loan data pursuant part 1003 of this title shall include in its public file a written notice that the institution's HMDA Disclosure Statement may be obtained on the Consumer Financial Protection Bureau's (Bureau's) website at www.consumerfinance.gov/hmda. In addition, a bank or savings association that elected to have the appropriate Federal banking agency consider the mortgage lending of an affiliate shall include in its public file the name of the affiliate and a written notice that the affiliate's HMDA Disclosure Statement may be obtained at the Bureau's website. The bank or savings association shall place the written notice(s) in the public file within three business days after receiving notification from the Federal Financial Institutions Examination Council of the availability of the disclosure statement(s).

(3) Small banks and savings associations. A small bank or savings association or a bank or savings association that was a small bank or savings association during the prior calendar year shall include in its public file:

(i) The bank's or savings association's loan-to-deposit ratio for each quarter of the prior calendar year and, at its option, additional data on its loan-to-deposit ratio; and

(ii) The information required for other banks or savings associations by paragraph (b)(1) of this section, if the bank or savings association has elected to be evaluated under the lending, investment, and service tests.

(4) Banks and savings associations with strategic plans. A bank or savings association that has been approved to be assessed under a strategic plan shall include in its public file a copy of that plan. A bank or savings association need not include information submitted to the appropriate Federal banking agency on a confidential basis in conjunction with the plan.

(5) Banks and savings associations with less than satisfactory ratings. A bank or savings association that received a less than satisfactory rating during its most recent examination shall include in its public file a description of its current efforts to improve its performance in helping to meet the credit needs of its entire community. The bank or savings association shall update the description quarterly.

(c) Location of public information. A bank or savings association shall make available to the public for inspection upon request and at no cost the information required in this section as follows:

(1) At the main office and, if an interstate bank or savings association, at one branch office in each state, all information in the public file; and

(2) At each branch:

(i) A copy of the public section of the bank's or savings association's most recent CRA Performance Evaluation and a list of services provided by the branch; and

(ii) Within five calendar days of the request, all the information in the public file relating to the assessment area in which the branch is located.

(d) Copies. Upon request, a bank or savings association shall provide copies, either on paper or in another form acceptable to the person making the request, of the information in its public file. The bank or savings association may charge a reasonable fee not to exceed the cost of copying and mailing (if applicable).

(e) Updating. Except as otherwise provided in this section, a bank or savings association shall ensure that the information required by this section is current as of April 1 of each year.

§ 25.44 Public notice by banks and savings associations.

A bank or savings association shall provide in the public lobby of its main office and each of its branches the appropriate public notice set forth in appendix span of this part. Only a branch of a bank or savings association having more than one assessment area shall include the bracketed material in the notice for branch offices. Only an insured national bank that is an affiliate of a holding company shall include the next to the last sentence of the notices. An insured national bank shall include the last sentence of the notices only if it is an affiliate of a holding company that is not prevented by statute from acquiring additional banks. Only a savings association that is an affiliate of a holding company shall include the last two sentences of the notices.

§ 25.45 Publication of planned examination schedule.

The appropriate Federal banking agency publishes at least 30 days in advance of the beginning of each calendar quarter a list of banks and savings associations scheduled for CRA examinations in that quarter.

Subpart D—Transition Provisions

§ 25.51 Consideration of Bank Activities.

(a) In assessing a bank's CRA performance, the appropriate Federal banking agency will consider any loan, investment, or service that was eligible for CRA consideration at the time the bank conducted the activity.

(b) Notwithstanding paragraph (a), in assessing a bank's CRA performance, the appropriate Federal banking agency will consider any loan or investment that was eligible for CRA consideration at the time the bank entered into a legally binding commitment to make the loan or investment.

§ 25.52 Strategic Plan Retention.

A bank or savings association strategic plan approved by the appropriate Federal banking agency and in effect as of December 31, 2021, remains in effect, except that provisions of the plan that are not consistent with this part in effect as of January 1, 2022, are void, unless amended pursuant to § 25.27.

Subpart E—Prohibition Against Use of Interstate Branches Primarily for Deposit Production

§ 25.61 Purpose and scope.

