Community Reinvestment Act Regulations, 52026-52063 [2021-19738]

Download as PDF 52026 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Parts 25 and 195 [Docket ID OCC–2021–0014] RIN 1557–AF12 Community Reinvestment Act Regulations Office of the Comptroller of the Currency, Treasury. ACTION: Notice of proposed rulemaking. AGENCY: The Comptroller of the Currency proposes to replace the current Community Reinvestment Act rule with rules based on the 1995 Community Reinvestment Act (CRA) rules, as revised, issued by the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC). The proposal would replace the existing rule applicable to both national banks and savings associations with two separate rules, one for national banks and one for savings associations. Such action would effectively rescind the CRA final rule published by the Office of the Comptroller of the Currency on June 5, 2020, and facilitate the issuance of joint CRA rules with the Board and FDIC. DATES: Comments must be received on or before October 29, 2021. ADDRESSES: Commenters are encouraged to submit comments through the Federal eRulemaking Portal. Please use the title ‘‘Community Reinvestment Act Regulations’’ to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: b Federal eRulemaking Portal— Regulations.gov: Go to https:// regulations.gov/. Enter ‘‘Docket ID OCC– 2021–0014’’ in the Search Box and click ‘‘Search.’’ Public comments can be submitted via the ‘‘Comment’’ box below the displayed document information or by clicking on the document title and then clicking the ‘‘Comment’’ box on the top-left side of the screen. For help with submitting effective comments please click on ‘‘Commenter’s Checklist.’’ For assistance with the Regulations.gov site, please call (877) 378–5457 (toll free) or (703) 454–9859 Monday–Friday, 9am– 5pm ET or email regulations@ erulemakinghelpdesk.com. b Mail: Chief Counsel’s Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 SUMMARY: VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 7th Street SW, Suite 3E–218, Washington, DC 20219. b Hand Delivery/Courier: 400 7th Street SW, Suite 3E–218, Washington, DC 20219. Instructions: You must include ‘‘OCC’’ as the agency name and ‘‘Docket ID OCC–2021–0014’’ in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information provided, such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this action by the following method: b Viewing Comments Electronically—Regulations.gov: Go to https://regulations.gov/. Enter ‘‘Docket ID OCC–2021–0014’’ in the Search Box and click ‘‘Search.’’ Click on the ‘‘Documents’’ tab and then the document’s title. After clicking the document’s title, click the ‘‘Browse Comments’’ tab. Comments can be viewed and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Results’’ options on the left side of the screen. Supporting materials can be viewed by clicking on the ‘‘Documents’’ tab and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Documents Results’’ options on the left side of the screen.’’ For assistance with the Regulations.gov site, please call (877) 378–5457 (toll free) or (703) 454–9859 Monday–Friday, 9am–5pm ET or email regulations@erulemakinghelpdesk.com. The docket may be viewed after the close of the comment period in the same manner as during the comment period. FOR FURTHER INFORMATION CONTACT: Emily Boyes, Counsel, Chief Counsel’s Office, (202) 649–5490; Vonda Eanes, Director for CRA and Fair Lending Policy, Bobbie K. Kennedy, Technical Expert for CRA and Fair Lending, or Karen Bellesi, Director for Community Development, Bank Supervision Policy, (202) 649–5470, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 I. Introduction The Office of the Comptroller of the Currency (OCC) 1 proposes to rescind and replace its rule implementing the Community Reinvestment Act (CRA) 2 for national banks and savings associations 3 (collectively, banks),4 that was published on June 5, 2020 (June 2020 Rule).5 The OCC would replace the June 2020 Rule with rules largely based on those adopted by the OCC, Federal Deposit Insurance Corporation (FDIC), and Board of Governors of the Federal Reserve System (Board) (collectively, the Agencies) and the former Office of Thrift Supervision on May 4, 1995, as revised (1995 Rules).6 The proposal would align the OCC’s CRA rules with the current Board and FDIC CRA rules to facilitate on-going interagency work to modernize the CRA rules 7 and create consistency for all insured depository institutions (IDIs).8 As explained in greater detail below, under this proposal, the June 2020 Rule would remain in effect until replaced by 1 The OCC is the primary regulator for national banks and Federal savings associations. 2 Public Law 95–128, 91 Stat. 1147 (1977), codified at 12 U.S.C. 2901 et seq. The CRA was enacted to promote access to credit by encouraging insured depository institutions to serve their entire communities. During this period, Congress also enacted fair lending laws to address fairness and access to housing and credit. For example, in 1968, Congress passed the Fair Housing Act, 42 U.S.C. 3601 et seq., to prohibit discrimination in renting or buying a home. In 1974, Congress passed the Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq. (amended in 1976), to prohibit creditors from discriminating against an applicant on the basis of race, color, religion, national origin, sex, marital status, or age. These fair lending laws provide a legal basis for prohibiting discriminatory lending practices, such as redlining. Interagency Fair Lending Examination Procedures, p. iv (Aug. 2009), available at https://www.ffiec.gov/PDF/fairlend.pdf. 3 The Office of Thrift Supervision (OTS) and its predecessor agency, the Federal Home Loan Bank Board, also were charged with implementing the CRA. The rulemaking authority of OTS with respect to CRA transferred to the OCC in Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376, 1520 (2010). See also 12 U.S.C. 2905. The OCC has responsibility for examining Federal savings associations for CRA while the FDIC examines State savings associations for CRA. 4 As used throughout this notice, the term ‘‘bank’’ or ‘‘banks’ also includes uninsured Federal branches that result from an acquisition described in section 5(a)(8) of the International Banking Act of 1978 (12 U.S.C. 3103(a)(8)) and State savings associations. 5 85 FR 34734 (June 5, 2020). 6 60 FR 22156 (May 4, 1995). As used herein, the 1995 Rules refer to the regulatory framework adopted by the Agencies in 1995 and any revisions the Agencies have made to that regulatory framework, except for the changes made by the OCC in the June 2020 Rule. E.g., 70 FR 44256 (Aug. 2, 2005). 7 NR 2021–77, Interagency Statement on Community Reinvestment Act Joint Agency Action (July 20, 2021). 8 12 U.S.C. 1813(c)(2). E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules final rules based on this proposal. The OCC proposes to apply a transition for replacing certain aspects of the June 2020 Rule (e.g., bank type changes, approved strategic plans, and qualifying activities). Subsequently, as part of the ongoing interagency CRA rulemaking, the OCC would propose a joint revised CRA rule to replace the rules in this proposal. The proposed transition considerations are described in more detail in Section IV. II. Background Congress enacted the CRA in 1977 to encourage IDIs to help meet the credit needs of their entire communities, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound lending practices. Specifically, Congress found that ‘‘(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business; (2) the convenience and needs of communities include the need for credit as well as deposit services; and (3) regulated financial institutions have continuing and affirmative obligation[s] to help meet the credit needs of the local communities in which they are chartered.’’ 9 The Agencies first issued rules to implement the CRA in 1978.10 Between 1978 and 2018, the Agencies revised and sought to clarify the CRA rules numerous times, most significantly in 1995.11 On September 5, 2018, the OCC published an Advance Notice of Proposed Rulemaking (ANPR) as part of its renewed efforts to modernize the CRA regulatory framework.12 Subsequently, on January 9, 2020, the OCC and FDIC published a joint CRA Notice of Proposed Rulemaking (January 2020 NPR),13 and on June 5, 2020, the OCC issued the June 2020 Rule in an effort to modernize its CRA rules. The June 2020 Rule took effect October 1, 2020; however, several provisions have delayed compliance dates of either January 1, 2023, or January 1, 2024.14 To implement certain provisions of the June 2020 Rule with a January 1, 2023, compliance date, the 9 12 U.S.C. 2901(a). FR 47144 (Oct. 12, 1978). The CRA rules of the Agencies were codified in 12 CFR parts 25, 563e (recodified as 195), 228, and 345. 11 60 FR 22156 (May 4, 1995). 12 The OCC, along with the Board and the FDIC, worked together on an ANPR, which the OCC published on September 5, 2018. 83 FR 45053 (September 5, 2018). 13 85 FR 1204 (January 9, 2020). 14 12 CFR 25.01(c)(4). 10 43 VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 OCC published a Notice of Proposed Rulemaking on December 4, 2020 (December 2020 NPR), that proposed an approach to determine the benchmarks, thresholds, and minimums in the June 2020 Rule’s new performance standards.15 In connection with the December 2020 NPR, the OCC published a CRA information collection survey (Information Collection) 16 to obtain data necessary to calibrate the June 2020 Rule’s new performance standards. Subsequently, on May 18, 2021, the OCC announced that it was reconsidering the June 2020 Rule, did not plan to finalize the December 2020 NPR, and was discontinuing the Information Collection.17 The OCC took these steps to provide for an orderly reconsideration of the June 2020 Rule and provide banks with the flexibility to deploy resources in response to the COVID–19 pandemic.18 While the June 2020 Rule and the subsequent December 2020 NPR and Information Collection represent the OCC’s most recent efforts to modernize the CRA regulatory framework, the Agencies’ efforts at reform have spanned the past decade. For example, in 2014, pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA),19 the Agencies began a decennial review of all of their regulations, with input from the public, to identify outdated, unnecessary, or unduly burdensome regulations and consider how to reduce regulatory burden on IDIs—while, at the same time, ensuring the safety and soundness of these institutions and of the financial system. In 2017, the Agencies issued a report to Congress that included a summary of the public comments and recommendations received during the EGRPRA review, including those that addressed the CRA regulatory framework.20 Among the most frequently raised CRA-related issues were (1) the assessment area definition; (2) incentives for banks to serve LMI, unbanked, underbanked, and rural communities; (3) regulatory burdens associated with the recordkeeping and 15 85 FR 78258 (Dec. 4, 2020). FR 81270 (Dec. 15, 2020). 17 See OCC Bulletin 2021–24, Community Reinvestment Act: Implementation of the June 2020 Final Rule (May 18, 2021), available at https:// www.occ.gov/news-issuances/bulletins/2021/ bulletin-2021-24.html. 18 Id. 19 Public Law 104–208, 110 Stat. 3001 (1996) (codified at 12 U.S.C. 3311). 20 See Federal Financial Institutions Examination Council, Joint Report to Congress. Economic Growth and Regulatory Paperwork Reduction Act, pp. 41–48 (March 3, 2017), available at https:// www.ffiec.gov/pdf/2017_FFIEC_EGRPRA_JointReport_to_Congress.pdf. 16 85 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 52027 reporting requirements and the asset thresholds for the various CRA examination methods; (4) the need for clarity regarding performance measures and better examiner training to ensure consistency and rigor in CRA examinations; and (5) the refinement of the CRA ratings methodology. On April 3, 2018, the U.S. Department of the Treasury released a report on the implementation of the CRA, which included recommendations for modernizing the CRA rules based on stakeholder input.21 Starting in 2018, the Agencies also engaged with stakeholders, including civil rights organizations, community groups, members of Congress, academics, and IDIs, to obtain their perspectives and feedback on the CRA and potential improvements to the CRA regulatory framework. Throughout all phases of the OCC’s recent CRA modernization efforts, including prior to the issuance and during the implementation of the June 2020 Rule, many stakeholders objected to the OCC independently issuing a CRA rule and stressed the importance of the Agencies working together to issue consistent CRA rules. A. Board ANPR Separately from the OCC, the Board has explored ways to modernize the CRA regulatory framework to address changes in the banking industry, including the increased use of technology to deliver banking services. Specifically, the Board conducted stakeholder outreach through a series of roundtable discussions 22 and published a CRA ANPR on October 19, 2020 (Board ANPR),23 that invited public comment on an approach to modernize its CRA rule. The Board ANPR described its objectives as including: • Increasing the clarity, consistency, and transparency regarding where, how, and what activities receive CRA consideration, while minimizing data burden; • Tailoring CRA supervision to reflect differences in bank sizes and business models, local market needs and opportunities, and expectations across business cycles; 21 See Memorandum from the U.S. Department of the Treasury to the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation, Community Reinvestment Act— Findings and Recommendations (April 3, 2018), available at https://home.treasury.gov/sites/default/ files/2018-04/4-3-18%20CRA%20memo.pdf. 22 See, e.g., Perspectives from Main Street: Stakeholder Feedback on Modernizing the Community Reinvestment Act (June 2019) available at https://www.federalreserve.gov/publications/ files/stakeholder-feedback-on-modernizing-thecommunity-reinvestment-act-201906.pdf. 23 85 FR 66410. E:\FR\FM\17SEP2.SGM 17SEP2 52028 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules • Updating performance standards to address changes in the banking industry, particularly the increased use of mobile and internet delivery channels; • Promoting community engagement; • Strengthening the special treatment of minority depository institutions; and • Recognizing that CRA and fair lending responsibilities are mutually reinforcing. The Board ANPR invited public comment on different policy options to address its objectives. For example, the Board invited comment on how to delineate assessment areas around physical locations. It also sought public comment on deposit-based and lendingbased assessment areas for IDIs that conduct a significant amount of lending and deposit collection outside assessment areas around physical locations. In addition, the Board ANPR invited comment on nationwide assessment areas for internet banks. The Board ANPR suggested a framework for evaluating CRA performance based on a retail test (comprised of retail lending and retail services subtests) and a community development (CD) test (comprised of CD financing and CD services subtests) that would be applicable to Board-regulated IDIs, depending on their size or business model. In addition, the Board ANPR sought feedback on an evaluation framework based on IDI-asset-size thresholds of $750 million or $1 billion. Under this framework, smaller IDIs would be subject to a retail lending test but would have the option to be evaluated based on their retail services and CD activities, while larger IDIs would be evaluated under all four subtests. The suggested framework would base CRA examinations for wholesale and limited purpose IDIs on the CD test. The Board ANPR generally suggested a metric-based approach for the retail lending and CD financing subtests and a qualitative approach to evaluating retail and CD services under their respective subtests. In addition, the Board ANPR suggested a strategic plan option that would provide more clarity and flexibility for establishing bank specific standards to assess activities. The Board ANPR also discussed ways to update the State, multistate metropolitan statistical area (MSA), and institution ratings by basing these ratings on local assessment area performance. The Board ANPR suggested that the Board could consider certain activities outside of IDIs’ assessment areas at the institution level to achieve an ‘‘outstanding’’ rating. The Board also indicated it could revise how VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 it would consider discriminatory or other illegal credit practices (DOICP) to both align that consideration with the Uniform Interagency Consumer Compliance Rating System and include consideration of the Military Lending Act (MLA),24 the Servicemembers Civil Relief Act (SCRA),25 and the Prohibition Against Unfair, Deceptive, or Abusive Acts or Practices.26 The Board further sought feedback on potential revisions to CRA data collection and reporting requirements. The Board ANPR acknowledged that an increased use of metrics would result in an increased need for data collection and reporting and noted that the Board prioritized using both existing data where possible and exempting small IDIs from new data collection requirements. B. OCC December 2020 NPR The OCC’s June 2020 Rule included new performance standards meant to provide large banks with incentives to achieve specific performance goals and to make CRA evaluations more consistent, reproducible, and comparable over time. These performance standards included the CRA evaluation measure, retail lending distribution tests, and CD minimums. However, the June 2020 Rule did not include the specific benchmarks, thresholds, and minimum values proposed in the January 2020 NPR because the OCC believed that it was appropriate to gather more information to further calibrate these measures. To do so, the OCC undertook an Information Collection 27 and issued the December 2020 NPR, in which it proposed processes to calibrate the benchmark, threshold, and minimum values more precisely. The OCC received 13 comments on the December 2020 NPR.28 Although one commenter generally supported the December 2020 NPR’s approach to setting the benchmarks, thresholds, and minimums, most commenters expressed concerns with the proposal. These concerns included that the proposed approach would (1) lead to inflated ratings; (2) set arbitrary limits on ratings; (3) not account for local market conditions, which could penalize banks that operate in high-cost markets; (4) not adequately consider the innovative, 24 10 U.S.C. 987 et seq. U.S.C. 3901 et seq. 26 12 U.S.C. 5531. 27 See supra note 16. 28 The OCC received eight comments from the banking industry or industry trade associations, two comment from community groups, two comments from the general public, and one comment from a state government. 25 50 PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 rapid, and flexible funding solutions offered by internet-based banks with national footprints; and (5) be speculative and complicated. One commenter stated that there should be hundreds of ratios as opposed to the proposed 26 calibrated values. Another commenter favored an approach where the OCC would take into consideration surpassing a threshold, but it would not initially grant a presumption of a specific rating. The commenter asserted that this would be a more incremental change from the evaluation approach codified in the 1995 Rules and could be used until more data was available for a presumption-based approach. Other commenters stated that a one-size-fitsall model would not work, with one commenter suggesting that the OCC should tie benchmarks to historical, local bank performance data, and community demographics, rather than set them at a nationwide level.29 Commenters also generally expressed concern with the Information Collection, stating that (1) it would result in substantial burden and costs for the banks responding to the survey; (2) the data requested were not routinely available or did not exist; and (3) the collection would likely yield inaccurate results. Due to these concerns, several commenters requested that the OCC pause or rescind the Information Collection. Given the specific concerns with the December 2020 NPR and the related Information Collection, the majority of commenters reiterated the request that the Agencies work together to create a consistent CRA framework. After considering these comments, the OCC announced that it would not finalize the December 2020 NPR and would discontinue the Information Collection.30 In addition, as noted, the OCC later announced that it would work with the Board and FDIC on joint rules to modernize the CRA.31 C. June 2020 Rule Implementation Following publication of the June 2020 Rule, the OCC began its implementation by developing transition policies and procedures to address the phased compliance dates 29 Stakeholders also offered comments on other aspects of the December 2020 NPR, including the OCC’s proposed approach for addressing declines in CRA performance and the proposed technical changes. Comments on the approach for addressing declines in CRA performance questioned how the OCC would measure declines in activities and whether the proposed ten percent decline was appropriate. Comments regarding the technical changes generally sought additional clarifications. 30 See supra note 17. 31 See supra note 7. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules provided in the rule. In addition, the OCC (1) issued guidance on implementation of key provisions of the June 2020 Rule; (2) provided training and outreach for examiners, community groups, and the banking industry; and (3) instituted the CRA illustrative list and Qualifying Activities Confirmation Request Form. To implement the June 2020 Rule between the October 1, 2020, effective date and the January 1, 2023, or January 1, 2024, compliance dates, the OCC leveraged the flexibility provided by the June 2020 Rule’s transition provision.32 It is the OCC’s intention that the June 2020 Rule and associated guidance would continue to apply until such time as the OCC modifies the rule. A summary of the guidance issued related to the transition provision in the June 2020 Rule includes the following: • Definitions.33 Æ Compensation—The OCC issued guidance on the calculation of the median hourly compensation value for the banking industry for use in quantifying CD services. Effective October 1, 2020, through December 31, 2021, the median hourly compensation value is $39.03.34 Æ Partially—The OCC advised that OCC-regulated banks may receive consideration in CRA evaluations that begin on or after October 1, 2020, for the full or partial value of qualifying CD activities, as applicable, based on the qualifying activities criteria set forth in the June 2020 Rule (e.g., affordable housing for LMI individuals, community support services for LMI individuals, financial education, essential community facilities, and economic development) if those activities are conducted on or after October 1, 2020. For activities conducted before October 1, 2020, the OCC explained that the 1995 Rules and Interagency Questions and Answers Regarding Community Reinvestment (Q&As) 35 will continue to apply and provide partial credit for the portion of mixed-income housing that provides affordable housing to LMI individuals.36 32 12 CFR 25.01(c)(5). CFR 25.03. 34 OCC Bulletin 2021–5, Community Reinvestment Act: Bank Type Determinations, Distressed and Underserved Areas, and Banking Industry Compensation Provisions of the June 2020 CRA (January 29, 2021) available at https:// www.occ.gov/news-issuances/bulletins/2021/ bulletin-2021-5.html. 35 See Q&A §ll .12(h)—8, 81 FR 48506 (July 25, 2016). 36 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020), available at https:// www.occ.gov/news-issuances/bulletins/2020/ bulletin-2020-99.html. 33 12 VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 Æ Retail lending activities and related definitions (i.e., home mortgage loans, consumer loans, small loans to businesses, small loans to farms, CRAeligible businesses, and CRA-eligible farms)—In order to provide OCCregulated banks with sufficient time to update systems for data collection, recordkeeping, and reporting, the OCC advised that examiners will conduct CRA examinations of performance under the applicable retail lending test criteria using the 1995 Rules’ definitions of home mortgage loan, small business loan, small farm loan, and consumer loan and the business and farm gross annual revenue threshold of $1 million or less during the transition period. However, the OCC also provided that, at an OCC-regulated bank’s option, the OCC also will consider retail loans, as defined in the June 2020 Rule, as ‘‘other loan data,’’ or ‘‘other lending-related activities,’’ as applicable, if those loans are not otherwise considered under the 1995 Rules’ applicable lending test.37 Æ Distressed areas and underserved areas—The June 2020 Rule expanded the definition of what were termed ‘‘distressed or underserved nonmetropolitan middle-income geographies’’ under the 1995 Rules to include census tracts that met those definitions in MSAs and added to the definition of underserved area census tracts that did not have a branch within specified distances. On January 29, 2021 the OCC published a list of census tracts that meet the revised definitions.38 Æ Small banks and intermediate banks—The OCC applied the asset-size thresholds in the June 2020 Rule’s small bank and intermediate bank definitions to determine bank type in December 2020 and communicated the revised bank types for OCC-regulated banks on January 29, 2021.39 OCC-regulated banks that transitioned from large banks under the 1995 Rules to intermediate banks under the June 2020 Rule are not required to collect data required under the 1995 Rules for calendar years 2021 forward or report data for calendar years 2022 forward.40 • CD loans, CD investments, and CD services.41 The OCC advised that during the June 2020 Rule transition period, examiners will consider all CD activities 37 Id. 38 OCC Bulletin 2021–5, Community Reinvestment Act: Bank Type Determinations, Distressed and Underserved Areas, and Banking Industry Compensation Provisions of the June 2020 CRA (January 29, 2021). 39 Id. 40 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 41 12 CFR 25.04(c). PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 52029 under the June 2020 Rule that are conducted by OCC-regulated banks on or after October 1, 2020. Further, during the transition period, examiners also will consider all CD activities defined in 12 CFR 25.12(g) of the 1995 Rules 42 that are conducted by OCC-regulated banks during the transition period to the extent there are gaps between the 1995 Rules’ CD activities and the qualifying activities criteria in the June 2020 Rule in evaluating performance under the applicable lending, investment, service, or CD test.43 • Qualifying activities confirmation and illustrative list.44 As of October 1, 2020, banks and interested parties may elect to submit confirmation requests using the CRA Qualifying Activities Confirmation Request Form to determine whether an activity is consistent with the qualifying activities criteria in the June 2020 Rule.45 The OCC also published the illustrative list on www.OCC.gov to provide examples of activities that meet the qualifying activities criteria in the June 2020 Rule.46 • Small and intermediate bank performance standards 47 and wholesale and limited purpose bank performance standards.48 The OCC explained that under the June 2020 Rule, the performance standards for small and intermediate banks and wholesale and limited purpose banks would apply beginning on October 1, 2020. The OCC further explained that examiners would apply the Q&As and 1995 Rules’ examination procedures, as supplemented by the transition guidance issued by the OCC, to evaluate CRA activities conducted between October 1, 2020, and the effective date of new guidance or examination procedures applicable to the particular activities.49 The OCC has not issued new guidance replacing the Q&As or 42 See 12 CFR part 25, Appendix C. Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 44 12 CFR 25.05. 45 CRA Qualifying Activities Confirmation Request Guidance and Form is available at https:// www.occ.gov/topics/consumers-and-communities/ cra/qualifying-activity-confirmation-request/indexcra-qualifying-activities-confirmation-request.html. 46 The CRA Illustrative List of Qualifying Activities is available at https://www.occ.gov/ topics/consumers-and-communities/cra/craillustrative-list-of-qualifying-activities.pdf. 47 12 CFR 25.14. 48 12 CFR 25.15. 49 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 43 OCC E:\FR\FM\17SEP2.SGM 17SEP2 52030 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules examination procedures applicable to the June 2020 Rule. • Consideration of performance context.50 With regard to performance context (i.e., information about a bank, its community, and its competitors), the OCC stated that it would continue to develop and consider a bank’s performance context according to the 1995 Rules’ performance context procedures during CRA evaluations until the OCC develops and implements a system for electronic bank submission of performance context under the June 2020 Rule.51 The OCC has not implemented an electronic system and is still considering performance context as provided in the 1995 Rules. • DOICP.52 The June 2020 Rule added violations of SCRA and the MLA to the list of enumerated credit-related violations considered when assessing a bank’s CRA performance. The addition of these violations codified existing policy under the 1995 Rules, and, therefore, did not substantively alter requirements for OCC-regulated bank CRA examinations.53 • Strategic plans.54 As of October 1, 2020, OCC-regulated banks operating under a strategic plan and those that submitted new strategic plans for approval could create one or more target market assessment areas, as permitted in 12 CFR 25.18(g)(2) of the June 2020 Rule, in addition to the bank’s assessment areas delineated under 12 CFR 25.41 of the 1995 Rules.55 • Activity location.56 The June 2020 Rule provided for the allocation of the dollar value of qualifying activities across multiple assessment areas in 12 CFR 25.24(b)(2). This provision of the June 2020 Rule took effect October 1, 2020.57 • Content and availability of the public file.58 As of October 1, 2020, the OCC required OCC-regulated banks to make the public file information 50 12 CFR 25.16. Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 52 12 CFR 25.17. 53 SM 2019–03, Supervisory Policies and Processes for Community Reinvestment Act Performance Evaluations (April 12, 2019), available at https://el.occ/news-issuances/memorandums/sm2019-3.pdf. 54 12 CFR 25.18. 55 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 56 12 CFR 25.24. 57 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 58 12 CFR 25.28. 51 OCC VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 required by the June 2020 Rule available to the public in a paper or electronic form. The OCC advised that OCCregulated banks could comply with this requirement by making the public file available solely on their websites.59 • Public notice by banks.60 The OCC required OCC-regulated banks to comply with the June 2020 Rule’s public notice requirements by March 1, 2021. To comply with the public notice requirements, OCC guidance permitted these banks to display the notice in their main office and branch office locations in either paper or an electronic format, such as a digital display. In addition to the requirement for display of the public notice in one of these formats, OCC guidance also permitted these banks to post the notice on their websites.61 As noted, it is the intention of the OCC that the June 2020 Rule and related guidance will remain in effect until such time as the OCC issues replacement rules associated with this proposal. In addition to providing guidance on the above provisions that took effect October 1, 2020, the OCC also provided guidance on other issues, including the circumstances under which OCCregulated banks would receive credit for activities outside of their assessment areas, the definition of disaster area (a term the June 2020 Rule did not define), and consideration of affiliate activities through April 1, 2022. In considering these and other issues, the OCC identified areas where the June 2020 Rule would benefit from clarification and revision, some of which the December 2020 NPR addressed. While the OCC’s June 2020 CRA Rule was an important step in modernizing the CRA regulatory framework, its implementation revealed to the OCC some of the rule’s complexities and demonstrated where there were opportunities for improvement. In particular, the partial implementation of the June 2020 Rule and the responses to the December 2020 NPR made clear the extent of the burden and complexities associated with the data collection and reporting integral to the June 2020 Rule. Moreover, the disproportionate effect of the COVID–19 pandemic on minorities and rural and LMI communities provided further evidence of the need to 59 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 60 12 CFR 25.30. 61 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 revisit the June 2020 Rule with the goal of better addressing the financial services needs of vulnerable communities coming out of the pandemic. In addition, through comment letters, stakeholders have identified specific opportunities for improvement of the June 2020 Rule in areas where the rule was not as clear and transparent as intended. For example, stakeholders have stated that the change in the treatment of affiliate activities was not clear because those activities are not mentioned explicitly in the rule. Rather, stakeholders stated that the lack of consideration for affiliate activities under the June 2020 Rule is inferred from the definition of ‘‘activity,’’ which is ‘‘a loan, investment, or service by a bank.’’ 62 Stakeholders also said that the rule is not clear on how the OCC would treat qualifying activities outside of banks’ assessment areas or the broader statewide or regional areas that includes a bank’s assessment areas for banks that are not evaluated under the general performance standards. A third example of where the June 2020 Rule could benefit from additional clarity involves the ‘‘CRA desert’’ definition, which as defined in the June 2020 Rule could encompass the vast majority of geographic areas in the country and may be too general to ensure consistent application. Stakeholder feedback on the lack of clarity with certain aspects of the June 2020 Rule and the OCC’s experience with its partial implementation highlight that opportunities exist for improvements to a modernized CRA regulatory framework. Such improvements could be achieved through a joint rulemaking that leverages these lessons learned as well as the other feedback the Agencies have received since issuance of the June 2020 Rule. The OCC has reviewed the June 2020 Rule with these considerations in mind. Based on this review, the OCC proposes to rescind the June 2020 Rule and replace it with rules based on the 1995 Rules (subject to a minor change explained below), while simultaneously working with the Board and FDIC on a joint proposal to modernize the CRA rules.63 Both of these actions are discussed in more detail below. III. June 2020 Rule Proposed Rescission and Replacement The OCC’s initial reconsideration of the June 2020 Rule focused on (1) creating consistency and transparency 62 12 CFR 25.03. supra note 7. 63 See E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules in the rules applicable to IDIs; (2) limiting burden on banks, their communities, and examiners; and (3) ensuring that the OCC continues to advance the purpose of the CRA—to encourage banks to help meet the credit needs of their entire communities, including LMI neighborhoods, consistent with safe and sound operations. The OCC considered different options for a revised regulatory framework, including proposing a revised rule that retained aspects of the June 2020 Rule that stakeholders generally supported. The OCC determined, however, that proposing yet another regulatory framework would impose undue burden on banks, their communities, and examiners who would need to learn and implement a new framework that was neither the June 2020 Rule, the 1995 Rules, nor the prospective interagency CRA rules. Further, proposing a new rule that retained aspects of the June 2020 Rule would fail to harmonize the OCC’s rule with those of the Board and FDIC, potentially complicating an interagency rulemaking process by introducing unique OCC considerations regarding necessary changes to the regulatory framework and implementation of and transition to any prospective interagency final rules. In contrast, rescinding and replacing the June 2020 Rule with rules based on the 1995 Rules would provide consistency throughout the banking industry with respect to the rules that apply by statute to all IDIs. A consistent regulatory framework would facilitate an interagency rulemaking process because it would allow all the Agencies to propose common solutions for the same issues. Further, replacing the June 2020 Rule with a regulatory framework that is familiar to all stakeholders would limit the burden associated with adapting to new rules. The partial implementation of the June 2020 Rule further limits the burden on stakeholders because much of the 1995 regulatory framework remains in effect. Specifically, for most banks, reverting to rules based on the 1995 Rules would result in little change to how their CRA performance is evaluated, whereas retaining the June 2020 Rule or some other regulatory framework would require continued implementation actions on the part of banks and the OCC. Finally, reverting to rules based on the 1995 Rules would enable the OCC to continue to meet the requirements of the CRA by ensuring that examiners are evaluating banks’ CRA performance based on a proven framework that is VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 52031 focused on ensuring that banks meet the needs of LMI communities. national banks and savings associations. A. Proposed 12 CFR Part 25 C. Summary of Proposed Rules As with the 1995 Rules, the proposed rules would provide for different evaluation methods to respond to basic differences in banks’ structures and operations. The proposed rules would provide (1) a streamlined assessment method for small banks that emphasizes lending performance; (2) an assessment method for intermediate small banks (ISB) that considers lending and CD activities; (3) an assessment method for large, retail banks that focuses on lending, investment, and service performance; and (4) an assessment method for wholesale and limitedpurpose banks based on CD activities. Further, the proposed rules also would give any bank, regardless of size or business strategy, the choice to be evaluated under a strategic plan. Under the proposed performance tests and standards, an examiner would consider a bank’s performance context in assessing its CRA performance. Specifically, an examiner would review demographic and economic data about the bank’s assessment area(s) and information about local economic conditions, the institution’s major business products and strategies, and its financial condition, capacity, and ability to lend or invest in its community. The examiner also would review information a bank chooses to provide about lending, investment, and service opportunities in its assessment areas. Banks would identify one or more assessment areas within which examiners would evaluate CRA performance. In most cases, a bank would delineate a town, municipality, county, some other political subdivision, or an MSA where its main office, branches, and deposit-taking ATMs are located and a substantial portion of its loans are made as an assessment area. If a bank chooses, however, its assessment areas would not need to coincide with the boundaries of one or more political subdivisions (e.g., counties, cities, and towns or MSAs), so long as the adjustments to those boundaries reflect the areas that the bank reasonably could serve, meet regulatory requirements, and do not arbitrarily exclude LMI census tracts. Large banks, and in some circumstances, other banks, would need to collect, maintain, and report certain data related to the proposed performance tests and standards. The OCC would make bank CRA data available through individual and aggregate disclosure statements. Banks also would make CRA-related The proposal would replace the June 2020 Rule with a revised 12 CFR part 25 based on the 1995 Rules. Under the proposal, 12 CFR part 25 would be applicable to national banks. The proposed 12 CFR part 25 would be substantively identical to the 1995 Rules. Consequently, all definitions, performance tests and standards, and related data collection, recordkeeping, and reporting requirements would revert to those in place prior to the issuance of the June 2020 Rule. Further, the 1995 Rules’ public file and public notice requirements would replace the existing requirements. Proposed Subpart E would correct the 1995 Rules’ crossreferenced regulatory citation in 12 CFR 25.62(a)(2) to the definition of ‘‘foreign bank,’’ which would read ‘‘12 CFR 28.11(i).’’ B. Proposed 12 CFR Part 195 The proposal would reinstate 12 CFR part 195 for savings associations.64 Under the proposal, the reinstated 12 CFR part 195 would apply to both Federal savings associations regulated by the OCC and State savings associations regulated by the FDIC. Reinstating part 195 would enable the OCC to consult with the FDIC on the integration of the CRA rules applicable to national banks and savings associations as part of the interagency rulemaking process to ensure that the interests of both regulatory agencies and their regulated entities are considered. As with the proposed revised 12 CFR part 25, the proposed 12 CFR part 195 would be substantively identical to the 1995 Rules. In the alternative, the OCC is considering integrating parts 25 and 195 into a single rule in part 25 applicable to both national banks and savings associations. An integrated part 25 rule applicable to both national banks and savings associations would be substantively the same as the separate rules. In an integrated rule in part 25, proposed Subpart E (Prohibition Against Use of Interstate Branches Primarily for Deposit Production) would apply only to national banks. The OCC requests specific comment on whether: The OCC should reinstate separate rules for national banks and savings associations or integrate the rules so that part 25 is applicable to both 64 The OCC has CRA rulewriting authority for both Federal and State savings associations, in addition to national banks. See 12 U.S.C. 2905. PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 E:\FR\FM\17SEP2.SGM 17SEP2 52032 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules information available in their public files and inform the public through a CRA notice in specified locations. For a more detailed description of the 1995 Rules, please see the SUPPLEMENTAL INFORMATION section of the Federal Register document at: 60 FR 22156 (May 4, 1995).65 The following is a summary of key provisions of the proposed rules. • Performance tests and standards.66 Æ The proposed rules’ small bank (i.e., banks with less than $330 million in assets) performance standards would establish a retail lending test for assessing CRA performance. The proposed small bank lending test may also consider CD loans. Qualified investments and CD services could be considered at the bank’s option for an ‘‘outstanding’’ rating, but only if the bank meets or exceeds the lending test criteria in the small bank performance standards. Æ The proposed rules’ ISB (i.e., banks with asset sizes of at least $330 million and less than $1.322 billion) performance standards would assess CRA performance under the small bank retail lending test and a CD test. The ISB CD test would evaluate all CD activities together. Æ The proposed rules would establish lending, investment, and service tests applicable to large banks (i.e., banks with $1.322 billion or more in assets). The large bank lending and service tests would consider both retail and CD activity, while the investment test would focus on qualified investments as defined in the proposed rules. Æ The proposed rules would evaluate wholesale and limited purpose banks under a CD test that considers activities in a bank’s broader statewide or regional area as activities that benefit the bank’s assessment area. Activities outside of the broader statewide or regional area also would be considered if the bank has been responsive to needs in its assessment area. Æ All banks could elect to be evaluated under a strategic plan that 65 The proposed rules also include the 2005 substantive revisions to the 1995 regulatory framework (e.g., the small bank and ISB asset-size thresholds and associated changes and the inclusion of activities to revitalize and stabilize distressed or underserved rural areas and designated in the CD definition) as well as other revisions made to the 1995 Rules since they were adopted by the Agencies. See 70 FR 44256 (Aug. 2, 2005). 66 The applicable proposed performance tests and standards would be based on the asset size of a bank. The asset-size thresholds for determining whether a bank is a large bank, ISB, or small bank would be adjusted annually based on the Consumer Price Index and be aligned with the current asset size thresholds in the Board and FDIC rules. See 12 CFR parts 228 and 345. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 sets out measurable goals for lending, investment, and services, as applicable, to achieve a ‘‘satisfactory’’ or ‘‘outstanding’’ rating. The bank would develop a strategic plan with community input and the plan would be approved by the bank’s primary regulator. • DOICP. Under the proposal MLA and SCRA violations would not be included in the proposed rules’ enumerated list of violations considered in evaluating banks’ CRA performance. Nonetheless, examiners would continue to consider these violations in banks’ CRA performance evaluations based on guidance that predated the June 2020 Rule.67 • Retail and CD Activities. Examiners would evaluate banks’ CRA performance based on retail lending (i.e., home mortgage loans, small business loans, small farm loans, and consumer loans, as applicable) and CD loans, qualified investments, and CD services as defined in the proposed rules and considered in the applicable performance tests and standards. • Assessment Areas. Æ Banks would delineate assessment areas that generally D Include the geographies (i.e., census tracts) where a bank has its main office, branches, and deposit-taking automated teller machines as well as the surrounding geographies where the bank has originated or purchased a substantial portion of its loans; and D Consist of one or more MSAs, metropolitan divisions, or political subdivisions with banks permitted to adjust the boundaries of their assessment areas to include only the portion of the political subdivision that banks can reasonably be expected to serve; and Æ Assessment areas would be required to D Consist of whole geographies, D Not reflect illegal discrimination, D Not arbitrarily exclude LMI geographies, and D Not extend substantially beyond an MSA or State boundary unless the bank’s assessment area is in a multistate MSA. • Data collection, recordkeeping, and reporting. Æ Banks other than small banks would collect, maintain, and report certain data related to small business loans, small farm loans, CD loans, and assessment areas. Banks subject to the Home Mortgage Disclosure Act (HMDA) reporting requirements 68 also would report home mortgage lending outside of 67 See 68 12 PO 00000 supra note 53. CFR part 1003. Frm 00008 Fmt 4701 Sfmt 4702 the MSAs where the bank has a home or branch office. The proposed rules also would include certain optional data collection and reporting. Æ The proposal would reinstate additional public file and public notice requirements eliminated under the June 2020 Rule regarding the content of the public file and the location of the public file and public notices. • Ratings. Examiners would determine ratings as provided in proposed Appendix A. IV. Transition Considerations As discussed above, the June 2020 Rule included a transition provision, effective October 1, 2020, to provide for an orderly move to the new regulatory framework. As a result, many aspects of the 1995 Rules remain in effect, limiting the potential disruption associated with the proposed reversion to CRA rules based on the 1995 Rules. Therefore, the OCC is considering an effective date of January 1, 2022, for any final rules, provided they are published by December 1, 2021. A January 1, 2022, effective date would provide all stakeholders with certainty regarding the applicable rules and would eliminate the need for banks to continue to expend resources developing new systems necessary for compliance with the June 2020 Rule. The OCC recognizes that banks have relied in part on the June 2020 Rule in planning for their ongoing compliance with the CRA. Following publication of any final rules pertaining to this proposal, banks would have a minimum of 30 days, as required by the Administrative Procedures Act,69 before they would be required to comply with most of the provisions described in the proposed rules. However, given the partial implementation of the June 2020 Rule, its replacement would result in certain changes to the regulatory framework that impact, among other things, how banks would be evaluated and what activities would receive consideration in CRA examinations. The OCC proposes to address such considerations, as discussed below.70 While the proposal does not include particular transition provisions in the proposed rule text, the OCC invites comment on whether, for purposes of any final rules the OCC should amend the proposed rule text to address any or all of the following transition issues. 69 Public Law 79–404, 60 Stat. 237 (1946), codified at 5 U.S.C. 500 et seq. 70 Information related to the June 2020 Rule implementation is discussed in Section II.C. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules A. Bank Type Changes The June 2020 Rule resulted in a change in bank type for some banks due to changes in the bank asset-size thresholds. For example, certain ISBs became small banks (i.e., banks with assets between $326 million and $600 million) and certain large banks became intermediate banks (i.e., banks with assets between $1.305 billion and $2.5 billion). These banks are subject to different performance standards for activities conducted on or after October 1, 2020, than they were prior to that date. In addition, OCC-regulated large banks under the 1995 Rules that became intermediate banks under the June 2020 Rule were no longer required to collect data for calendar years 2021 forward and report data for calendar years 2022 forward. Under the proposed rules, many of these banks would transition back to their prior bank type based on the proposed asset-size thresholds (i.e., small banks would be banks with less than $330 million in assets, ISBs would be banks with at least $330 million but less than $1.322 billion, and large banks would be banks with assets of $1.322 billion or more, as adjusted). As a result, reinstated data collection and reporting requirements would apply to banks redesignated as large banks under the proposed rules. The OCC proposes to treat banks that would transition from ISBs to large banks under the proposed rules consistent with how the OCC has historically treated these banks. Under the 1995 Rules, the OCC would have required banks that transitioned from ISBs to large banks to begin collecting loan data as provided in proposed 12 CFR 25.42 one year after the bank type changed. Therefore, if the proposed rules take effect on January 1, 2022, the OCC would require newly classified large banks to begin collecting data on January 1, 2023, and reporting required and optional data the following year. For banks that would transition from small bank to ISBs under the proposed rules, the OCC would not provide additional time to transition to the ISB performance standards; however, the OCC would consider the change in bank type as part of the bank’s performance context when evaluating the bank’s CRA performance. Additionally, the OCC intends to continue to issue bulletins to inform the public of the annual bank asset-size threshold adjustments based on changes in the Consumer Price Index for Urban Wage Earners and Clerical VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 52033 Workers (CPI–W).71 The OCC requests specific comment on whether: The OCC requests specific comment on whether: The OCC should apply its historical policy for newly designated large banks’ data collection, recordkeeping, and reporting requirements, with the result that certain large banks under the final rules would not collect data until January 2023 and would not report it until January 2024. In the alternative, should banks that were formerly large banks under the 1995 Rules and that return to large bank status as proposed begin data collection in 2022? Are there alternative transition policies related to data collection, recordkeeping, and reporting requirements that the OCC should consider? The OCC’s plan to consider changes from small bank to ISB bank type as part of performance context is a reasonable means of addressing the transition from the June 2020 Rule to the proposed rules’ bank asset-size thresholds. The proposal to consider activities based on whether they qualified at the time the activities were conducted is a reasonable approach to addressing the changes to the type of activities that will receive consideration in CRA examinations. B. Qualifying Activities As of the effective date of the final rules, the OCC would rescind the qualifying activities criteria in the June 2020 Rule and replace it with the 1995 Rules’ home mortgage loan, small business loan, small farm loan, consumer loan, and CD definitions. Also, as of the effective date of any final rules, the definitions related to the qualifying activities criteria in the June 2020 Rule, including the compensation, distressed area, underserved area, CRAeligible business, CRA-eligible farm, small loans to businesses, small loans to farms, partially, and primarily definitions would revert to the applicable definitions under the 1995 Rules or be eliminated. The OCC proposes to address these changes by explaining that OCCregulated banks would receive consideration in their CRA examinations for activities that met the qualifying activities criteria or definitions that were in effect at the time that the bank conducted those activities. Consistent with the OCC’s historical practice, the OCC also would apply this policy to legally binding commitments to lend or invest. For banks or interested parties that received confirmation letters for qualifying activities under the June 2020 Rule, those letters would be applicable while the June 2020 Rule was in effect but would not apply to activities conducted after any final rules’ effective date. The OCC believes this policy is reasonable because it honors the qualified status of activities when conducted by the bank. 71 See OCC Bulletin 2021–5, Community Reinvestment Act: Bank Type Determinations, Distressed and Underserved Areas, and Banking Industry Compensation Provisions of the June 2020 CRA (January 29, 2021). PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 C. Affiliates As explained in a January 2021 interpretive letter, under the June 2020 Rule, generally, a bank would not receive CRA consideration for affiliate activities, including activities conducted by the nonbank parent and sister companies of the bank, unless the bank could demonstrate that it provided financing for or otherwise supported the qualifying activities of these affiliates.72 This policy represented a significant change from how the OCC considered affiliate activities under the 1995 Rules, and, as such, the OCC used the flexibility provided by the transition provision to delay compliance with this aspect of the June 2020 Rule until April 1, 2022.73 The proposal would consider affiliate activities consistent with their treatment under the 1995 Rules and the guidance in the Q&As, which permit banks to elect to include affiliate activities in their CRA evaluations, subject to certain limitations. Consequently, the OCC would rescind the January 2021 interpretive letter regarding affiliate activities as of the effective date of any final rules. D. Outside Assessment Area Activities Under the 1995 Rules, the agencies provided consideration for activities conducted outside banks’ assessment areas in limited circumstances. Specifically, under the 1995 Rules, the performance tests and standards generally provided that the Agencies would evaluate an IDI’s CRA performance in its assessment areas.74 In addition, the 1995 Rules provided that the Agencies may consider CD activities that benefit the broader statewide or regional areas that include 72 OCC Senior Deputy Comptroller and Chief Counsel’s Interpretation: Community Reinvestment Act Qualifying (CRA) Activities Conducted by a National Bank’s or Savings Association’s Subsidiaries and Affiliates, Including Nonbank Parent and Sister Companies of a National Bank or Savings Association Under Certain Circumstances, Can Receive CRA Credit Under the June 2020 CRA Final Rule (January 4, 2021), available at https:// www.occ.gov/topics/charters-and-licensing/ interpretations-and-actions/2021/interpretive-letteraffiliates.pdf. 73 OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions (November 9, 2020). 74 See 12 CFR part 25, Appendix C. E:\FR\FM\17SEP2.SGM 17SEP2 52034 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules an IDI’s assessment areas.75 With respect to wholesale and limited purpose institutions, the 1995 Rules provided that the Agencies may consider CD activities nationwide if the IDI had adequately addressed the needs of its assessment areas.76 The Q&As clarified the circumstances in which the Agencies would provide consideration for activities in the broader statewide or regional area but generally did not provide consideration for activities nationwide.77 In contrast, the June 2020 Rule provided nationwide consideration of qualifying activities for banks evaluated under the general performance standards. To provide consistency across bank type during the transition period, the OCC also explained in guidance that any OCC-regulated bank may receive consideration for qualifying activities outside of its assessment areas that do not directly or indirectly serve its assessment areas provided certain conditions were met.78 The OCC requests specific comment on whether: The OCC should continue to provide consideration for activities that do not directly or indirectly serve a bank’s assessment areas or the broader statewide or regional areas that include a bank’s assessment areas under the proposed rules. What conditions, if any, should be met in order for the OCC to provide consideration for activities that do not directly or indirectly serve a bank’s assessment areas or the broader statewide or regional areas that include a bank’s assessment areas? E. CD Activity Confirmation Process and Illustrative List Stakeholders generally supported the creation of the qualifying activities confirmation process and illustrative list in the June 2020 Rule. These provisions clarified the activities that would receive consideration in an OCCregulated bank’s CRA examination. Because the qualifying activity confirmation process is procedural and applies facts regarding a potential qualifying activity to qualifying activity criteria set forth in the June 2020 Rule, the OCC could have interpreted and provided guidance on which activities would receive consideration in CRA examinations without codifying the process in the June 2020 Rule. The OCC is considering whether to implement a qualifying activities confirmation process based on the CD definition in the 1995 Rules, as interpreted through the Q&As, while the OCC is working on the interagency CRA rulemaking process. Providing for a qualifying activities confirmation process outside of the CRA rules would be the least disruptive outcome for banks and interested parties that have found the process beneficial. Moreover, maintaining a confirmation process is not inconsistent with the Board ANPR, which included a suggestion related to a qualifying activities confirmation process. The OCC also would maintain the illustrative list of qualifying activities on its website as a reference for banks to determine whether activities that they conducted while the June 2020 Rule was in effect are eligible for CRA consideration; however, activities included on the illustrative list may not receive consideration if conducted after the effective date of the final rules. The OCC requests specific comment on whether: The OCC should implement a CD activity confirmation process during the period between the rescission of the June 2020 Rule and the issuance of prospective joint interagency rules. F. Strategic Plans The June 2020 Rule revised the requirements for requesting approval of a strategic plan. Among other things, the June 2020 Rule permitted banks requesting approval for a strategic plan to include target market assessment areas. For purposes of any final rules, the OCC proposes to maintain any strategic plans approved by the OCC under the June 2020 Rule and would not require these banks to amend their strategic plans. The OCC believes that permitting strategic plan banks to maintain their target market assessment areas is not inconsistent with proposed 12 CFR 25.41 and would cause the least disruption during the transition from the OCC’s June 2020 Rule to any future interagency final rules. The OCC requests specific comment on whether: The OCC’s proposed plan to maintain strategic plans approved under the June 2020 Rule with target market assessment areas is a reasonable way of addressing this transition consideration. G. June 2020 Rule Subpart E Subpart E of the June 2020 Rule includes the data collection, recordkeeping, and reporting provisions. Most of these provisions were subject to a January 1, 2023, or January 1, 2024, compliance date, and, therefore, do not require any transition. However, the changes to the public file requirements took effect October 1, 2020. These changes reduced the information required in the public file and changed the requirements for how an OCC-regulated bank makes the public file available to the public, including permitting these banks to make the public file available solely on their websites. Under the proposed rules, banks would need to include additional information in their public file and make the file available at their main office, and for interstate banks, at one branch in each State and more limited information at each branch. Since the proposed rules would impose additional public file content and availability requirements, the OCC expects to provide in the final rules that banks would comply with these requirements no later than three months after the effective date of the final rules. The OCC specifically requests comment on whether: Three months is sufficient time for banks to make the changes necessary to comply with the public file content and availability requirements of the proposed rules. The OCC should enact a transition period for the public notice requirements that took effect on October 1, 2020. H. Summary Chart of Proposed Transition Considerations OCC RESCIND AND REPLACE TRANSITION CONSIDERATIONS Description of the proposed provision Proposed transition plan Bank Type Changes Certain small banks (i.e., banks with at least $330 million but less than $600 million in assets). These small banks would become ISBs as of the effective date of any final rules. The change in bank type would be considered as part of performance context when evaluating the bank’s CRA performance. No additional transition time would be provided for adjusting to the ISB performance standards. 