(a) Purpose. The purpose of this subpart is to implement section 109 (12 U.S.C. 1835a) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).

(b) Scope. (1) This subpart applies to any national bank that has operated a covered interstate branch for a period of at least one year, and any foreign bank that has operated a covered interstate branch that is a Federal branch for a period of at least one year.

(2) This subpart describes the requirements imposed under 12 U.S.C. 1835a, which requires the appropriate Federal banking agencies (the OCC, the Board of Governors of the Federal Reserve System, and the FDIC) to prescribe uniform rules that prohibit a bank from using any authority to engage in interstate branching pursuant to the Interstate Act, or any amendment made by the Interstate Act to any other provision of law, primarily for the purpose of deposit production.

§ 25.62 Definitions.

For purposes of this subpart, the following definitions apply:

(a) Bank means, unless the context indicates otherwise:

(1) A national bank; and

(2) A foreign bank as that term is defined in 12 U.S.C. 3101(7) and 12 CFR 28.11(i).

(b) Covered interstate branch means:

(1) Any branch of a national bank, and any Federal branch of a foreign bank, that:

(i) Is established or acquired outside the bank's home State pursuant to the interstate branching authority granted by the Interstate Act or by any amendment made by the Interstate Act to any other provision of law; or

(ii) Could not have been established or acquired outside of the bank's home State but for the establishment or acquisition of a branch described in paragraph (b)(1)(i) of this section; and

(2) Any bank or branch of a bank controlled by an out-of-State bank holding company.

(c) Federal branch means Federal branch as that term is defined in 12 U.S.C. 3101(6) and 12 CFR 28.11(h).

(d) Home State means:

(1) With respect to a State bank, the State that chartered the bank;

(2) With respect to a national bank, the State in which the main office of the bank is located;

(3) With respect to a bank holding company, the State in which the total deposits of all banking subsidiaries of such company are the largest on the later of:

(i) July 1, 1966; or

(ii) The date on which the company becomes a bank holding company under the Bank Holding Company Act;

(4) With respect to a foreign bank:

(i) For purposes of determining whether a U.S. branch of a foreign bank is a covered interstate branch, the home State of the foreign bank as determined in accordance with 12 U.S.C. 3103(c) and 12 CFR 28.11(n); and

(ii) For purposes of determining whether a branch of a U.S. bank controlled by a foreign bank is a covered interstate branch, the State in which the total deposits of all banking subsidiaries of such foreign bank are the largest on the later of:

(A) July 1, 1966; or

(span) The date on which the foreign bank becomes a bank holding company under the Bank Holding Company Act.

(e) Host State means a State in which a covered interstate branch is established or acquired.

(f) Host state loan-to-deposit ratio generally means, with respect to a particular host state, the ratio of total loans in the host state relative to total deposits from the host state for all banks (including institutions covered under the definition of “bank” in 12 U.S.C. 1813(a)(1)) that have that state as their home state, as determined and updated periodically by the appropriate Federal banking agencies and made available to the public.

(g) Out-of-State bank holding company means, with respect to any State, a bank holding company whose home State is another State.

(h) State means state as that term is defined in 12 U.S.C. 1813(a)(3).

(i) Statewide loan-to-deposit ratio means, with respect to a bank, the ratio of the bank's loans to its deposits in a state in which the bank has one or more covered interstate branches, as determined by the OCC.

§ 25.63 Loan-to-deposit ratio screen.

(a) Application of screen. Beginning no earlier than one year after a covered interstate branch is acquired or established, the OCC will consider whether the bank's statewide loan-to-deposit ratio is less than 50 percent of the relevant host State loan-to-deposit ratio.

(b) Results of screen. (1) If the OCC determines that the bank's statewide loan-to-deposit ratio is 50 percent or more of the host state loan-to-deposit ratio, no further consideration under this subpart is required.

(2) If the OCC determines that the bank's statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, or if reasonably available data are insufficient to calculate the bank's statewide loan-to-deposit ratio, the OCC will make a credit needs determination for the bank as provided in § 25.64.

§ 25.64 Credit needs determination.

(a) In general. The OCC will review the loan portfolio of the bank and determine whether the bank is reasonably helping to meet the credit needs of the communities in the host state that are served by the bank.

(b) Guidelines. The OCC will use the following considerations as guidelines when making the determination pursuant to paragraph (a) of this section:

(1) Whether covered interstate branches were formerly part of a failed or failing depository institution;

(2) Whether covered interstate branches were acquired under circumstances where there was a low loan-to-deposit ratio because of the nature of the acquired institution's business or loan portfolio;

(3) Whether covered interstate branches have a high concentration of commercial or credit card lending, trust services, or other specialized activities, including the extent to which the covered interstate branches accept deposits in the host state;

(4) The CRA ratings received by the bank, if any;

(5) Economic conditions, including the level of loan demand, within the communities served by the covered interstate branches;

(6) The safe and sound operation and condition of the bank; and

(7) The OCC's CRA regulations (subparts A through D of this part) and interpretations of those regulations.

§ 25.65 Sanctions.

(a) In general. If the OCC determines that a bank is not reasonably helping to meet the credit needs of the communities served by the bank in the host state, and that the bank's statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, the OCC:

(1) May order that a bank's covered interstate branch or branches be closed unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank has an acceptable plan under which the bank will reasonably help to meet the credit needs of the communities served by the bank in the host state; and

(2) Will not permit the bank to open a new branch in the host state that would be considered to be a covered interstate branch unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank will reasonably help to meet the credit needs of the community that the new branch will serve.

(b) Notice prior to closure of a covered interstate branch. Before exercising the OCC's authority to order the bank to close a covered interstate branch, the OCC will issue to the bank a notice of the OCC's intent to order the closure and will schedule a hearing within 60 days of issuing the notice.

(c) Hearing. The OCC will conduct a hearing scheduled under paragraph (b) of this section in accordance with the provisions of 12 U.S.C. 1818(h) and 12 CFR part 19.

Appendix A to Part 25—Ratings

(a) Ratings in general. (1) In assigning a rating, the appropriate Federal banking agency evaluates a bank's or savings association's performance under the applicable performance criteria in this part, in accordance with §§ 25.21 and 25.28. This includes consideration of low-cost education loans provided to low-income borrowers and activities in cooperation with minority- or women-owned financial institutions and low-income credit unions, as well as adjustments on the basis of evidence of discriminatory or other illegal credit practices.

(2) A bank's or savings association's performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The bank's or savings association's overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile as follows.

(b) Banks and savings associations evaluated under the lending, investment, and service tests—(1) Lending performance rating. The appropriate Federal banking agency assigns each bank's or savings association's lending performance one of the five following ratings.

(i) Outstanding. The appropriate Federal banking agency rates a bank's or savings association's lending performance “outstanding” if, in general, it demonstrates:

(A) Excellent responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(span) A substantial majority of its loans are made in its assessment area(s);

(C) An excellent geographic distribution of loans in its assessment area(s);

(D) An excellent distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank or savings association;

(E) An excellent record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Extensive use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It is a leader in making community development loans.

(ii) High satisfactory. The appropriate Federal banking agency rates a bank's or savings association's lending performance “high satisfactory” if, in general, it demonstrates:

(A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(span) A high percentage of its loans are made in its assessment area(s);

(C) A good geographic distribution of loans in its assessment area(s);

(D) A good distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank or savings association;

(E) A good record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made a relatively high level of community development loans.

(iii) Low satisfactory. The appropriate Federal banking agency rates a bank's or savings association's lending performance “low satisfactory” if, in general, it demonstrates:

(A) Adequate responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(span) An adequate percentage of its loans are made in its assessment area(s);

(C) An adequate geographic distribution of loans in its assessment area(s);

(D) An adequate distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank or savings association;

(E) An adequate record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Limited use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made an adequate level of community development loans.

(iv) Needs to improve. The appropriate Federal banking agency rates a bank's or savings association's lending performance “needs to improve” if, in general, it demonstrates:

(A) Poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(span) A small percentage of its loans are made in its assessment area(s);

(C) A poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);

(D) A poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank or savings association;

(E) A poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) Little use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made a low level of community development loans.