77 Q&A § ll.12(h)—6; Q&A § ll.12(h)—7; and Q&A § ll.23(a)—2. 78 See OCC Bulletin 2020–99, Community Reinvestment Act: Key Provisions of the June 2020 75 Id. 76 Id. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 CRA Rule and Frequently Asked Questions (November 9, 2020). E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules 52035 OCC RESCIND AND REPLACE TRANSITION CONSIDERATIONS—Continued Description of the proposed provision Proposed transition plan Certain ISBs (i.e., banks with at least $1.322 billion but not more than $2.5 billion in assets). These ISBs would become large banks as of the effective date of any final rules. The newly classified large banks would (1) begin collecting data to be evaluated under the large bank lending, investment, and service tests on January 1, 2023, and (2) report required and optional data the following year. Qualifying Activities Consideration of retail lending (i.e., home mortgage loans, small loans to businesses, small loans to farms, and consumer loans) and CD activities (i.e., CD loans, CD investments, and CD services—including legally binding commitments to lend and invest) and their related definitions. Qualifying activities confirmation letters issued under the June 2020 Rule. The proposed rules’ revised definitions would apply as of the effective date of any final rules. Banks would receive consideration in their CRA examinations for activities that met the qualifying activities criteria or definitions that were in effect at the time the bank conducted these activities. Confirmation letters would be applicable while the June 2020 Rule was in effect but would not apply to activities conducted after any final rules’ effective date. Affiliates Affiliate activities conducted after the effective date of any final rules. Banks may to elect to include affiliate activities in their CRA evaluations, subject to certain limitations. The OCC also would rescind the January 2021 interpretive letter regarding affiliate activities as of the effective date of any final rules. Outside Assessment Area Activities Consideration of activities conducted outside bank assessment areas. The OCC is considering whether it should continue to provide consideration for activities that do not directly or indirectly serve a bank’s assessment areas or the broader statewide or regional areas that include a bank’s assessment areas. CD Activity Confirmation Process and Illustrative List CD activities confirmation process Qualifying activities illustrative list .. The OCC is considering providing a process for qualifying activities confirmation outside of the CRA rules. The OCC would maintain the qualifying activities illustrative list on its website as a reference for banks to determine whether activities conducted while the June 2020 Rule was in effect are eligible for CRA consideration. Strategic Plans Strategic plans with target market assessment areas approved under the June 2020 Rule. The OCC would maintain any strategic plans approved by the OCC under the June 2020 Rule and would not require these banks to amend their strategic plans. June 2020 Rule Subpart E CRA public file content and location requirements. CRA notice requirements ................ Banks would comply with the additional public file content and availability requirements no later than three months after the effective date of any final rules. The OCC would not provide additional time for banks to comply with the CRA notice requirements. V. Interagency Rulemaking As noted, on July 20, 2021, the Agencies announced they had initiated an interagency rulemaking, stating that they are ‘‘committed to working together to jointly strengthen and modernize rules implementing the [CRA].’’ 79 The Agencies’ announcement stated that ‘‘[j]oint agency action will best achieve a consistent, modernized framework across all banks to help meet the credit needs of the communities in which they do business, including [LMI] neighborhoods.’’ 80 A reinstatement of 79 See 80 See supra note 7. supra note 7. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 the 1995 Rules would allow for an orderly transition to future, modernized CRA rules. VI. Regulatory Analysis A. Regulatory Flexibility Act In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) requires an agency, in connection with a proposed rule, to prepare an Initial Regulatory Flexibility Analysis describing the impact of the rule on small entities (defined by the Small Business Administration for purposes of the RFA to include commercial banks and savings institutions with total assets of $600 million or less and trust PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 companies with total assets of $41.5 million of less). However, under section 605(b) of the RFA, this analysis is not required if the agency certifies that the rule would not have a significant economic impact on a substantial number of small entities and publishes its certification and a short explanatory statement in the Federal Register along with its rule. The OCC currently supervises approximately 669 small entities, all of which may be impacted by the proposed rules. The OCC estimates the annual cost for small entities to comply with the proposed rules would be approximately $1,824 per bank ($114 per hour × 16 hours). In general, the E:\FR\FM\17SEP2.SGM 17SEP2 52036 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules OCC classifies the economic impact on an individual small entity as significant if the total estimated impact in one year is greater than 5 percent of the small entity’s total annual salaries and benefits or greater than 2.5 percent of the small entity’s total non-interest expense. Based on these thresholds, the OCC estimates that, if implemented, the proposed rules would have a significant economic impact on zero small entities, which is not a substantial number. Therefore, the OCC certifies that the proposed rules would not have a significant economic impact on a substantial number of small entities. B. Paperwork Reduction Act Certain provisions of the proposed rules contain ‘‘collection of information’’ requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501– 3521). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC reviewed the proposed rules and determined that it revises certain information collection requirements previously cleared by OMB under OMB Control No. 1557– 0160. The OCC has submitted the revised information collection to OMB for review under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of the OMB’s implementing regulations (5 CFR1320). Under the proposed rules: • 12 CFR 25.25(b) and 195.25(b)— Requests for designation as a wholesale or limited purpose bank would be made in writing with the OCC at least three months prior to the proposed effective date of the designation. • 12 CFR 25.27 and 195.27—Strategic plans would be submitted at least three months prior to proposed effective dates. Plans would include measurable goals and address all the performance categories. Plans would include a description of informal efforts to solicit public suggestions, any written public comments received, and if revised pursuant to public comment, a copy of the initial plan. Amendments to plans could be submitted in the case of a change in material circumstances. • 12 CFR 25.42(a) and 195.42(a)— Large banks would collect and maintain certain small business and small farm loan data in a machine-readable form and report it annually pursuant to 12 CFR 25.42(b)(1) and 195.42(b)(1). VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 • 12 CFR 25.42(b)(2) and 195.42(b)(2)—Large banks would report annually in machine readable form the aggregate number and aggregate amount of community development loans originated or purchased. • 12 CFR 25.42(b)(3) and 195.42(b)(3)—Large banks, if subject to reporting under HMDA, would report the location of each home mortgage loan application, origination, or purchase outside the MSAs where the bank has a home or branch office. • 12 CFR 25.42(c)(1) and 195.42(c)(1)—All banks could collect and maintain in machine readable form certain data for consumer loans originated or purchased by a bank for consideration under the lending test. Under 12 CFR 25.42(c)(2)–(4) and 195.42(c)(2)–(4), other information could be included concerning a bank’s lending performance, including additional loan distribution data. • 12 CFR 25.42(d) and 195.42(d)— Banks that elect to have the OCC consider loans by an affiliate, for purposes of the lending or community development test or an approved strategic plan, would collect, maintain, and report the data that the bank would have collected, maintained, and reported pursuant to 12 CFR 25.42(a)– (c) or 195.42(a)–(c), respectively, had the loans been originated or purchased by the bank. For home mortgage loans, the bank would also be prepared to identify the home mortgage loans reported under HMDA by the affiliate. • 12 CFR 25.42(e) and 195.42(e)— Banks that elect to have the OCC consider community development loans by a consortium or a third party, for purposes of the lending or community development tests or an approved strategic plan, would report for those loans the data that the bank would have reported under 12 CFR 25.42(b)(2) or 195.42(b)(2), respectively, had the loans been originated or purchased by the bank. • 12 CFR 25.42(f) and 195.42(f)— Small banks that qualify for evaluation under the small bank performance standards but elect evaluation under the lending, investment, and service tests would collect, maintain, and report the data required for other banks under 12 CFR 25.42(a), 25.42(b), 195.42(a), and 195.42(b). • 12 CFR 25.42(g) and 195.42(g)— Banks, except those that were a small bank during the prior calendar year, would collect and report to the OCC by March 1 each year a list for each assessment area showing the geographies within the area. • 12 CFR 25.43(a) and 195.43(a)—All banks would maintain a public file that PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 contains with certain specified details: all written comments and responses; a copy of the public section of the bank’s most recent CRA performance evaluation; a list of the bank’s branches; a list of the branches opened or closed; a list of services offered; and a map of each assessment area delineated by the bank. • 12 CFR 25.43(b) and 195.43(b)— Large banks would include in their public files certain information pertaining to the institution and its affiliates, if applicable, for each of the prior two calendar years. If the bank has elected to have one or more categories of its consumer loans considered under the lending test, for each of these categories, they would include the number and amount of loans: to low-, moderate-, middle-, and upper-income individuals; located in low-, moderate, middle-, and upper-income census tracts; and located inside the bank’s assessment area(s) and outside the bank’s assessment area(s); and their CRA Disclosure Statement. A bank required to report home mortgage loan data pursuant to 12 CFR part 1003 would include a written notice that the institution’s HMDA Disclosure Statement may be obtained on the Consumer Financial Protection Bureau’s (Bureau’s) website. A bank that elected to have the OCC consider the mortgage lending of an affiliate would include the name of the affiliate and a written notice that the affiliate’s HMDA Disclosure Statement may be obtained at the Bureau’s website. A small bank or a bank that was a small bank during the prior calendar year would include: its loan-to-deposit ratio for each quarter of the prior calendar year and, at its option, additional data on its loan-todeposit ratio; and the information required for other banks by 12 CFR 24.43(b)(1) or 195.43(b)(1), if it has elected to be evaluated under the lending, investment, and service tests. A bank that has been approved to be assessed under a strategic plan would include in its public file a copy of that plan. A bank that received a less than satisfactory rating during its most recent examination would include in its public file a description of its current efforts to improve its performance in helping to meet the credit needs of its entire community. The bank would update the description quarterly. • 12 CFR 25.43(c) through (e) and 12 CFR 195.43(c) through (e)—A bank would make available to the public for inspection upon request and at no cost the information required in these provisions at the main office or branch as specified. Upon request, bank would provide copies, either on paper or in E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules another form acceptable to the person making the request, of the information in its public file. A bank would ensure that this information is current as of April 1 of each year. OCC Title of Information Collection: Community Reinvestment Act. Frequency: On Occasion. Affected Public: Businesses or other for-profit. Total estimated annual burden: 113,351 hours. Comments are invited on: a. Whether the collections of information are necessary for the proper performance of the OCC’s functions, including whether the information has practical utility; b. The accuracy or the estimate of the burden of the information collections, including the validity of the methodology and assumptions used; c. Ways to enhance the quality, utility, and clarity of the information to be collected; d. Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information. C. Unfunded Mandates Reform Act of 1995 D. Riegle Community Development and Regulatory Improvement Act Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4802(a)), in determining the effective date and administrative compliance requirements for new rules that impose additional reporting, 17:07 Sep 16, 2021 Jkt 253001 List of Subjects Community development, Credit, Investments, National banks, Reporting and recordkeeping requirements, Savings associations. 12 CFR Part 195 For the reasons discussed in the preamble, and under the authority of 12 U.S.C. 93a, the Office of the Comptroller of the Currency proposes to amend 12 CFR part 25 and proposes to add part 195 as follows: 1. Part 25 is revised to read as follows: PART 25—COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT PRODUCTION REGULATIONS Subpart A—General Sec. 25.11 25.12 Authority, purposes, and scope. Definitions. Subpart B—Standards for Assessing Performance Sec. 25.21 Performance tests, standards, and ratings, in general. 25.22 Lending test. 25.23 Investment test. 25.24 Service test. 25.25 Community development test for wholesale or limited purpose banks. 25.26 Small bank performance standards. 25.27 Strategic plan. 25.28 Assigned ratings. 25.29 Effect of CRA performance on applications. PO 00000 Frm 00013 Fmt 4701 Subpart D [Reserved] Subpart E—Prohibition Against Use of Interstate Branches Primarily for Deposit Production Sec. 25.61 Purpose and scope. 25.62 Definitions. 25.63 Loan-to-deposit ratio screen. 25.64 Credit needs determination. 25.65 Sanctions. Appendix A to Part 25—Ratings Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215, 215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2908, and 3101 through 3111. Subpart A—General § 25.11 Banks, Banking, Community development, Credit, Investments, Reporting and recordkeeping requirements. ■ Subpart C—Records, Reporting, and Disclosure Requirements Sec. 25.41 Assessment area delineation. 25.42 Data collection, reporting, and disclosure. 25.43 Content and availability of public file. 25.44 Public notice by banks. 25.45 Publication of planned examination schedule. Appendix B to Part 25—CRA Notice 12 CFR Part 25 Authority and Issuance The OCC considers whether a proposed rule includes a Federal mandate, under the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq.), that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year ($158 million as adjusted annually for inflation). The UMRA does not apply to rules that incorporate requirements specifically set forth in law. The OCC estimates that expenditures associated with mandates in the proposed rules would be approximately $6 million. Therefore, the OCC concludes the proposed rules would not result in an expenditure of $158 million or more annually by State, local, and tribal governments or by the private sector. VerDate Sep<11>2014 disclosure, or other requirements on insured depository institutions, the OCC will consider, consistent with principles of safety and soundness and the public interest (1) any administrative burdens that the proposed rules would place on depository institutions, including small depository institutions and customers of depository institutions; and (2) the benefits of the proposed rules. The OCC requests comment on (1) any administrative burdens that the proposed rules would place on depository institutions, including small depository institutions, and their customers and (2) the benefits of the proposed rules that the OCC should consider in determining the effective date and administrative compliance requirements for any final rules. 52037 Sfmt 4702 Authority, purposes, and scope. (a) Authority and OMB control number—(1) Authority. The authority for subparts A, B, C, D, and E is 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215, 215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2907, and 3101 through 3111. (2) OMB control number. The information collection requirements contained in this part were approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMB control number 1557–0160. (b) Purposes. In enacting the Community Reinvestment Act (CRA), the Congress required each appropriate Federal financial supervisory agency to assess an institution’s record of helping to meet the credit needs of the local communities in which the institution is chartered, consistent with the safe and sound operation of the institution, and to take this record into account in the agency’s evaluation of an application for a deposit facility by the institution. This part is intended to carry out the purposes of the CRA by: (1) Establishing the framework and criteria by which the Office of the Comptroller of the Currency (OCC) assesses a bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank; and E:\FR\FM\17SEP2.SGM 17SEP2 52038 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (2) Providing that the OCC takes that record into account in considering certain applications. (c) Scope—(1) General. This part applies to all banks except as provided in paragraphs (c)(2) and (3) of this section. (2) Federal branches and agencies. (i) This part applies to all insured Federal branches and to any Federal branch that is uninsured that results from an acquisition described in section 5(a)(8) of the International Banking Act of 1978 (12 U.S.C. 3103(a)(8)). (ii) Except as provided in paragraph (c)(2)(i) of this section, this part does not apply to Federal branches that are uninsured, limited Federal branches, or Federal agencies, as those terms are defined in part 28 of this chapter. (3) Certain special purpose banks. This part does not apply to special purpose banks that do not perform commercial or retail banking services by granting credit to the public in the ordinary course of business, other than as incident to their specialized operations. These banks include banker’s banks, as defined in 12 U.S.C. 24 (Seventh), and banks that engage only in one or more of the following activities: Providing cash management controlled disbursement services or serving as correspondent banks, trust companies, or clearing agents. § 25.12 Definitions. For purposes of this part, the following definitions apply: (a) Affiliate means any company that controls, is controlled by, or is under common control with another company. The term ‘‘control’’ has the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company is under common control with another company if both companies are directly or indirectly controlled by the same company. (b) Area median income means: (1) The median family income for the MSA, if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions; or (2) The statewide nonmetropolitan median family income, if a person or geography is located outside an MSA. (c) Assessment area means a geographic area delineated in accordance with § 25.41. (d) Automated teller machine (ATM) means an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank at which deposits are received, cash dispersed, or money lent. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (e) Bank means a national bank (including a Federal branch as defined in part 28 of this chapter) with Federally insured deposits, except as provided in § 25.11(c). (f) Branch means a staffed banking facility authorized as a branch, whether shared or unshared, including, for example, a mini-branch in a grocery store or a branch operated in conjunction with any other local business or nonprofit organization. (g) Community development means: (1) Affordable housing (including multifamily rental housing) for low- or moderate-income individuals; (2) Community services targeted to low- or moderate-income individuals; (3) Activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration’s Development Company or Small Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or (4) Activities that revitalize or stabilize— (i) Low-or moderate-income geographies; (ii) Designated disaster areas; or (iii) Distressed or underserved nonmetropolitan middle-income geographies designated by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and OCC, based on— (A) Rates of poverty, unemployment, and population loss; or (B) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals. (h) Community development loan means a loan that: (1) Has as its primary purpose community development; and (2) Except in the case of a wholesale or limited purpose bank: (i) Has not been reported or collected by the bank or an affiliate for consideration in the bank’s assessment as a home mortgage, small business, small farm, or consumer loan, unless the loan is for a multifamily dwelling (as defined in § 1003.2(n) of this title); and (ii) Benefits the bank’s assessment area(s) or a broader statewide or regional area that includes the bank’s assessment area(s). (i) Community development service means a service that: (1) Has as its primary purpose community development; (2) Is related to the provision of financial services; and PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 (3) Has not been considered in the evaluation of the bank’s retail banking services under § 25.24(d). (j) Consumer loan means a loan to one or more individuals for household, family, or other personal expenditures. A consumer loan does not include a home mortgage, small business, or small farm loan. Consumer loans include the following categories of loans: (1) Motor vehicle loan, which is a consumer loan extended for the purchase of and secured by a motor vehicle; (2) Credit card loan, which is a line of credit for household, family, or other personal expenditures that is accessed by a borrower’s use of a ‘‘credit card,’’ as this term is defined in § 1026.2 of this title; (3) Other secured consumer loan, which is a secured consumer loan that is not included in one of the other categories of consumer loans; and (4) Other unsecured consumer loan, which is an unsecured consumer loan that is not included in one of the other categories of consumer loans. (k) Geography means a census tract delineated by the United States Bureau of the Census in the most recent decennial census. (l) Home mortgage loan means a closed-end mortgage loan or an openend line of credit as these terms are defined under § 1003.2 of this title, and that is not an excluded transaction under § 1003.3(c)(1) through (10) and (13) of this title. (m) Income level includes: (1) Low-income, which means an individual income that is less than 50 percent of the area median income, or a median family income that is less than 50 percent, in the case of a geography. (2) Moderate-income, which means an individual income that is at least 50 percent and less than 80 percent of the area median income, or a median family income that is at least 50 and less than 80 percent, in the case of a geography. (3) Middle-income, which means an individual income that is at least 80 percent and less than 120 percent of the area median income, or a median family income that is at least 80 and less than 120 percent, in the case of a geography. (4) Upper-income, which means an individual income that is 120 percent or more of the area median income, or a median family income that is 120 percent or more, in the case of a geography. (n) Limited purpose bank means a bank that offers only a narrow product line (such as credit card or motor vehicle loans) to a regional or broader market and for which a designation as E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules a limited purpose bank is in effect, in accordance with § 25.25(b). (o) Loan location. A loan is located as follows: (1) A consumer loan is located in the geography where the borrower resides; (2) A home mortgage loan is located in the geography where the property to which the loan relates is located; and (3) A small business or small farm loan is located in the geography where the main business facility or farm is located or where the loan proceeds otherwise will be applied, as indicated by the borrower. (p) Loan production office means a staffed facility, other than a branch, that is open to the public and that provides lending-related services, such as loan information and applications. (q) Metropolitan division means a metropolitan division as defined by the Director of the Office of Management and Budget. (r) MSA means a metropolitan statistical area as defined by the Director of the Office of Management and Budget. (s) Nonmetropolitan area means any area that is not located in an MSA. (t) Qualified investment means a lawful investment, deposit, membership share, or grant that has as its primary purpose community development. (u) Small bank—(1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion. Intermediate small bank means a small bank with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years. (2) Adjustment. The dollar figures in paragraph (u)(1) of this section shall be adjusted annually and published by the OCC, based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each twelve-month period ending in November, with rounding to the nearest million. (v) Small business loan means a loan included in ‘‘loans to small businesses’’ as defined in the instructions for preparation of the Consolidated Report of Condition and Income. (w) Small farm loan means a loan included in ‘‘loans to small farms’’ as defined in the instructions for preparation of the Consolidated Report of Condition and Income. (x) Wholesale bank means a bank that is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers, and for which a designation as a wholesale VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 bank is in effect, in accordance with § 25.25(b). Subpart B—Standards for Assessing Performance § 25.21 Performance tests, standards, and ratings, in general. (a) Performance tests and standards. The OCC assesses the CRA performance of a bank in an examination as follows: (1) Lending, investment, and service tests. The OCC applies the lending, investment, and service tests, as provided in §§ 25.22 through 25.24, in evaluating the performance of a bank, except as provided in paragraphs (a)(2), (3), and (4) of this section. (2) Community development test for wholesale or limited purpose banks. The OCC applies the community development test for a wholesale or limited purpose bank, as provided in § 25.25, except as provided in paragraph (a)(4) of this section. (3) Small bank performance standards. The OCC applies the small bank performance standards as provided in § 25.26 in evaluating the performance of a small bank or a bank that was a small bank during the prior calendar year, unless the bank elects to be assessed as provided in paragraphs (a)(1), (2), or (4) of this section. The bank may elect to be assessed as provided in paragraph (a)(1) of this section only if it collects and reports the data required for other banks under § 25.42. (4) Strategic plan. The OCC evaluates the performance of a bank under a strategic plan if the bank submits, and the OCC approves, a strategic plan as provided in § 25.27. (b) Performance context. The OCC applies the tests and standards in paragraph (a) of this section and also considers whether to approve a proposed strategic plan in the context of: (1) Demographic data on median income levels, distribution of household income, nature of housing stock, housing costs, and other relevant data pertaining to a bank’s assessment area(s); (2) Any information about lending, investment, and service opportunities in the bank’s assessment area(s) maintained by the bank or obtained from community organizations, state, local, and tribal governments, economic development agencies, or other sources; (3) The bank’s product offerings and business strategy as determined from data provided by the bank; (4) Institutional capacity and constraints, including the size and financial condition of the bank, the PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 52039 economic climate (national, regional, and local), safety and soundness limitations, and any other factors that significantly affect the bank’s ability to provide lending, investments, or services in its assessment area(s); (5) The bank’s past performance and the performance of similarly situated lenders; (6) The bank’s public file, as described in § 25.43, and any written comments about the bank’s CRA performance submitted to the bank or the OCC; and (7) Any other information deemed relevant by the OCC. (c) Assigned ratings. The OCC assigns to a bank one of the following four ratings pursuant to § 25.28 and appendix A of this part: ‘‘outstanding’’; ‘‘satisfactory’’; ‘‘needs to improve’’; or ‘‘substantial noncompliance’’ as provided in 12 U.S.C. 2906(b)(2). The rating assigned by the OCC reflects the bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank. (d) Safe and sound operations. This part and the CRA do not require a bank to make loans or investments or to provide services that are inconsistent with safe and sound operations. To the contrary, the OCC anticipates banks can meet the standards of this part with safe and sound loans, investments, and services on which the banks expect to make a profit. Banks are permitted and encouraged to develop and apply flexible underwriting standards for loans that benefit low- or moderateincome geographies or individuals, only if consistent with safe and sound operations. (e) Low-cost education loans provided to low-income borrowers. In assessing and taking into account the record of a bank under this part, the OCC considers, as a factor, low-cost education loans originated by the bank to borrowers, particularly in its assessment area(s), who have an individual income that is less than 50 percent of the area median income. For purposes of this paragraph, ‘‘low-cost education loans’’ means any education loan, as defined in section 140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7)) (including a loan under a state or local education loan program), originated by the bank for a student at an ‘‘institution of higher education,’’ as that term is generally defined in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing regulations published by the U.S. Department of Education, with interest rates and fees no greater than those of E:\FR\FM\17SEP2.SGM 17SEP2 52040 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules comparable education loans offered directly by the U.S. Department of Education. Such rates and fees are specified in section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e). (f) Activities in cooperation with minority- or women-owned financial institutions and low-income credit unions. In assessing and taking into account the record of a nonminorityowned and nonwomen-owned bank under this part, the OCC considers as a factor capital investment, loan participation, and other ventures undertaken by the bank in cooperation with minority- and women-owned financial institutions and low-income credit unions. Such activities must help meet the credit needs of local communities in which the minorityand women-owned financial institutions and low-income credit unions are chartered. To be considered, such activities need not also benefit the bank’s assessment area(s) or the broader statewide or regional area that includes the bank’s assessment area(s). § 25.22 Lending test. (a) Scope of test. (1) The lending test evaluates a bank’s record of helping to meet the credit needs of its assessment area(s) through its lending activities by considering a bank’s home mortgage, small business, small farm, and community development lending. If consumer lending constitutes a substantial majority of a bank’s business, the OCC will evaluate the bank’s consumer lending in one or more of the following categories: Motor vehicle, credit card, other secured, and other unsecured loans. In addition, at a bank’s option, the OCC will evaluate one or more categories of consumer lending, if the bank has collected and maintained, as required in § 25.42(c)(1), the data for each category that the bank elects to have the OCC evaluate. (2) The OCC considers originations and purchases of loans. The OCC will also consider any other loan data the bank may choose to provide, including data on loans outstanding, commitments and letters of credit. (3) A bank may ask the OCC to consider loans originated or purchased by consortia in which the bank participates or by third parties in which the bank has invested only if the loans meet the definition of community development loans and only in accordance with paragraph (d) of this section. The OCC will not consider these loans under any criterion of the lending test except the community development lending criterion. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (b) Performance criteria. The OCC evaluates a bank’s lending performance pursuant to the following criteria: (1) Lending activity. The number and amount of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, in the bank’s assessment area(s); (2) Geographic distribution. The geographic distribution of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, based on the loan location, including: (i) The proportion of the bank’s lending in the bank’s assessment area(s); (ii) The dispersion of lending in the bank’s assessment area(s); and (iii) The number and amount of loans in low-, moderate-, middle-, and upperincome geographies in the bank’s assessment area(s); (3) Borrower characteristics. The distribution, particularly in the bank’s assessment area(s), of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, based on borrower characteristics, including the number and amount of: (i) Home mortgage loans to low-, moderate-, middle-, and upper-income individuals; (ii) Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (iii) Small business and small farm loans by loan amount at origination; and (iv) Consumer loans, if applicable, to low-, moderate-, middle-, and upperincome individuals; (4) Community development lending. The bank’s community development lending, including the number and amount of community development loans, and their complexity and innovativeness; and (5) Innovative or flexible lending practices. The bank’s use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies. (c) Affiliate lending. (1) At a bank’s option, the OCC will consider loans by an affiliate of the bank, if the bank provides data on the affiliate’s loans pursuant to § 25.42. (2) The OCC considers affiliate lending subject to the following constraints: (i) No affiliate may claim a loan origination or loan purchase if another institution claims the same loan origination or purchase; and (ii) If a bank elects to have the OCC consider loans within a particular lending category made by one or more of the bank’s affiliates in a particular assessment area, the bank shall elect to have the OCC consider, in accordance PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 with paragraph (c)(1) of this section, all the loans within that lending category in that particular assessment area made by all of the bank’s affiliates. (3) The OCC does not consider affiliate lending in assessing a bank’s performance under paragraph (b)(2)(i) of this section. (d) Lending by a consortium or a third party. Community development loans originated or purchased by a consortium in which the bank participates or by a third party in which the bank has invested: (1) Will be considered, at the bank’s option, if the bank reports the data pertaining to these loans under § 25.42(b)(2); and (2) May be allocated among participants or investors, as they choose, for purposes of the lending test, except that no participant or investor: (i) May claim a loan origination or loan purchase if another participant or investor claims the same loan origination or purchase; or (ii) May claim loans accounting for more than its percentage share (based on the level of its participation or investment) of the total loans originated by the consortium or third party. (e) Lending performance rating. The OCC rates a bank’s lending performance as provided in appendix A of this part. § 25.23 Investment test. (a) Scope of test. The investment test evaluates a bank’s record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader statewide or regional area that includes the bank’s assessment area(s). (b) Exclusion. Activities considered under the lending or service tests may not be considered under the investment test. (c) Affiliate investment. At a bank’s option, the OCC will consider, in its assessment of a bank’s investment performance, a qualified investment made by an affiliate of the bank, if the qualified investment is not claimed by any other institution. (d) Disposition of branch premises. Donating, selling on favorable terms, or making available on a rent-free basis a branch of the bank that is located in a predominantly minority neighborhood to a minority depository institution or women’s depository institution (as these terms are defined in 12 U.S.C. 2907(b)) will be considered as a qualified investment. (e) Performance criteria. The OCC evaluates the investment performance of a bank pursuant to the following criteria: (1) The dollar amount of qualified investments; E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (2) The innovativeness or complexity of qualified investments; (3) The responsiveness of qualified investments to credit and community development needs; and (4) The degree to which the qualified investments are not routinely provided by private investors. (f) Investment performance rating. The OCC rates a bank’s investment performance as provided in appendix A of this part. evaluates community development services pursuant to the following criteria: (1) The extent to which the bank provides community development services; and (2) The innovativeness and responsiveness of community development services. (f) Service performance rating. The OCC rates a bank’s service performance as provided in appendix A of this part. § 25.24 § 25.25 Community development test for wholesale or limited purpose banks. Service test. (a) Scope of test. The service test evaluates a bank’s record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of a bank’s systems for delivering retail banking services and the extent and innovativeness of its community development services. (b) Area(s) benefitted. Community development services must benefit a bank’s assessment area(s) or a broader statewide or regional area that includes the bank’s assessment area(s). (c) Affiliate service. At a bank’s option, the OCC will consider, in its assessment of a bank’s service performance, a community development service provided by an affiliate of the bank, if the community development service is not claimed by any other institution. (d) Performance criteria—retail banking services. The OCC evaluates the availability and effectiveness of a bank’s systems for delivering retail banking services, pursuant to the following criteria: (1) The current distribution of the bank’s branches among low-, moderate, middle-, and upper-income geographies; (2) In the context of its current distribution of the bank’s branches, the bank’s record of opening and closing branches, particularly branches located in low- or moderate-income geographies or primarily serving low- or moderateincome individuals; (3) The availability and effectiveness of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank, banking by telephone or computer, loan production offices, and bank-at-work or bank-bymail programs) in low- and moderateincome geographies and to low- and moderate-income individuals; and (4) The range of services provided in low-, moderate-, middle-, and upperincome geographies and the degree to which the services are tailored to meet the needs of those geographies. (e) Performance criteria—community development services. The OCC VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (a) Scope of test. The OCC assesses a wholesale or limited purpose bank’s record of helping to meet the credit needs of its assessment area(s) under the community development test through its community development lending, qualified investments, or community development services. (b) Designation as a wholesale or limited purpose bank. In order to receive a designation as a wholesale or limited purpose bank, a bank shall file a request, in writing, with the OCC, at least three months prior to the proposed effective date of the designation. If the OCC approves the designation, it remains in effect until the bank requests revocation of the designation or until one year after the OCC notifies the bank that the OCC has revoked the designation on its own initiative. (c) Performance criteria. The OCC evaluates the community development performance of a wholesale or limited purpose bank pursuant to the following criteria: (1) The number and amount of community development loans (including originations and purchases of loans and other community development loan data provided by the bank, such as data on loans outstanding, commitments, and letters of credit), qualified investments, or community development services; (2) The use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and (3) The bank’s responsiveness to credit and community development needs. (d) Indirect activities. At a bank’s option, the OCC will consider in its community development performance assessment: (1) Qualified investments or community development services provided by an affiliate of the bank, if the investments or services are not claimed by any other institution; and (2) Community development lending by affiliates, consortia and third parties, PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 52041 subject to the requirements and limitations in § 25.22(c) and (d). (e) Benefit to assessment area(s)—(1) Benefit inside assessment area(s). The OCC considers all qualified investments, community development loans, and community development services that benefit areas within the bank’s assessment area(s) or a broader statewide or regional area that includes the bank’s assessment area(s). (2) Benefit outside assessment area(s). The OCC considers the qualified investments, community development loans, and community development services that benefit areas outside the bank’s assessment area(s), if the bank has adequately addressed the needs of its assessment area(s). (f) Community development performance rating. The OCC rates a bank’s community development performance as provided in appendix A of this part. § 25.26 Small bank performance standards. (a) Performance criteria—(1) Small banks that are not intermediate small banks. The OCC evaluates the record of a small bank that is not, or that was not during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraph (b) of this section. (2) Intermediate small banks. The OCC evaluates the record of a small bank that is, or that was during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraphs (b) and (c) of this section. (b) Lending test. A small bank’s lending performance is evaluated pursuant to the following criteria: (1) The bank’s loan-to-deposit ratio, adjusted for seasonal variation, and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans, or qualified investments; (2) The percentage of loans and, as appropriate, other lending-related activities located in the bank’s assessment area(s); (3) The bank’s record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes; (4) The geographic distribution of the bank’s loans; and (5) The bank’s record of taking action, if warranted, in response to written complaints about its performance in E:\FR\FM\17SEP2.SGM 17SEP2 52042 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules helping to meet credit needs in its assessment area(s). (c) Community development test. An intermediate small bank’s community development performance also is evaluated pursuant to the following criteria: (1) The number and amount of community development loans; (2) The number and amount of qualified investments; (3) The extent to which the bank provides community development services; and (4) The bank’s responsiveness through such activities to community development lending, investment, and services needs. (d) Small bank performance rating. The OCC rates the performance of a bank evaluated under this section as provided in appendix A of this part. § 25.27 Strategic plan. (a) Alternative election. The OCC will assess a bank’s record of helping to meet the credit needs of its assessment area(s) under a strategic plan if: (1) The bank has submitted the plan to the OCC as provided for in this section; (2) The OCC has approved the plan; (3) The plan is in effect; and (4) The bank has been operating under an approved plan for at least one year. (b) Data reporting. The OCC’s approval of a plan does not affect the bank’s obligation, if any, to report data as required by § 25.42. (c) Plans in general—(1) Term. A plan may have a term of no more than five years, and any multi-year plan must include annual interim measurable goals under which the OCC will evaluate the bank’s performance. (2) Multiple assessment areas. A bank with more than one assessment area may prepare a single plan for all of its assessment areas or one or more plans for one or more of its assessment areas. (3) Treatment of affiliates. Affiliated institutions may prepare a joint plan if the plan provides measurable goals for each institution. Activities may be allocated among institutions at the institutions’ option, provided that the same activities are not considered for more than one institution. (d) Public participation in plan development. Before submitting a plan to the OCC for approval, a bank shall: (1) Informally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan; (2) Once the bank has developed a plan, formally solicit public comment on the plan for at least 30 days by publishing notice in at least one VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 newspaper of general circulation in each assessment area covered by the plan; and (3) During the period of formal public comment, make copies of the plan available for review by the public at no cost at all offices of the bank in any assessment area covered by the plan and provide copies of the plan upon request for a reasonable fee to cover copying and mailing, if applicable. (e) Submission of plan. The bank shall submit its plan to the OCC at least three months prior to the proposed effective date of the plan. The bank shall also submit with its plan a description of its informal efforts to seek suggestions from members of the public, any written public comment received, and, if the plan was revised in light of the comment received, the initial plan as released for public comment. (f) Plan content—(1) Measurable goals. (i) A bank shall specify in its plan measurable goals for helping to meet the credit needs of each assessment area covered by the plan, particularly the needs of low- and moderate-income geographies and low- and moderateincome individuals, through lending, investment, and services, as appropriate. (ii) A bank shall address in its plan all three performance categories and, unless the bank has been designated as a wholesale or limited purpose bank, shall emphasize lending and lendingrelated activities. Nevertheless, a different emphasis, including a focus on one or more performance categories, may be appropriate if responsive to the characteristics and credit needs of its assessment area(s), considering public comment and the bank’s capacity and constraints, product offerings, and business strategy. (2) Confidential information. A bank may submit additional information to the OCC on a confidential basis, but the goals stated in the plan must be sufficiently specific to enable the public and the OCC to judge the merits of the plan. (3) Satisfactory and outstanding goals. A bank shall specify in its plan measurable goals that constitute ‘‘satisfactory’’ performance. A plan may specify measurable goals that constitute ‘‘outstanding’’ performance. If a bank submits, and the OCC approves, both ‘‘satisfactory’’ and ‘‘outstanding’’ performance goals, the OCC will consider the bank eligible for an ‘‘outstanding’’ performance rating. (4) Election if satisfactory goals not substantially met. A bank may elect in its plan that, if the bank fails to meet substantially its plan goals for a satisfactory rating, the OCC will PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 evaluate the bank’s performance under the lending, investment, and service tests, the community development test, or the small bank performance standards, as appropriate. (g) Plan approval—(1) Timing. The OCC will act upon a plan within 60 calendar days after the OCC receives the complete plan and other material required under paragraph (e) of this section. If the OCC fails to act within this time period, the plan shall be deemed approved unless the OCC extends the review period for good cause. (2) Public participation. In evaluating the plan’s goals, the OCC considers the public’s involvement in formulating the plan, written public comment on the plan, and any response by the bank to public comment on the plan. (3) Criteria for evaluating plan. The OCC evaluates a plan’s measurable goals using the following criteria, as appropriate: (i) The extent and breadth of lending or lending-related activities, including, as appropriate, the distribution of loans among different geographies, businesses and farms of different sizes, and individuals of different income levels, the extent of community development lending, and the use of innovative or flexible lending practices to address credit needs; (ii) The amount and innovativeness, complexity, and responsiveness of the bank’s qualified investments; and (iii) The availability and effectiveness of the bank’s systems for delivering retail banking services and the extent and innovativeness of the bank’s community development services. (h) Plan amendment. During the term of a plan, a bank may request the OCC to approve an amendment to the plan on grounds that there has been a material change in circumstances. The bank shall develop an amendment to a previously approved plan in accordance with the public participation requirements of paragraph (d) of this section. (i) Plan assessment. The OCC approves the goals and assesses performance under a plan as provided for in appendix A of this part. § 25.28 Assigned ratings. (a) Ratings in general. Subject to paragraphs (b) and (c) of this section, the OCC assigns to a bank a rating of ‘‘outstanding,’’ ‘‘satisfactory,’’ ‘‘needs to improve,’’ or ‘‘substantial noncompliance’’ based on the bank’s performance under the lending, investment and service tests, the community development test, the small bank performance standards, or an approved strategic plan, as applicable. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (b) Lending, investment, and service tests. The OCC assigns a rating for a bank assessed under the lending, investment, and service tests in accordance with the following principles: (1) A bank that receives an ‘‘outstanding’’ rating on the lending test receives an assigned rating of at least ‘‘satisfactory’’; (2) A bank that receives an ‘‘outstanding’’ rating on both the service test and the investment test and a rating of at least ‘‘high satisfactory’’ on the lending test receives an assigned rating of ‘‘outstanding’’; and (3) No bank may receive an assigned rating of ‘‘satisfactory’’ or higher unless it receives a rating of at least ‘‘low satisfactory’’ on the lending test. (c) Effect of evidence of discriminatory or other illegal credit practices. (1) The OCC’s evaluation of a bank’s CRA performance is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the bank or in any assessment area by any affiliate whose loans have been considered as part of the bank’s lending performance. In connection with any type of lending activity described in § 25.22(a), evidence of discriminatory or other credit practices that violate an applicable law, rule, or regulation includes, but is not limited to: (i) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act; (ii) Violations of the Home Ownership and Equity Protection Act; (iii) Violations of section 5 of the Federal Trade Commission Act; (iv) Violations of section 8 of the Real Estate Settlement Procedures Act; and (v) Violations of the Truth in Lending Act provisions regarding a consumer’s right of rescission. (2) In determining the effect of evidence of practices described in paragraph (c)(1) of this section on the bank’s assigned rating, the OCC considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the bank (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the bank (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from selfassessment; and any other relevant information. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 § 25.29 Effect of CRA performance on applications. (a) CRA performance. Among other factors, the OCC takes into account the record of performance under the CRA of each applicant bank in considering an application for: (1) The establishment of a domestic branch; (2) The relocation of the main office or a branch; (3) Under the Bank Merger Act (12 U.S.C. 1828(c)), the merger or consolidation with or the acquisition of assets or assumption of liabilities of an insured depository institution; and (4) The conversion of an insured depository institution to a national bank charter. (b) Charter application. An applicant (other than an insured depository institution) for a national bank charter shall submit with its application a description of how it will meet its CRA objectives. The OCC takes the description into account in considering the application and may deny or condition approval on that basis. (c) Interested parties. The OCC takes into account any views expressed by interested parties that are submitted in accordance with the OCC’s procedures set forth in part 5 of this chapter in considering CRA performance in an application listed in paragraphs (a) and (b) of this section. (d) Denial or conditional approval of application. A bank’s record of performance may be the basis for denying or conditioning approval of an application listed in paragraph (a) of this section. (e) Insured depository institution. For purposes of this section, the term ‘‘insured depository institution’’ has the meaning given to that term in 12 U.S.C. 1813. Subpart C—Records, Reporting, and Disclosure Requirements § 25.41 Assessment area delineation. (a) In general. A bank shall delineate one or more assessment areas within which the OCC evaluates the bank’s record of helping to meet the credit needs of its community. The OCC does not evaluate the bank’s delineation of its assessment area(s) as a separate performance criterion, but the OCC reviews the delineation for compliance with the requirements of this section. (b) Geographic area(s) for wholesale or limited purpose banks. The assessment area(s) for a wholesale or limited purpose bank must consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 52043 were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns, in which the bank has its main office, branches, and deposittaking ATMs. (c) Geographic area(s) for other banks. The assessment area(s) for a bank other than a wholesale or limited purpose bank must: (1) Consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns; and (2) Include the geographies in which the bank has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding geographies in which the bank has originated or purchased a substantial portion of its loans (including home mortgage loans, small business and small farm loans, and any other loans the bank chooses, such as those consumer loans on which the bank elects to have its performance assessed). (d) Adjustments to geographic area(s). A bank may adjust the boundaries of its assessment area(s) to include only the portion of a political subdivision that it reasonably can be expected to serve. An adjustment is particularly appropriate in the case of an assessment area that otherwise would be extremely large, of unusual configuration, or divided by significant geographic barriers. (e) Limitations on the delineation of an assessment area. Each bank’s assessment area(s): (1) Must consist only of whole geographies; (2) May not reflect illegal discrimination; (3) May not arbitrarily exclude low- or moderate-income geographies, taking into account the bank’s size and financial condition; and (4) May not extend substantially beyond an MSA boundary or beyond a state boundary unless the assessment area is located in a multistate MSA. If a bank serves a geographic area that extends substantially beyond a state boundary, the bank shall delineate separate assessment areas for the areas in each state. If a bank serves a geographic area that extends substantially beyond an MSA boundary, the bank shall delineate separate assessment areas for the areas inside and outside the MSA. (f) Banks serving military personnel. Notwithstanding the requirements of this section, a bank whose business E:\FR\FM\17SEP2.SGM 17SEP2 52044 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules predominantly consists of serving the needs of military personnel or their dependents who are not located within a defined geographic area may delineate its entire deposit customer base as its assessment area. (g) Use of assessment area(s). The OCC uses the assessment area(s) delineated by a bank in its evaluation of the bank’s CRA performance unless the OCC determines that the assessment area(s) do not comply with the requirements of this section. § 25.42 Data collection, reporting, and disclosure. (a) Loan information required to be collected and maintained. A bank, except a small bank, shall collect, and maintain in machine readable form (as prescribed by the OCC) until the completion of its next CRA examination, the following data for each small business or small farm loan originated or purchased by the bank: (1) A unique number or alphanumeric symbol that can be used to identify the relevant loan file; (2) The loan amount at origination; (3) The loan location; and (4) An indicator whether the loan was to a business or farm with gross annual revenues of $1 million or less. (b) Loan information required to be reported. A bank, except a small bank or a bank that was a small bank during the prior calendar year, shall report annually by March 1 to the OCC in machine readable form (as prescribed by the OCC) the following data for the prior calendar year: (1) Small business and small farm loan data. For each geography in which the bank originated or purchased a small business or small farm loan, the aggregate number and amount of loans: (i) With an amount at origination of $100,000 or less; (ii) With amount at origination of more than $100,000 but less than or equal to $250,000; (iii) With an amount at origination of more than $250,000; and (iv) To businesses and farms with gross annual revenues of $1 million or less (using the revenues that the bank considered in making its credit decision); (2) Community development loan data. The aggregate number and aggregate amount of community development loans originated or purchased; and (3) Home mortgage loans. If the bank is subject to reporting under part 1003 of this title, the location of each home mortgage loan application, origination, or purchase outside the MSAs in which the bank has a home or branch office (or VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 outside any MSA) in accordance with the requirements of part 1003 of this title. (c) Optional data collection and maintenance—(1) Consumer loans. A bank may collect and maintain in machine readable form (as prescribed by the OCC) data for consumer loans originated or purchased by the bank for consideration under the lending test. A bank may maintain data for one or more of the following categories of consumer loans: Motor vehicle, credit card, other secured, and other unsecured. If the bank maintains data for loans in a certain category, it shall maintain data for all loans originated or purchased within that category. The bank shall maintain data separately for each category, including for each loan: (i) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file; (ii) The loan amount at origination or purchase; (iii) The loan location; and (iv) The gross annual income of the borrower that the bank considered in making its credit decision. (2) Other loan data. At its option, a bank may provide other information concerning its lending performance, including additional loan distribution data. (d) Data on affiliate lending. A bank that elects to have the OCC consider loans by an affiliate, for purposes of the lending or community development test or an approved strategic plan, shall collect, maintain, and report for those loans the data that the bank would have collected, maintained, and reported pursuant to paragraphs (a), (b), and (c) of this section had the loans been originated or purchased by the bank. For home mortgage loans, the bank shall also be prepared to identify the home mortgage loans reported under part 1003 of this title by the affiliate. (e) Data on lending by a consortium or a third party. A bank that elects to have the OCC consider community development loans by a consortium or third party, for purposes of the lending or community development tests or an approved strategic plan, shall report for those loans the data that the bank would have reported under paragraph (b)(2) of this section had the loans been originated or purchased by the bank. (f) Small banks electing evaluation under the lending, investment, and service tests. A bank that qualifies for evaluation under the small bank performance standards but elects evaluation under the lending, investment, and service tests shall collect, maintain, and report the data PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 required for other banks pursuant to paragraphs (a) and (b) of this section. (g) Assessment area data. A bank, except a small bank or a bank that was a small bank during the prior calendar year, shall collect and report to the OCC by March 1 of each year a list for each assessment area showing the geographies within the area. (h) CRA Disclosure Statement. The OCC prepares annually for each bank that reports data pursuant to this section a CRA Disclosure Statement that contains, on a state-by-state basis: (1) For each county (and for each assessment area smaller than a county) with a population of 500,000 persons or fewer in which the bank reported a small business or small farm loan: (i) The number and amount of small business and small farm loans reported as originated or purchased located in low-, moderate-, middle-, and upperincome geographies; (ii) A list grouping each geography according to whether the geography is low-, moderate-, middle-, or upperincome; (iii) A list showing each geography in which the bank reported a small business or small farm loan; and (iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (2) For each county (and for each assessment area smaller than a county) with a population in excess of 500,000 persons in which the bank reported a small business or small farm loan: (i) The number and amount of small business and small farm loans reported as originated or purchased located in geographies with median income relative to the area median income of less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more; (ii) A list grouping each geography in the county or assessment area according to whether the median income in the geography relative to the area median income is less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more; (iii) A list showing each geography in which the bank reported a small business or small farm loan; and (iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (3) The number and amount of small business and small farm loans located inside each assessment area reported by the bank and the number and amount of small business and small farm loans located outside the assessment area(s) reported by the bank; and (4) The number and amount of community development loans reported as originated or purchased. (i) Aggregate disclosure statements. The OCC, in conjunction with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, prepares annually, for each MSA or metropolitan division (including an MSA or metropolitan division that crosses a state boundary) and the nonmetropolitan portion of each state, an aggregate disclosure statement of small business and small farm lending by all institutions subject to reporting under this part or parts 195, 228, or 345 of this title. These disclosure statements indicate, for each geography, the number and amount of all small business and small farm loans originated or purchased by reporting institutions, except that the OCC may adjust the form of the disclosure if necessary, because of special circumstances, to protect the privacy of a borrower or the competitive position of an institution. (j) Central data depositories. The OCC makes the aggregate disclosure statements, described in paragraph (i) of this section, and the individual bank CRA Disclosure Statements, described in paragraph (h) of this section, available to the public at central data depositories. The OCC publishes a list of the depositories at which the statements are available. § 25.43 file. Content and availability of public (a) Information available to the public. A bank shall maintain a public file that includes the following information: (1) All written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the bank’s VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 performance in helping to meet community credit needs, and any response to the comments by the bank, if neither the comments nor the responses contain statements that reflect adversely on the good name or reputation of any persons other than the bank or publication of which would violate specific provisions of law; (2) A copy of the public section of the bank’s most recent CRA Performance Evaluation prepared by the OCC. The bank shall place this copy in the public file within 30 business days after its receipt from the OCC; (3) A list of the bank’s branches, their street addresses, and geographies; (4) A list of branches opened or closed by the bank during the current year and each of the prior two calendar years, their street addresses, and geographies; (5) A list of services (including hours of operation, available loan and deposit products, and transaction fees) generally offered at the bank’s branches and descriptions of material differences in the availability or cost of services at particular branches, if any. At its option, a bank may include information regarding the availability of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs); (6) A map of each assessment area showing the boundaries of the area and identifying the geographies contained within the area, either on the map or in a separate list; and (7) Any other information the bank chooses. (b) Additional information available to the public—(1) Banks other than small banks. A bank, except a small bank or a bank that was a small bank during the prior calendar year, shall include in its public file the following information pertaining to the bank and its affiliates, if applicable, for each of the prior two calendar years: (i) If the bank has elected to have one or more categories of its consumer loans considered under the lending test, for each of these categories, the number and amount of loans: (A) To low-, moderate-, middle-, and upper-income individuals; (B) Located in low-, moderate-, middle-, and upper-income census tracts; and (C) Located inside the bank’s assessment area(s) and outside the bank’s assessment area(s); and (ii) The bank’s CRA Disclosure Statement. The bank shall place the statement in the public file within three PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 52045 business days of its receipt from the OCC. (2) Banks required to report Home Mortgage Disclosure Act (HMDA) data. A bank required to report home mortgage loan data pursuant part 1003 of this title shall include in its public file a written notice that the institution’s HMDA Disclosure Statement may be obtained on the Consumer Financial Protection Bureau’s (Bureau’s) website at www.consumerfinance.gov/hmda. In addition, a bank that elected to have the OCC consider the mortgage lending of an affiliate shall include in its public file the name of the affiliate and a written notice that the affiliate’s HMDA Disclosure Statement may be obtained at the Bureau’s website. The bank shall place the written notice(s) in the public file within three business days after receiving notification from the Federal Financial Institutions Examination Council of the availability of the disclosure statement(s). (3) Small banks. A small bank or a bank that was a small bank during the prior calendar year shall include in its public file: (i) The bank’s loan-to-deposit ratio for each quarter of the prior calendar year and, at its option, additional data on its loan-to-deposit ratio; and (ii) The information required for other banks by paragraph (b)(1) of this section, if the bank has elected to be evaluated under the lending, investment, and service tests. (4) Banks with strategic plans. A bank that has been approved to be assessed under a strategic plan shall include in its public file a copy of that plan. A bank need not include information submitted to the OCC on a confidential basis in conjunction with the plan. (5) Banks with less than satisfactory ratings. A bank that received a less than satisfactory rating during its most recent examination shall include in its public file a description of its current efforts to improve its performance in helping to meet the credit needs of its entire community. The bank shall update the description quarterly. (c) Location of public information. A bank shall make available to the public for inspection upon request and at no cost the information required in this section as follows: (1) At the main office and, if an interstate bank, at one branch office in each state, all information in the public file; and (2) At each branch: (i) A copy of the public section of the bank’s most recent CRA Performance Evaluation and a list of services provided by the branch; and E:\FR\FM\17SEP2.SGM 17SEP2 52046 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (ii) Within five calendar days of the request, all the information in the public file relating to the assessment area in which the branch is located. (d) Copies. Upon request, a bank shall provide copies, either on paper or in another form acceptable to the person making the request, of the information in its public file. The bank may charge a reasonable fee not to exceed the cost of copying and mailing (if applicable). (e) Updating. Except as otherwise provided in this section, a bank shall ensure that the information required by this section is current as of April 1 of each year. § 25.44 Public notice by banks. A bank shall provide in the public lobby of its main office and each of its branches the appropriate public notice set forth in appendix B of this part. Only a branch of a bank having more than one assessment area shall include the bracketed material in the notice for branch offices. Only a bank that is an affiliate of a holding company shall include the next to the last sentence of the notices. A bank shall include the last sentence of the notices only if it is an affiliate of a holding company that is not prevented by statute from acquiring additional banks. § 25.45 Publication of planned examination schedule. The OCC publishes at least 30 days in advance of the beginning of each calendar quarter a list of banks scheduled for CRA examinations in that quarter. Subpart D [Reserved] Subpart E—Prohibition Against Use of Interstate Branches Primarily for Deposit Production § 25.61 Purpose and scope. (a) Purpose. The purpose of this subpart is to implement section 109 (12 U.S.C. 1835a) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act). (b) Scope. (1) This subpart applies to any national bank that has operated a covered interstate branch for a period of at least one year, and any foreign bank that has operated a covered interstate branch that is a Federal branch for a period of at least one year. (2) This subpart describes the requirements imposed under 12 U.S.C. 1835a, which requires the appropriate Federal banking agencies (the OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation) to prescribe uniform rules that prohibit a bank from using any authority to engage in VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 interstate branching pursuant to the Interstate Act, or any amendment made by the Interstate Act to any other provision of law, primarily for the purpose of deposit production. § 25.62 Definitions. For purposes of this subpart, the following definitions apply: (a) Bank means, unless the context indicates otherwise: (1) A national bank; and (2) A foreign bank as that term is defined in 12 U.S.C. 3101(7) and 12 CFR 28.11(i). (b) Covered interstate branch means: (1) Any branch of a national bank, and any Federal branch of a foreign bank, that: (i) Is established or acquired outside the bank’s home State pursuant to the interstate branching authority granted by the Interstate Act or by any amendment made by the Interstate Act to any other provision of law; or (ii) Could not have been established or acquired outside of the bank’s home State but for the establishment or acquisition of a branch described in paragraph (b)(1)(i) of this section; and (2) Any bank or branch of a bank controlled by an out-of-State bank holding company. (c) Federal branch means Federal branch as that term is defined in 12 U.S.C. 3101(6) and 12 CFR 28.11(i). (d) Home State means: (1) With respect to a State bank, the State that chartered the bank; (2) With respect to a national bank, the State in which the main office of the bank is located; (3) With respect to a bank holding company, the State in which the total deposits of all banking subsidiaries of such company are the largest on the later of: (i) July 1, 1966; or (ii) The date on which the company becomes a bank holding company under the Bank Holding Company Act; (4) With respect to a foreign bank: (i) For purposes of determining whether a U.S. branch of a foreign bank is a covered interstate branch, the home State of the foreign bank as determined in accordance with 12 U.S.C. 3103(c) and 12 CFR 28.11(o); and (ii) For purposes of determining whether a branch of a U.S. bank controlled by a foreign bank is a covered interstate branch, the State in which the total deposits of all banking subsidiaries of such foreign bank are the largest on the later of: (A) July 1, 1966; or (B) The date on which the foreign bank becomes a bank holding company under the Bank Holding Company Act. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 (e) Host State means a State in which a covered interstate branch is established or acquired. (f) Host state loan-to-deposit ratio generally means, with respect to a particular host state, the ratio of total loans in the host state relative to total deposits from the host state for all banks (including institutions covered under the definition of ‘‘bank’’ in 12 U.S.C. 1813(a)(1)) that have that state as their home state, as determined and updated periodically by the appropriate Federal banking agencies and made available to the public. (g) Out-of-State bank holding company means, with respect to any State, a bank holding company whose home State is another State. (h) State means state as that term is defined in 12 U.S.C. 1813(a)(3). (i) Statewide loan-to-deposit ratio means, with respect to a bank, the ratio of the bank’s loans to its deposits in a state in which the bank has one or more covered interstate branches, as determined by the OCC. § 25.63 Loan-to-deposit ratio screen. (a) Application of screen. Beginning no earlier than one year after a covered interstate branch is acquired or established, the OCC will consider whether the bank’s statewide loan-todeposit ratio is less than 50 percent of the relevant host State loan-to-deposit ratio. (b) Results of screen. (1) If the OCC determines that the bank’s statewide loan-to-deposit ratio is 50 percent or more of the host state loan-to-deposit ratio, no further consideration under this subpart is required. (2) If the OCC determines that the bank’s statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, or if reasonably available data are insufficient to calculate the bank’s statewide loan-todeposit ratio, the OCC will make a credit needs determination for the bank as provided in § 25.64. § 25.64 Credit needs determination. (a) In general. The OCC will review the loan portfolio of the bank and determine whether the bank is reasonably helping to meet the credit needs of the communities in the host state that are served by the bank. (b) Guidelines. The OCC will use the following considerations as guidelines when making the determination pursuant to paragraph (a) of this section: (1) Whether covered interstate branches were formerly part of a failed or failing depository institution; (2) Whether covered interstate branches were acquired under E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules circumstances where there was a low loan-to-deposit ratio because of the nature of the acquired institution’s business or loan portfolio; (3) Whether covered interstate branches have a high concentration of commercial or credit card lending, trust services, or other specialized activities, including the extent to which the covered interstate branches accept deposits in the host state; (4) The CRA ratings received by the bank, if any; (5) Economic conditions, including the level of loan demand, within the communities served by the covered interstate branches; (6) The safe and sound operation and condition of the bank; and (7) The OCC’s CRA regulations (subparts A through D of this part) and interpretations of those regulations. § 25.65 Sanctions. (a) In general. If the OCC determines that a bank is not reasonably helping to meet the credit needs of the communities served by the bank in the host state, and that the bank’s statewide loan-to-deposit ratio is less than 50 percent of the host state loan-to-deposit ratio, the OCC: (1) May order that a bank’s covered interstate branch or branches be closed unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank has an acceptable plan under which the bank will reasonably help to meet the credit needs of the communities served by the bank in the host state; and (2) Will not permit the bank to open a new branch in the host state that would be considered to be a covered interstate branch unless the bank provides reasonable assurances to the satisfaction of the OCC, after an opportunity for public comment, that the bank will reasonably help to meet the credit needs of the community that the new branch will serve. (b) Notice prior to closure of a covered interstate branch. Before exercising the OCC’s authority to order the bank to close a covered interstate branch, the OCC will issue to the bank a notice of the OCC’s intent to order the closure and will schedule a hearing within 60 days of issuing the notice. (c) Hearing. The OCC will conduct a hearing scheduled under paragraph (b) of this section in accordance with the provisions of 12 U.S.C. 1818(h) and 12 CFR part 19. Appendix A to Part 25—Ratings (a) Ratings in general. (1) In assigning a rating, the OCC evaluates a bank’s VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 performance under the applicable performance criteria in this part, in accordance with §§ 25.21 and 25.28. This includes consideration of low-cost education loans provided to low-income borrowers and activities in cooperation with minority- or women-owned financial institutions and low-income credit unions, as well as adjustments on the basis of evidence of discriminatory or other illegal credit practices. (2) A bank’s performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The bank’s overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile as follows. (b) Banks evaluated under the lending, investment, and service tests—(1) Lending performance rating. The OCC assigns each bank’s lending performance one of the five following ratings. (i) Outstanding. The OCC rates a bank’s lending performance ‘‘outstanding’’ if, in general, it demonstrates: (A) Excellent responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A substantial majority of its loans are made in its assessment area(s); (C) An excellent geographic distribution of loans in its assessment area(s); (D) An excellent distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank; (E) An excellent record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Extensive use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and (G) It is a leader in making community development loans. (ii) High satisfactory. The OCC rates a bank’s lending performance ‘‘high satisfactory’’ if, in general, it demonstrates: (A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A high percentage of its loans are made in its assessment area(s); (C) A good geographic distribution of loans in its assessment area(s); (D) A good distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank; PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 52047 (E) A good record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderateincome individuals or geographies; and (G) It has made a relatively high level of community development loans. (iii) Low satisfactory. The OCC rates a bank’s lending performance ‘‘low satisfactory’’ if, in general, it demonstrates: (A) Adequate responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) An adequate percentage of its loans are made in its assessment area(s); (C) An adequate geographic distribution of loans in its assessment area(s); (D) An adequate distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank; (E) An adequate record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Limited use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and (G) It has made an adequate level of community development loans. (iv) Needs to improve. The OCC rates a bank’s lending performance ‘‘needs to improve’’ if, in general, it demonstrates: (A) Poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A small percentage of its loans are made in its assessment area(s); (C) A poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s); (D) A poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank; (E) A poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Little use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and E:\FR\FM\17SEP2.SGM 17SEP2 52048 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (G) It has made a low level of community development loans. (v) Substantial noncompliance. The OCC rates a bank’s lending performance as being in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (A) A very poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A very small percentage of its loans are made in its assessment area(s); (C) A very poor geographic distribution of loans, particularly to low- or moderateincome geographies, in its assessment area(s); (D) A very poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the bank; (E) A very poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) No use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderateincome individuals or geographies; and (G) It has made few, if any, community development loans. (2) Investment performance rating. The OCC assigns each bank’s investment performance one of the five following ratings. (i) Outstanding. The OCC rates a bank’s investment performance ‘‘outstanding’’ if, in general, it demonstrates: (A) An excellent level of qualified investments, particularly those that are not routinely provided by private investors, often in a leadership position; (B) Extensive use of innovative or complex qualified investments; and (C) Excellent responsiveness to credit and community development needs. (ii) High satisfactory. The OCC rates a bank’s investment performance ‘‘high satisfactory’’ if, in general, it demonstrates: (A) A significant level of qualified investments, particularly those that are not routinely provided by private investors, occasionally in a leadership position; (B) Significant use of innovative or complex qualified investments; and (C) Good responsiveness to credit and community development needs. (iii) Low satisfactory. The OCC rates a bank’s investment performance ‘‘low satisfactory’’ if, in general, it demonstrates: (A) An adequate level of qualified investments, particularly those that are not routinely provided by private investors, although rarely in a leadership position; (B) Occasional use of innovative or complex qualified investments; and (C) Adequate responsiveness to credit and community development needs. (iv) Needs to improve. The OCC rates a bank’s investment performance ‘‘needs to improve’’ if, in general, it demonstrates: VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (A) A poor level of qualified investments, particularly those that are not routinely provided by private investors; (B) Rare use of innovative or complex qualified investments; and (C) Poor responsiveness to credit and community development needs. (v) Substantial noncompliance. The OCC rates a bank’s investment performance as being in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (A) Few, if any, qualified investments, particularly those that are not routinely provided by private investors; (B) No use of innovative or complex qualified investments; and (C) Very poor responsiveness to credit and community development needs. (3) Service performance rating. The OCC assigns each bank’s service performance one of the five following ratings. (i) Outstanding. The OCC rates a bank’s service performance ‘‘outstanding’’ if, in general, the bank demonstrates: (A) Its service delivery systems are readily accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has improved the accessibility of its delivery systems, particularly in low- or moderateincome geographies or to low- or moderateincome individuals; (C) Its services (including, where appropriate, business hours) are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It is a leader in providing community development services. (ii) High satisfactory. The OCC rates a bank’s service performance ‘‘high satisfactory’’ if, in general, the bank demonstrates: (A) Its service delivery systems are accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to lowand moderate-income individuals; (C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and (D) It provides a relatively high level of community development services. (iii) Low satisfactory. The OCC rates a bank’s service performance ‘‘low satisfactory’’ if, in general, the bank demonstrates: (A) Its service delivery systems are reasonably accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has generally not adversely affected the accessibility of its delivery systems, PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 particularly in low- and moderate-income geographies and to low- and moderateincome individuals; (C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and (D) It provides an adequate level of community development services. (iv) Needs to improve. The OCC rates a bank’s service performance ‘‘needs to improve’’ if, in general, the bank demonstrates: (A) Its service delivery systems are unreasonably inaccessible to portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals; (B) To the extent changes have been made, its record of opening and closing branches has adversely affected the accessibility its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals; (C) Its services (including, where appropriate, business hours) vary in a way that inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It provides a limited level of community development services. (v) Substantial noncompliance. The OCC rates a bank’s service performance as being in ‘‘substantial noncompliance’’ if, in general, the bank demonstrates: (A) Its service delivery systems are unreasonably inaccessible to significant portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals; (B) To the extent changes have been made, its record of opening and closing branches has significantly adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals; (C) Its services (including, where appropriate, business hours) vary in a way that significantly inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It provides few, if any, community development services. (c) Wholesale or limited purpose banks. The OCC assigns each wholesale or limited purpose bank’s community development performance one of the four following ratings. (1) Outstanding. The OCC rates a wholesale or limited purpose bank’s community development performance ‘‘outstanding’’ if, in general, it demonstrates: (i) A high level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Extensive use of innovative or complex qualified investments, community development loans, or community development services; and E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (iii) Excellent responsiveness to credit and community development needs in its assessment area(s). (2) Satisfactory. The OCC rates a wholesale or limited purpose bank’s community development performance ‘‘satisfactory’’ if, in general, it demonstrates: (i) An adequate level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Occasional use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Adequate responsiveness to credit and community development needs in its assessment area(s). (3) Needs to improve. The OCC rates a wholesale or limited purpose bank’s community development performance as ‘‘needs to improve’’ if, in general, it demonstrates: (i) A poor level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Rare use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Poor responsiveness to credit and community development needs in its assessment area(s). (4) Substantial noncompliance. The OCC rates a wholesale or limited purpose bank’s community development performance in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (i) Few, if any, community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) No use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Very poor responsiveness to credit and community development needs in its assessment area(s). (d) Banks evaluated under the small bank performance standards—(1) Lending test ratings. (i) Eligibility for a satisfactory lending test rating. The OCC rates a small bank’s lending performance ‘‘satisfactory’’ if, in general, the bank demonstrates: (A) A reasonable loan-to-deposit ratio (considering seasonal variations) given the bank’s size, financial condition, the credit needs of its assessment area(s), and taking into account, as appropriate, other lendingrelated activities such as loan originations for sale to the secondary markets and community development loans and qualified investments; (B) A majority of its loans and, as appropriate, other lending-related activities, are in its assessment area; (C) A distribution of loans to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 different sizes that is reasonable given the demographics of the bank’s assessment area(s); (D) A record of taking appropriate action, when warranted, in response to written complaints, if any, about the bank’s performance in helping to meet the credit needs of its assessment area(s); and (E) A reasonable geographic distribution of loans given the bank’s assessment area(s). (ii) Eligibility for an ‘‘outstanding’’ lending test rating. A small bank that meets each of the standards for a ‘‘satisfactory’’ rating under this paragraph and exceeds some or all of those standards may warrant consideration for a lending test rating of ‘‘outstanding.’’ (iii) Needs to improve or substantial noncompliance ratings. A small bank may also receive a lending test rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standard for a ‘‘satisfactory’’ rating. (2) Community development test ratings for intermediate small banks—(i) Eligibility for a satisfactory community development test rating. The OCC rates an intermediate small bank’s community development performance ‘‘satisfactory’’ if the bank demonstrates adequate responsiveness to the community development needs of its assessment area(s) through community development loans, qualified investments, and community development services. The adequacy of the bank’s response will depend on its capacity for such community development activities, its assessment area’s need for such community development activities, and the availability of such opportunities for community development in the bank’s assessment area(s). (ii) Eligibility for an outstanding community development test rating. The OCC rates an intermediate small bank’s community development performance ‘‘outstanding’’ if the bank demonstrates excellent responsiveness to community development needs in its assessment area(s) through community development loans, qualified investments, and community development services, as appropriate, considering the bank’s capacity and the need and availability of such opportunities for community development in the bank’s assessment area(s). (iii) Needs to improve or substantial noncompliance ratings. An intermediate small bank may also receive a community development test rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standards for a ‘‘satisfactory’’ rating. (3) Overall rating—(i) Eligibility for a satisfactory overall rating. No intermediate small bank may receive an assigned overall rating of ‘‘satisfactory’’ unless it receives a rating of at least ‘‘satisfactory’’ on both the lending test and the community development test. (ii) Eligibility for an outstanding overall rating. (A) An intermediate small bank that receives an ‘‘outstanding’’ rating on one test and at least ‘‘satisfactory’’ on the other test may receive an assigned overall rating of ‘‘outstanding.’’ PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 52049 (B) A small bank that is not an intermediate small bank that meets each of the standards for a ‘‘satisfactory’’ rating under the lending test and exceeds some or all of those standards may warrant consideration for an overall rating of ‘‘outstanding.’’ In assessing whether a bank’s performance is ‘‘outstanding,’’ the OCC considers the extent to which the bank exceeds each of the performance standards for a ‘‘satisfactory’’ rating and its performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s). (iii) Needs to improve or substantial noncompliance overall ratings. A small bank may also receive a rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standards for a ‘‘satisfactory’’ rating. (e) Strategic plan assessment and rating— (1) Satisfactory goals. The OCC approves as ‘‘satisfactory’’ measurable goals that adequately help to meet the credit needs of the bank’s assessment area(s). (2) Outstanding goals. If the plan identifies a separate group of measurable goals that substantially exceed the levels approved as ‘‘satisfactory,’’ the OCC will approve those goals as ‘‘outstanding.’’ (3) Rating. The OCC assesses the performance of a bank operating under an approved plan to determine if the bank has met its plan goals: (i) If the bank substantially achieves its plan goals for a satisfactory rating, the OCC will rate the bank’s performance under the plan as ‘‘satisfactory.’’ (ii) If the bank exceeds its plan goals for a satisfactory rating and substantially achieves its plan goals for an outstanding rating, the OCC will rate the bank’s performance under the plan as ‘‘outstanding.’’ (iii) If the bank fails to meet substantially its plan goals for a satisfactory rating, the OCC will rate the bank as either ‘‘needs to improve’’ or ‘‘substantial noncompliance,’’ depending on the extent to which it falls short of its plan goals, unless the bank elected in its plan to be rated otherwise, as provided in § 25.27(f)(4). Appendix B to Part 25—CRA Notice (a) Notice for main offices and, if an interstate bank, one branch office in each state. Community Reinvestment Act Notice Under the Federal Community Reinvestment Act (CRA), the Comptroller of the Currency evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The Comptroller also takes this record into account when deciding on certain applications submitted by us. Your involvement is encouraged. You are entitled to certain information about our operations and our performance under the CRA, including, for example, information about our branches, such as their location and services provided at them; the public section of our most recent CRA E:\FR\FM\17SEP2.SGM 17SEP2 52050 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules Performance Evaluation, prepared by the Comptroller; and comments received from the public relating to our performance in helping to meet community credit needs, as well as our responses to those comments. You may review this information today. At least 30 days before the beginning of each quarter, the Comptroller publishes a nationwide list of the banks that are scheduled for CRA examination in that quarter. This list is available from the Deputy Comptroller (address). You may send written comments about our performance in helping to meet community credit needs to (name and address of official at bank) and Deputy Comptroller (address). Your letter, together with any response by us, will be considered by the Comptroller in evaluating our CRA performance and may be made public. You may ask to look at any comments received by the Deputy Comptroller. You may also request from the Deputy Comptroller an announcement of our applications covered by the CRA filed with the Comptroller. We are an affiliate of (name of holding company), a bank holding company. You may request from the (title of responsible official), Federal Reserve Bank of llll (address) an announcement of applications covered by the CRA filed by bank holding companies. (b) Notice for branch offices. Community Reinvestment Act Notice Under the Federal Community Reinvestment Act (CRA), the Comptroller of the Currency evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The Comptroller also takes this record into account when deciding on certain applications submitted by us. Your involvement is encouraged. You are entitled to certain information about our operations and our performance under the CRA. You may review today the public section of our most recent CRA evaluation, prepared by the Comptroller, and a list of services provided at this branch. You may also have access to the following additional information, which we will make available to you at this branch within five calendar days after you make a request to us: (1) A map showing the assessment area containing this branch, which is the area in which the Comptroller evaluates our CRA performance in this community; (2) information about our branches in this assessment area; (3) a list of services we provide at those locations; (4) data on our lending performance in this assessment area; and (5) copies of all written comments received by us that specifically relate to our CRA performance in this assessment area, and any responses we have made to those comments. If we are operating under an approved strategic plan, you may also have access to a copy of the plan. [If you would like to review information about our CRA performance in other communities served by us, the public file for our entire bank is available at (name of office located in state), located at (address).] At least 30 days before the beginning of each quarter, the Comptroller publishes a nationwide list of the banks that are scheduled for CRA examination in that VerDate Sep<11>2014 19:58 Sep 16, 2021 Jkt 253001 quarter. This list is available from the Deputy Comptroller (address). You may send written comments about our performance in helping to meet community credit needs to (name and address of official at bank) and Deputy Comptroller (address). Your letter, together with any response by us, will be considered by the Comptroller in evaluating our CRA performance and may be made public. You may ask to look at any comments received by the Deputy Comptroller. You may also request from the Deputy Comptroller an announcement of our applications covered by the CRA filed with the Comptroller. We are an affiliate of (name of holding company), a bank holding company. You may request from the (title of responsible official), Federal Reserve Bank of llll (address) an announcement of applications covered by the CRA filed by bank holding companies. 2. Add 12 CFR part 195 to read as follows: ■ PART 195—COMMUNITY REINVESTMENT ACT Subpart A—General Sec. 195.11 Authority, purposes, and scope. 195.12 Definitions. Subpart B—Standards for Assessing Performance Sec. 195.21 Performance tests, standards, and ratings, in general. 195.22 Lending test. 195.23 Investment test. 195.24 Service test. 195.25 Community development test for wholesale or limited purpose savings associations. 195.26 Small savings association performance standards. 195.27 Strategic plan. 195.28 Assigned ratings. 195.29 Effect of CRA performance on applications. Subpart C—Records, Reporting, and Disclosure Requirements Sec. 195.41 Assessment area delineation. 195.42 Data collection, reporting, and disclosure. 195.43 Content and availability of public file. 195.44 Public notice by savings associations. 195.45 Publication of planned examination schedule. Appendix A to Part 195—Ratings Appendix B to Part 195—CRA Notice Authority: 12 U.S.C. 1462a, 1463, 1464, 1814, 1816, 1828(c), 2901 through 2908, and 5412(b)(2)(B). Subpart A—General § 195.11 Authority, purposes, and scope. (a) Authority. This part is issued under the Community Reinvestment Act of 1977 (CRA), as amended (12 U.S.C. 2901 et seq.); section 5, as amended, and PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 sections 3, and 4, as added, of the Home Owners’ Loan Act of 1933 (12 U.S.C. 1462a, 1463, and 1464); and sections 4, 6, and 18(c), as amended of the Federal Deposit Insurance Act (12 U.S.C. 1814, 1816, 1828(c)). (b) Purposes. In enacting the CRA, the Congress required each appropriate Federal financial supervisory agency to assess an institution’s record of helping to meet the credit needs of the local communities in which the institution is chartered, consistent with the safe and sound operation of the institution, and to take this record into account in the agency’s evaluation of an application for a deposit facility by the institution. This part is intended to carry out the purposes of the CRA by: (1) Establishing the framework and criteria by which the appropriate Federal banking agency assesses a savings association’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the savings association; and (2) Providing that the appropriate Federal banking agency takes that record into account in considering certain applications. (c) Scope—(1) General. This part applies to all savings associations except as provided in paragraph (c)(2) of this section. (2) Certain special purpose savings associations. This part does not apply to special purpose savings associations that do not perform commercial or retail banking services by granting credit to the public in the ordinary course of business, other than as incident to their specialized operations. These associations include banker’s banks, as defined in 12 U.S.C. 24 (Seventh), and associations that engage only in one or more of the following activities: Providing cash management controlled disbursement services or serving as correspondent associations, trust companies, or clearing agents. § 195.12 Definitions. For purposes of this part, the following definitions apply: (a) Affiliate means any company that controls, is controlled by, or is under common control with another company. The term ‘‘control’’ has the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company is under common control with another company if both companies are directly or indirectly controlled by the same company. (b) Area median income means: (1) The median family income for the MSA, if a person or geography is located E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions; or (2) The statewide nonmetropolitan median family income, if a person or geography is located outside an MSA. (c) Assessment area means a geographic area delineated in accordance with § 195.41. (d) Automated teller machine (ATM) means an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the savings association at which deposits are received, cash dispersed, or money lent. (e) [Reserved] (f) Branch means a staffed banking facility authorized as a branch, whether shared or unshared, including, for example, a mini-branch in a grocery store or a branch operated in conjunction with any other local business or nonprofit organization. (g) Community development means: (1) Affordable housing (including multifamily rental housing) for low or moderate-income individuals; (2) Community services targeted to low- or moderate-income individuals; (3) Activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration’s Development Company or Small Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or (4) Activities that revitalize or stabilize— (i) Low- or moderate-income geographies; (ii) Designated disaster areas; or (iii) Distressed or underserved, nonmetropolitan middle-income geographies designated by the appropriate Federal banking agency based on— (A) Rates of poverty, unemployment, and population loss; or (B) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals. (h) Community development loan means a loan that: (1) Has as its primary purpose community development; and (2) Except in the case of a wholesale or limited purpose savings association: (i) Has not been reported or collected by the savings association or an affiliate for consideration in the savings association’s assessment as a home VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 mortgage, small business, small farm, or consumer loan, unless the loan is for a multifamily dwelling (as defined in § 1003.2(n) of this title); and (ii) Benefits the savings association’s assessment area(s) or a broader statewide or regional area that includes the savings association’s assessment area(s). (i) Community development service means a service that: (1) Has as its primary purpose community development; (2) Is related to the provision of financial services; and (3) Has not been considered in the evaluation of the savings association’s retail banking services under § 195.24(d). (j) Consumer loan means a loan to one or more individuals for household, family, or other personal expenditures. A consumer loan does not include a home mortgage, small business, or small farm loan. Consumer loans include the following categories of loans: (1) Motor vehicle loan, which is a consumer loan extended for the purchase of and secured by a motor vehicle; (2) Credit card loan, which is a line of credit for household, family, or other personal expenditures that is accessed by a borrower’s use of a ‘‘credit card,’’ as this term is defined in § 1026.2 of this title; (3) Other secured consumer loan, which is a secured consumer loan that is not included in one of the other categories of consumer loans; and (4) Other unsecured consumer loan, which is an unsecured consumer loan that is not included in one of the other categories of consumer loans. (k) Geography means a census tract delineated by the United States Bureau of the Census in the most recent decennial census. (l) Home mortgage loan means a closed-end mortgage loan or an openend line of credit as these terms are defined under § 1003.2 of this title and that is not an excluded transaction under § 1003.3(c)(1) through (10) and (13) of this title. (m) Income level includes: (1) Low-income, which means an individual income that is less than 50 percent of the area median income or a median family income that is less than 50 percent in the case of a geography. (2) Moderate-income, which means an individual income that is at least 50 percent and less than 80 percent of the area median income or a median family income that is at least 50 and less than 80 percent in the case of a geography. (3) Middle-income, which means an individual income that is at least 80 PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 52051 percent and less than 120 percent of the area median income or a median family income that is at least 80 and less than 120 percent in the case of a geography. (4) Upper-income, which means an individual income that is 120 percent or more of the area median income or a median family income that is 120 percent or more in the case of a geography. (n) Limited purpose savings association means a savings association that offers only a narrow product line (such as credit card or motor vehicle loans) to a regional or broader market and for which a designation as a limited purpose savings association is in effect, in accordance with § 195.25(b). (o) Loan location. A loan is located as follows: (1) A consumer loan is located in the geography where the borrower resides; (2) A home mortgage loan is located in the geography where the property to which the loan relates is located; and (3) A small business or small farm loan is located in the geography where the main business facility or farm is located or where the loan proceeds otherwise will be applied, as indicated by the borrower. (p) Loan production office means a staffed facility, other than a branch, that is open to the public and that provides lending-related services, such as loan information and applications. (q) Metropolitan division means a metropolitan division as defined by the Director of the Office of Management and Budget. (r) MSA means a metropolitan statistical area as defined by the Director of the Office of Management and Budget. (s) Nonmetropolitan area means any area that is not located in an MSA. (t) Qualified investment means a lawful investment, deposit, membership share, or grant that has as its primary purpose community development. (u) Small savings association—(1) Definition. Small savings association means a savings association that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion. Intermediate small savings association means a small savings association with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years. (2) Adjustment. The dollar figures in paragraph (u)(1) of this section shall be adjusted annually and published by the OCC based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical E:\FR\FM\17SEP2.SGM 17SEP2 52052 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules Workers, not seasonally adjusted, for each twelve-month period ending in November, with rounding to the nearest million. (v) Small business loan means a loan included in ‘‘loans to small businesses’’ as defined in the instructions for preparation of the Thrift Financial Report (TFR) or Consolidated Reports of Condition and Income (Call Report), as appropriate. (w) Small farm loan means a loan included in ‘‘loans to small farms’’ as defined in the instructions for preparation of the TFR or Call Report, as appropriate. (x) Wholesale savings association means a savings association that is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers, and for which a designation as a wholesale savings association is in effect, in accordance with § 195.25(b). Subpart B—Standards for Assessing Performance § 195.21 Performance tests, standards, and ratings, in general. (a) Performance tests and standards. The appropriate Federal banking agency assesses the CRA performance of a savings association in an examination as follows: (1) Lending, investment, and service tests. The appropriate Federal banking agency applies the lending, investment, and service tests, as provided in §§ 195.22 through 195.24, in evaluating the performance of a savings association, except as provided in paragraphs (a)(2), (3), and (4) of this section. (2) Community development test for wholesale or limited purpose savings associations. The appropriate Federal banking agency applies the community development test for a wholesale or limited purpose savings association, as provided in § 195.25, except as provided in paragraph (a)(4) of this section. (3) Small savings association performance standards. The appropriate Federal banking agency applies the small savings association performance standards as provided in § 195.26 in evaluating the performance of a small savings association or a savings association that was a small savings association during the prior calendar year, unless the savings association elects to be assessed as provided in paragraphs (a)(1), (2), or (4) of this section. The savings association may elect to be assessed as provided in paragraph (a)(1) of this section only if it collects and reports the data required for VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 other savings associations under § 195.42. (4) Strategic plan. The appropriate Federal banking agency evaluates the performance of a savings association under a strategic plan if the savings association submits, and the appropriate Federal banking agency approves, a strategic plan as provided in § 195.27. (b) Performance context. The appropriate Federal banking agency applies the tests and standards in paragraph (a) of this section and also considers whether to approve a proposed strategic plan in the context of: (1) Demographic data on median income levels, distribution of household income, nature of housing stock, housing costs, and other relevant data pertaining to a savings association’s assessment area(s); (2) Any information about lending, investment, and service opportunities in the savings association’s assessment area(s) maintained by the savings association or obtained from community organizations, state, local, and tribal governments, economic development agencies, or other sources; (3) The savings association’s product offerings and business strategy as determined from data provided by the savings association; (4) Institutional capacity and constraints, including the size and financial condition of the savings association, the economic climate (national, regional, and local), safety and soundness limitations, and any other factors that significantly affect the savings association’s ability to provide lending, investments, or services in its assessment area(s); (5) The savings association’s past performance and the performance of similarly situated lenders; (6) The savings association’s public file, as described in § 195.43, and any written comments about the savings association’s CRA performance submitted to the savings association or the appropriate Federal banking agency; and (7) Any other information deemed relevant by the appropriate Federal banking agency. (c) Assigned ratings. The appropriate Federal banking agency assigns to a savings association one of the following four ratings pursuant to § 195.28 and appendix A of this part: ‘‘outstanding’’; ‘‘satisfactory’’; ‘‘needs to improve’’; or ‘‘substantial noncompliance,’’ as provided in 12 U.S.C. 2906(b)(2). The rating assigned by the appropriate Federal banking agency reflects the savings association’s record of helping to meet the credit needs of its entire PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the savings association. (d) Safe and sound operations. This part and the CRA do not require a savings association to make loans or investments or to provide services that are inconsistent with safe and sound operations. To the contrary, the appropriate Federal banking agency anticipates savings associations can meet the standards of this part with safe and sound loans, investments, and services on which the savings associations expect to make a profit. Savings associations are permitted and encouraged to develop and apply flexible underwriting standards for loans that benefit low- or moderateincome geographies or individuals, only if consistent with safe and sound operations. (e) Low-cost education loans provided to low-income borrowers. In assessing and taking into account the record of a savings association under this part, the appropriate Federal banking agency considers, as a factor, low-cost education loans originated by the savings association to borrowers, particularly in its assessment area(s), who have an individual income that is less than 50 percent of the area median income. For purposes of this paragraph, ‘‘low-cost education loans’’ means any education loan, as defined in section 140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7)) (including a loan under a state or local education loan program), originated by the savings association for a student at an ‘‘institution of higher education,’’ as that term is generally defined in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing regulations published by the U.S. Department of Education, with interest rates and fees no greater than those of comparable education loans offered directly by the U.S. Department of Education. Such rates and fees are specified in section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e). (f) Activities in cooperation with minority- or women-owned financial institutions and low-income credit unions. In assessing and taking into account the record of a nonminorityowned and nonwomen-owned savings association under this part, the appropriate Federal banking agency considers as a factor capital investment, loan participation, and other ventures undertaken by the savings association in cooperation with minority- and womenowned financial institutions and low- E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules income credit unions. Such activities must help meet the credit needs of local communities in which the minorityand women-owned financial institutions and low-income credit unions are chartered. To be considered, such activities need not also benefit the savings association’s assessment area(s) or the broader statewide or regional area that includes the savings association’s assessment area(s). § 195.22 Lending test. (a) Scope of test. (1) The lending test evaluates a savings association’s record of helping to meet the credit needs of its assessment area(s) through its lending activities by considering a savings association’s home mortgage, small business, small farm, and community development lending. If consumer lending constitutes a substantial majority of a savings association’s business, the appropriate Federal banking agency will evaluate the savings association’s consumer lending in one or more of the following categories: Motor vehicle, credit card, other secured, and other unsecured loans. In addition, at a savings association’s option, the appropriate Federal banking agency will evaluate one or more categories of consumer lending, if the savings association has collected and maintained, as required in § 195.42(c)(1), the data for each category that the savings association elects to have the appropriate Federal banking agency evaluate. (2) The appropriate Federal banking agency considers originations and purchases of loans. The appropriate Federal banking agency will also consider any other loan data the savings association may choose to provide, including data on loans outstanding, commitments and letters of credit. (3) A savings association may ask the appropriate Federal banking agency to consider loans originated or purchased by consortia in which the savings association participates or by third parties in which the savings association has invested only if the loans meet the definition of community development loans and only in accordance with paragraph (d) of this section. The appropriate Federal banking agency will not consider these loans under any criterion of the lending test except the community development lending criterion. (b) Performance criteria. The appropriate Federal banking agency evaluates a savings association’s lending performance pursuant to the following criteria: (1) Lending activity. The number and amount of the savings association’s VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 home mortgage, small business, small farm, and consumer loans, if applicable, in the savings association’s assessment area(s); (2) Geographic distribution. The geographic distribution of the savings association’s home mortgage, small business, small farm, and consumer loans, if applicable, based on the loan location, including: (i) The proportion of the savings association’s lending in the savings association’s assessment area(s); (ii) The dispersion of lending in the savings association’s assessment area(s); and (iii) The number and amount of loans in low-, moderate-, middle-, and upperincome geographies in the savings association’s assessment area(s); (3) Borrower characteristics. The distribution, particularly in the savings association’s assessment area(s), of the savings association’s home mortgage, small business, small farm, and consumer loans, if applicable, based on borrower characteristics, including the number and amount of: (i) Home mortgage loans to low-, moderate-, middle-, and upper-income individuals; (ii) Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (iii) Small business and small farm loans by loan amount at origination; and (iv) Consumer loans, if applicable, to low-, moderate-, middle-, and upperincome individuals; (4) Community development lending. The savings association’s community development lending, including the number and amount of community development loans, and their complexity and innovativeness; and (5) Innovative or flexible lending practices. The savings association’s use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies. (c) Affiliate lending. (1) At a savings association’s option, the appropriate Federal banking agency will consider loans by an affiliate of the savings association, if the savings association provides data on the affiliate’s loans pursuant to § 195.42. (2) The appropriate Federal banking agency considers affiliate lending subject to the following constraints: (i) No affiliate may claim a loan origination or loan purchase if another institution claims the same loan origination or purchase; and (ii) If a savings association elects to have the appropriate Federal banking agency consider loans within a PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 52053 particular lending category made by one or more of the savings association’s affiliates in a particular assessment area, the savings association shall elect to have the appropriate Federal banking agency consider, in accordance with paragraph (c)(1) of this section, all the loans within that lending category in that particular assessment area made by all of the savings association’s affiliates. (3) The appropriate Federal banking agency does not consider affiliate lending in assessing a savings association’s performance under paragraph (b)(2)(i) of this section. (d) Lending by a consortium or a third party. Community development loans originated or purchased by a consortium in which the savings association participates or by a third party in which the savings association has invested: (1) Will be considered, at the savings association’s option, if the savings association reports the data pertaining to these loans under § 195.42(b)(2); and (2) May be allocated among participants or investors, as they choose, for purposes of the lending test, except that no participant or investor: (i) May claim a loan origination or loan purchase if another participant or investor claims the same loan origination or purchase; or (ii) May claim loans accounting for more than its percentage share (based on the level of its participation or investment) of the total loans originated by the consortium or third party. (e) Lending performance rating. The appropriate Federal banking agency rates a savings association’s lending performance as provided in appendix A of this part. § 195.23 Investment test. (a) Scope of test. The investment test evaluates a savings association’s record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader statewide or regional area that includes the savings association’s assessment area(s). (b) Exclusion. Activities considered under the lending or service tests may not be considered under the investment test. (c) Affiliate investment. At a savings association’s option, the appropriate Federal banking agency will consider, in its assessment of a savings association’s investment performance, a qualified investment made by an affiliate of the savings association, if the qualified investment is not claimed by any other institution. (d) Disposition of branch premises. Donating, selling on favorable terms, or making available on a rent-free basis a E:\FR\FM\17SEP2.SGM 17SEP2 52054 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules branch of the savings association that is located in a predominantly minority neighborhood to a minority depository institution or women’s depository institution (as these terms are defined in 12 U.S.C. 2907(b)) will be considered as a qualified investment. (e) Performance criteria. The appropriate Federal banking agency evaluates the investment performance of a savings association pursuant to the following criteria: (1) The dollar amount of qualified investments; (2) The innovativeness or complexity of qualified investments; (3) The responsiveness of qualified investments to credit and community development needs; and (4) The degree to which the qualified investments are not routinely provided by private investors. (f) Investment performance rating. The appropriate Federal banking agency rates a savings association’s investment performance as provided in appendix A of this part. § 195.24 Service test. (a) Scope of test. The service test evaluates a savings association’s record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of a savings association’s systems for delivering retail banking services and the extent and innovativeness of its community development services. (b) Area(s) benefitted. Community development services must benefit a savings association’s assessment area(s) or a broader statewide or regional area that includes the savings association’s assessment area(s). (c) Affiliate service. At a savings association’s option, the appropriate Federal banking agency will consider, in its assessment of a savings association’s service performance, a community development service provided by an affiliate of the savings association, if the community development service is not claimed by any other institution. (d) Performance criteria—retail banking services. The appropriate Federal banking agency evaluates the availability and effectiveness of a savings association’s systems for delivering retail banking services, pursuant to the following criteria: (1) The current distribution of the savings association’s branches among low-, moderate-, middle-, and upperincome geographies; (2) In the context of its current distribution of the savings association’s branches, the savings association’s record of opening and closing branches, particularly branches located in low- or VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 moderate-income geographies or primarily serving low- or moderateincome individuals; (3) The availability and effectiveness of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the savings association, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs) in low- and moderate-income geographies and to low- and moderate-income individuals; and (4) The range of services provided in low-, moderate-, middle-, and upperincome geographies and the degree to which the services are tailored to meet the needs of those geographies. (e) Performance criteria—community development services. The appropriate Federal banking agency evaluates community development services pursuant to the following criteria: (1) The extent to which the savings association provides community development services; and (2) The innovativeness and responsiveness of community development services. (f) Service performance rating. The appropriate Federal banking agency rates a savings association’s service performance as provided in appendix A of this part. § 195.25 Community development test for wholesale or limited purpose savings associations. (a) Scope of test. The appropriate Federal banking agency assesses a wholesale or limited purpose savings association’s record of helping to meet the credit needs of its assessment area(s) under the community development test through its community development lending, qualified investments, or community development services. (b) Designation as a wholesale or limited purpose savings association. In order to receive a designation as a wholesale or limited purpose savings association, a savings association shall file a request, in writing, with the appropriate Federal banking agency, at least three months prior to the proposed effective date of the designation. If the appropriate Federal banking agency approves the designation, it remains in effect until the savings association requests revocation of the designation or until one year after the appropriate Federal banking agency notifies the savings association that the appropriate Federal banking agency has revoked the designation on its own initiative. (c) Performance criteria. The appropriate Federal banking agency evaluates the community development PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 performance of a wholesale or limited purpose savings association pursuant to the following criteria: (1) The number and amount of community development loans (including originations and purchases of loans and other community development loan data provided by the savings association, such as data on loans outstanding, commitments, and letters of credit), qualified investments, or community development services; (2) The use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and (3) The savings association’s responsiveness to credit and community development needs. (d) Indirect activities. At a savings association’s option, the appropriate Federal banking agency will consider in its community development performance assessment: (1) Qualified investments or community development services provided by an affiliate of the savings association, if the investments or services are not claimed by any other institution; and (2) Community development lending by affiliates, consortia and third parties, subject to the requirements and limitations in § 195.22(c) and (d). (e) Benefit to assessment area(s)—(1) Benefit inside assessment area(s). The appropriate Federal banking agency considers all qualified investments, community development loans, and community development services that benefit areas within the savings association’s assessment area(s) or a broader statewide or regional area that includes the savings association’s assessment area(s). (2) Benefit outside assessment area(s). The appropriate Federal banking agency considers the qualified investments, community development loans, and community development services that benefit areas outside the savings association’s assessment area(s), if the savings association has adequately addressed the needs of its assessment area(s). (f) Community development performance rating. The appropriate Federal banking agency rates a savings association’s community development performance as provided in appendix A of this part. § 195.26 Small savings association performance standards. (a) Performance criteria—(1) Small savings associations that are not intermediate small savings associations. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules The appropriate Federal banking agency evaluates the record of a small savings association that is not, or that was not during the prior calendar year, an intermediate small savings association, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraph (b) of this section. (2) Intermediate small savings associations. The appropriate Federal banking agency evaluates the record of a small savings association that is, or that was during the prior calendar year, an intermediate small savings association, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraphs (b) and (c) of this section. (b) Lending test. A small savings association’s lending performance is evaluated pursuant to the following criteria: (1) The savings association’s loan-todeposit ratio, adjusted for seasonal variation, and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans, or qualified investments; (2) The percentage of loans and, as appropriate, other lending-related activities located in the savings association’s assessment area(s); (3) The savings association’s record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes; (4) The geographic distribution of the savings association’s loans; and (5) The savings association’s record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s). (c) Community development test. An intermediate small savings association’s community development performance also is evaluated pursuant to the following criteria: (1) The number and amount of community development loans; (2) The number and amount of qualified investments; (3) The extent to which the savings association provides community development services; and (4) The savings association’s responsiveness through such activities to community development lending, investment, and services needs. (d) Small savings association performance rating. The appropriate Federal banking agency rates the performance of a savings association evaluated under this section as provided in appendix A of this part. VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 § 195.27 Strategic plan. (a) Alternative election. The appropriate Federal banking agency will assess a savings association’s record of helping to meet the credit needs of its assessment area(s) under a strategic plan if: (1) The savings association has submitted the plan to the appropriate Federal banking agency as provided for in this section; (2) The appropriate Federal banking agency has approved the plan; (3) The plan is in effect; and (4) The savings association has been operating under an approved plan for at least one year. (b) Data reporting. The appropriate Federal banking agency’s approval of a plan does not affect the savings association’s obligation, if any, to report data as required by § 195.42. (c) Plans in general—(1) Term. A plan may have a term of no more than five years, and any multi-year plan must include annual interim measurable goals under which the appropriate Federal banking agency will evaluate the savings association’s performance. (2) Multiple assessment areas. A savings association with more than one assessment area may prepare a single plan for all of its assessment areas or one or more plans for one or more of its assessment areas. (3) Treatment of affiliates. Affiliated institutions may prepare a joint plan if the plan provides measurable goals for each institution. Activities may be allocated among institutions at the institutions’ option, provided that the same activities are not considered for more than one institution. (d) Public participation in plan development. Before submitting a plan to the appropriate Federal banking agency for approval, a savings association shall: (1) Informally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan; (2) Once the savings association has developed a plan, formally solicit public comment on the plan for at least 30 days by publishing notice in at least one newspaper of general circulation in each assessment area covered by the plan; and (3) During the period of formal public comment, make copies of the plan available for review by the public at no cost at all offices of the savings association in any assessment area covered by the plan and provide copies of the plan upon request for a reasonable fee to cover copying and mailing, if applicable. PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 52055 (e) Submission of plan. The savings association shall submit its plan to the appropriate Federal banking agency at least three months prior to the proposed effective date of the plan. The savings association shall also submit with its plan a description of its informal efforts to seek suggestions from members of the public, any written public comment received, and, if the plan was revised in light of the comment received, the initial plan as released for public comment. (f) Plan content—(1) Measurable goals. (i) A savings association shall specify in its plan measurable goals for helping to meet the credit needs of each assessment area covered by the plan, particularly the needs of low- and moderate-income geographies and lowand moderate-income individuals, through lending, investment, and services, as appropriate. (ii) A savings association shall address in its plan all three performance categories and, unless the savings association has been designated as a wholesale or limited purpose savings association, shall emphasize lending and lending-related activities. Nevertheless, a different emphasis, including a focus on one or more performance categories, may be appropriate if responsive to the characteristics and credit needs of its assessment area(s), considering public comment and the savings association’s capacity and constraints, product offerings, and business strategy. (2) Confidential information. A savings association may submit additional information to the appropriate Federal banking agency on a confidential basis, but the goals stated in the plan must be sufficiently specific to enable the public and the appropriate Federal banking agency to judge the merits of the plan. (3) Satisfactory and outstanding goals. A savings association shall specify in its plan measurable goals that constitute ‘‘satisfactory’’ performance. A plan may specify measurable goals that constitute ‘‘outstanding’’ performance. If a savings association submits, and the appropriate Federal banking agency approves, both ‘‘satisfactory’’ and ‘‘outstanding’’ performance goals, the appropriate Federal banking agency will consider the savings association eligible for an ‘‘outstanding’’ performance rating. (4) Election if satisfactory goals not substantially met. A savings association may elect in its plan that, if the savings association fails to meet substantially its plan goals for a satisfactory rating, the appropriate Federal banking agency will evaluate the savings association’s performance under the lending, E:\FR\FM\17SEP2.SGM 17SEP2 52056 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules investment, and service tests, the community development test, or the small savings association performance standards, as appropriate. (g) Plan approval—(1) Timing. The appropriate Federal banking agency will act upon a plan within 60 calendar days after it receives the complete plan and other material required under paragraph (e) of this section. If the appropriate Federal banking agency fails to act within this time period, the plan shall be deemed approved unless the appropriate Federal banking agency extends the review period for good cause. (2) Public participation. In evaluating the plan’s goals, the appropriate Federal banking agency considers the public’s involvement in formulating the plan, written public comment on the plan, and any response by the savings association to public comment on the plan. (3) Criteria for evaluating plan. The appropriate Federal banking agency evaluates a plan’s measurable goals using the following criteria, as appropriate: (i) The extent and breadth of lending or lending-related activities, including, as appropriate, the distribution of loans among different geographies, businesses and farms of different sizes, and individuals of different income levels, the extent of community development lending, and the use of innovative or flexible lending practices to address credit needs; (ii) The amount and innovativeness, complexity, and responsiveness of the savings association’s qualified investments; and (iii) The availability and effectiveness of the savings association’s systems for delivering retail banking services and the extent and innovativeness of the savings association’s community development services. (h) Plan amendment. During the term of a plan, a savings association may request the appropriate Federal banking agency to approve an amendment to the plan on grounds that there has been a material change in circumstances. The savings association shall develop an amendment to a previously approved plan in accordance with the public participation requirements of paragraph (d) of this section. (i) Plan assessment. The appropriate Federal banking agency approves the goals and assesses performance under a plan as provided for in appendix A of this part. § 195.28 Assigned ratings. (a) Ratings in general. Subject to paragraphs (b) and (c) of this section, VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 the appropriate Federal banking agency assigns to a savings association a rating of ‘‘outstanding,’’ ‘‘satisfactory,’’ ‘‘needs to improve,’’ or ‘‘substantial noncompliance’’ based on the savings association’s performance under the lending, investment and service tests, the community development test, the small savings association performance standards, or an approved strategic plan, as applicable. (b) Lending, investment, and service tests. The appropriate Federal banking agency assigns a rating for a savings association assessed under the lending, investment, and service tests in accordance with the following principles: (1) A savings association that receives an ‘‘outstanding’’ rating on the lending test receives an assigned rating of at least ‘‘satisfactory’’; (2) A savings association that receives an ‘‘outstanding’’ rating on both the service test and the investment test and a rating of at least ‘‘high satisfactory’’ on the lending test receives an assigned rating of ‘‘outstanding’’; and (3) No savings association may receive an assigned rating of ‘‘satisfactory’’ or higher unless it receives a rating of at least ‘‘low satisfactory’’ on the lending test. (c) Effect of evidence of discriminatory or other illegal credit practices. (1) The appropriate Federal banking agency’s evaluation of a savings association’s CRA performance is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the savings association or in any assessment area by any affiliate whose loans have been considered as part of the savings association’s lending performance. In connection with any type of lending activity described in § 195.22(a), evidence of discriminatory or other credit practices that violate an applicable law, rule, or regulation includes, but is not limited to: (i) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act; (ii) Violations of the Home Ownership and Equity Protection Act; (iii) Violations of section 5 of the Federal Trade Commission Act; (iv) Violations of section 8 of the Real Estate Settlement Procedures Act; and (v) Violations of the Truth in Lending Act provisions regarding a consumer’s right of rescission. (2) In determining the effect of evidence of practices described in paragraph (c)(1) of this section on the savings association’s assigned rating, the PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 appropriate Federal banking agency considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the savings association (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the savings association (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from self-assessment; and any other relevant information. § 195.29 Effect of CRA performance on applications. (a) CRA performance. Among other factors, the appropriate Federal banking agency takes into account the record of performance under the CRA of each applicant savings association, and for applications under section 10(e) of the Home Owners’ Loan Act (12 U.S.C. 1467a(e)), of each proposed subsidiary savings association, in considering an application for: (1) The establishment of a domestic branch or other facility that would be authorized to take deposits; (2) The relocation of the main office or a branch; (3) The merger or consolidation with or the acquisition of the assets or assumption of the liabilities of an insured depository institution requiring appropriate Federal banking agency approval under the Bank Merger Act (12 U.S.C. 1828(c)); (4) A Federal thrift charter; and (5) Acquisitions subject to section 10(e) of the Home Owners’ Loan Act (12 U.S.C. 1467a(e)). (b) Charter application. An applicant for a Federal thrift charter shall submit with its application a description of how it will meet its CRA objectives. The appropriate Federal banking agency takes the description into account in considering the application and may deny or condition approval on that basis. (c) Interested parties. The appropriate Federal banking agency takes into account any views expressed by interested parties that are submitted in accordance with the applicable comment procedures in considering CRA performance in an application listed in paragraphs (a) and (b) of this section. (d) Denial or conditional approval of application. A savings association’s record of performance may be the basis for denying or conditioning approval of an application listed in paragraph (a) of this section. (e) Insured depository institution. For purposes of this section, the term ‘‘insured depository institution’’ has the E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules meaning given to that term in 12 U.S.C. 1813. Subpart C—Records, Reporting, and Disclosure Requirements § 195.41 Assessment area delineation. (a) In general. A savings association shall delineate one or more assessment areas within which the appropriate Federal banking agency evaluates the savings association’s record of helping to meet the credit needs of its community. The appropriate Federal banking agency does not evaluate the savings association’s delineation of its assessment area(s) as a separate performance criterion, but the appropriate Federal banking agency reviews the delineation for compliance with the requirements of this section. (b) Geographic area(s) for wholesale or limited purpose savings associations. The assessment area(s) for a wholesale or limited purpose savings association must consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns, in which the savings association has its main office, branches, and deposit-taking ATMs. (c) Geographic area(s) for other savings associations. The assessment area(s) for a savings association other than a wholesale or limited purpose savings association must: (1) Consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns; and (2) Include the geographies in which the savings association has its main office, its branches, and its deposittaking ATMs, as well as the surrounding geographies in which the savings association has originated or purchased a substantial portion of its loans (including home mortgage loans, small business and small farm loans, and any other loans the savings association chooses, such as those consumer loans on which the savings association elects to have its performance assessed). (d) Adjustments to geographic area(s). A savings association may adjust the boundaries of its assessment area(s) to include only the portion of a political subdivision that it reasonably can be expected to serve. An adjustment is particularly appropriate in the case of VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 an assessment area that otherwise would be extremely large, of unusual configuration, or divided by significant geographic barriers. (e) Limitations on the delineation of an assessment area. Each savings association’s assessment area(s): (1) Must consist only of whole geographies; (2) May not reflect illegal discrimination; (3) May not arbitrarily exclude low- or moderate-income geographies, taking into account the savings association’s size and financial condition; and (4) May not extend substantially beyond an MSA boundary or beyond a state boundary unless the assessment area is located in a multistate MSA. If a savings association serves a geographic area that extends substantially beyond a state boundary, the savings association shall delineate separate assessment areas for the areas in each state. If a savings association serves a geographic area that extends substantially beyond an MSA boundary, the savings association shall delineate separate assessment areas for the areas inside and outside the MSA. (f) Savings associations serving military personnel. Notwithstanding the requirements of this section, a savings association whose business predominantly consists of serving the needs of military personnel or their dependents who are not located within a defined geographic area may delineate its entire deposit customer base as its assessment area. (g) Use of assessment area(s). The appropriate Federal banking agency uses the assessment area(s) delineated by a savings association in its evaluation of the savings association’s CRA performance unless the appropriate Federal banking agency determines that the assessment area(s) do not comply with the requirements of this section. § 195.42 Data collection, reporting, and disclosure. (a) Loan information required to be collected and maintained. A savings association, except a small savings association, shall collect, and maintain in machine readable form (as prescribed by the appropriate Federal banking agency) until the completion of its next CRA examination, the following data for each small business or small farm loan originated or purchased by the savings association: (1) A unique number or alphanumeric symbol that can be used to identify the relevant loan file; (2) The loan amount at origination; (3) The loan location; and PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 52057 (4) An indicator whether the loan was to a business or farm with gross annual revenues of $1 million or less. (b) Loan information required to be reported. A savings association, except a small savings association or a savings association that was a small savings association during the prior calendar year, shall report annually by March 1 to the appropriate Federal banking agency in machine readable form (as prescribed by the agency) the following data for the prior calendar year: (1) Small business and small farm loan data. For each geography in which the savings association originated or purchased a small business or small farm loan, the aggregate number and amount of loans: (i) With an amount at origination of $100,000 or less; (ii) With amount at origination of more than $100,000 but less than or equal to $250,000; (iii) With an amount at origination of more than $250,000; and (iv) To businesses and farms with gross annual revenues of $1 million or less (using the revenues that the savings association considered in making its credit decision); (2) Community development loan data. The aggregate number and aggregate amount of community development loans originated or purchased; and (3) Home mortgage loans. If the savings association is subject to reporting under part 1003 of this title, the location of each home mortgage loan application, origination, or purchase outside the MSAs in which the savings association has a home or branch office (or outside any MSA) in accordance with the requirements of part 1003 of this title. (c) Optional data collection and maintenance—(1) Consumer loans. A savings association may collect and maintain in machine readable form (as prescribed by the appropriate Federal banking agency) data for consumer loans originated or purchased by the savings association for consideration under the lending test. A savings association may maintain data for one or more of the following categories of consumer loans: Motor vehicle, credit card, other secured, and other unsecured. If the savings association maintains data for loans in a certain category, it shall maintain data for all loans originated or purchased within that category. The savings association shall maintain data separately for each category, including for each loan: (i) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file; E:\FR\FM\17SEP2.SGM 17SEP2 52058 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (ii) The loan amount at origination or purchase; (iii) The loan location; and (iv) The gross annual income of the borrower that the savings association considered in making its credit decision. (2) Other loan data. At its option, a savings association may provide other information concerning its lending performance, including additional loan distribution data. (d) Data on affiliate lending. A savings association that elects to have the appropriate Federal banking agency consider loans by an affiliate, for purposes of the lending or community development test or an approved strategic plan, shall collect, maintain, and report for those loans the data that the savings association would have collected, maintained, and reported pursuant to paragraphs (a), (b), and (c) of this section had the loans been originated or purchased by the savings association. For home mortgage loans, the savings association shall also be prepared to identify the home mortgage loans reported under part 1003 of this title by the affiliate. (e) Data on lending by a consortium or a third-party. A savings association that elects to have the appropriate Federal banking agency consider community development loans by a consortium or third party, for purposes of the lending or community development tests or an approved strategic plan, shall report for those loans the data that the savings association would have reported under paragraph (b)(2) of this section had the loans been originated or purchased by the savings association. (f) Small savings associations electing evaluation under the lending, investment, and service tests. A savings association that qualifies for evaluation under the small savings association performance standards but elects evaluation under the lending, investment, and service tests shall collect, maintain, and report the data required for other savings associations pursuant to paragraphs (a) and (b) of this section. (g) Assessment area data. A savings association, except a small savings association or a savings association that was a small savings association during the prior calendar year, shall collect and report to the appropriate Federal banking agency by March 1 of each year a list for each assessment area showing the geographies within the area. (h) CRA Disclosure Statement. The appropriate Federal banking agency prepares annually for each savings association that reports data pursuant to VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 this section a CRA Disclosure Statement that contains, on a state-by-state basis: (1) For each county (and for each assessment area smaller than a county) with a population of 500,000 persons or fewer in which the savings association reported a small business or small farm loan: (i) The number and amount of small business and small farm loans reported as originated or purchased located in low-, moderate-, middle-, and upperincome geographies; (ii) A list grouping each geography according to whether the geography is low-, moderate-, middle-, or upperincome; (iii) A list showing each geography in which the savings association reported a small business or small farm loan; and (iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (2) For each county (and for each assessment area smaller than a county) with a population in excess of 500,000 persons in which the savings association reported a small business or small farm loan: (i) The number and amount of small business and small farm loans reported as originated or purchased located in geographies with median income relative to the area median income of less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more; (ii) A list grouping each geography in the county or assessment area according to whether the median income in the geography relative to the area median income is less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more; (iii) A list showing each geography in which the savings association reported a small business or small farm loan; and PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 (iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; (3) The number and amount of small business and small farm loans located inside each assessment area reported by the savings association and the number and amount of small business and small farm loans located outside the assessment area(s) reported by the savings association; and (4) The number and amount of community development loans reported as originated or purchased. (i) Aggregate disclosure statements. The appropriate Federal banking agency, in conjunction with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation or the OCC, as appropriate, prepares annually, for each MSA or metropolitan division (including an MSA or metropolitan division that crosses a state boundary) and the nonmetropolitan portion of each state, an aggregate disclosure statement of small business and small farm lending by all institutions subject to reporting under this part or parts 25, 228, or 345 of this title. These disclosure statements indicate, for each geography, the number and amount of all small business and small farm loans originated or purchased by reporting institutions, except that the appropriate Federal banking agency may adjust the form of the disclosure if necessary, because of special circumstances, to protect the privacy of a borrower or the competitive position of an institution. (j) Central data depositories. The appropriate Federal banking agency makes the aggregate disclosure statements, described in paragraph (i) of this section, and the individual savings association CRA Disclosure Statements, described in paragraph (h) of this section, available to the public at central data depositories. The appropriate Federal banking agency publishes a list of the depositories at which the statements are available. § 195.43 file. Content and availability of public (a) Information available to the public. A savings association shall maintain a public file that includes the following information: (1) All written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the savings association’s performance in helping to meet community credit needs, and any response to the comments by the savings association, if neither the comments nor the responses contain E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules statements that reflect adversely on the good name or reputation of any persons other than the savings association or publication of which would violate specific provisions of law; (2) A copy of the public section of the savings association’s most recent CRA Performance Evaluation prepared by the appropriate Federal banking agency. The savings association shall place this copy in the public file within 30 business days after its receipt from the appropriate Federal banking agency; (3) A list of the savings association’s branches, their street addresses, and geographies; (4) A list of branches opened or closed by the savings association during the current year and each of the prior two calendar years, their street addresses, and geographies; (5) A list of services (including hours of operation, available loan and deposit products, and transaction fees) generally offered at the savings association’s branches and descriptions of material differences in the availability or cost of services at particular branches, if any. At its option, a savings association may include information regarding the availability of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the savings association, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs); (6) A map of each assessment area showing the boundaries of the area and identifying the geographies contained within the area, either on the map or in a separate list; and (7) Any other information the savings association chooses. (b) Additional information available to the public—(1) Savings associations other than small savings associations. A savings association, except a small savings association or a savings association that was a small savings association during the prior calendar year, shall include in its public file the following information pertaining to the savings association and its affiliates, if applicable, for each of the prior two calendar years: (i) If the savings association has elected to have one or more categories of its consumer loans considered under the lending test, for each of these categories, the number and amount of loans: (A) To low-, moderate-, middle-, and upper-income individuals; (B) Located in low-, moderate-, middle-, and upper-income census tracts; and VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (C) Located inside the savings association’s assessment area(s) and outside the savings association’s assessment area(s); and (ii) The savings association’s CRA Disclosure Statement. The savings association shall place the statement in the public file within three business days of its receipt from the appropriate Federal banking agency. (2) Savings associations required to report Home Mortgage Disclosure Act (HMDA) data. A savings association required to report home mortgage loan data pursuant part 1003 of this title shall include in its public file a written notice that the institution’s HMDA Disclosure Statement may be obtained on the Consumer Financial Protection Bureau’s (Bureau’s) website at www.consumerfinance.gov/hmda. In addition, a savings association that elected to have the appropriate Federal banking agency consider the mortgage lending of an affiliate shall include in its public file the name of the affiliate and a written notice that the affiliate’s HMDA Disclosure Statement may be obtained at the Bureau’s website. The savings association shall place the written notice(s) in the public file within three business days after receiving notification from the Federal Financial Institutions Examination Council of the availability of the disclosure statement(s). (3) Small savings associations. A small savings association or a savings association that was a small savings association during the prior calendar year shall include in its public file: (i) The savings association’s loan-todeposit ratio for each quarter of the prior calendar year and, at its option, additional data on its loan-to-deposit ratio; and (ii) The information required for other savings associations by paragraph (b)(1) of this section, if the savings association has elected to be evaluated under the lending, investment, and service tests. (4) Savings associations with strategic plans. A savings association that has been approved to be assessed under a strategic plan shall include in its public file a copy of that plan. A savings association need not include information submitted to the appropriate Federal banking agency on a confidential basis in conjunction with the plan. (5) Savings associations with less than satisfactory ratings. A savings association that received a less than satisfactory rating during its most recent examination shall include in its public file a description of its current efforts to improve its performance in helping to meet the credit needs of its entire PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 52059 community. The savings association shall update the description quarterly. (c) Location of public information. A savings association shall make available to the public for inspection upon request and at no cost the information required in this section as follows: (1) At the main office and, if an interstate savings association, at one branch office in each state, all information in the public file; and (2) At each branch: (i) A copy of the public section of the savings association’s most recent CRA Performance Evaluation and a list of services provided by the branch; and (ii) Within five calendar days of the request, all the information in the public file relating to the assessment area in which the branch is located. (d) Copies. Upon request, a savings association shall provide copies, either on paper or in another form acceptable to the person making the request, of the information in its public file. The savings association may charge a reasonable fee not to exceed the cost of copying and mailing (if applicable). (e) Updating. Except as otherwise provided in this section, a savings association shall ensure that the information required by this section is current as of April 1 of each year. § 195.44 Public notice by savings associations. A savings association shall provide in the public lobby of its main office and each of its branches the appropriate public notice set forth in appendix B of this part. Only a branch of a savings association having more than one assessment area shall include the bracketed material in the notice for branch offices. Only a savings association that is an affiliate of a holding company shall include the last two sentences of the notices. § 195.45 Publication of planned examination schedule. The appropriate Federal banking agency publishes at least 30 days in advance of the beginning of each calendar quarter a list of savings associations scheduled for CRA examinations in that quarter. Appendix A to Part 195—Ratings (a) Ratings in general. (1) In assigning a rating, the appropriate Federal banking agency evaluates a savings association’s performance under the applicable performance criteria in this part, in accordance with §§ 195.21 and 195.28. This includes consideration of low-cost education loans provided to low-income borrowers and activities in cooperation with minority- or women-owned financial institutions and low-income credit unions, as well as E:\FR\FM\17SEP2.SGM 17SEP2 52060 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules adjustments on the basis of evidence of discriminatory or other illegal credit practices. (2) A savings association’s performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The savings association’s overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile as follows. (b) Savings associations evaluated under the lending, investment, and service tests— (1) Lending performance rating. The appropriate Federal banking agency assigns each savings association’s lending performance one of the five following ratings. (i) Outstanding. The appropriate Federal banking agency rates a savings association’s lending performance ‘‘outstanding’’ if, in general, it demonstrates: (A) Excellent responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A substantial majority of its loans are made in its assessment area(s); (C) An excellent geographic distribution of loans in its assessment area(s); (D) An excellent distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association; (E) An excellent record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Extensive use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and (G) It is a leader in making community development loans. (ii) High satisfactory. The appropriate Federal banking agency rates a savings association’s lending performance ‘‘high satisfactory’’ if, in general, it demonstrates: (A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A high percentage of its loans are made in its assessment area(s); (C) A good geographic distribution of loans in its assessment area(s); (D) A good distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association; (E) A good record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderateincome individuals or geographies; and (G) It has made a relatively high level of community development loans. (iii) Low satisfactory. The appropriate Federal banking agency rates a savings association’s lending performance ‘‘low satisfactory’’ if, in general, it demonstrates: (A) Adequate responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) An adequate percentage of its loans are made in its assessment area(s); (C) An adequate geographic distribution of loans in its assessment area(s); (D) An adequate distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association; (E) An adequate record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Limited use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and (G) It has made an adequate level of community development loans. (iv) Needs to improve. The appropriate Federal banking agency rates a savings association’s lending performance ‘‘needs to improve’’ if, in general, it demonstrates: (A) Poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A small percentage of its loans are made in its assessment area(s); (C) A poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s); (D) A poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association; (E) A poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) Little use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and (G) It has made a low level of community development loans. PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 (v) Substantial noncompliance. The appropriate Federal banking agency rates a savings association’s lending performance as being in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (A) A very poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s); (B) A very small percentage of its loans are made in its assessment area(s); (C) A very poor geographic distribution of loans, particularly to low- or moderateincome geographies, in its assessment area(s); (D) A very poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association; (E) A very poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations; (F) No use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderateincome individuals or geographies; and (G) It has made few, if any, community development loans. (2) Investment performance rating. The appropriate Federal banking agency assigns each savings association’s investment performance one of the five following ratings. (i) Outstanding. The appropriate Federal banking agency rates a savings association’s investment performance ‘‘outstanding’’ if, in general, it demonstrates: (A) An excellent level of qualified investments, particularly those that are not routinely provided by private investors, often in a leadership position; (B) Extensive use of innovative or complex qualified investments; and (C) Excellent responsiveness to credit and community development needs. (ii) High satisfactory. The appropriate Federal banking agency rates a savings association’s investment performance ‘‘high satisfactory’’ if, in general, it demonstrates: (A) A significant level of qualified investments, particularly those that are not routinely provided by private investors, occasionally in a leadership position; (B) Significant use of innovative or complex qualified investments; and (C) Good responsiveness to credit and community development needs. (iii) Low satisfactory. The appropriate Federal banking agency rates a savings association’s investment performance ‘‘low satisfactory’’ if, in general, it demonstrates: (A) An adequate level of qualified investments, particularly those that are not routinely provided by private investors, although rarely in a leadership position; (B) Occasional use of innovative or complex qualified investments; and (C) Adequate responsiveness to credit and community development needs. (iv) Needs to improve. The appropriate Federal banking agency rates a savings E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules association’s investment performance ‘‘needs to improve’’ if, in general, it demonstrates: (A) A poor level of qualified investments, particularly those that are not routinely provided by private investors; (B) Rare use of innovative or complex qualified investments; and (C) Poor responsiveness to credit and community development needs. (v) Substantial noncompliance. The appropriate Federal banking agency rates a savings association’s investment performance as being in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (A) Few, if any, qualified investments, particularly those that are not routinely provided by private investors; (B) No use of innovative or complex qualified investments; and (C) Very poor responsiveness to credit and community development needs. (3) Service performance rating. The appropriate Federal banking agency assigns each savings association’s service performance one of the five following ratings. (i) Outstanding. The appropriate Federal banking agency rates a savings association’s service performance ‘‘outstanding’’ if, in general, the savings association demonstrates: (A) Its service delivery systems are readily accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has improved the accessibility of its delivery systems, particularly in low- or moderateincome geographies or to low- or moderateincome individuals; (C) Its services (including, where appropriate, business hours) are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It is a leader in providing community development services. (ii) High satisfactory. The appropriate Federal banking agency rates a savings association’s service performance ‘‘high satisfactory’’ if, in general, the savings association demonstrates: (A) Its service delivery systems are accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to lowand moderate-income individuals; (C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and (D) It provides a relatively high level of community development services. (iii) Low satisfactory. The appropriate Federal banking agency rates a savings association’s service performance ‘‘low satisfactory’’ if, in general, the savings association demonstrates: VerDate Sep<11>2014 17:07 Sep 16, 2021 Jkt 253001 (A) Its service delivery systems are reasonably accessible to geographies and individuals of different income levels in its assessment area(s); (B) To the extent changes have been made, its record of opening and closing branches has generally not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderateincome individuals; (C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderateincome geographies and low- and moderateincome individuals; and (D) It provides an adequate level of community development services. (iv) Needs to improve. The appropriate Federal banking agency rates a savings association’s service performance ‘‘needs to improve’’ if, in general, the savings association demonstrates: (A) Its service delivery systems are unreasonably inaccessible to portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals; (B) To the extent changes have been made, its record of opening and closing branches has adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals; (C) Its services (including, where appropriate, business hours) vary in a way that inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It provides a limited level of community development services. (v) Substantial noncompliance. The appropriate Federal banking agency rates a savings association’s service performance as being in ‘‘substantial noncompliance’’ if, in general, the savings association demonstrates: (A) Its service delivery systems are unreasonably inaccessible to significant portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals; (B) To the extent changes have been made, its record of opening and closing branches has significantly adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals; (C) Its services (including, where appropriate, business hours) vary in a way that significantly inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and (D) It provides few, if any, community development services. (c) Wholesale or limited purpose savings associations. The appropriate Federal banking agency assigns each wholesale or limited purpose savings association’s community development performance one of the four following ratings. (1) Outstanding. The appropriate Federal banking agency rates a wholesale or limited PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 52061 purpose savings association’s community development performance ‘‘outstanding’’ if, in general, it demonstrates: (i) A high level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Extensive use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Excellent responsiveness to credit and community development needs in its assessment area(s). (2) Satisfactory. The appropriate Federal banking agency rates a wholesale or limited purpose savings association’s community development performance ‘‘satisfactory’’ if, in general, it demonstrates: (i) An adequate level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Occasional use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Adequate responsiveness to credit and community development needs in its assessment area(s). (3) Needs to improve. The appropriate Federal banking agency rates a wholesale or limited purpose savings association’s community development performance as ‘‘needs to improve’’ if, in general, it demonstrates: (i) A poor level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) Rare use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Poor responsiveness to credit and community development needs in its assessment area(s). (4) Substantial noncompliance. The appropriate Federal banking agency rates a wholesale or limited purpose savings association’s community development performance in ‘‘substantial noncompliance’’ if, in general, it demonstrates: (i) Few, if any, community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors; (ii) No use of innovative or complex qualified investments, community development loans, or community development services; and (iii) Very poor responsiveness to credit and community development needs in its assessment area(s). (d) Savings associations evaluated under the small savings association performance standard—(1)Lending test ratings. (i) Eligibility for a satisfactory lending test rating. The appropriate Federal banking agency rates a small savings association’s lending performance ‘‘satisfactory’’ if, in general, the savings association demonstrates: E:\FR\FM\17SEP2.SGM 17SEP2 52062 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules (A) A reasonable loan-to-deposit ratio (considering seasonal variations) given the savings association’s size, financial condition, the credit needs of its assessment area(s), and taking into account, as appropriate, other lending-related activities such as loan originations for sale to the secondary markets and community development loans and qualified investments; (B) A majority of its loans and, as appropriate, other lending-related activities, are in its assessment area; (C) A distribution of loans to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the demographics of the savings association’s assessment area(s); (D) A record of taking appropriate action, when warranted, in response to written complaints, if any, about the savings association’s performance in helping to meet the credit needs of its assessment area(s); and (E) A reasonable geographic distribution of loans given the savings association’s assessment area(s). (ii) Eligibility for an ‘‘outstanding’’ lending test rating. A small savings association that meets each of the standards for a ‘‘satisfactory’’ rating under this paragraph and exceeds some or all of those standards may warrant consideration for a lending test rating of ‘‘outstanding.’’ (iii) Needs to improve or substantial noncompliance ratings. A small savings association may also receive a lending test rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standard for a ‘‘satisfactory’’ rating. (2) Community development test ratings for intermediate small savings associations—(i) Eligibility for a satisfactory community development test rating. The appropriate Federal banking agency rates an intermediate small savings association’s community development performance ‘‘satisfactory’’ if the savings association demonstrates adequate responsiveness to the community development needs of its assessment area(s) through community development loans, qualified investments, and community development services. The adequacy of the savings association’s response will depend on its capacity for such community development activities, its assessment area’s need for such community development activities, and the availability of such opportunities for community development in the savings association’s assessment area(s). (ii) Eligibility for an outstanding community development test rating. The appropriate Federal banking agency rates an intermediate small savings association’s community development performance ‘‘outstanding’’ if the savings association demonstrates excellent responsiveness to community development needs in its assessment area(s) through community development loans, qualified investments, and community development services, as appropriate, considering the savings association’s capacity and the need and VerDate Sep<11>2014 19:58 Sep 16, 2021 Jkt 253001 availability of such opportunities for community development in the savings association’s assessment area(s). (iii) Needs to improve or substantial noncompliance ratings. An intermediate small savings association may also receive a community development test rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standards for a ‘‘satisfactory’’ rating. (3) Overall rating—(i) Eligibility for a satisfactory overall rating. No intermediate small savings association may receive an assigned overall rating of ‘‘satisfactory’’ unless it receives a rating of at least ‘‘satisfactory’’ on both the lending test and the community development test. (ii) Eligibility for an outstanding overall rating. (A) An intermediate small savings association that receives an ‘‘outstanding’’ rating on one test and at least ‘‘satisfactory’’ on the other test may receive an assigned overall rating of ‘‘outstanding.’’ (B) A small savings association that is not an intermediate small savings association that meets each of the standards for a ‘‘satisfactory’’ rating under the lending test and exceeds some or all of those standards may warrant consideration for an overall rating of ‘‘outstanding.’’ In assessing whether a savings association’s performance is ‘‘outstanding,’’ the appropriate Federal banking agency considers the extent to which the savings association exceeds each of the performance standards for a ‘‘satisfactory’’ rating and its performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s). (iii) Needs to improve or substantial noncompliance overall ratings. A small savings association may also receive a rating of ‘‘needs to improve’’ or ‘‘substantial noncompliance’’ depending on the degree to which its performance has failed to meet the standards for a ‘‘satisfactory’’ rating. (e) Strategic plan assessment and rating— (1) Satisfactory goals. The appropriate Federal banking agency approves as ‘‘satisfactory’’ measurable goals that adequately help to meet the credit needs of the savings association’s assessment area(s). (2) Outstanding goals. If the plan identifies a separate group of measurable goals that substantially exceed the levels approved as ‘‘satisfactory,’’ the appropriate Federal banking agency will approve those goals as ‘‘outstanding.’’ (3) Rating. The appropriate Federal banking agency assesses the performance of a savings association operating under an approved plan to determine if the savings association has met its plan goals: (i) If the savings association substantially achieves its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the savings association’s performance under the plan as ‘‘satisfactory.’’ (ii) If the savings association exceeds its plan goals for a satisfactory rating and substantially achieves its plan goals for an outstanding rating, the appropriate Federal banking agency will rate the savings association’s performance under the plan as ‘‘outstanding.’’ PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 (iii) If the savings association fails to meet substantially its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the savings association as either ‘‘needs to improve’’ or ‘‘substantial noncompliance,’’ depending on the extent to which it falls short of its plan goals, unless the savings association elected in its plan to be rated otherwise, as provided in § 195.27(f)(4). Appendix B to Part 195—CRA Notice (a) Notice for main offices and, if an interstate savings association, one branch office in each state. Community Reinvestment Act Notice Under the Federal Community Reinvestment Act (CRA), the [Office of the Comptroller of the Currency (OCC) or Federal Deposit Insurance Corporation (FDIC)] evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The [OCC or FDIC] also takes this record into account when deciding on certain applications submitted by us. Your involvement is encouraged. You are entitled to certain information about our operations and our performance under the CRA, including, for example, information about our branches, such as their location and services provided at them; the public section of our most recent CRA Performance Evaluation, prepared by the [OCC or FDIC]; and comments received from the public relating to our performance in helping to meet community credit needs, as well as our responses to those comments. You may review this information today. At least 30 days before the beginning of each quarter, the [OCC or FDIC] publishes a nationwide list of the savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC Deputy Comptroller (address) or FDIC appropriate regional director (address)]. You may send written comments about our performance in helping to meet community credit needs to (name and address of official at savings association) and the [OCC Deputy Comptroller (address) or FDIC appropriate regional director (address)]. Your letter, together with any response by us, will be considered by the [OCC or FDIC] in evaluating our CRA performance and may be made public. You may ask to look at any comments received by the [OCC Deputy Comptroller or FDIC appropriate regional director]. You may also request from the [OCC Deputy Comptroller or FDIC appropriate regional director] an announcement of our applications covered by the CRA filed with the [OCC or FDIC]. We are an affiliate of (name of holding company), a savings and loan holding company. You may request from the (title of responsible official), Federal Reserve Bank of llll (address) an announcement of applications covered by the CRA filed by savings and loan holding companies. (b) Notice for branch offices. Community Reinvestment Act Notice Under the Federal Community Reinvestment Act (CRA), the [Office of the E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Proposed Rules Comptroller of the Currency (OCC) or Federal Deposit Insurance Corporation (FDIC)] evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The [OCC or FDIC] also takes this record into account when deciding on certain applications submitted by us. Your involvement is encouraged. You are entitled to certain information about our operations and our performance under the CRA. You may review today the public section of our most recent CRA evaluation, prepared by the [OCC or FDIC] and a list of services provided at this branch. You may also have access to the following additional information, which we will make available to you at this branch within five calendar days after you make a request to us: (1) A map showing the assessment area containing this branch, which is the area in which the [OCC or FDIC] evaluates our CRA performance in this community; (2) information about our branches in this assessment area; (3) a list of services we VerDate Sep<11>2014 19:58 Sep 16, 2021 Jkt 253001 provide at those locations; (4) data on our lending performance in this assessment area; and (5) copies of all written comments received by us that specifically relate to our CRA performance in this assessment area, and any responses we have made to those comments. If we are operating under an approved strategic plan, you may also have access to a copy of the plan. [If you would like to review information about our CRA performance in other communities served by us, the public file for our entire savings association is available at (name of office located in state), located at (address).] At least 30 days before the beginning of each quarter, the [OCC or FDIC] publishes a nationwide list of the savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC Deputy Comptroller (address) or FDIC appropriate regional office (address)]. You may send written comments about our performance in helping to meet community credit needs to (name and address of official PO 00000 Frm 00039 Fmt 4701 Sfmt 9990 52063 at savings association) and the [OCC or FDIC]. Your letter, together with any response by us, will be considered by the [OCC or FDIC] in evaluating our CRA performance and may be made public. You may ask to look at any comments received by the [OCC Deputy Comptroller or FDIC appropriate regional director]. You may also request an announcement of our applications covered by the CRA filed with the [OCC Deputy Comptroller or FDIC appropriate regional director]. We are an affiliate of (name of holding company), a savings and loan holding company. You may request from the (title of responsible official), Federal Reserve Bank of llll (address) an announcement of applications covered by the CRA filed by savings and loan holding companies. Michael J. Hsu, Acting Comptroller of the Currency. [FR Doc. 2021–19738 Filed 9–16–21; 8:45 am] BILLING CODE 4810–33–P E:\FR\FM\17SEP2.SGM 17SEP2