(v) Substantial noncompliance. The appropriate Federal banking agency rates a bank's or savings association's lending performance as being in “substantial noncompliance” if, in general, it demonstrates:

(A) A very poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);

(span) A very small percentage of its loans are made in its assessment area(s);

(C) A very poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);

(D) A very poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank or savings association;

(E) A very poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;

(F) No use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and

(G) It has made few, if any, community development loans.

(2) Investment performance rating. The appropriate Federal banking agency assigns each bank's or savings association's investment performance one of the five following ratings.

(i) Outstanding. The appropriate Federal banking agency rates a bank's or savings association's investment performance “outstanding” if, in general, it demonstrates:

(A) An excellent level of qualified investments, particularly those that are not routinely provided by private investors, often in a leadership position;

(span) Extensive use of innovative or complex qualified investments; and

(C) Excellent responsiveness to credit and community development needs.

(ii) High satisfactory. The appropriate Federal banking agency rates a bank's or savings association's investment performance “high satisfactory” if, in general, it demonstrates:

(A) A significant level of qualified investments, particularly those that are not routinely provided by private investors, occasionally in a leadership position;

(span) Significant use of innovative or complex qualified investments; and

(C) Good responsiveness to credit and community development needs.

(iii) Low satisfactory. The appropriate Federal banking agency rates a bank's or savings association's investment performance “low satisfactory” if, in general, it demonstrates:

(A) An adequate level of qualified investments, particularly those that are not routinely provided by private investors, although rarely in a leadership position;

(span) Occasional use of innovative or complex qualified investments; and

(C) Adequate responsiveness to credit and community development needs.

(iv) Needs to improve. The appropriate Federal banking agency rates a bank's or savings association's investment performance “needs to improve” if, in general, it demonstrates:

(A) A poor level of qualified investments, particularly those that are not routinely provided by private investors;

(span) Rare use of innovative or complex qualified investments; and

(C) Poor responsiveness to credit and community development needs.

(v) Substantial noncompliance. The appropriate Federal banking agency rates a bank's or savings association's investment performance as being in “substantial noncompliance” if, in general, it demonstrates:

(A) Few, if any, qualified investments, particularly those that are not routinely provided by private investors;

(span) No use of innovative or complex qualified investments; and

(C) Very poor responsiveness to credit and community development needs.

(3) Service performance rating. The appropriate Federal banking agency assigns each bank's or savings association's service performance one of the five following ratings.

(i) Outstanding. The appropriate Federal banking agency rates a bank's or savings association's service performance “outstanding” if, in general, the bank or savings association demonstrates:

(A) Its service delivery systems are readily accessible to geographies and individuals of different income levels in its assessment area(s);

(span) To the extent changes have been made, its record of opening and closing branches has improved the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It is a leader in providing community development services.

(ii) High satisfactory. The appropriate Federal banking agency rates a bank's or savings association's service performance “high satisfactory” if, in general, the bank or savings association demonstrates:

(A) Its service delivery systems are accessible to geographies and individuals of different income levels in its assessment area(s);

(span) To the extent changes have been made, its record of opening and closing branches has not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;

(C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals; and

(D) It provides a relatively high level of community development services.

(iii) Low satisfactory. The appropriate Federal banking agency rates a bank's or savings association's service performance “low satisfactory” if, in general, the bank or savings association demonstrates:

(A) Its service delivery systems are reasonably accessible to geographies and individuals of different income levels in its assessment area(s);

(span) To the extent changes have been made, its record of opening and closing branches has generally not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;

(C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals; and

(D) It provides an adequate level of community development services.

(iv) Needs to improve. The appropriate Federal banking agency rates a bank's or savings association's service performance “needs to improve” if, in general, the bank or savings association demonstrates:

(A) Its service delivery systems are unreasonably inaccessible to portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;

(span) To the extent changes have been made, its record of opening and closing branches has adversely affected the accessibility its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) vary in a way that inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It provides a limited level of community development services.

(v) Substantial noncompliance. The appropriate Federal banking agency rates a bank's or savings association's service performance as being in “substantial noncompliance” if, in general, the bank or savings association demonstrates:

(A) Its service delivery systems are unreasonably inaccessible to significant portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;

(span) To the extent changes have been made, its record of opening and closing branches has significantly adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;

(C) Its services (including, where appropriate, business hours) vary in a way that significantly inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and

(D) It provides few, if any, community development services.