Agencies

[Federal Register Volume 86, Number 178 (Friday, September 17, 2021)]
[Proposed Rules]
[Pages 52026-52063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19738]



[[Page 52025]]

Vol. 86

Friday,

No. 178

September 17, 2021

Part III





 Department of the Treasury





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Office of the Comptroller of the Currency





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12 CFR Parts 25 and 195





Community Reinvestment Act Regulations; Proposed Rule

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

[[Page 52026]]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 25 and 195

[Docket ID OCC-2021-0014]
RIN 1557-AF12


Community Reinvestment Act Regulations

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Comptroller of the Currency proposes to replace the 
current Community Reinvestment Act rule with rules based on the 1995 
Community Reinvestment Act (CRA) rules, as revised, issued by the 
Office of the Comptroller of the Currency (OCC), Board of Governors of 
the Federal Reserve System (Board), and Federal Deposit Insurance 
Corporation (FDIC). The proposal would replace the existing rule 
applicable to both national banks and savings associations with two 
separate rules, one for national banks and one for savings 
associations. Such action would effectively rescind the CRA final rule 
published by the Office of the Comptroller of the Currency on June 5, 
2020, and facilitate the issuance of joint CRA rules with the Board and 
FDIC.

DATES: Comments must be received on or before October 29, 2021.

ADDRESSES: Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal. Please use the title ``Community 
Reinvestment Act Regulations'' to facilitate the organization and 
distribution of the comments. You may submit comments by any of the 
following methods:
    [square] Federal eRulemaking Portal--Regulations.gov: Go to https://regulations.gov/. Enter ``Docket ID OCC-2021-0014'' in the Search Box 
and click ``Search.'' Public comments can be submitted via the 
``Comment'' box below the displayed document information or by clicking 
on the document title and then clicking the ``Comment'' box on the top-
left side of the screen. For help with submitting effective comments 
please click on ``Commenter's Checklist.'' For assistance with the 
Regulations.gov site, please call (877) 378-5457 (toll free) or (703) 
454-9859 Monday-Friday, 9am-5pm ET or email 
[email protected].
    [square] Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, 400 7th Street 
SW, Suite 3E-218, Washington, DC 20219.
    [square] Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2021-0014'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information provided, such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this action by the following method:
    [square] Viewing Comments Electronically--Regulations.gov: Go to 
https://regulations.gov/. Enter ``Docket ID OCC-2021-0014'' in the 
Search Box and click ``Search.'' Click on the ``Documents'' tab and 
then the document's title. After clicking the document's title, click 
the ``Browse Comments'' tab. Comments can be viewed and filtered by 
clicking on the ``Sort By'' drop-down on the right side of the screen 
or the ``Refine Results'' options on the left side of the screen. 
Supporting materials can be viewed by clicking on the ``Documents'' tab 
and filtered by clicking on the ``Sort By'' drop-down on the right side 
of the screen or the ``Refine Documents Results'' options on the left 
side of the screen.'' For assistance with the Regulations.gov site, 
please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 
9am-5pm ET or email [email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.

FOR FURTHER INFORMATION CONTACT: Emily Boyes, Counsel, Chief Counsel's 
Office, (202) 649-5490; Vonda Eanes, Director for CRA and Fair Lending 
Policy, Bobbie K. Kennedy, Technical Expert for CRA and Fair Lending, 
or Karen Bellesi, Director for Community Development, Bank Supervision 
Policy, (202) 649-5470, Office of the Comptroller of the Currency, 400 
7th Street SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Office of the Comptroller of the Currency (OCC) \1\ proposes to 
rescind and replace its rule implementing the Community Reinvestment 
Act (CRA) \2\ for national banks and savings associations \3\ 
(collectively, banks),\4\ that was published on June 5, 2020 (June 2020 
Rule).\5\ The OCC would replace the June 2020 Rule with rules largely 
based on those adopted by the OCC, Federal Deposit Insurance 
Corporation (FDIC), and Board of Governors of the Federal Reserve 
System (Board) (collectively, the Agencies) and the former Office of 
Thrift Supervision on May 4, 1995, as revised (1995 Rules).\6\ The 
proposal would align the OCC's CRA rules with the current Board and 
FDIC CRA rules to facilitate on-going interagency work to modernize the 
CRA rules \7\ and create consistency for all insured depository 
institutions (IDIs).\8\
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    \1\ The OCC is the primary regulator for national banks and 
Federal savings associations.
    \2\ Public Law 95-128, 91 Stat. 1147 (1977), codified at 12 
U.S.C. 2901 et seq. The CRA was enacted to promote access to credit 
by encouraging insured depository institutions to serve their entire 
communities. During this period, Congress also enacted fair lending 
laws to address fairness and access to housing and credit. For 
example, in 1968, Congress passed the Fair Housing Act, 42 U.S.C. 
3601 et seq., to prohibit discrimination in renting or buying a 
home. In 1974, Congress passed the Equal Credit Opportunity Act, 15 
U.S.C. 1691 et seq. (amended in 1976), to prohibit creditors from 
discriminating against an applicant on the basis of race, color, 
religion, national origin, sex, marital status, or age. These fair 
lending laws provide a legal basis for prohibiting discriminatory 
lending practices, such as redlining. Interagency Fair Lending 
Examination Procedures, p. iv (Aug. 2009), available at https://www.ffiec.gov/PDF/fairlend.pdf.
    \3\ The Office of Thrift Supervision (OTS) and its predecessor 
agency, the Federal Home Loan Bank Board, also were charged with 
implementing the CRA. The rulemaking authority of OTS with respect 
to CRA transferred to the OCC in Title III of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, Public Law 111-203, 124 
Stat. 1376, 1520 (2010). See also 12 U.S.C. 2905. The OCC has 
responsibility for examining Federal savings associations for CRA 
while the FDIC examines State savings associations for CRA.
    \4\ As used throughout this notice, the term ``bank'' or 
``banks' also includes uninsured Federal branches that result from 
an acquisition described in section 5(a)(8) of the International 
Banking Act of 1978 (12 U.S.C. 3103(a)(8)) and State savings 
associations.
    \5\ 85 FR 34734 (June 5, 2020).
    \6\ 60 FR 22156 (May 4, 1995). As used herein, the 1995 Rules 
refer to the regulatory framework adopted by the Agencies in 1995 
and any revisions the Agencies have made to that regulatory 
framework, except for the changes made by the OCC in the June 2020 
Rule. E.g., 70 FR 44256 (Aug. 2, 2005).
    \7\ NR 2021-77, Interagency Statement on Community Reinvestment 
Act Joint Agency Action (July 20, 2021).
    \8\ 12 U.S.C. 1813(c)(2).
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    As explained in greater detail below, under this proposal, the June 
2020 Rule would remain in effect until replaced by

[[Page 52027]]

final rules based on this proposal. The OCC proposes to apply a 
transition for replacing certain aspects of the June 2020 Rule (e.g., 
bank type changes, approved strategic plans, and qualifying 
activities). Subsequently, as part of the ongoing interagency CRA 
rulemaking, the OCC would propose a joint revised CRA rule to replace 
the rules in this proposal. The proposed transition considerations are 
described in more detail in Section IV.

II. Background

    Congress enacted the CRA in 1977 to encourage IDIs to help meet the 
credit needs of their entire communities, including low- and moderate-
income (LMI) neighborhoods, consistent with safe and sound lending 
practices. Specifically, Congress found that ``(1) regulated financial 
institutions are required by law to demonstrate that their deposit 
facilities serve the convenience and needs of the communities in which 
they are chartered to do business; (2) the convenience and needs of 
communities include the need for credit as well as deposit services; 
and (3) regulated financial institutions have continuing and 
affirmative obligation[s] to help meet the credit needs of the local 
communities in which they are chartered.'' \9\
---------------------------------------------------------------------------

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

    The Agencies first issued rules to implement the CRA in 1978.\10\ 
Between 1978 and 2018, the Agencies revised and sought to clarify the 
CRA rules numerous times, most significantly in 1995.\11\ On September 
5, 2018, the OCC published an Advance Notice of Proposed Rulemaking 
(ANPR) as part of its renewed efforts to modernize the CRA regulatory 
framework.\12\ Subsequently, on January 9, 2020, the OCC and FDIC 
published a joint CRA Notice of Proposed Rulemaking (January 2020 
NPR),\13\ and on June 5, 2020, the OCC issued the June 2020 Rule in an 
effort to modernize its CRA rules.
---------------------------------------------------------------------------

    \10\ 43 FR 47144 (Oct. 12, 1978). The CRA rules of the Agencies 
were codified in 12 CFR parts 25, 563e (recodified as 195), 228, and 
345.
    \11\ 60 FR 22156 (May 4, 1995).
    \12\ The OCC, along with the Board and the FDIC, worked together 
on an ANPR, which the OCC published on September 5, 2018. 83 FR 
45053 (September 5, 2018).
    \13\ 85 FR 1204 (January 9, 2020).
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    The June 2020 Rule took effect October 1, 2020; however, several 
provisions have delayed compliance dates of either January 1, 2023, or 
January 1, 2024.\14\ To implement certain provisions of the June 2020 
Rule with a January 1, 2023, compliance date, the OCC published a 
Notice of Proposed Rulemaking on December 4, 2020 (December 2020 NPR), 
that proposed an approach to determine the benchmarks, thresholds, and 
minimums in the June 2020 Rule's new performance standards.\15\ In 
connection with the December 2020 NPR, the OCC published a CRA 
information collection survey (Information Collection) \16\ to obtain 
data necessary to calibrate the June 2020 Rule's new performance 
standards. Subsequently, on May 18, 2021, the OCC announced that it was 
reconsidering the June 2020 Rule, did not plan to finalize the December 
2020 NPR, and was discontinuing the Information Collection.\17\ The OCC 
took these steps to provide for an orderly reconsideration of the June 
2020 Rule and provide banks with the flexibility to deploy resources in 
response to the COVID-19 pandemic.\18\
---------------------------------------------------------------------------

    \14\ 12 CFR 25.01(c)(4).
    \15\ 85 FR 78258 (Dec. 4, 2020).
    \16\ 85 FR 81270 (Dec. 15, 2020).
    \17\ See OCC Bulletin 2021-24, Community Reinvestment Act: 
Implementation of the June 2020 Final Rule (May 18, 2021), available 
at https://www.occ.gov/news-issuances/bulletins/2021/bulletin-2021-24.html.
    \18\ Id.
---------------------------------------------------------------------------

    While the June 2020 Rule and the subsequent December 2020 NPR and 
Information Collection represent the OCC's most recent efforts to 
modernize the CRA regulatory framework, the Agencies' efforts at reform 
have spanned the past decade. For example, in 2014, pursuant to the 
Economic Growth and Regulatory Paperwork Reduction Act of 1996 
(EGRPRA),\19\ the Agencies began a decennial review of all of their 
regulations, with input from the public, to identify outdated, 
unnecessary, or unduly burdensome regulations and consider how to 
reduce regulatory burden on IDIs--while, at the same time, ensuring the 
safety and soundness of these institutions and of the financial system. 
In 2017, the Agencies issued a report to Congress that included a 
summary of the public comments and recommendations received during the 
EGRPRA review, including those that addressed the CRA regulatory 
framework.\20\ Among the most frequently raised CRA-related issues were 
(1) the assessment area definition; (2) incentives for banks to serve 
LMI, unbanked, underbanked, and rural communities; (3) regulatory 
burdens associated with the recordkeeping and reporting requirements 
and the asset thresholds for the various CRA examination methods; (4) 
the need for clarity regarding performance measures and better examiner 
training to ensure consistency and rigor in CRA examinations; and (5) 
the refinement of the CRA ratings methodology.
---------------------------------------------------------------------------

    \19\ Public Law 104-208, 110 Stat. 3001 (1996) (codified at 12 
U.S.C. 3311).
    \20\ See Federal Financial Institutions Examination Council, 
Joint Report to Congress. Economic Growth and Regulatory Paperwork 
Reduction Act, pp. 41-48 (March 3, 2017), available at https://www.ffiec.gov/pdf/2017_FFIEC_EGRPRA_Joint-Report_to_Congress.pdf.
---------------------------------------------------------------------------

    On April 3, 2018, the U.S. Department of the Treasury released a 
report on the implementation of the CRA, which included recommendations 
for modernizing the CRA rules based on stakeholder input.\21\ Starting 
in 2018, the Agencies also engaged with stakeholders, including civil 
rights organizations, community groups, members of Congress, academics, 
and IDIs, to obtain their perspectives and feedback on the CRA and 
potential improvements to the CRA regulatory framework. Throughout all 
phases of the OCC's recent CRA modernization efforts, including prior 
to the issuance and during the implementation of the June 2020 Rule, 
many stakeholders objected to the OCC independently issuing a CRA rule 
and stressed the importance of the Agencies working together to issue 
consistent CRA rules.
---------------------------------------------------------------------------

    \21\ See Memorandum from the U.S. Department of the Treasury to 
the Office of the Comptroller of the Currency, Board of Governors of 
the Federal Reserve System, and the Federal Deposit Insurance 
Corporation, Community Reinvestment Act--Findings and 
Recommendations (April 3, 2018), available at https://home.treasury.gov/sites/default/files/2018-04/4-3-18%20CRA%20memo.pdf.
---------------------------------------------------------------------------

A. Board ANPR

    Separately from the OCC, the Board has explored ways to modernize 
the CRA regulatory framework to address changes in the banking 
industry, including the increased use of technology to deliver banking 
services. Specifically, the Board conducted stakeholder outreach 
through a series of roundtable discussions \22\ and published a CRA 
ANPR on October 19, 2020 (Board ANPR),\23\ that invited public comment 
on an approach to modernize its CRA rule. The Board ANPR described its 
objectives as including:
---------------------------------------------------------------------------

    \22\ See, e.g., Perspectives from Main Street: Stakeholder 
Feedback on Modernizing the Community Reinvestment Act (June 2019) 
available at https://www.federalreserve.gov/publications/files/stakeholder-feedback-on-modernizing-the-community-reinvestment-act-201906.pdf.
    \23\ 85 FR 66410.
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     Increasing the clarity, consistency, and transparency 
regarding where, how, and what activities receive CRA consideration, 
while minimizing data burden;
     Tailoring CRA supervision to reflect differences in bank 
sizes and business models, local market needs and opportunities, and 
expectations across business cycles;

[[Page 52028]]

     Updating performance standards to address changes in the 
banking industry, particularly the increased use of mobile and internet 
delivery channels;
     Promoting community engagement;
     Strengthening the special treatment of minority depository 
institutions; and
     Recognizing that CRA and fair lending responsibilities are 
mutually reinforcing.
    The Board ANPR invited public comment on different policy options 
to address its objectives. For example, the Board invited comment on 
how to delineate assessment areas around physical locations. It also 
sought public comment on deposit-based and lending-based assessment 
areas for IDIs that conduct a significant amount of lending and deposit 
collection outside assessment areas around physical locations. In 
addition, the Board ANPR invited comment on nationwide assessment areas 
for internet banks.
    The Board ANPR suggested a framework for evaluating CRA performance 
based on a retail test (comprised of retail lending and retail services 
subtests) and a community development (CD) test (comprised of CD 
financing and CD services subtests) that would be applicable to Board-
regulated IDIs, depending on their size or business model. In addition, 
the Board ANPR sought feedback on an evaluation framework based on IDI-
asset-size thresholds of $750 million or $1 billion. Under this 
framework, smaller IDIs would be subject to a retail lending test but 
would have the option to be evaluated based on their retail services 
and CD activities, while larger IDIs would be evaluated under all four 
subtests. The suggested framework would base CRA examinations for 
wholesale and limited purpose IDIs on the CD test. The Board ANPR 
generally suggested a metric-based approach for the retail lending and 
CD financing subtests and a qualitative approach to evaluating retail 
and CD services under their respective subtests. In addition, the Board 
ANPR suggested a strategic plan option that would provide more clarity 
and flexibility for establishing bank specific standards to assess 
activities.
    The Board ANPR also discussed ways to update the State, multistate 
metropolitan statistical area (MSA), and institution ratings by basing 
these ratings on local assessment area performance. The Board ANPR 
suggested that the Board could consider certain activities outside of 
IDIs' assessment areas at the institution level to achieve an 
``outstanding'' rating. The Board also indicated it could revise how it 
would consider discriminatory or other illegal credit practices (DOICP) 
to both align that consideration with the Uniform Interagency Consumer 
Compliance Rating System and include consideration of the Military 
Lending Act (MLA),\24\ the Servicemembers Civil Relief Act (SCRA),\25\ 
and the Prohibition Against Unfair, Deceptive, or Abusive Acts or 
Practices.\26\
---------------------------------------------------------------------------

    \24\ 10 U.S.C. 987 et seq.
    \25\ 50 U.S.C. 3901 et seq.
    \26\ 12 U.S.C. 5531.
---------------------------------------------------------------------------

    The Board further sought feedback on potential revisions to CRA 
data collection and reporting requirements. The Board ANPR acknowledged 
that an increased use of metrics would result in an increased need for 
data collection and reporting and noted that the Board prioritized 
using both existing data where possible and exempting small IDIs from 
new data collection requirements.

B. OCC December 2020 NPR

    The OCC's June 2020 Rule included new performance standards meant 
to provide large banks with incentives to achieve specific performance 
goals and to make CRA evaluations more consistent, reproducible, and 
comparable over time. These performance standards included the CRA 
evaluation measure, retail lending distribution tests, and CD minimums. 
However, the June 2020 Rule did not include the specific benchmarks, 
thresholds, and minimum values proposed in the January 2020 NPR because 
the OCC believed that it was appropriate to gather more information to 
further calibrate these measures. To do so, the OCC undertook an 
Information Collection \27\ and issued the December 2020 NPR, in which 
it proposed processes to calibrate the benchmark, threshold, and 
minimum values more precisely.
---------------------------------------------------------------------------

    \27\ See supra note 16.
---------------------------------------------------------------------------

    The OCC received 13 comments on the December 2020 NPR.\28\ Although 
one commenter generally supported the December 2020 NPR's approach to 
setting the benchmarks, thresholds, and minimums, most commenters 
expressed concerns with the proposal. These concerns included that the 
proposed approach would (1) lead to inflated ratings; (2) set arbitrary 
limits on ratings; (3) not account for local market conditions, which 
could penalize banks that operate in high-cost markets; (4) not 
adequately consider the innovative, rapid, and flexible funding 
solutions offered by internet-based banks with national footprints; and 
(5) be speculative and complicated.
---------------------------------------------------------------------------

    \28\ The OCC received eight comments from the banking industry 
or industry trade associations, two comment from community groups, 
two comments from the general public, and one comment from a state 
government.
---------------------------------------------------------------------------

    One commenter stated that there should be hundreds of ratios as 
opposed to the proposed 26 calibrated values. Another commenter favored 
an approach where the OCC would take into consideration surpassing a 
threshold, but it would not initially grant a presumption of a specific 
rating. The commenter asserted that this would be a more incremental 
change from the evaluation approach codified in the 1995 Rules and 
could be used until more data was available for a presumption-based 
approach. Other commenters stated that a one-size-fits-all model would 
not work, with one commenter suggesting that the OCC should tie 
benchmarks to historical, local bank performance data, and community 
demographics, rather than set them at a nationwide level.\29\
---------------------------------------------------------------------------

    \29\ Stakeholders also offered comments on other aspects of the 
December 2020 NPR, including the OCC's proposed approach for 
addressing declines in CRA performance and the proposed technical 
changes. Comments on the approach for addressing declines in CRA 
performance questioned how the OCC would measure declines in 
activities and whether the proposed ten percent decline was 
appropriate. Comments regarding the technical changes generally 
sought additional clarifications.
---------------------------------------------------------------------------

    Commenters also generally expressed concern with the Information 
Collection, stating that (1) it would result in substantial burden and 
costs for the banks responding to the survey; (2) the data requested 
were not routinely available or did not exist; and (3) the collection 
would likely yield inaccurate results. Due to these concerns, several 
commenters requested that the OCC pause or rescind the Information 
Collection.
    Given the specific concerns with the December 2020 NPR and the 
related Information Collection, the majority of commenters reiterated 
the request that the Agencies work together to create a consistent CRA 
framework. After considering these comments, the OCC announced that it 
would not finalize the December 2020 NPR and would discontinue the 
Information Collection.\30\ In addition, as noted, the OCC later 
announced that it would work with the Board and FDIC on joint rules to 
modernize the CRA.\31\
---------------------------------------------------------------------------

    \30\ See supra note 17.
    \31\ See supra note 7.
---------------------------------------------------------------------------

C. June 2020 Rule Implementation

    Following publication of the June 2020 Rule, the OCC began its 
implementation by developing transition policies and procedures to 
address the phased compliance dates

[[Page 52029]]

provided in the rule. In addition, the OCC (1) issued guidance on 
implementation of key provisions of the June 2020 Rule; (2) provided 
training and outreach for examiners, community groups, and the banking 
industry; and (3) instituted the CRA illustrative list and Qualifying 
Activities Confirmation Request Form.
    To implement the June 2020 Rule between the October 1, 2020, 
effective date and the January 1, 2023, or January 1, 2024, compliance 
dates, the OCC leveraged the flexibility provided by the June 2020 
Rule's transition provision.\32\ It is the OCC's intention that the 
June 2020 Rule and associated guidance would continue to apply until 
such time as the OCC modifies the rule. A summary of the guidance 
issued related to the transition provision in the June 2020 Rule 
includes the following:
---------------------------------------------------------------------------

    \32\ 12 CFR 25.01(c)(5).
---------------------------------------------------------------------------

     Definitions.\33\
---------------------------------------------------------------------------

    \33\ 12 CFR 25.03.
---------------------------------------------------------------------------

    [cir] Compensation--The OCC issued guidance on the calculation of 
the median hourly compensation value for the banking industry for use 
in quantifying CD services. Effective October 1, 2020, through December 
31, 2021, the median hourly compensation value is $39.03.\34\
---------------------------------------------------------------------------

    \34\ OCC Bulletin 2021-5, Community Reinvestment Act: Bank Type 
Determinations, Distressed and Underserved Areas, and Banking 
Industry Compensation Provisions of the June 2020 CRA (January 29, 
2021) available at https://www.occ.gov/news-issuances/bulletins/2021/bulletin-2021-5.html.
---------------------------------------------------------------------------

    [cir] Partially--The OCC advised that OCC-regulated banks may 
receive consideration in CRA evaluations that begin on or after October 
1, 2020, for the full or partial value of qualifying CD activities, as 
applicable, based on the qualifying activities criteria set forth in 
the June 2020 Rule (e.g., affordable housing for LMI individuals, 
community support services for LMI individuals, financial education, 
essential community facilities, and economic development) if those 
activities are conducted on or after October 1, 2020. For activities 
conducted before October 1, 2020, the OCC explained that the 1995 Rules 
and Interagency Questions and Answers Regarding Community Reinvestment 
(Q&As) \35\ will continue to apply and provide partial credit for the 
portion of mixed-income housing that provides affordable housing to LMI 
individuals.\36\
---------------------------------------------------------------------------

    \35\ See Q&A Sec. __ .12(h)--8, 81 FR 48506 (July 25, 2016).
    \36\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020), available at https://www.occ.gov/news-issuances/bulletins/2020/bulletin-2020-99.html.
---------------------------------------------------------------------------

    [cir] Retail lending activities and related definitions (i.e., home 
mortgage loans, consumer loans, small loans to businesses, small loans 
to farms, CRA-eligible businesses, and CRA-eligible farms)--In order to 
provide OCC-regulated banks with sufficient time to update systems for 
data collection, recordkeeping, and reporting, the OCC advised that 
examiners will conduct CRA examinations of performance under the 
applicable retail lending test criteria using the 1995 Rules' 
definitions of home mortgage loan, small business loan, small farm 
loan, and consumer loan and the business and farm gross annual revenue 
threshold of $1 million or less during the transition period. However, 
the OCC also provided that, at an OCC-regulated bank's option, the OCC 
also will consider retail loans, as defined in the June 2020 Rule, as 
``other loan data,'' or ``other lending-related activities,'' as 
applicable, if those loans are not otherwise considered under the 1995 
Rules' applicable lending test.\37\
---------------------------------------------------------------------------

    \37\ Id.
---------------------------------------------------------------------------

    [cir] Distressed areas and underserved areas--The June 2020 Rule 
expanded the definition of what were termed ``distressed or underserved 
nonmetropolitan middle-income geographies'' under the 1995 Rules to 
include census tracts that met those definitions in MSAs and added to 
the definition of underserved area census tracts that did not have a 
branch within specified distances. On January 29, 2021 the OCC 
published a list of census tracts that meet the revised 
definitions.\38\
---------------------------------------------------------------------------

    \38\ OCC Bulletin 2021-5, Community Reinvestment Act: Bank Type 
Determinations, Distressed and Underserved Areas, and Banking 
Industry Compensation Provisions of the June 2020 CRA (January 29, 
2021).
---------------------------------------------------------------------------

    [cir] Small banks and intermediate banks--The OCC applied the 
asset-size thresholds in the June 2020 Rule's small bank and 
intermediate bank definitions to determine bank type in December 2020 
and communicated the revised bank types for OCC-regulated banks on 
January 29, 2021.\39\ OCC-regulated banks that transitioned from large 
banks under the 1995 Rules to intermediate banks under the June 2020 
Rule are not required to collect data required under the 1995 Rules for 
calendar years 2021 forward or report data for calendar years 2022 
forward.\40\
---------------------------------------------------------------------------

    \39\ Id.
    \40\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     CD loans, CD investments, and CD services.\41\ The OCC 
advised that during the June 2020 Rule transition period, examiners 
will consider all CD activities under the June 2020 Rule that are 
conducted by OCC-regulated banks on or after October 1, 2020. Further, 
during the transition period, examiners also will consider all CD 
activities defined in 12 CFR 25.12(g) of the 1995 Rules \42\ that are 
conducted by OCC-regulated banks during the transition period to the 
extent there are gaps between the 1995 Rules' CD activities and the 
qualifying activities criteria in the June 2020 Rule in evaluating 
performance under the applicable lending, investment, service, or CD 
test.\43\
---------------------------------------------------------------------------

    \41\ 12 CFR 25.04(c).
    \42\ See 12 CFR part 25, Appendix C.
    \43\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     Qualifying activities confirmation and illustrative 
list.\44\ As of October 1, 2020, banks and interested parties may elect 
to submit confirmation requests using the CRA Qualifying Activities 
Confirmation Request Form to determine whether an activity is 
consistent with the qualifying activities criteria in the June 2020 
Rule.\45\ The OCC also published the illustrative list on www.OCC.gov 
to provide examples of activities that meet the qualifying activities 
criteria in the June 2020 Rule.\46\
---------------------------------------------------------------------------

    \44\ 12 CFR 25.05.
    \45\ CRA Qualifying Activities Confirmation Request Guidance and 
Form is available at https://www.occ.gov/topics/consumers-and-communities/cra/qualifying-activity-confirmation-request/index-cra-qualifying-activities-confirmation-request.html.
    \46\ The CRA Illustrative List of Qualifying Activities is 
available at https://www.occ.gov/topics/consumers-and-communities/cra/cra-illustrative-list-of-qualifying-activities.pdf.
---------------------------------------------------------------------------

     Small and intermediate bank performance standards \47\ and 
wholesale and limited purpose bank performance standards.\48\ The OCC 
explained that under the June 2020 Rule, the performance standards for 
small and intermediate banks and wholesale and limited purpose banks 
would apply beginning on October 1, 2020. The OCC further explained 
that examiners would apply the Q&As and 1995 Rules' examination 
procedures, as supplemented by the transition guidance issued by the 
OCC, to evaluate CRA activities conducted between October 1, 2020, and 
the effective date of new guidance or examination procedures applicable 
to the particular activities.\49\ The OCC has not issued new guidance 
replacing the Q&As or

[[Page 52030]]

examination procedures applicable to the June 2020 Rule.
---------------------------------------------------------------------------

    \47\ 12 CFR 25.14.
    \48\ 12 CFR 25.15.
    \49\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     Consideration of performance context.\50\ With regard to 
performance context (i.e., information about a bank, its community, and 
its competitors), the OCC stated that it would continue to develop and 
consider a bank's performance context according to the 1995 Rules' 
performance context procedures during CRA evaluations until the OCC 
develops and implements a system for electronic bank submission of 
performance context under the June 2020 Rule.\51\ The OCC has not 
implemented an electronic system and is still considering performance 
context as provided in the 1995 Rules.
---------------------------------------------------------------------------

    \50\ 12 CFR 25.16.
    \51\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     DOICP.\52\ The June 2020 Rule added violations of SCRA and 
the MLA to the list of enumerated credit-related violations considered 
when assessing a bank's CRA performance. The addition of these 
violations codified existing policy under the 1995 Rules, and, 
therefore, did not substantively alter requirements for OCC-regulated 
bank CRA examinations.\53\
---------------------------------------------------------------------------

    \52\ 12 CFR 25.17.
    \53\ SM 2019-03, Supervisory Policies and Processes for 
Community Reinvestment Act Performance Evaluations (April 12, 2019), 
available at https://el.occ/news-issuances/memorandums/sm-2019-3.pdf.
---------------------------------------------------------------------------

     Strategic plans.\54\ As of October 1, 2020, OCC-regulated 
banks operating under a strategic plan and those that submitted new 
strategic plans for approval could create one or more target market 
assessment areas, as permitted in 12 CFR 25.18(g)(2) of the June 2020 
Rule, in addition to the bank's assessment areas delineated under 12 
CFR 25.41 of the 1995 Rules.\55\
---------------------------------------------------------------------------

    \54\ 12 CFR 25.18.
    \55\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     Activity location.\56\ The June 2020 Rule provided for the 
allocation of the dollar value of qualifying activities across multiple 
assessment areas in 12 CFR 25.24(b)(2). This provision of the June 2020 
Rule took effect October 1, 2020.\57\
---------------------------------------------------------------------------

    \56\ 12 CFR 25.24.
    \57\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     Content and availability of the public file.\58\ As of 
October 1, 2020, the OCC required OCC-regulated banks to make the 
public file information required by the June 2020 Rule available to the 
public in a paper or electronic form. The OCC advised that OCC-
regulated banks could comply with this requirement by making the public 
file available solely on their websites.\59\
---------------------------------------------------------------------------

    \58\ 12 CFR 25.28.
    \59\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

     Public notice by banks.\60\ The OCC required OCC-regulated 
banks to comply with the June 2020 Rule's public notice requirements by 
March 1, 2021. To comply with the public notice requirements, OCC 
guidance permitted these banks to display the notice in their main 
office and branch office locations in either paper or an electronic 
format, such as a digital display. In addition to the requirement for 
display of the public notice in one of these formats, OCC guidance also 
permitted these banks to post the notice on their websites.\61\
---------------------------------------------------------------------------

    \60\ 12 CFR 25.30.
    \61\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

    As noted, it is the intention of the OCC that the June 2020 Rule 
and related guidance will remain in effect until such time as the OCC 
issues replacement rules associated with this proposal.
    In addition to providing guidance on the above provisions that took 
effect October 1, 2020, the OCC also provided guidance on other issues, 
including the circumstances under which OCC-regulated banks would 
receive credit for activities outside of their assessment areas, the 
definition of disaster area (a term the June 2020 Rule did not define), 
and consideration of affiliate activities through April 1, 2022.
    In considering these and other issues, the OCC identified areas 
where the June 2020 Rule would benefit from clarification and revision, 
some of which the December 2020 NPR addressed.
    While the OCC's June 2020 CRA Rule was an important step in 
modernizing the CRA regulatory framework, its implementation revealed 
to the OCC some of the rule's complexities and demonstrated where there 
were opportunities for improvement. In particular, the partial 
implementation of the June 2020 Rule and the responses to the December 
2020 NPR made clear the extent of the burden and complexities 
associated with the data collection and reporting integral to the June 
2020 Rule. Moreover, the disproportionate effect of the COVID-19 
pandemic on minorities and rural and LMI communities provided further 
evidence of the need to revisit the June 2020 Rule with the goal of 
better addressing the financial services needs of vulnerable 
communities coming out of the pandemic.
    In addition, through comment letters, stakeholders have identified 
specific opportunities for improvement of the June 2020 Rule in areas 
where the rule was not as clear and transparent as intended. For 
example, stakeholders have stated that the change in the treatment of 
affiliate activities was not clear because those activities are not 
mentioned explicitly in the rule. Rather, stakeholders stated that the 
lack of consideration for affiliate activities under the June 2020 Rule 
is inferred from the definition of ``activity,'' which is ``a loan, 
investment, or service by a bank.'' \62\ Stakeholders also said that 
the rule is not clear on how the OCC would treat qualifying activities 
outside of banks' assessment areas or the broader statewide or regional 
areas that includes a bank's assessment areas for banks that are not 
evaluated under the general performance standards. A third example of 
where the June 2020 Rule could benefit from additional clarity involves 
the ``CRA desert'' definition, which as defined in the June 2020 Rule 
could encompass the vast majority of geographic areas in the country 
and may be too general to ensure consistent application.
---------------------------------------------------------------------------

    \62\ 12 CFR 25.03.
---------------------------------------------------------------------------

    Stakeholder feedback on the lack of clarity with certain aspects of 
the June 2020 Rule and the OCC's experience with its partial 
implementation highlight that opportunities exist for improvements to a 
modernized CRA regulatory framework. Such improvements could be 
achieved through a joint rulemaking that leverages these lessons 
learned as well as the other feedback the Agencies have received since 
issuance of the June 2020 Rule.
    The OCC has reviewed the June 2020 Rule with these considerations 
in mind. Based on this review, the OCC proposes to rescind the June 
2020 Rule and replace it with rules based on the 1995 Rules (subject to 
a minor change explained below), while simultaneously working with the 
Board and FDIC on a joint proposal to modernize the CRA rules.\63\ Both 
of these actions are discussed in more detail below.
---------------------------------------------------------------------------

    \63\ See supra note 7.
---------------------------------------------------------------------------

III. June 2020 Rule Proposed Rescission and Replacement

    The OCC's initial reconsideration of the June 2020 Rule focused on 
(1) creating consistency and transparency

[[Page 52031]]

in the rules applicable to IDIs; (2) limiting burden on banks, their 
communities, and examiners; and (3) ensuring that the OCC continues to 
advance the purpose of the CRA--to encourage banks to help meet the 
credit needs of their entire communities, including LMI neighborhoods, 
consistent with safe and sound operations. The OCC considered different 
options for a revised regulatory framework, including proposing a 
revised rule that retained aspects of the June 2020 Rule that 
stakeholders generally supported. The OCC determined, however, that 
proposing yet another regulatory framework would impose undue burden on 
banks, their communities, and examiners who would need to learn and 
implement a new framework that was neither the June 2020 Rule, the 1995 
Rules, nor the prospective interagency CRA rules. Further, proposing a 
new rule that retained aspects of the June 2020 Rule would fail to 
harmonize the OCC's rule with those of the Board and FDIC, potentially 
complicating an interagency rulemaking process by introducing unique 
OCC considerations regarding necessary changes to the regulatory 
framework and implementation of and transition to any prospective 
interagency final rules.
    In contrast, rescinding and replacing the June 2020 Rule with rules 
based on the 1995 Rules would provide consistency throughout the 
banking industry with respect to the rules that apply by statute to all 
IDIs. A consistent regulatory framework would facilitate an interagency 
rulemaking process because it would allow all the Agencies to propose 
common solutions for the same issues. Further, replacing the June 2020 
Rule with a regulatory framework that is familiar to all stakeholders 
would limit the burden associated with adapting to new rules. The 
partial implementation of the June 2020 Rule further limits the burden 
on stakeholders because much of the 1995 regulatory framework remains 
in effect. Specifically, for most banks, reverting to rules based on 
the 1995 Rules would result in little change to how their CRA 
performance is evaluated, whereas retaining the June 2020 Rule or some 
other regulatory framework would require continued implementation 
actions on the part of banks and the OCC. Finally, reverting to rules 
based on the 1995 Rules would enable the OCC to continue to meet the 
requirements of the CRA by ensuring that examiners are evaluating 
banks' CRA performance based on a proven framework that is focused on 
ensuring that banks meet the needs of LMI communities.

A. Proposed 12 CFR Part 25

    The proposal would replace the June 2020 Rule with a revised 12 CFR 
part 25 based on the 1995 Rules. Under the proposal, 12 CFR part 25 
would be applicable to national banks. The proposed 12 CFR part 25 
would be substantively identical to the 1995 Rules. Consequently, all 
definitions, performance tests and standards, and related data 
collection, recordkeeping, and reporting requirements would revert to 
those in place prior to the issuance of the June 2020 Rule. Further, 
the 1995 Rules' public file and public notice requirements would 
replace the existing requirements. Proposed Subpart E would correct the 
1995 Rules' cross-referenced regulatory citation in 12 CFR 25.62(a)(2) 
to the definition of ``foreign bank,'' which would read ``12 CFR 
28.11(i).''

B. Proposed 12 CFR Part 195

    The proposal would reinstate 12 CFR part 195 for savings 
associations.\64\ Under the proposal, the reinstated 12 CFR part 195 
would apply to both Federal savings associations regulated by the OCC 
and State savings associations regulated by the FDIC. Reinstating part 
195 would enable the OCC to consult with the FDIC on the integration of 
the CRA rules applicable to national banks and savings associations as 
part of the interagency rulemaking process to ensure that the interests 
of both regulatory agencies and their regulated entities are 
considered. As with the proposed revised 12 CFR part 25, the proposed 
12 CFR part 195 would be substantively identical to the 1995 Rules.
---------------------------------------------------------------------------

    \64\ The OCC has CRA rulewriting authority for both Federal and 
State savings associations, in addition to national banks. See 12 
U.S.C. 2905.
---------------------------------------------------------------------------

    In the alternative, the OCC is considering integrating parts 25 and 
195 into a single rule in part 25 applicable to both national banks and 
savings associations. An integrated part 25 rule applicable to both 
national banks and savings associations would be substantively the same 
as the separate rules. In an integrated rule in part 25, proposed 
Subpart E (Prohibition Against Use of Interstate Branches Primarily for 
Deposit Production) would apply only to national banks. The OCC 
requests specific comment on whether:
    The OCC should reinstate separate rules for national banks and 
savings associations or integrate the rules so that part 25 is 
applicable to both national banks and savings associations.

C. Summary of Proposed Rules

    As with the 1995 Rules, the proposed rules would provide for 
different evaluation methods to respond to basic differences in banks' 
structures and operations. The proposed rules would provide (1) a 
streamlined assessment method for small banks that emphasizes lending 
performance; (2) an assessment method for intermediate small banks 
(ISB) that considers lending and CD activities; (3) an assessment 
method for large, retail banks that focuses on lending, investment, and 
service performance; and (4) an assessment method for wholesale and 
limited-purpose banks based on CD activities. Further, the proposed 
rules also would give any bank, regardless of size or business 
strategy, the choice to be evaluated under a strategic plan.
    Under the proposed performance tests and standards, an examiner 
would consider a bank's performance context in assessing its CRA 
performance. Specifically, an examiner would review demographic and 
economic data about the bank's assessment area(s) and information about 
local economic conditions, the institution's major business products 
and strategies, and its financial condition, capacity, and ability to 
lend or invest in its community. The examiner also would review 
information a bank chooses to provide about lending, investment, and 
service opportunities in its assessment areas.
    Banks would identify one or more assessment areas within which 
examiners would evaluate CRA performance. In most cases, a bank would 
delineate a town, municipality, county, some other political 
subdivision, or an MSA where its main office, branches, and deposit-
taking ATMs are located and a substantial portion of its loans are made 
as an assessment area. If a bank chooses, however, its assessment areas 
would not need to coincide with the boundaries of one or more political 
subdivisions (e.g., counties, cities, and towns or MSAs), so long as 
the adjustments to those boundaries reflect the areas that the bank 
reasonably could serve, meet regulatory requirements, and do not 
arbitrarily exclude LMI census tracts.
    Large banks, and in some circumstances, other banks, would need to 
collect, maintain, and report certain data related to the proposed 
performance tests and standards. The OCC would make bank CRA data 
available through individual and aggregate disclosure statements. Banks 
also would make CRA-related

[[Page 52032]]

information available in their public files and inform the public 
through a CRA notice in specified locations.
    For a more detailed description of the 1995 Rules, please see the 
Supplemental Information section of the Federal Register document at: 
60 FR 22156 (May 4, 1995).\65\ The following is a summary of key 
provisions of the proposed rules.
---------------------------------------------------------------------------

    \65\ The proposed rules also include the 2005 substantive 
revisions to the 1995 regulatory framework (e.g., the small bank and 
ISB asset-size thresholds and associated changes and the inclusion 
of activities to revitalize and stabilize distressed or underserved 
rural areas and designated in the CD definition) as well as other 
revisions made to the 1995 Rules since they were adopted by the 
Agencies. See 70 FR 44256 (Aug. 2, 2005).
---------------------------------------------------------------------------

     Performance tests and standards.\66\
---------------------------------------------------------------------------

    \66\ The applicable proposed performance tests and standards 
would be based on the asset size of a bank. The asset-size 
thresholds for determining whether a bank is a large bank, ISB, or 
small bank would be adjusted annually based on the Consumer Price 
Index and be aligned with the current asset size thresholds in the 
Board and FDIC rules. See 12 CFR parts 228 and 345.
---------------------------------------------------------------------------

    [cir] The proposed rules' small bank (i.e., banks with less than 
$330 million in assets) performance standards would establish a retail 
lending test for assessing CRA performance. The proposed small bank 
lending test may also consider CD loans. Qualified investments and CD 
services could be considered at the bank's option for an 
``outstanding'' rating, but only if the bank meets or exceeds the 
lending test criteria in the small bank performance standards.
    [cir] The proposed rules' ISB (i.e., banks with asset sizes of at 
least $330 million and less than $1.322 billion) performance standards 
would assess CRA performance under the small bank retail lending test 
and a CD test. The ISB CD test would evaluate all CD activities 
together.
    [cir] The proposed rules would establish lending, investment, and 
service tests applicable to large banks (i.e., banks with $1.322 
billion or more in assets). The large bank lending and service tests 
would consider both retail and CD activity, while the investment test 
would focus on qualified investments as defined in the proposed rules.
    [cir] The proposed rules would evaluate wholesale and limited 
purpose banks under a CD test that considers activities in a bank's 
broader statewide or regional area as activities that benefit the 
bank's assessment area. Activities outside of the broader statewide or 
regional area also would be considered if the bank has been responsive 
to needs in its assessment area.
    [cir] All banks could elect to be evaluated under a strategic plan 
that sets out measurable goals for lending, investment, and services, 
as applicable, to achieve a ``satisfactory'' or ``outstanding'' rating. 
The bank would develop a strategic plan with community input and the 
plan would be approved by the bank's primary regulator.
     DOICP. Under the proposal MLA and SCRA violations would 
not be included in the proposed rules' enumerated list of violations 
considered in evaluating banks' CRA performance. Nonetheless, examiners 
would continue to consider these violations in banks' CRA performance 
evaluations based on guidance that predated the June 2020 Rule.\67\
---------------------------------------------------------------------------

    \67\ See supra note 53.
---------------------------------------------------------------------------

     Retail and CD Activities. Examiners would evaluate banks' 
CRA performance based on retail lending (i.e., home mortgage loans, 
small business loans, small farm loans, and consumer loans, as 
applicable) and CD loans, qualified investments, and CD services as 
defined in the proposed rules and considered in the applicable 
performance tests and standards.
     Assessment Areas.
    [cir] Banks would delineate assessment areas that generally
    [ssquf] Include the geographies (i.e., census tracts) where a bank 
has its main office, branches, and deposit-taking automated teller 
machines as well as the surrounding geographies where the bank has 
originated or purchased a substantial portion of its loans; and
    [ssquf] Consist of one or more MSAs, metropolitan divisions, or 
political subdivisions with banks permitted to adjust the boundaries of 
their assessment areas to include only the portion of the political 
subdivision that banks can reasonably be expected to serve; and
    [cir] Assessment areas would be required to
    [ssquf] Consist of whole geographies,
    [ssquf] Not reflect illegal discrimination,
    [ssquf] Not arbitrarily exclude LMI geographies, and
    [ssquf] Not extend substantially beyond an MSA or State boundary 
unless the bank's assessment area is in a multistate MSA.
     Data collection, recordkeeping, and reporting.
    [cir] Banks other than small banks would collect, maintain, and 
report certain data related to small business loans, small farm loans, 
CD loans, and assessment areas. Banks subject to the Home Mortgage 
Disclosure Act (HMDA) reporting requirements \68\ also would report 
home mortgage lending outside of the MSAs where the bank has a home or 
branch office. The proposed rules also would include certain optional 
data collection and reporting.
---------------------------------------------------------------------------

    \68\ 12 CFR part 1003.
---------------------------------------------------------------------------

    [cir] The proposal would reinstate additional public file and 
public notice requirements eliminated under the June 2020 Rule 
regarding the content of the public file and the location of the public 
file and public notices.
     Ratings. Examiners would determine ratings as provided in 
proposed Appendix A.

IV. Transition Considerations

    As discussed above, the June 2020 Rule included a transition 
provision, effective October 1, 2020, to provide for an orderly move to 
the new regulatory framework. As a result, many aspects of the 1995 
Rules remain in effect, limiting the potential disruption associated 
with the proposed reversion to CRA rules based on the 1995 Rules. 
Therefore, the OCC is considering an effective date of January 1, 2022, 
for any final rules, provided they are published by December 1, 2021. A 
January 1, 2022, effective date would provide all stakeholders with 
certainty regarding the applicable rules and would eliminate the need 
for banks to continue to expend resources developing new systems 
necessary for compliance with the June 2020 Rule.
    The OCC recognizes that banks have relied in part on the June 2020 
Rule in planning for their ongoing compliance with the CRA. Following 
publication of any final rules pertaining to this proposal, banks would 
have a minimum of 30 days, as required by the Administrative Procedures 
Act,\69\ before they would be required to comply with most of the 
provisions described in the proposed rules. However, given the partial 
implementation of the June 2020 Rule, its replacement would result in 
certain changes to the regulatory framework that impact, among other 
things, how banks would be evaluated and what activities would receive 
consideration in CRA examinations. The OCC proposes to address such 
considerations, as discussed below.\70\ While the proposal does not 
include particular transition provisions in the proposed rule text, the 
OCC invites comment on whether, for purposes of any final rules the OCC 
should amend the proposed rule text to address any or all of the 
following transition issues.
---------------------------------------------------------------------------

    \69\ Public Law 79-404, 60 Stat. 237 (1946), codified at 5 
U.S.C. 500 et seq.
    \70\ Information related to the June 2020 Rule implementation is 
discussed in Section II.C.

---------------------------------------------------------------------------

[[Page 52033]]

A. Bank Type Changes

    The June 2020 Rule resulted in a change in bank type for some banks 
due to changes in the bank asset-size thresholds. For example, certain 
ISBs became small banks (i.e., banks with assets between $326 million 
and $600 million) and certain large banks became intermediate banks 
(i.e., banks with assets between $1.305 billion and $2.5 billion). 
These banks are subject to different performance standards for 
activities conducted on or after October 1, 2020, than they were prior 
to that date. In addition, OCC-regulated large banks under the 1995 
Rules that became intermediate banks under the June 2020 Rule were no 
longer required to collect data for calendar years 2021 forward and 
report data for calendar years 2022 forward.
    Under the proposed rules, many of these banks would transition back 
to their prior bank type based on the proposed asset-size thresholds 
(i.e., small banks would be banks with less than $330 million in 
assets, ISBs would be banks with at least $330 million but less than 
$1.322 billion, and large banks would be banks with assets of $1.322 
billion or more, as adjusted). As a result, reinstated data collection 
and reporting requirements would apply to banks redesignated as large 
banks under the proposed rules.
    The OCC proposes to treat banks that would transition from ISBs to 
large banks under the proposed rules consistent with how the OCC has 
historically treated these banks. Under the 1995 Rules, the OCC would 
have required banks that transitioned from ISBs to large banks to begin 
collecting loan data as provided in proposed 12 CFR 25.42 one year 
after the bank type changed. Therefore, if the proposed rules take 
effect on January 1, 2022, the OCC would require newly classified large 
banks to begin collecting data on January 1, 2023, and reporting 
required and optional data the following year.
    For banks that would transition from small bank to ISBs under the 
proposed rules, the OCC would not provide additional time to transition 
to the ISB performance standards; however, the OCC would consider the 
change in bank type as part of the bank's performance context when 
evaluating the bank's CRA performance. Additionally, the OCC intends to 
continue to issue bulletins to inform the public of the annual bank 
asset-size threshold adjustments based on changes in the Consumer Price 
Index for Urban Wage Earners and Clerical Workers (CPI-W).\71\ The OCC 
requests specific comment on whether:
---------------------------------------------------------------------------

    \71\ See OCC Bulletin 2021-5, Community Reinvestment Act: Bank 
Type Determinations, Distressed and Underserved Areas, and Banking 
Industry Compensation Provisions of the June 2020 CRA (January 29, 
2021).

    The OCC should apply its historical policy for newly designated 
large banks' data collection, recordkeeping, and reporting 
requirements, with the result that certain large banks under the 
final rules would not collect data until January 2023 and would not 
report it until January 2024. In the alternative, should banks that 
were formerly large banks under the 1995 Rules and that return to 
large bank status as proposed begin data collection in 2022? Are 
there alternative transition policies related to data collection, 
recordkeeping, and reporting requirements that the OCC should 
consider?
    The OCC's plan to consider changes from small bank to ISB bank 
type as part of performance context is a reasonable means of 
addressing the transition from the June 2020 Rule to the proposed 
rules' bank asset-size thresholds.

B. Qualifying Activities

    As of the effective date of the final rules, the OCC would rescind 
the qualifying activities criteria in the June 2020 Rule and replace it 
with the 1995 Rules' home mortgage loan, small business loan, small 
farm loan, consumer loan, and CD definitions. Also, as of the effective 
date of any final rules, the definitions related to the qualifying 
activities criteria in the June 2020 Rule, including the compensation, 
distressed area, underserved area, CRA-eligible business, CRA-eligible 
farm, small loans to businesses, small loans to farms, partially, and 
primarily definitions would revert to the applicable definitions under 
the 1995 Rules or be eliminated.
    The OCC proposes to address these changes by explaining that OCC-
regulated banks would receive consideration in their CRA examinations 
for activities that met the qualifying activities criteria or 
definitions that were in effect at the time that the bank conducted 
those activities. Consistent with the OCC's historical practice, the 
OCC also would apply this policy to legally binding commitments to lend 
or invest. For banks or interested parties that received confirmation 
letters for qualifying activities under the June 2020 Rule, those 
letters would be applicable while the June 2020 Rule was in effect but 
would not apply to activities conducted after any final rules' 
effective date. The OCC believes this policy is reasonable because it 
honors the qualified status of activities when conducted by the bank. 
The OCC requests specific comment on whether:

    The proposal to consider activities based on whether they 
qualified at the time the activities were conducted is a reasonable 
approach to addressing the changes to the type of activities that 
will receive consideration in CRA examinations.

C. Affiliates

    As explained in a January 2021 interpretive letter, under the June 
2020 Rule, generally, a bank would not receive CRA consideration for 
affiliate activities, including activities conducted by the nonbank 
parent and sister companies of the bank, unless the bank could 
demonstrate that it provided financing for or otherwise supported the 
qualifying activities of these affiliates.\72\ This policy represented 
a significant change from how the OCC considered affiliate activities 
under the 1995 Rules, and, as such, the OCC used the flexibility 
provided by the transition provision to delay compliance with this 
aspect of the June 2020 Rule until April 1, 2022.\73\
---------------------------------------------------------------------------

    \72\ OCC Senior Deputy Comptroller and Chief Counsel's 
Interpretation: Community Reinvestment Act Qualifying (CRA) 
Activities Conducted by a National Bank's or Savings Association's 
Subsidiaries and Affiliates, Including Nonbank Parent and Sister 
Companies of a National Bank or Savings Association Under Certain 
Circumstances, Can Receive CRA Credit Under the June 2020 CRA Final 
Rule (January 4, 2021), available at https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2021/interpretive-letter-affiliates.pdf.
    \73\ OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).
---------------------------------------------------------------------------

    The proposal would consider affiliate activities consistent with 
their treatment under the 1995 Rules and the guidance in the Q&As, 
which permit banks to elect to include affiliate activities in their 
CRA evaluations, subject to certain limitations. Consequently, the OCC 
would rescind the January 2021 interpretive letter regarding affiliate 
activities as of the effective date of any final rules.