(c) Wholesale or limited purpose banks. The appropriate Federal banking agency assigns each wholesale or limited purpose bank's or savings association's community development performance one of the four following ratings.

(1) Outstanding. The appropriate Federal banking agency rates a wholesale or limited purpose bank's or savings association's community development performance “outstanding” if, in general, it demonstrates:

(i) A high level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Extensive use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Excellent responsiveness to credit and community development needs in its assessment area(s).

(2) Satisfactory. The appropriate Federal banking agency rates a wholesale or limited purpose bank's or savings association's community development performance “satisfactory” if, in general, it demonstrates:

(i) An adequate level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Occasional use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Adequate responsiveness to credit and community development needs in its assessment area(s).

(3) Needs to improve. The appropriate Federal banking agency rates a wholesale or limited purpose bank's or savings association's community development performance as “needs to improve” if, in general, it demonstrates:

(i) A poor level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) Rare use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Poor responsiveness to credit and community development needs in its assessment area(s).

(4) Substantial noncompliance. The appropriate Federal banking agency rates a wholesale or limited purpose bank's or savings association's community development performance in “substantial noncompliance” if, in general, it demonstrates:

(i) Few, if any, community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;

(ii) No use of innovative or complex qualified investments, community development loans, or community development services; and

(iii) Very poor responsiveness to credit and community development needs in its assessment area(s).

(d) Banks and savings associations evaluated under the small bank and savings association performance standards—(1) Lending test ratings. (i) Eligibility for a satisfactory lending test rating. The appropriate Federal banking agency rates a small bank's or savings association's lending performance “satisfactory” if, in general, the bank or savings association demonstrates:

(A) A reasonable loan-to-deposit ratio (considering seasonal variations) given the bank's or savings association's size, financial condition, the credit needs of its assessment area(s), and taking into account, as appropriate, other lending-related activities such as loan originations for sale to the secondary markets and community development loans and qualified investments;

(span) A majority of its loans and, as appropriate, other lending-related activities, are in its assessment area;

(C) A distribution of loans to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the demographics of the bank's or savings association's assessment area(s);

(D) A record of taking appropriate action, when warranted, in response to written complaints, if any, about the bank's or savings association's performance in helping to meet the credit needs of its assessment area(s); and

(E) A reasonable geographic distribution of loans given the bank's or savings association's assessment area(s).

(ii) Eligibility for an “outstanding” lending test rating. A small bank or savings association that meets each of the standards for a “satisfactory” rating under this paragraph and exceeds some or all of those standards may warrant consideration for a lending test rating of “outstanding.”

(iii) Needs to improve or substantial noncompliance ratings. A small bank or savings association may also receive a lending test rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standard for a “satisfactory” rating.

(2) Community development test ratings for intermediate small banks and savings associations—(i) Eligibility for a satisfactory community development test rating. The appropriate Federal banking agency rates an intermediate small bank's or savings association's community development performance “satisfactory” if the bank or savings association demonstrates adequate responsiveness to the community development needs of its assessment area(s) through community development loans, qualified investments, and community development services. The adequacy of the bank's or savings association's response will depend on its capacity for such community development activities, its assessment area's need for such community development activities, and the availability of such opportunities for community development in the bank's or savings association's assessment area(s).

(ii) Eligibility for an outstanding community development test rating. The appropriate Federal banking agency rates an intermediate small bank's or savings association's community development performance “outstanding” if the bank or savings association demonstrates excellent responsiveness to community development needs in its assessment area(s) through community development loans, qualified investments, and community development services, as appropriate, considering the bank's or savings association's capacity and the need and availability of such opportunities for community development in the bank's or savings association's assessment area(s).

(iii) Needs to improve or substantial noncompliance ratings. An intermediate small bank or savings association may also receive a community development test rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standards for a “satisfactory” rating.

(3) Overall rating—(i) Eligibility for a satisfactory overall rating. No intermediate small bank or savings association may receive an assigned overall rating of “satisfactory” unless it receives a rating of at least “satisfactory” on both the lending test and the community development test.