D. Outside Assessment Area Activities

    Under the 1995 Rules, the agencies provided consideration for 
activities conducted outside banks' assessment areas in limited 
circumstances. Specifically, under the 1995 Rules, the performance 
tests and standards generally provided that the Agencies would evaluate 
an IDI's CRA performance in its assessment areas.\74\ In addition, the 
1995 Rules provided that the Agencies may consider CD activities that 
benefit the broader statewide or regional areas that include

[[Page 52034]]

an IDI's assessment areas.\75\ With respect to wholesale and limited 
purpose institutions, the 1995 Rules provided that the Agencies may 
consider CD activities nationwide if the IDI had adequately addressed 
the needs of its assessment areas.\76\ The Q&As clarified the 
circumstances in which the Agencies would provide consideration for 
activities in the broader statewide or regional area but generally did 
not provide consideration for activities nationwide.\77\
---------------------------------------------------------------------------

    \74\ See 12 CFR part 25, Appendix C.
    \75\ Id.
    \76\ Id.
    \77\ Q&A Sec.  __.12(h)--6; Q&A Sec.  __.12(h)--7; and Q&A Sec.  
__.23(a)--2.
---------------------------------------------------------------------------

    In contrast, the June 2020 Rule provided nationwide consideration 
of qualifying activities for banks evaluated under the general 
performance standards. To provide consistency across bank type during 
the transition period, the OCC also explained in guidance that any OCC-
regulated bank may receive consideration for qualifying activities 
outside of its assessment areas that do not directly or indirectly 
serve its assessment areas provided certain conditions were met.\78\ 
The OCC requests specific comment on whether:
---------------------------------------------------------------------------

    \78\ See OCC Bulletin 2020-99, Community Reinvestment Act: Key 
Provisions of the June 2020 CRA Rule and Frequently Asked Questions 
(November 9, 2020).

    The OCC should continue to provide consideration for activities 
that do not directly or indirectly serve a bank's assessment areas 
or the broader statewide or regional areas that include a bank's 
assessment areas under the proposed rules. What conditions, if any, 
should be met in order for the OCC to provide consideration for 
activities that do not directly or indirectly serve a bank's 
assessment areas or the broader statewide or regional areas that 
include a bank's assessment areas?

E. CD Activity Confirmation Process and Illustrative List

    Stakeholders generally supported the creation of the qualifying 
activities confirmation process and illustrative list in the June 2020 
Rule. These provisions clarified the activities that would receive 
consideration in an OCC-regulated bank's CRA examination. Because the 
qualifying activity confirmation process is procedural and applies 
facts regarding a potential qualifying activity to qualifying activity 
criteria set forth in the June 2020 Rule, the OCC could have 
interpreted and provided guidance on which activities would receive 
consideration in CRA examinations without codifying the process in the 
June 2020 Rule.
    The OCC is considering whether to implement a qualifying activities 
confirmation process based on the CD definition in the 1995 Rules, as 
interpreted through the Q&As, while the OCC is working on the 
interagency CRA rulemaking process. Providing for a qualifying 
activities confirmation process outside of the CRA rules would be the 
least disruptive outcome for banks and interested parties that have 
found the process beneficial. Moreover, maintaining a confirmation 
process is not inconsistent with the Board ANPR, which included a 
suggestion related to a qualifying activities confirmation process. The 
OCC also would maintain the illustrative list of qualifying activities 
on its website as a reference for banks to determine whether activities 
that they conducted while the June 2020 Rule was in effect are eligible 
for CRA consideration; however, activities included on the illustrative 
list may not receive consideration if conducted after the effective 
date of the final rules. The OCC requests specific comment on whether:

    The OCC should implement a CD activity confirmation process 
during the period between the rescission of the June 2020 Rule and 
the issuance of prospective joint interagency rules.

F. Strategic Plans

    The June 2020 Rule revised the requirements for requesting approval 
of a strategic plan. Among other things, the June 2020 Rule permitted 
banks requesting approval for a strategic plan to include target market 
assessment areas. For purposes of any final rules, the OCC proposes to 
maintain any strategic plans approved by the OCC under the June 2020 
Rule and would not require these banks to amend their strategic plans. 
The OCC believes that permitting strategic plan banks to maintain their 
target market assessment areas is not inconsistent with proposed 12 CFR 
25.41 and would cause the least disruption during the transition from 
the OCC's June 2020 Rule to any future interagency final rules. The OCC 
requests specific comment on whether:

    The OCC's proposed plan to maintain strategic plans approved 
under the June 2020 Rule with target market assessment areas is a 
reasonable way of addressing this transition consideration.

G. June 2020 Rule Subpart E

    Subpart E of the June 2020 Rule includes the data collection, 
recordkeeping, and reporting provisions. Most of these provisions were 
subject to a January 1, 2023, or January 1, 2024, compliance date, and, 
therefore, do not require any transition. However, the changes to the 
public file requirements took effect October 1, 2020. These changes 
reduced the information required in the public file and changed the 
requirements for how an OCC-regulated bank makes the public file 
available to the public, including permitting these banks to make the 
public file available solely on their websites. Under the proposed 
rules, banks would need to include additional information in their 
public file and make the file available at their main office, and for 
interstate banks, at one branch in each State and more limited 
information at each branch. Since the proposed rules would impose 
additional public file content and availability requirements, the OCC 
expects to provide in the final rules that banks would comply with 
these requirements no later than three months after the effective date 
of the final rules. The OCC specifically requests comment on whether:

    Three months is sufficient time for banks to make the changes 
necessary to comply with the public file content and availability 
requirements of the proposed rules.
    The OCC should enact a transition period for the public notice 
requirements that took effect on October 1, 2020.

H. Summary Chart of Proposed Transition Considerations

            OCC Rescind and Replace Transition Considerations
------------------------------------------------------------------------
   Description of the  proposed
             provision                    Proposed transition plan
------------------------------------------------------------------------
                            Bank Type Changes
------------------------------------------------------------------------
Certain small banks (i.e., banks    These small banks would become ISBs
 with at least $330 million but      as of the effective date of any
 less than $600 million in assets).  final rules. The change in bank
                                     type would be considered as part of
                                     performance context when evaluating
                                     the bank's CRA performance. No
                                     additional transition time would be
                                     provided for adjusting to the ISB
                                     performance standards.

[[Page 52035]]

 
Certain ISBs (i.e., banks with at   These ISBs would become large banks
 least $1.322 billion but not more   as of the effective date of any
 than $2.5 billion in assets).       final rules. The newly classified
                                     large banks would (1) begin
                                     collecting data to be evaluated
                                     under the large bank lending,
                                     investment, and service tests on
                                     January 1, 2023, and (2) report
                                     required and optional data the
                                     following year.
------------------------------------------------------------------------
                          Qualifying Activities
------------------------------------------------------------------------
Consideration of retail lending     The proposed rules' revised
 (i.e., home mortgage loans, small   definitions would apply as of the
 loans to businesses, small loans    effective date of any final rules.
 to farms, and consumer loans) and   Banks would receive consideration
 CD activities (i.e., CD loans, CD   in their CRA examinations for
 investments, and CD services--      activities that met the qualifying
 including legally binding           activities criteria or definitions
 commitments to lend and invest)     that were in effect at the time the
 and their related definitions.      bank conducted these activities.
Qualifying activities confirmation  Confirmation letters would be
 letters issued under the June       applicable while the June 2020 Rule
 2020 Rule.                          was in effect but would not apply
                                     to activities conducted after any
                                     final rules' effective date.
------------------------------------------------------------------------
                               Affiliates
------------------------------------------------------------------------
Affiliate activities conducted      Banks may to elect to include
 after the effective date of any     affiliate activities in their CRA
 final rules.                        evaluations, subject to certain
                                     limitations. The OCC also would
                                     rescind the January 2021
                                     interpretive letter regarding
                                     affiliate activities as of the
                                     effective date of any final rules.
------------------------------------------------------------------------
                   Outside Assessment Area Activities
------------------------------------------------------------------------
Consideration of activities         The OCC is considering whether it
 conducted outside bank assessment   should continue to provide
 areas.                              consideration for activities that
                                     do not directly or indirectly serve
                                     a bank's assessment areas or the
                                     broader statewide or regional areas
                                     that include a bank's assessment
                                     areas.
------------------------------------------------------------------------
         CD Activity Confirmation Process and Illustrative List
------------------------------------------------------------------------
CD activities confirmation process  The OCC is considering providing a
                                     process for qualifying activities
                                     confirmation outside of the CRA
                                     rules.
Qualifying activities illustrative  The OCC would maintain the
 list.                               qualifying activities illustrative
                                     list on its website as a reference
                                     for banks to determine whether
                                     activities conducted while the June
                                     2020 Rule was in effect are
                                     eligible for CRA consideration.
------------------------------------------------------------------------
                             Strategic Plans
------------------------------------------------------------------------
Strategic plans with target market  The OCC would maintain any strategic
 assessment areas approved under     plans approved by the OCC under the
 the June 2020 Rule.                 June 2020 Rule and would not
                                     require these banks to amend their
                                     strategic plans.
------------------------------------------------------------------------
                        June 2020 Rule Subpart E
------------------------------------------------------------------------
CRA public file content and         Banks would comply with the
 location requirements.              additional public file content and
                                     availability requirements no later
                                     than three months after the
                                     effective date of any final rules.
CRA notice requirements...........  The OCC would not provide additional
                                     time for banks to comply with the
                                     CRA notice requirements.
------------------------------------------------------------------------

V. Interagency Rulemaking

    As noted, on July 20, 2021, the Agencies announced they had 
initiated an interagency rulemaking, stating that they are ``committed 
to working together to jointly strengthen and modernize rules 
implementing the [CRA].'' \79\ The Agencies' announcement stated that 
``[j]oint agency action will best achieve a consistent, modernized 
framework across all banks to help meet the credit needs of the 
communities in which they do business, including [LMI] neighborhoods.'' 
\80\ A reinstatement of the 1995 Rules would allow for an orderly 
transition to future, modernized CRA rules.
---------------------------------------------------------------------------

    \79\ See supra note 7.
    \80\ See supra note 7.
---------------------------------------------------------------------------

VI. Regulatory Analysis

A. Regulatory Flexibility Act

    In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.) requires an agency, in connection with a proposed rule, to 
prepare an Initial Regulatory Flexibility Analysis describing the 
impact of the rule on small entities (defined by the Small Business 
Administration for purposes of the RFA to include commercial banks and 
savings institutions with total assets of $600 million or less and 
trust companies with total assets of $41.5 million of less). However, 
under section 605(b) of the RFA, this analysis is not required if the 
agency certifies that the rule would not have a significant economic 
impact on a substantial number of small entities and publishes its 
certification and a short explanatory statement in the Federal Register 
along with its rule.
    The OCC currently supervises approximately 669 small entities, all 
of which may be impacted by the proposed rules. The OCC estimates the 
annual cost for small entities to comply with the proposed rules would 
be approximately $1,824 per bank ($114 per hour x 16 hours). In 
general, the

[[Page 52036]]

OCC classifies the economic impact on an individual small entity as 
significant if the total estimated impact in one year is greater than 5 
percent of the small entity's total annual salaries and benefits or 
greater than 2.5 percent of the small entity's total non-interest 
expense.
    Based on these thresholds, the OCC estimates that, if implemented, 
the proposed rules would have a significant economic impact on zero 
small entities, which is not a substantial number. Therefore, the OCC 
certifies that the proposed rules would not have a significant economic 
impact on a substantial number of small entities.

B. Paperwork Reduction Act

    Certain provisions of the proposed rules contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with 
the requirements of the PRA, the OCC may not conduct or sponsor, and a 
respondent is not required to respond to, an information collection 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number. The OCC reviewed the proposed rules and 
determined that it revises certain information collection requirements 
previously cleared by OMB under OMB Control No. 1557-0160. The OCC has 
submitted the revised information collection to OMB for review under 
section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of 
the OMB's implementing regulations (5 CFR1320).
    Under the proposed rules:
     12 CFR 25.25(b) and 195.25(b)--Requests for designation as 
a wholesale or limited purpose bank would be made in writing with the 
OCC at least three months prior to the proposed effective date of the 
designation.
     12 CFR 25.27 and 195.27--Strategic plans would be 
submitted at least three months prior to proposed effective dates. 
Plans would include measurable goals and address all the performance 
categories. Plans would include a description of informal efforts to 
solicit public suggestions, any written public comments received, and 
if revised pursuant to public comment, a copy of the initial plan. 
Amendments to plans could be submitted in the case of a change in 
material circumstances.
     12 CFR 25.42(a) and 195.42(a)--Large banks would collect 
and maintain certain small business and small farm loan data in a 
machine-readable form and report it annually pursuant to 12 CFR 
25.42(b)(1) and 195.42(b)(1).
     12 CFR 25.42(b)(2) and 195.42(b)(2)--Large banks would 
report annually in machine readable form the aggregate number and 
aggregate amount of community development loans originated or 
purchased.
     12 CFR 25.42(b)(3) and 195.42(b)(3)--Large banks, if 
subject to reporting under HMDA, would report the location of each home 
mortgage loan application, origination, or purchase outside the MSAs 
where the bank has a home or branch office.
     12 CFR 25.42(c)(1) and 195.42(c)(1)--All banks could 
collect and maintain in machine readable form certain data for consumer 
loans originated or purchased by a bank for consideration under the 
lending test. Under 12 CFR 25.42(c)(2)-(4) and 195.42(c)(2)-(4), other 
information could be included concerning a bank's lending performance, 
including additional loan distribution data.
     12 CFR 25.42(d) and 195.42(d)--Banks that elect to have 
the OCC consider loans by an affiliate, for purposes of the lending or 
community development test or an approved strategic plan, would 
collect, maintain, and report the data that the bank would have 
collected, maintained, and reported pursuant to 12 CFR 25.42(a)-(c) or 
195.42(a)-(c), respectively, had the loans been originated or purchased 
by the bank. For home mortgage loans, the bank would also be prepared 
to identify the home mortgage loans reported under HMDA by the 
affiliate.
     12 CFR 25.42(e) and 195.42(e)--Banks that elect to have 
the OCC consider community development loans by a consortium or a third 
party, for purposes of the lending or community development tests or an 
approved strategic plan, would report for those loans the data that the 
bank would have reported under 12 CFR 25.42(b)(2) or 195.42(b)(2), 
respectively, had the loans been originated or purchased by the bank.
     12 CFR 25.42(f) and 195.42(f)--Small banks that qualify 
for evaluation under the small bank performance standards but elect 
evaluation under the lending, investment, and service tests would 
collect, maintain, and report the data required for other banks under 
12 CFR 25.42(a), 25.42(b), 195.42(a), and 195.42(b).
     12 CFR 25.42(g) and 195.42(g)--Banks, except those that 
were a small bank during the prior calendar year, would collect and 
report to the OCC by March 1 each year a list for each assessment area 
showing the geographies within the area.
     12 CFR 25.43(a) and 195.43(a)--All banks would maintain a 
public file that contains with certain specified details: all written 
comments and responses; a copy of the public section of the bank's most 
recent CRA performance evaluation; a list of the bank's branches; a 
list of the branches opened or closed; a list of services offered; and 
a map of each assessment area delineated by the bank.
     12 CFR 25.43(b) and 195.43(b)--Large banks would include 
in their public files certain information pertaining to the institution 
and its affiliates, if applicable, for each of the prior two calendar 
years. If the bank has elected to have one or more categories of its 
consumer loans considered under the lending test, for each of these 
categories, they would include the number and amount of loans: to low-, 
moderate-, middle-, and upper-income individuals; located in low-, 
moderate-, middle-, and upper-income census tracts; and located inside 
the bank's assessment area(s) and outside the bank's assessment 
area(s); and their CRA Disclosure Statement. A bank required to report 
home mortgage loan data pursuant to 12 CFR part 1003 would include a 
written notice that the institution's HMDA Disclosure Statement may be 
obtained on the Consumer Financial Protection Bureau's (Bureau's) 
website. A bank that elected to have the OCC consider the mortgage 
lending of an affiliate would include the name of the affiliate and a 
written notice that the affiliate's HMDA Disclosure Statement may be 
obtained at the Bureau's website. A small bank or a bank that was a 
small bank during the prior calendar year would include: its loan-to-
deposit ratio for each quarter of the prior calendar year and, at its 
option, additional data on its loan-to-deposit ratio; and the 
information required for other banks by 12 CFR 24.43(b)(1) or 
195.43(b)(1), if it has elected to be evaluated under the lending, 
investment, and service tests. A bank that has been approved to be 
assessed under a strategic plan would include in its public file a copy 
of that plan. A bank that received a less than satisfactory rating 
during its most recent examination would include in its public file a 
description of its current efforts to improve its performance in 
helping to meet the credit needs of its entire community. The bank 
would update the description quarterly.
     12 CFR 25.43(c) through (e) and 12 CFR 195.43(c) through 
(e)--A bank would make available to the public for inspection upon 
request and at no cost the information required in these provisions at 
the main office or branch as specified. Upon request, bank would 
provide copies, either on paper or in

[[Page 52037]]

another form acceptable to the person making the request, of the 
information in its public file. A bank would ensure that this 
information is current as of April 1 of each year.
    OCC Title of Information Collection: Community Reinvestment Act.
    Frequency: On Occasion.
    Affected Public: Businesses or other for-profit.
    Total estimated annual burden: 113,351 hours.
    Comments are invited on:
    a. Whether the collections of information are necessary for the 
proper performance of the OCC's functions, including whether the 
information has practical utility;
    b. The accuracy or the estimate of the burden of the information 
collections, including the validity of the methodology and assumptions 
used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of the information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.

C. Unfunded Mandates Reform Act of 1995

    The OCC considers whether a proposed rule includes a Federal 
mandate, under the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1501 et seq.), that may result in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any one year ($158 million as 
adjusted annually for inflation). The UMRA does not apply to rules that 
incorporate requirements specifically set forth in law.
    The OCC estimates that expenditures associated with mandates in the 
proposed rules would be approximately $6 million. Therefore, the OCC 
concludes the proposed rules would not result in an expenditure of $158 
million or more annually by State, local, and tribal governments or by 
the private sector.

D. Riegle Community Development and Regulatory Improvement Act

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act of 1994 (12 U.S.C. 4802(a)), in determining 
the effective date and administrative compliance requirements for new 
rules that impose additional reporting, disclosure, or other 
requirements on insured depository institutions, the OCC will consider, 
consistent with principles of safety and soundness and the public 
interest (1) any administrative burdens that the proposed rules would 
place on depository institutions, including small depository 
institutions and customers of depository institutions; and (2) the 
benefits of the proposed rules. The OCC requests comment on (1) any 
administrative burdens that the proposed rules would place on 
depository institutions, including small depository institutions, and 
their customers and (2) the benefits of the proposed rules that the OCC 
should consider in determining the effective date and administrative 
compliance requirements for any final rules.

List of Subjects

12 CFR Part 25

    Community development, Credit, Investments, National banks, 
Reporting and recordkeeping requirements, Savings associations.

12 CFR Part 195

    Banks, Banking, Community development, Credit, Investments, 
Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons discussed in the preamble, and under the authority 
of 12 U.S.C. 93a, the Office of the Comptroller of the Currency 
proposes to amend 12 CFR part 25 and proposes to add part 195 as 
follows:

0
1. Part 25 is revised to read as follows:

PART 25--COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT 
PRODUCTION REGULATIONS

Subpart A--General
Sec.
25.11 Authority, purposes, and scope.
25.12 Definitions.
Subpart B--Standards for Assessing Performance
Sec.
25.21 Performance tests, standards, and ratings, in general.
25.22 Lending test.
25.23 Investment test.
25.24 Service test.
25.25 Community development test for wholesale or limited purpose 
banks.
25.26 Small bank performance standards.
25.27 Strategic plan.
25.28 Assigned ratings.
25.29 Effect of CRA performance on applications.
Subpart C--Records, Reporting, and Disclosure Requirements
Sec.
25.41 Assessment area delineation.
25.42 Data collection, reporting, and disclosure.
25.43 Content and availability of public file.
25.44 Public notice by banks.
25.45 Publication of planned examination schedule.
Subpart D [Reserved]
Subpart E--Prohibition Against Use of Interstate Branches Primarily for 
Deposit Production
Sec.
25.61 Purpose and scope.
25.62 Definitions.
25.63 Loan-to-deposit ratio screen.
25.64 Credit needs determination.
25.65 Sanctions.

Appendix A to Part 25--Ratings

Appendix B to Part 25--CRA Notice

    Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215, 
215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2908, and 3101 
through 3111.

Subpart A--General


Sec.  25.11  Authority, purposes, and scope.

    (a) Authority and OMB control number--(1) Authority. The authority 
for subparts A, B, C, D, and E is 12 U.S.C. 21, 22, 26, 27, 30, 36, 
93a, 161, 215, 215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 
2907, and 3101 through 3111.
    (2) OMB control number. The information collection requirements 
contained in this part were approved by the Office of Management and 
Budget under the provisions of 44 U.S.C. 3501 et seq. and have been 
assigned OMB control number 1557-0160.
    (b) Purposes. In enacting the Community Reinvestment Act (CRA), the 
Congress required each appropriate Federal financial supervisory agency 
to assess an institution's record of helping to meet the credit needs 
of the local communities in which the institution is chartered, 
consistent with the safe and sound operation of the institution, and to 
take this record into account in the agency's evaluation of an 
application for a deposit facility by the institution. This part is 
intended to carry out the purposes of the CRA by:
    (1) Establishing the framework and criteria by which the Office of 
the Comptroller of the Currency (OCC) assesses a bank's record of 
helping to meet the credit needs of its entire community, including 
low- and moderate-income neighborhoods, consistent with the safe and 
sound operation of the bank; and

[[Page 52038]]

    (2) Providing that the OCC takes that record into account in 
considering certain applications.
    (c) Scope--(1) General. This part applies to all banks except as 
provided in paragraphs (c)(2) and (3) of this section.
    (2) Federal branches and agencies. (i) This part applies to all 
insured Federal branches and to any Federal branch that is uninsured 
that results from an acquisition described in section 5(a)(8) of the 
International Banking Act of 1978 (12 U.S.C. 3103(a)(8)).
    (ii) Except as provided in paragraph (c)(2)(i) of this section, 
this part does not apply to Federal branches that are uninsured, 
limited Federal branches, or Federal agencies, as those terms are 
defined in part 28 of this chapter.
    (3) Certain special purpose banks. This part does not apply to 
special purpose banks that do not perform commercial or retail banking 
services by granting credit to the public in the ordinary course of 
business, other than as incident to their specialized operations. These 
banks include banker's banks, as defined in 12 U.S.C. 24 (Seventh), and 
banks that engage only in one or more of the following activities: 
Providing cash management controlled disbursement services or serving 
as correspondent banks, trust companies, or clearing agents.


Sec.  25.12   Definitions.

    For purposes of this part, the following definitions apply:
    (a) Affiliate means any company that controls, is controlled by, or 
is under common control with another company. The term ``control'' has 
the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company 
is under common control with another company if both companies are 
directly or indirectly controlled by the same company.
    (b) Area median income means:
    (1) The median family income for the MSA, if a person or geography 
is located in an MSA, or for the metropolitan division, if a person or 
geography is located in an MSA that has been subdivided into 
metropolitan divisions; or
    (2) The statewide nonmetropolitan median family income, if a person 
or geography is located outside an MSA.
    (c) Assessment area means a geographic area delineated in 
accordance with Sec.  25.41.
    (d) Automated teller machine (ATM) means an automated, unstaffed 
banking facility owned or operated by, or operated exclusively for, the 
bank at which deposits are received, cash dispersed, or money lent.
    (e) Bank means a national bank (including a Federal branch as 
defined in part 28 of this chapter) with Federally insured deposits, 
except as provided in Sec.  25.11(c).
    (f) Branch means a staffed banking facility authorized as a branch, 
whether shared or unshared, including, for example, a mini-branch in a 
grocery store or a branch operated in conjunction with any other local 
business or nonprofit organization.
    (g) Community development means:
    (1) Affordable housing (including multifamily rental housing) for 
low- or moderate-income individuals;
    (2) Community services targeted to low- or moderate-income 
individuals;
    (3) Activities that promote economic development by financing 
businesses or farms that meet the size eligibility standards of the 
Small Business Administration's Development Company or Small Business 
Investment Company programs (13 CFR 121.301) or have gross annual 
revenues of $1 million or less; or
    (4) Activities that revitalize or stabilize--
    (i) Low-or moderate-income geographies;
    (ii) Designated disaster areas; or
    (iii) Distressed or underserved nonmetropolitan middle-income 
geographies designated by the Board of Governors of the Federal Reserve 
System, Federal Deposit Insurance Corporation, and OCC, based on--
    (A) Rates of poverty, unemployment, and population loss; or
    (B) Population size, density, and dispersion. Activities revitalize 
and stabilize geographies designated based on population size, density, 
and dispersion if they help to meet essential community needs, 
including needs of low- and moderate-income individuals.
    (h) Community development loan means a loan that:
    (1) Has as its primary purpose community development; and
    (2) Except in the case of a wholesale or limited purpose bank:
    (i) Has not been reported or collected by the bank or an affiliate 
for consideration in the bank's assessment as a home mortgage, small 
business, small farm, or consumer loan, unless the loan is for a 
multifamily dwelling (as defined in Sec.  1003.2(n) of this title); and
    (ii) Benefits the bank's assessment area(s) or a broader statewide 
or regional area that includes the bank's assessment area(s).
    (i) Community development service means a service that:
    (1) Has as its primary purpose community development;
    (2) Is related to the provision of financial services; and
    (3) Has not been considered in the evaluation of the bank's retail 
banking services under Sec.  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 Sec.  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 Sec.  1003.2 of 
this title, and that is not an excluded transaction under Sec.  
1003.3(c)(1) through (10) and (13) of this title.
    (m) Income level includes:
    (1) Low-income, which means an individual income that is less than 
50 percent of the area median income, or a median family income that is 
less than 50 percent, in the case of a geography.
    (2) Moderate-income, which means an individual income that is at 
least 50 percent and less than 80 percent of the area median income, or 
a median family income that is at least 50 and less than 80 percent, in 
the case of a geography.
    (3) Middle-income, which means an individual income that is at 
least 80 percent and less than 120 percent of the area median income, 
or a median family income that is at least 80 and less than 120 
percent, in the case of a geography.
    (4) Upper-income, which means an individual income that is 120 
percent or more of the area median income, or a median family income 
that is 120 percent or more, in the case of a geography.
    (n) Limited purpose bank means a bank that offers only a narrow 
product line (such as credit card or motor vehicle loans) to a regional 
or broader market and for which a designation as

[[Page 52039]]

a limited purpose bank is in effect, in accordance with Sec.  25.25(b).
    (o) Loan location. A loan is located as follows:
    (1) A consumer loan is located in the geography where the borrower 
resides;
    (2) A home mortgage loan is located in the geography where the 
property to which the loan relates is located; and
    (3) A small business or small farm loan is located in the geography 
where the main business facility or farm is located or where the loan 
proceeds otherwise will be applied, as indicated by the borrower.
    (p) Loan production office means a staffed facility, other than a 
branch, that is open to the public and that provides lending-related 
services, such as loan information and applications.
    (q) Metropolitan division means a metropolitan division as defined 
by the Director of the Office of Management and Budget.
    (r) MSA means a metropolitan statistical area as defined by the 
Director of the Office of Management and Budget.
    (s) Nonmetropolitan area means any area that is not located in an 
MSA.
    (t) Qualified investment means a lawful investment, deposit, 
membership share, or grant that has as its primary purpose community 
development.
    (u) Small bank--(1) Definition. Small bank means a bank that, as of 
December 31 of either of the prior two calendar years, had assets of 
less than $1.322 billion. Intermediate small bank means a small bank 
with assets of at least $330 million as of December 31 of both of the 
prior two calendar years and less than $1.322 billion as of December 31 
of either of the prior two calendar years.
    (2) Adjustment. The dollar figures in paragraph (u)(1) of this 
section shall be adjusted annually and published by the OCC, based on 
the year-to-year change in the average of the Consumer Price Index for 
Urban Wage Earners and Clerical Workers, not seasonally adjusted, for 
each twelve-month period ending in November, with rounding to the 
nearest million.
    (v) Small business loan means a loan included in ``loans to small 
businesses'' as defined in the instructions for preparation of the 
Consolidated Report of Condition and Income.
    (w) Small farm loan means a loan included in ``loans to small 
farms'' as defined in the instructions for preparation of the 
Consolidated Report of Condition and Income.
    (x) Wholesale bank means a bank that is not in the business of 
extending home mortgage, small business, small farm, or consumer loans 
to retail customers, and for which a designation as a wholesale bank is 
in effect, in accordance with Sec.  25.25(b).

Subpart B--Standards for Assessing Performance


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

    (a) Performance tests and standards. The OCC assesses the CRA 
performance of a bank in an examination as follows:
    (1) Lending, investment, and service tests. The OCC applies the 
lending, investment, and service tests, as provided in Sec. Sec.  25.22 
through 25.24, in evaluating the performance of a bank, except as 
provided in paragraphs (a)(2), (3), and (4) of this section.
    (2) Community development test for wholesale or limited purpose 
banks. The OCC applies the community development test for a wholesale 
or limited purpose bank, as provided in Sec.  25.25, except as provided 
in paragraph (a)(4) of this section.
    (3) Small bank performance standards. The OCC applies the small 
bank performance standards as provided in Sec.  25.26 in evaluating the 
performance of a small bank or a bank that was a small bank during the 
prior calendar year, unless the bank elects to be assessed as provided 
in paragraphs (a)(1), (2), or (4) of this section. The bank may elect 
to be assessed as provided in paragraph (a)(1) of this section only if 
it collects and reports the data required for other banks under Sec.  
25.42.
    (4) Strategic plan. The OCC evaluates the performance of a bank 
under a strategic plan if the bank submits, and the OCC approves, a 
strategic plan as provided in Sec.  25.27.
    (b) Performance context. The OCC applies the tests and standards in 
paragraph (a) of this section and also considers whether to approve a 
proposed strategic plan in the context of:
    (1) Demographic data on median income levels, distribution of 
household income, nature of housing stock, housing costs, and other 
relevant data pertaining to a bank's assessment area(s);
    (2) Any information about lending, investment, and service 
opportunities in the bank's assessment area(s) maintained by the bank 
or obtained from community organizations, state, local, and tribal 
governments, economic development agencies, or other sources;
    (3) The bank's product offerings and business strategy as 
determined from data provided by the bank;
    (4) Institutional capacity and constraints, including the size and 
financial condition of the bank, the economic climate (national, 
regional, and local), safety and soundness limitations, and any other 
factors that significantly affect the bank's ability to provide 
lending, investments, or services in its assessment area(s);
    (5) The bank's past performance and the performance of similarly 
situated lenders;
    (6) The bank's public file, as described in Sec.  25.43, and any 
written comments about the bank's CRA performance submitted to the bank 
or the OCC; and
    (7) Any other information deemed relevant by the OCC.
    (c) Assigned ratings. The OCC assigns to a bank one of the 
following four ratings pursuant to Sec.  25.28 and appendix A of this 
part: ``outstanding''; ``satisfactory''; ``needs to improve''; or 
``substantial noncompliance'' as provided in 12 U.S.C. 2906(b)(2). The 
rating assigned by the OCC reflects the bank's record of helping to 
meet the credit needs of its entire community, including low- and 
moderate-income neighborhoods, consistent with the safe and sound 
operation of the bank.
    (d) Safe and sound operations. This part and the CRA do not require 
a bank to make loans or investments or to provide services that are 
inconsistent with safe and sound operations. To the contrary, the OCC 
anticipates banks can meet the standards of this part with safe and 
sound loans, investments, and services on which the banks expect to 
make a profit. Banks are permitted and encouraged to develop and apply 
flexible underwriting standards for loans that benefit low- or 
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 under this part, 
the OCC considers, as a factor, low-cost education loans originated by 
the bank to borrowers, particularly in its assessment area(s), who have 
an individual income that is less than 50 percent of the area median 
income. For purposes of this paragraph, ``low-cost education loans'' 
means any education loan, as defined in section 140(a)(7) of the Truth 
in Lending Act (15 U.S.C. 1650(a)(7)) (including a loan under a state 
or local education loan program), originated by the bank for a student 
at an ``institution of higher education,'' as that term is generally 
defined in sections 101 and 102 of the Higher Education Act of 1965 (20 
U.S.C. 1001 and 1002) and the implementing regulations published by the 
U.S. Department of Education, with interest rates and fees no greater 
than those of

[[Page 52040]]

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 under this part, the OCC considers as a factor capital 
investment, loan participation, and other ventures undertaken by the 
bank in cooperation with minority- and women-owned financial 
institutions and low-income credit unions. Such activities must help 
meet the credit needs of local communities in which the 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 assessment area(s) or the broader statewide or regional area 
that includes the bank's assessment area(s).


Sec.  25.22  Lending test.

    (a) Scope of test. (1) The lending test evaluates a bank's record 
of helping to meet the credit needs of its assessment area(s) through 
its lending activities by considering a bank's home mortgage, small 
business, small farm, and community development lending. If consumer 
lending constitutes a substantial majority of a bank's business, the 
OCC will evaluate the bank's consumer lending in one or more of the 
following categories: Motor vehicle, credit card, other secured, and 
other unsecured loans. In addition, at a bank's option, the OCC will 
evaluate one or more categories of consumer lending, if the bank has 
collected and maintained, as required in Sec.  25.42(c)(1), the data 
for each category that the bank elects to have the OCC evaluate.
    (2) The OCC considers originations and purchases of loans. The OCC 
will also consider any other loan data the bank may choose to provide, 
including data on loans outstanding, commitments and letters of credit.
    (3) A bank may ask the OCC to consider loans originated or 
purchased by consortia in which the bank participates or by third 
parties in which the bank has invested only if the loans meet the 
definition of community development loans and only in accordance with 
paragraph (d) of this section. The OCC will not consider these loans 
under any criterion of the lending test except the community 
development lending criterion.
    (b) Performance criteria. The OCC evaluates a bank's lending 
performance pursuant to the following criteria:
    (1) Lending activity. The number and amount of the bank's home 
mortgage, small business, small farm, and consumer loans, if 
applicable, in the bank's assessment area(s);
    (2) Geographic distribution. The geographic distribution of the 
bank's home mortgage, small business, small farm, and consumer loans, 
if applicable, based on the loan location, including:
    (i) The proportion of the bank's lending in the bank's assessment 
area(s);
    (ii) The dispersion of lending in the bank's assessment area(s); 
and
    (iii) The number and amount of loans in low-, moderate-, middle-, 
and upper-income geographies in the bank's assessment area(s);
    (3) Borrower characteristics. The distribution, particularly in the 
bank's assessment area(s), of the bank's home mortgage, small business, 
small farm, and consumer loans, if applicable, based on borrower 
characteristics, including the number and amount of:
    (i) Home mortgage loans to low-, moderate-, middle-, and upper-
income individuals;
    (ii) Small business and small farm loans to businesses and farms 
with gross annual revenues of $1 million or less;
    (iii) Small business and small farm loans by loan amount at 
origination; and
    (iv) Consumer loans, if applicable, to low-, moderate-, middle-, 
and upper-income individuals;
    (4) Community development lending. The bank's community development 
lending, including the number and amount of community development 
loans, and their complexity and innovativeness; and
    (5) Innovative or flexible lending practices. The bank's use of 
innovative or flexible lending practices in a safe and sound manner to 
address the credit needs of low- or moderate-income individuals or 
geographies.
    (c) Affiliate lending. (1) At a bank's option, the OCC will 
consider loans by an affiliate of the bank, if the bank provides data 
on the affiliate's loans pursuant to Sec.  25.42.
    (2) The OCC considers affiliate lending subject to the following 
constraints:
    (i) No affiliate may claim a loan origination or loan purchase if 
another institution claims the same loan origination or purchase; and
    (ii) If a bank elects to have the OCC consider loans within a 
particular lending category made by one or more of the bank's 
affiliates in a particular assessment area, the bank shall elect to 
have the OCC consider, in accordance with paragraph (c)(1) of this 
section, all the loans within that lending category in that particular 
assessment area made by all of the bank's affiliates.
    (3) The OCC does not consider affiliate lending in assessing a 
bank's performance under paragraph (b)(2)(i) of this section.
    (d) Lending by a consortium or a third party. Community development 
loans originated or purchased by a consortium in which the bank 
participates or by a third party in which the bank has invested:
    (1) Will be considered, at the bank's option, if the bank reports 
the data pertaining to these loans under Sec.  25.42(b)(2); and
    (2) May be allocated among participants or investors, as they 
choose, for purposes of the lending test, except that no participant or 
investor:
    (i) May claim a loan origination or loan purchase if another 
participant or investor claims the same loan origination or purchase; 
or
    (ii) May claim loans accounting for more than its percentage share 
(based on the level of its participation or investment) of the total 
loans originated by the consortium or third party.
    (e) Lending performance rating. The OCC rates a bank's lending 
performance as provided in appendix A of this part.


Sec.  25.23  Investment test.

    (a) Scope of test. The investment test evaluates a bank's record of 
helping to meet the credit needs of its assessment area(s) through 
qualified investments that benefit its assessment area(s) or a broader 
statewide or regional area that includes the bank's assessment area(s).
    (b) Exclusion. Activities considered under the lending or service 
tests may not be considered under the investment test.
    (c) Affiliate investment. At a bank's option, the OCC will 
consider, in its assessment of a bank's investment performance, a 
qualified investment made by an affiliate of the bank, if the qualified 
investment is not claimed by any other institution.
    (d) Disposition of branch premises. Donating, selling on favorable 
terms, or making available on a rent-free basis a branch of the bank 
that is located in a predominantly minority neighborhood to a minority 
depository institution or women's depository institution (as these 
terms are defined in 12 U.S.C. 2907(b)) will be considered as a 
qualified investment.
    (e) Performance criteria. The OCC evaluates the investment 
performance of a bank pursuant to the following criteria:
    (1) The dollar amount of qualified investments;

[[Page 52041]]

    (2) The innovativeness or complexity of qualified investments;
    (3) The responsiveness of qualified investments to credit and 
community development needs; and
    (4) The degree to which the qualified investments are not routinely 
provided by private investors.
    (f) Investment performance rating. The OCC rates a bank's 
investment performance as provided in appendix A of this part.


Sec.  25.24  Service test.

    (a) Scope of test. The service test evaluates a bank's record of 
helping to meet the credit needs of its assessment area(s) by analyzing 
both the availability and effectiveness of a bank's systems for 
delivering retail banking services and the extent and innovativeness of 
its community development services.
    (b) Area(s) benefitted. Community development services must benefit 
a bank's assessment area(s) or a broader statewide or regional area 
that includes the bank's assessment area(s).
    (c) Affiliate service. At a bank's option, the OCC will consider, 
in its assessment of a bank's service performance, a community 
development service provided by an affiliate of the bank, if the 
community development service is not claimed by any other institution.
    (d) Performance criteria--retail banking services. The OCC 
evaluates the availability and effectiveness of a bank's systems for 
delivering retail banking services, pursuant to the following criteria:
    (1) The current distribution of the bank's branches among low-, 
moderate-, middle-, and upper-income geographies;
    (2) In the context of its current distribution of the bank's 
branches, the bank's record of opening and closing branches, 
particularly branches located in low- or moderate-income geographies or 
primarily serving low- or 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, 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 OCC 
evaluates community development services pursuant to the following 
criteria:
    (1) The extent to which the bank provides community development 
services; and
    (2) The innovativeness and responsiveness of community development 
services.
    (f) Service performance rating. The OCC rates a bank's service 
performance as provided in appendix A of this part.