(ii) Eligibility for an outstanding overall rating. (A) An intermediate small bank or savings association that receives an “outstanding” rating on one test and at least “satisfactory” on the other test may receive an assigned overall rating of “outstanding.”

(span) A small bank or savings association that is not an intermediate small bank or savings association that meets each of the standards for a “satisfactory” rating under the lending test and exceeds some or all of those standards may warrant consideration for an overall rating of “outstanding.” In assessing whether a bank's or savings association's performance is “outstanding,” the appropriate Federal banking agency considers the extent to which the bank or savings association exceeds each of the performance standards for a “satisfactory” rating and its performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s).

(iii) Needs to improve or substantial noncompliance overall ratings. A small bank or savings association may also receive a rating of “needs to improve” or “substantial noncompliance” depending on the degree to which its performance has failed to meet the standards for a “satisfactory” rating.

(e) Strategic plan assessment and rating—(1) Satisfactory goals. The appropriate Federal banking agency approves as “satisfactory” measurable goals that adequately help to meet the credit needs of the bank's or savings association's assessment area(s).

(2) Outstanding goals. If the plan identifies a separate group of measurable goals that substantially exceed the levels approved as “satisfactory,” the appropriate Federal banking agency will approve those goals as “outstanding.”

(3) Rating. The appropriate Federal banking agency assesses the performance of a bank or savings association operating under an approved plan to determine if the bank or savings association has met its plan goals:

(i) If the bank or savings association substantially achieves its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the bank's or savings association's performance under the plan as “satisfactory.”

(ii) If the bank or savings association exceeds its plan goals for a satisfactory rating and substantially achieves its plan goals for an outstanding rating, the appropriate Federal banking agency will rate the bank's or savings association's performance under the plan as “outstanding.”

(iii) If the bank or savings association fails to meet substantially its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the bank or savings association as either “needs to improve” or “substantial noncompliance,” depending on the extent to which it falls short of its plan goals, unless the bank or savings association elected in its plan to be rated otherwise, as provided in § 25.27(f)(4).

Appendix span to Part 25—CRA Notice

(a) Notice for main offices and, if an interstate bank and savings association, one branch office in each state.

Community Reinvestment Act Notice

Under the Federal Community Reinvestment Act (CRA), the [Office of the Comptroller of the Currency (OCC) or Federal Deposit Insurance Corporation (FDIC), 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.

At least 30 days before the beginning of each quarter, the [OCC or FDIC, as appropriate] publishes a nationwide list of the banks and savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC or FDIC, as appropriate], at [address]. You may send written comments about our performance in helping to meet community credit needs to [name and address of official at bank or savings association] and to the [OCC or FDIC, as appropriate], at [address]. Your letter, 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, as appropriate]. You may also request from the [OCC or FDIC, 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 or savings and loan holding company, as appropriate]. You may request from the [title of responsible official], Federal Reserve Bank of [__] [address] an announcement of applications covered by the CRA filed by [bank holding companies or savings and loan holding companies, as appropriate].

(b) Notice for branch offices.

Community Reinvestment Act Notice

Under the Federal Community Reinvestment Act (CRA), the [Comptroller of the Currency (OCC) and 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 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 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 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 or savings association, as appropriate] is available at [name of office located in state], located at [address].]

At least 30 days before the beginning of each quarter, the [OCC or FDIC, as appropriate] publishes a nationwide list of the banks and savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC or FDIC, as appropriate] at [address]. You may send written comments about our performance in helping to meet community credit needs to [name and address of official at bank or savings association, as appropriate] and to the [OCC or FDIC, as appropriate] at [address]. Your letter, 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, as appropriate]. You may also request from the [OCC or FDIC, 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 or savings and loan holding company, as appropriate]. You may request from the [title of responsible official], Federal Reserve Bank of [__], [address], an announcement of applications covered by the CRA filed by [bank holding companies or savings and loan holding companies, as appropriate].

[89 FR 7172, Feb. 1, 2024] Effective Date Note:At 89 FR 7172, Feb. 1, 2024, appendix G to part 25 was added, effective until Jan. 1, 2031.