Sec.  25.25  Community development test for wholesale or limited 
purpose banks.

    (a) Scope of test. The OCC assesses a wholesale or limited purpose 
bank's record of helping to meet the credit needs of its assessment 
area(s) under the community development test through its community 
development lending, qualified investments, or community development 
services.
    (b) Designation as a wholesale or limited purpose bank. In order to 
receive a designation as a wholesale or limited purpose bank, a bank 
shall file a request, in writing, with the OCC, at least three months 
prior to the proposed effective date of the designation. If the OCC 
approves the designation, it remains in effect until the bank requests 
revocation of the designation or until one year after the OCC notifies 
the bank that the OCC has revoked the designation on its own 
initiative.
    (c) Performance criteria. The OCC evaluates the community 
development performance of a wholesale or limited purpose bank pursuant 
to the following criteria:
    (1) The number and amount of community development loans (including 
originations and purchases of loans and other community development 
loan data provided by the bank, such as data on loans outstanding, 
commitments, and letters of credit), qualified investments, or 
community development services;
    (2) The use of innovative or complex qualified investments, 
community development loans, or community development services and the 
extent to which the investments are not routinely provided by private 
investors; and
    (3) The bank's responsiveness to credit and community development 
needs.
    (d) Indirect activities. At a bank's option, the OCC will consider 
in its community development performance assessment:
    (1) Qualified investments or community development services 
provided by an affiliate of the bank, if the investments or services 
are not claimed by any other institution; and
    (2) Community development lending by affiliates, consortia and 
third parties, subject to the requirements and limitations in Sec.  
25.22(c) and (d).
    (e) Benefit to assessment area(s)--(1) Benefit inside assessment 
area(s). The OCC considers all qualified investments, community 
development loans, and community development services that benefit 
areas within the bank's assessment area(s) or a broader statewide or 
regional area that includes the bank's assessment area(s).
    (2) Benefit outside assessment area(s). The OCC considers the 
qualified investments, community development loans, and community 
development services that benefit areas outside the bank's assessment 
area(s), if the bank has adequately addressed the needs of its 
assessment area(s).
    (f) Community development performance rating. The OCC rates a 
bank's community development performance as provided in appendix A of 
this part.


Sec.  25.26   Small bank performance standards.

    (a) Performance criteria--(1) Small banks that are not intermediate 
small banks. The OCC evaluates the record of a small bank that is not, 
or that was not during the prior calendar year, an intermediate small 
bank, of helping to meet the credit needs of its assessment area(s) 
pursuant to the criteria set forth in paragraph (b) of this section.
    (2) Intermediate small banks. The OCC evaluates the record of a 
small bank that is, or that was during the prior calendar year, an 
intermediate small bank, of helping to meet the credit needs of its 
assessment area(s) pursuant to the criteria set forth in paragraphs (b) 
and (c) of this section.
    (b) Lending test. A small bank's lending performance is evaluated 
pursuant to the following criteria:
    (1) The bank's loan-to-deposit ratio, adjusted for seasonal 
variation, and, as appropriate, other lending-related activities, such 
as loan originations for sale to the secondary markets, community 
development loans, or qualified investments;
    (2) The percentage of loans and, as appropriate, other lending-
related activities located in the bank's assessment area(s);
    (3) The bank's record of lending to and, as appropriate, engaging 
in other lending-related activities for borrowers of different income 
levels and businesses and farms of different sizes;
    (4) The geographic distribution of the bank's loans; and
    (5) The bank's record of taking action, if warranted, in response 
to written complaints about its performance in

[[Page 52042]]

helping to meet credit needs in its assessment area(s).
    (c) Community development test. An intermediate small bank's 
community development performance also is evaluated pursuant to the 
following criteria:
    (1) The number and amount of community development loans;
    (2) The number and amount of qualified investments;
    (3) The extent to which the bank provides community development 
services; and
    (4) The bank's responsiveness through such activities to community 
development lending, investment, and services needs.
    (d) Small bank performance rating. The OCC rates the performance of 
a bank evaluated under this section as provided in appendix A of this 
part.


Sec.  25.27   Strategic plan.

    (a) Alternative election. The OCC will assess a bank's record of 
helping to meet the credit needs of its assessment area(s) under a 
strategic plan if:
    (1) The bank has submitted the plan to the OCC as provided for in 
this section;
    (2) The OCC has approved the plan;
    (3) The plan is in effect; and
    (4) The bank has been operating under an approved plan for at least 
one year.
    (b) Data reporting. The OCC's approval of a plan does not affect 
the bank's obligation, if any, to report data as required by Sec.  
25.42.
    (c) Plans in general--(1) Term. A plan may have a term of no more 
than five years, and any multi-year plan must include annual interim 
measurable goals under which the OCC will evaluate the bank's 
performance.
    (2) Multiple assessment areas. A bank with more than one assessment 
area may prepare a single plan for all of its assessment areas or one 
or more plans for one or more of its assessment areas.
    (3) Treatment of affiliates. Affiliated institutions may prepare a 
joint plan if the plan provides measurable goals for each institution. 
Activities may be allocated among institutions at the institutions' 
option, provided that the same activities are not considered for more 
than one institution.
    (d) Public participation in plan development. Before submitting a 
plan to the OCC for approval, a bank shall:
    (1) Informally seek suggestions from members of the public in its 
assessment area(s) covered by the plan while developing the plan;
    (2) Once the bank has developed a plan, formally solicit public 
comment on the plan for at least 30 days by publishing notice in at 
least one newspaper of general circulation in each assessment area 
covered by the plan; and
    (3) During the period of formal public comment, make copies of the 
plan available for review by the public at no cost at all offices of 
the bank in any assessment area covered by the plan and provide copies 
of the plan upon request for a reasonable fee to cover copying and 
mailing, if applicable.
    (e) Submission of plan. The bank shall submit its plan to the OCC 
at least three months prior to the proposed effective date of the plan. 
The bank shall also submit with its plan a description of its informal 
efforts to seek suggestions from members of the public, any written 
public comment received, and, if the plan was revised in light of the 
comment received, the initial plan as released for public comment.
    (f) Plan content--(1) Measurable goals. (i) A bank shall specify in 
its plan measurable goals for helping to meet the credit needs of each 
assessment area covered by the plan, particularly the needs of low- and 
moderate-income geographies and low- and moderate-income individuals, 
through lending, investment, and services, as appropriate.
    (ii) A bank shall address in its plan all three performance 
categories and, unless the bank has been designated as a wholesale or 
limited purpose bank, shall emphasize lending and 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 capacity and constraints, 
product offerings, and business strategy.
    (2) Confidential information. A bank may submit additional 
information to the OCC on a confidential basis, but the goals stated in 
the plan must be sufficiently specific to enable the public and the OCC 
to judge the merits of the plan.
    (3) Satisfactory and outstanding goals. A bank shall specify in its 
plan measurable goals that constitute ``satisfactory'' performance. A 
plan may specify measurable goals that constitute ``outstanding'' 
performance. If a bank submits, and the OCC approves, both 
``satisfactory'' and ``outstanding'' performance goals, the OCC will 
consider the bank eligible for an ``outstanding'' performance rating.
    (4) Election if satisfactory goals not substantially met. A bank 
may elect in its plan that, if the bank fails to meet substantially its 
plan goals for a satisfactory rating, the OCC will evaluate the bank's 
performance under the lending, investment, and service tests, the 
community development test, or the small bank performance standards, as 
appropriate.
    (g) Plan approval--(1) Timing. The OCC will act upon a plan within 
60 calendar days after the OCC receives the complete plan and other 
material required under paragraph (e) of this section. If the OCC fails 
to act within this time period, the plan shall be deemed approved 
unless the OCC extends the review period for good cause.
    (2) Public participation. In evaluating the plan's goals, the OCC 
considers the public's involvement in formulating the plan, written 
public comment on the plan, and any response by the bank to public 
comment on the plan.
    (3) Criteria for evaluating plan. The OCC evaluates a plan's 
measurable goals using the following criteria, as appropriate:
    (i) The extent and breadth of lending or lending-related 
activities, including, as appropriate, the distribution of loans among 
different geographies, businesses and farms of different sizes, and 
individuals of different income levels, the extent of community 
development lending, and the use of innovative or flexible lending 
practices to address credit needs;
    (ii) The amount and innovativeness, complexity, and responsiveness 
of the bank's qualified investments; and
    (iii) The availability and effectiveness of the bank's systems for 
delivering retail banking services and the extent and innovativeness of 
the bank's community development services.
    (h) Plan amendment. During the term of a plan, a bank may request 
the OCC to approve an amendment to the plan on grounds that there has 
been a material change in circumstances. The bank shall develop an 
amendment to a previously approved plan in accordance with the public 
participation requirements of paragraph (d) of this section.
    (i) Plan assessment. The OCC approves the goals and assesses 
performance under a plan as provided for in appendix A of this part.


Sec.  25.28   Assigned ratings.

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

[[Page 52043]]

    (b) Lending, investment, and service tests. The OCC assigns a 
rating for a bank assessed under the lending, investment, and service 
tests in accordance with the following principles:
    (1) A bank that receives an ``outstanding'' rating on the lending 
test receives an assigned rating of at least ``satisfactory'';
    (2) A bank that receives an ``outstanding'' rating on both the 
service test and the investment test and a rating of at least ``high 
satisfactory'' on the lending test receives an assigned rating of 
``outstanding''; and
    (3) No bank may receive an assigned rating of ``satisfactory'' or 
higher unless it receives a rating of at least ``low satisfactory'' on 
the lending test.
    (c) Effect of evidence of discriminatory or other illegal credit 
practices. (1) The OCC's evaluation of a bank's CRA performance is 
adversely affected by evidence of discriminatory or other illegal 
credit practices in any geography by the bank or in any assessment area 
by any affiliate whose loans have been considered as part of the bank's 
lending performance. In connection with any type of lending activity 
described in Sec.  25.22(a), evidence of discriminatory or other credit 
practices that violate an applicable law, rule, or regulation includes, 
but is not limited to:
    (i) Discrimination against applicants on a prohibited basis in 
violation, for example, of the Equal Credit Opportunity Act or the Fair 
Housing Act;
    (ii) Violations of the Home Ownership and Equity Protection Act;
    (iii) Violations of section 5 of the Federal Trade Commission Act;
    (iv) Violations of section 8 of the Real Estate Settlement 
Procedures Act; and
    (v) Violations of the Truth in Lending Act provisions regarding a 
consumer's right of rescission.
    (2) In determining the effect of evidence of practices described in 
paragraph (c)(1) of this section on the bank's assigned rating, the OCC 
considers the nature, extent, and strength of the evidence of the 
practices; the policies and procedures that the bank (or affiliate, as 
applicable) has in place to prevent the practices; any corrective 
action that the bank (or affiliate, as applicable) has taken or has 
committed to take, including voluntary corrective action resulting from 
self-assessment; and any other relevant information.


Sec.  25.29   Effect of CRA performance on applications.

    (a) CRA performance. Among other factors, the OCC takes into 
account the record of performance under the CRA of each applicant bank 
in considering an application for:
    (1) The establishment of a domestic branch;
    (2) The relocation of the main office or a branch;
    (3) Under the Bank Merger Act (12 U.S.C. 1828(c)), the merger or 
consolidation with or the acquisition of assets or assumption of 
liabilities of an insured depository institution; and
    (4) The conversion of an insured depository institution to a 
national bank charter.
    (b) Charter application. An applicant (other than an insured 
depository institution) for a national bank charter shall submit with 
its application a description of how it will meet its CRA objectives. 
The OCC takes the description into account in considering the 
application and may deny or condition approval on that basis.
    (c) Interested parties. The OCC takes into account any views 
expressed by interested parties that are submitted in accordance with 
the OCC's procedures set forth in part 5 of this chapter in considering 
CRA performance in an application listed in paragraphs (a) and (b) of 
this section.
    (d) Denial or conditional approval of application. A bank's record 
of performance may be the basis for denying or conditioning approval of 
an application listed in paragraph (a) of this section.
    (e) Insured depository institution. For purposes of this section, 
the term ``insured depository institution'' has the meaning given to 
that term in 12 U.S.C. 1813.

Subpart C--Records, Reporting, and Disclosure Requirements


Sec.  25.41   Assessment area delineation.

    (a) In general. A bank shall delineate one or more assessment areas 
within which the OCC evaluates the bank's record of helping to meet the 
credit needs of its community. The OCC does not evaluate the bank's 
delineation of its assessment area(s) as a separate performance 
criterion, but the OCC reviews the delineation for compliance with the 
requirements of this section.
    (b) Geographic area(s) for wholesale or limited purpose banks. The 
assessment area(s) for a wholesale or limited purpose bank must consist 
generally of one or more MSAs or metropolitan divisions (using the MSA 
or metropolitan division boundaries that were in effect as of January 1 
of the calendar year in which the delineation is made) or one or more 
contiguous political subdivisions, such as counties, cities, or towns, 
in which the bank has its main office, branches, and deposit-taking 
ATMs.
    (c) Geographic area(s) for other banks. The assessment area(s) for 
a bank other than a wholesale or limited purpose bank must:
    (1) Consist generally of one or more MSAs or metropolitan divisions 
(using the MSA or metropolitan division boundaries that were in effect 
as of January 1 of the calendar year in which the delineation is made) 
or one or more contiguous political subdivisions, such as counties, 
cities, or towns; and
    (2) Include the geographies in which the bank has its main office, 
its branches, and its deposit-taking ATMs, as well as the surrounding 
geographies in which the bank has originated or purchased a substantial 
portion of its loans (including home mortgage loans, small business and 
small farm loans, and any other loans the bank chooses, such as those 
consumer loans on which the bank elects to have its performance 
assessed).
    (d) Adjustments to geographic area(s). A bank may adjust the 
boundaries of its assessment area(s) to include only the portion of a 
political subdivision that it reasonably can be expected to serve. An 
adjustment is particularly appropriate in the case of an assessment 
area that otherwise would be extremely large, of unusual configuration, 
or divided by significant geographic barriers.
    (e) Limitations on the delineation of an assessment area. Each 
bank's assessment area(s):
    (1) Must consist only of whole geographies;
    (2) May not reflect illegal discrimination;
    (3) May not arbitrarily exclude low- or moderate-income 
geographies, taking into account the bank's size and financial 
condition; and
    (4) May not extend substantially beyond an MSA boundary or beyond a 
state boundary unless the assessment area is located in a multistate 
MSA. If a bank serves a geographic area that extends substantially 
beyond a state boundary, the bank shall delineate separate assessment 
areas for the areas in each state. If a bank serves a geographic area 
that extends substantially beyond an MSA boundary, the bank shall 
delineate separate assessment areas for the areas inside and outside 
the MSA.
    (f) Banks serving military personnel. Notwithstanding the 
requirements of this section, a bank whose business

[[Page 52044]]

predominantly consists of serving the needs of military personnel or 
their dependents who are not located within a defined geographic area 
may delineate its entire deposit customer base as its assessment area.
    (g) Use of assessment area(s). The OCC uses the assessment area(s) 
delineated by a bank in its evaluation of the bank's CRA performance 
unless the OCC determines that the assessment area(s) do not comply 
with the requirements of this section.


Sec.  25.42   Data collection, reporting, and disclosure.

    (a) Loan information required to be collected and maintained. A 
bank, except a small bank, shall collect, and maintain in machine 
readable form (as prescribed by the OCC) until the completion of its 
next CRA examination, the following data for each small business or 
small farm loan originated or purchased by the bank:
    (1) A unique number or 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, except a 
small bank or a bank that was a small bank during the prior calendar 
year, shall report annually by March 1 to the OCC in machine readable 
form (as prescribed by the OCC) the following data for the prior 
calendar year:
    (1) Small business and small farm loan data. For each geography in 
which the bank originated or purchased a small business or small farm 
loan, the aggregate number and amount of loans:
    (i) With an amount at origination of $100,000 or less;
    (ii) With amount at origination of more than $100,000 but less than 
or equal to $250,000;
    (iii) With an amount at origination of more than $250,000; and
    (iv) To businesses and farms with gross annual revenues of $1 
million or less (using the revenues that the bank considered in making 
its credit decision);
    (2) Community development loan data. The aggregate number and 
aggregate amount of community development loans originated or 
purchased; and
    (3) Home mortgage loans. If the bank is subject to reporting under 
part 1003 of this title, the location of each home mortgage loan 
application, origination, or purchase outside the MSAs in which the 
bank has a home or branch office (or outside any MSA) in accordance 
with the requirements of part 1003 of this title.
    (c) Optional data collection and maintenance--(1) Consumer loans. A 
bank may collect and maintain in machine readable form (as prescribed 
by the OCC) data for consumer loans originated or purchased by the bank 
for consideration under the lending test. A bank may maintain data for 
one or more of the following categories of consumer loans: Motor 
vehicle, credit card, other secured, and other unsecured. If the bank 
maintains data for loans in a certain category, it shall maintain data 
for all loans originated or purchased within that category. The bank 
shall maintain data separately for each category, including for each 
loan:
    (i) A unique number or alpha-numeric symbol that can be used to 
identify the relevant loan file;
    (ii) The loan amount at origination or purchase;
    (iii) The loan location; and
    (iv) The gross annual income of the borrower that the bank 
considered in making its credit decision.
    (2) Other loan data. At its option, a bank may provide other 
information concerning its lending performance, including additional 
loan distribution data.
    (d) Data on affiliate lending. A bank that elects to have the OCC 
consider loans by an affiliate, for purposes of the lending or 
community development test or an approved strategic plan, shall 
collect, maintain, and report for those loans the data that the bank 
would have collected, maintained, and reported pursuant to paragraphs 
(a), (b), and (c) of this section had the loans been originated or 
purchased by the bank. For home mortgage loans, the bank shall also be 
prepared to identify the home mortgage loans reported under part 1003 
of this title by the affiliate.
    (e) Data on lending by a consortium or a third party. A bank that 
elects to have the OCC consider community development loans by a 
consortium or third party, for purposes of the lending or community 
development tests or an approved strategic plan, shall report for those 
loans the data that the bank would have reported under paragraph (b)(2) 
of this section had the loans been originated or purchased by the bank.
    (f) Small banks electing evaluation under the lending, investment, 
and service tests. A bank that qualifies for evaluation under the small 
bank performance standards but elects evaluation under the lending, 
investment, and service tests shall collect, maintain, and report the 
data required for other banks pursuant to paragraphs (a) and (b) of 
this section.
    (g) Assessment area data. A bank, except a small bank or a bank 
that was a small bank during the prior calendar year, shall collect and 
report to the OCC by March 1 of each year a list for each assessment 
area showing the geographies within the area.
    (h) CRA Disclosure Statement. The OCC prepares annually for each 
bank that reports data pursuant to this section a CRA Disclosure 
Statement that contains, on a state-by-state basis:
    (1) For each county (and for each assessment area smaller than a 
county) with a population of 500,000 persons or fewer in which the bank 
reported a small business or small farm loan:
    (i) The number and amount of small business and small farm loans 
reported as originated or purchased located in low-, moderate-, middle-
, and 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 reported a 
small business or small farm loan; and
    (iv) The number and amount of small business and small farm loans 
to businesses and farms with gross annual revenues of $1 million or 
less;
    (2) For each county (and for each assessment area smaller than a 
county) with a population in excess of 500,000 persons in which the 
bank reported a small business or small farm loan:
    (i) The number and amount of small business and small farm loans 
reported as originated or purchased located in geographies with median 
income relative to the area median income of less than 10 percent, 10 
or more but less than 20 percent, 20 or more but less than 30 percent, 
30 or more but less than 40 percent, 40 or more but less than 50 
percent, 50 or more but less than 60 percent, 60 or more but less than 
70 percent, 70 or more but less than 80 percent, 80 or more but less 
than 90 percent, 90 or more but less than 100 percent, 100 or more but 
less than 110 percent, 110 or more but less than 120 percent, and 120 
percent or more;
    (ii) A list grouping each geography in the county or assessment 
area according to whether the median income in the geography relative 
to the area median income is less than 10 percent, 10 or more but less 
than 20 percent, 20 or more but less than 30 percent, 30 or more but 
less than 40 percent, 40 or more but less than 50 percent, 50 or more 
but less than 60 percent, 60 or more but less than 70 percent, 70 or

[[Page 52045]]

more but less than 80 percent, 80 or more but less than 90 percent, 90 
or more but less than 100 percent, 100 or more but less than 110 
percent, 110 or more but less than 120 percent, and 120 percent or 
more;
    (iii) A list showing each geography in which the bank reported a 
small business or small farm loan; and
    (iv) The number and amount of small business and small farm loans 
to businesses and farms with gross annual revenues of $1 million or 
less;
    (3) The number and amount of small business and small farm loans 
located inside each assessment area reported by the bank and the number 
and amount of small business and small farm loans located outside the 
assessment area(s) reported by the bank; and
    (4) The number and amount of community development loans reported 
as originated or purchased.
    (i) Aggregate disclosure statements. The OCC, in conjunction with 
the Board of Governors of the Federal Reserve System and the Federal 
Deposit Insurance Corporation, prepares annually, for each MSA or 
metropolitan division (including an MSA or metropolitan division that 
crosses a state boundary) and the nonmetropolitan portion of each 
state, an aggregate disclosure statement of small business and small 
farm lending by all institutions subject to reporting under this part 
or parts 195, 228, or 345 of this title. These disclosure statements 
indicate, for each geography, the number and amount of all small 
business and small farm loans originated or purchased by reporting 
institutions, except that the OCC may adjust the form of the disclosure 
if necessary, because of special circumstances, to protect the privacy 
of a borrower or the competitive position of an institution.
    (j) Central data depositories. The OCC makes the aggregate 
disclosure statements, described in paragraph (i) of this section, and 
the individual bank CRA Disclosure Statements, described in paragraph 
(h) of this section, available to the public at central data 
depositories. The OCC publishes a list of the depositories at which the 
statements are available.


Sec.  25.43   Content and availability of public file.

    (a) Information available to the public. A bank shall maintain a 
public file that includes the following information:
    (1) All written comments received from the public for the current 
year and each of the prior two calendar years that specifically relate 
to the bank's performance in helping to meet community credit needs, 
and any response to the comments by the bank, if neither the comments 
nor the responses contain statements that reflect adversely on the good 
name or reputation of any persons other than the bank or publication of 
which would violate specific provisions of law;
    (2) A copy of the public section of the bank's most recent CRA 
Performance Evaluation prepared by the OCC. The bank shall place this 
copy in the public file within 30 business days after its receipt from 
the OCC;
    (3) A list of the bank's branches, their street addresses, and 
geographies;
    (4) A list of branches opened or closed by the bank during the 
current year and each of the prior two calendar years, their street 
addresses, and geographies;
    (5) A list of services (including hours of operation, available 
loan and deposit products, and transaction fees) generally offered at 
the bank's branches and descriptions of material differences in the 
availability or cost of services at particular branches, if any. At its 
option, a bank may include information regarding the availability of 
alternative systems for delivering retail banking services (e.g., ATMs, 
ATMs not owned or operated by or exclusively for the bank, banking by 
telephone or computer, loan production offices, and bank-at-work or 
bank-by-mail programs);
    (6) A map of each assessment area showing the boundaries of the 
area and identifying the geographies contained within the area, either 
on the map or in a separate list; and
    (7) Any other information the bank chooses.
    (b) Additional information available to the public--(1) Banks other 
than small banks. A bank, except a small bank or a bank that was a 
small bank during the prior calendar year, shall include in its public 
file the following information pertaining to the bank and its 
affiliates, if applicable, for each of the prior two calendar years:
    (i) If the bank has elected to have one or more categories of its 
consumer loans considered under the lending test, for each of these 
categories, the number and amount of loans:
    (A) To low-, moderate-, middle-, and upper-income individuals;
    (B) Located in low-, moderate-, middle-, and upper-income census 
tracts; and
    (C) Located inside the bank's assessment area(s) and outside the 
bank's assessment area(s); and
    (ii) The bank's CRA Disclosure Statement. The bank shall place the 
statement in the public file within three business days of its receipt 
from the OCC.
    (2) Banks required to report Home Mortgage Disclosure Act (HMDA) 
data. A bank required to report home mortgage loan data pursuant part 
1003 of this title shall include in its public file a written notice 
that the institution's HMDA Disclosure Statement may be obtained on the 
Consumer Financial Protection Bureau's (Bureau's) website at 
www.consumerfinance.gov/hmda. In addition, a bank that elected to have 
the OCC consider the mortgage lending of an affiliate shall include in 
its public file the name of the affiliate and a written notice that the 
affiliate's HMDA Disclosure Statement may be obtained at the Bureau's 
website. The bank shall place the written notice(s) in the public file 
within three business days after receiving notification from the 
Federal Financial Institutions Examination Council of the availability 
of the disclosure statement(s).
    (3) Small banks. A small bank or a bank that was a small bank 
during the prior calendar year shall include in its public file:
    (i) The bank's loan-to-deposit ratio for each quarter of the prior 
calendar year and, at its option, additional data on its loan-to-
deposit ratio; and
    (ii) The information required for other banks by paragraph (b)(1) 
of this section, if the bank has elected to be evaluated under the 
lending, investment, and service tests.
    (4) Banks with strategic plans. A bank that has been approved to be 
assessed under a strategic plan shall include in its public file a copy 
of that plan. A bank need not include information submitted to the OCC 
on a confidential basis in conjunction with the plan.
    (5) Banks with less than satisfactory ratings. A bank that received 
a less than satisfactory rating during its most recent examination 
shall include in its public file a description of its current efforts 
to improve its performance in helping to meet the credit needs of its 
entire community. The bank shall update the description quarterly.
    (c) Location of public information. A bank shall make available to 
the public for inspection upon request and at no cost the information 
required in this section as follows:
    (1) At the main office and, if an interstate bank, at one branch 
office in each state, all information in the public file; and
    (2) At each branch:
    (i) A copy of the public section of the bank's most recent CRA 
Performance Evaluation and a list of services provided by the branch; 
and

[[Page 52046]]

    (ii) Within five calendar days of the request, all the information 
in the public file relating to the assessment area in which the branch 
is located.
    (d) Copies. Upon request, a bank shall provide copies, either on 
paper or in another form acceptable to the person making the request, 
of the information in its public file. The bank may charge a reasonable 
fee not to exceed the cost of copying and mailing (if applicable).
    (e) Updating. Except as otherwise provided in this section, a bank 
shall ensure that the information required by this section is current 
as of April 1 of each year.


Sec.  25.44   Public notice by banks.

    A bank shall provide in the public lobby of its main office and 
each of its branches the appropriate public notice set forth in 
appendix B of this part. Only a branch of a bank having more than one 
assessment area shall include the bracketed material in the notice for 
branch offices. Only a bank that is an affiliate of a holding company 
shall include the next to the last sentence of the notices. A bank 
shall include the last sentence of the notices only if it is an 
affiliate of a holding company that is not prevented by statute from 
acquiring additional banks.


Sec.  25.45   Publication of planned examination schedule.

    The OCC publishes at least 30 days in advance of the beginning of 
each calendar quarter a list of banks scheduled for CRA examinations in 
that quarter.

Subpart D [Reserved]

Subpart E--Prohibition Against Use of Interstate Branches Primarily 
for Deposit Production


Sec.  25.61   Purpose and scope.

    (a) Purpose. The purpose of this subpart is to implement section 
109 (12 U.S.C. 1835a) of the Riegle-Neal Interstate Banking and 
Branching Efficiency Act of 1994 (Interstate Act).
    (b) Scope. (1) This subpart applies to any national bank that has 
operated a covered interstate branch for a period of at least one year, 
and any foreign bank that has operated a covered interstate branch that 
is a Federal branch for a period of at least one year.
    (2) This subpart describes the requirements imposed under 12 U.S.C. 
1835a, which requires the appropriate Federal banking agencies (the 
OCC, the Board of Governors of the Federal Reserve System, and the 
Federal Deposit Insurance Corporation) to prescribe uniform rules that 
prohibit a bank from using any authority to engage in interstate 
branching pursuant to the Interstate Act, or any amendment made by the 
Interstate Act to any other provision of law, primarily for the purpose 
of deposit production.


Sec.  25.62   Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Bank means, unless the context indicates otherwise:
    (1) A national bank; and
    (2) A foreign bank as that term is defined in 12 U.S.C. 3101(7) and 
12 CFR 28.11(i).
    (b) Covered interstate branch means:
    (1) Any branch of a national bank, and any Federal branch of a 
foreign bank, that:
    (i) Is established or acquired outside the bank's home State 
pursuant to the interstate branching authority granted by the 
Interstate Act or by any amendment made by the Interstate Act to any 
other provision of law; or
    (ii) Could not have been established or acquired outside of the 
bank's home State but for the establishment or acquisition of a branch 
described in paragraph (b)(1)(i) of this section; and
    (2) Any bank or branch of a bank controlled by an out-of-State bank 
holding company.
    (c) Federal branch means Federal branch as that term is defined in 
12 U.S.C. 3101(6) and 12 CFR 28.11(i).
    (d) Home State means:
    (1) With respect to a State bank, the State that chartered the 
bank;
    (2) With respect to a national bank, the State in which the main 
office of the bank is located;
    (3) With respect to a bank holding company, the State in which the 
total deposits of all banking subsidiaries of such company are the 
largest on the later of:
    (i) July 1, 1966; or
    (ii) The date on which the company becomes a bank holding company 
under the Bank Holding Company Act;
    (4) With respect to a foreign bank:
    (i) For purposes of determining whether a U.S. branch of a foreign 
bank is a covered interstate branch, the home State of the foreign bank 
as determined in accordance with 12 U.S.C. 3103(c) and 12 CFR 28.11(o); 
and
    (ii) For purposes of determining whether a branch of a U.S. bank 
controlled by a foreign bank is a covered interstate branch, the State 
in which the total deposits of all banking subsidiaries of such foreign 
bank are the largest on the later of:
    (A) July 1, 1966; or
    (B) The date on which the foreign bank becomes a bank holding 
company under the Bank Holding Company Act.
    (e) Host State means a State in which a covered interstate branch 
is established or acquired.
    (f) Host state loan-to-deposit ratio generally means, with respect 
to a particular host state, the ratio of total loans in the host state 
relative to total deposits from the host state for all banks (including 
institutions covered under the definition of ``bank'' in 12 U.S.C. 
1813(a)(1)) that have that state as their home state, as determined and 
updated periodically by the appropriate Federal banking agencies and 
made available to the public.
    (g) Out-of-State bank holding company means, with respect to any 
State, a bank holding company whose home State is another State.
    (h) State means state as that term is defined in 12 U.S.C. 
1813(a)(3).
    (i) Statewide loan-to-deposit ratio means, with respect to a bank, 
the ratio of the bank's loans to its deposits in a state in which the 
bank has one or more covered interstate branches, as determined by the 
OCC.


Sec.  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 Sec.  25.64.


Sec.  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

[[Page 52047]]

circumstances where there was a low loan-to-deposit ratio because of 
the nature of the acquired institution's business or loan portfolio;
    (3) Whether covered interstate branches have a high concentration 
of commercial or credit card lending, trust services, or other 
specialized activities, including the extent to which the covered 
interstate branches accept deposits in the host state;
    (4) The CRA ratings received by the bank, if any;
    (5) Economic conditions, including the level of loan demand, within 
the communities served by the covered interstate branches;
    (6) The safe and sound operation and condition of the bank; and
    (7) The OCC's CRA regulations (subparts A through D of this part) 
and interpretations of those regulations.


Sec.  25.65   Sanctions.

    (a) In general. If the OCC determines that a bank is not reasonably 
helping to meet the credit needs of the communities served by the bank 
in the host state, and that the bank's statewide loan-to-deposit ratio 
is less than 50 percent of the host state loan-to-deposit ratio, the 
OCC:
    (1) May order that a bank's covered interstate branch or branches 
be closed unless the bank provides reasonable assurances to the 
satisfaction of the OCC, after an opportunity for public comment, that 
the bank has an acceptable plan under which the bank will reasonably 
help to meet the credit needs of the communities served by the bank in 
the host state; and
    (2) Will not permit the bank to open a new branch in the host state 
that would be considered to be a covered interstate branch unless the 
bank provides reasonable assurances to the satisfaction of the OCC, 
after an opportunity for public comment, that the bank will reasonably 
help to meet the credit needs of the community that the new branch will 
serve.
    (b) Notice prior to closure of a covered interstate branch. Before 
exercising the OCC's authority to order the bank to close a covered 
interstate branch, the OCC will issue to the bank a notice of the OCC's 
intent to order the closure and will schedule a hearing within 60 days 
of issuing the notice.
    (c) Hearing. The OCC will conduct a hearing scheduled under 
paragraph (b) of this section in accordance with the provisions of 12 
U.S.C. 1818(h) and 12 CFR part 19.

Appendix A to Part 25--Ratings

    (a) Ratings in general. (1) In assigning a rating, the OCC 
evaluates a bank's performance under the applicable performance 
criteria in this part, in accordance with Sec. Sec.  25.21 and 
25.28. This includes consideration of low-cost education loans 
provided to low-income borrowers and activities in cooperation with 
minority- or women-owned financial institutions and low-income 
credit unions, as well as adjustments on the basis of evidence of 
discriminatory or other illegal credit practices.
    (2) A bank's performance need not fit each aspect of a 
particular rating profile in order to receive that rating, and 
exceptionally strong performance with respect to some aspects may 
compensate for weak performance in others. The bank's overall 
performance, however, must be consistent with safe and sound banking 
practices and generally with the appropriate rating profile as 
follows.
    (b) Banks evaluated under the lending, investment, and service 
tests--(1) Lending performance rating. The OCC assigns each bank's 
lending performance one of the five following ratings.
    (i) Outstanding. The OCC rates a bank's lending performance 
``outstanding'' if, in general, it demonstrates:
    (A) Excellent responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A substantial majority of its loans are made in its 
assessment area(s);
    (C) An excellent geographic distribution of loans in its 
assessment area(s);
    (D) An excellent distribution, particularly in its assessment 
area(s), of loans among individuals of different income levels and 
businesses (including farms) of different sizes, given the product 
lines offered by the bank;
    (E) An excellent record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Extensive use of innovative or flexible lending practices in 
a safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and
    (G) It is a leader in making community development loans.
    (ii) High satisfactory. The OCC rates a bank's lending 
performance ``high satisfactory'' if, in general, it demonstrates:
    (A) Good responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A high percentage of its loans are made in its assessment 
area(s);
    (C) A good geographic distribution of loans in its assessment 
area(s);
    (D) A good distribution, particularly in its assessment area(s), 
of loans among individuals of different income levels and businesses 
(including farms) of different sizes, given the product lines 
offered by the bank;
    (E) A good record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Use of innovative or flexible lending practices in a safe 
and sound manner to address the credit needs of low- or moderate-
income individuals or geographies; and
    (G) It has made a relatively high level of community development 
loans.
    (iii) Low satisfactory. The OCC rates a bank's lending 
performance ``low satisfactory'' if, in general, it demonstrates:
    (A) Adequate responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) An adequate percentage of its loans are made in its 
assessment area(s);
    (C) An adequate geographic distribution of loans in its 
assessment area(s);
    (D) An adequate distribution, particularly in its assessment 
area(s), of loans among individuals of different income levels and 
businesses (including farms) of different sizes, given the product 
lines offered by the bank;
    (E) An adequate record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Limited use of innovative or flexible lending practices in a 
safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and
    (G) It has made an adequate level of community development 
loans.
    (iv) Needs to improve. The OCC rates a bank's lending 
performance ``needs to improve'' if, in general, it demonstrates:
    (A) Poor responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A small percentage of its loans are made in its assessment 
area(s);
    (C) A poor geographic distribution of loans, particularly to 
low- or moderate-income geographies, in its assessment area(s);
    (D) A poor distribution, particularly in its assessment area(s), 
of loans among individuals of different income levels and businesses 
(including farms) of different sizes, given the product lines 
offered by the bank;
    (E) A poor record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Little use of innovative or flexible lending practices in a 
safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and

[[Page 52048]]

    (G) It has made a low level of community development loans.
    (v) Substantial noncompliance. The OCC rates a bank's lending 
performance as being in ``substantial noncompliance'' if, in 
general, it demonstrates:
    (A) A very poor responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A very small percentage of its loans are made in its 
assessment area(s);
    (C) A very poor geographic distribution of loans, particularly 
to low- or 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;
    (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 OCC assigns each bank's 
investment performance one of the five following ratings.
    (i) Outstanding. The OCC rates a bank's investment performance 
``outstanding'' if, in general, it demonstrates:
    (A) An excellent level of qualified investments, particularly 
those that are not routinely provided by private investors, often in 
a leadership position;
    (B) Extensive use of innovative or complex qualified 
investments; and
    (C) Excellent responsiveness to credit and community development 
needs.
    (ii) High satisfactory. The OCC rates a bank's investment 
performance ``high satisfactory'' if, in general, it demonstrates:
    (A) A significant level of qualified investments, particularly 
those that are not routinely provided by private investors, 
occasionally in a leadership position;
    (B) Significant use of innovative or complex qualified 
investments; and
    (C) Good responsiveness to credit and community development 
needs.
    (iii) Low satisfactory. The OCC rates a bank's investment 
performance ``low satisfactory'' if, in general, it demonstrates:
    (A) An adequate level of qualified investments, particularly 
those that are not routinely provided by private investors, although 
rarely in a leadership position;
    (B) Occasional use of innovative or complex qualified 
investments; and
    (C) Adequate responsiveness to credit and community development 
needs.
    (iv) Needs to improve. The OCC rates a bank's investment 
performance ``needs to improve'' if, in general, it demonstrates:
    (A) A poor level of qualified investments, particularly those 
that are not routinely provided by private investors;
    (B) Rare use of innovative or complex qualified investments; and
    (C) Poor responsiveness to credit and community development 
needs.
    (v) Substantial noncompliance. The OCC rates a bank's investment 
performance as being in ``substantial noncompliance'' if, in 
general, it demonstrates:
    (A) Few, if any, qualified investments, particularly those that 
are not routinely provided by private investors;
    (B) No use of innovative or complex qualified investments; and
    (C) Very poor responsiveness to credit and community development 
needs.
    (3) Service performance rating. The OCC assigns each bank's 
service performance one of the five following ratings.
    (i) Outstanding. The OCC rates a bank's service performance 
``outstanding'' if, in general, the bank demonstrates:
    (A) Its service delivery systems are readily accessible to 
geographies and individuals of different income levels in its 
assessment area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has improved the accessibility of its delivery 
systems, particularly in low- or 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 OCC rates a bank's service 
performance ``high satisfactory'' if, in general, the bank 
demonstrates:
    (A) Its service delivery systems are accessible to geographies 
and individuals of different income levels in its assessment 
area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has not adversely affected the accessibility of 
its delivery systems, particularly in low- and moderate-income 
geographies and to 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 OCC rates a bank's service 
performance ``low satisfactory'' if, in general, the bank 
demonstrates:
    (A) Its service delivery systems are reasonably accessible to 
geographies and individuals of different income levels in its 
assessment area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has generally not adversely affected the 
accessibility of its delivery systems, particularly in low- and 
moderate-income geographies and to low- and 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 OCC rates a bank's service 
performance ``needs to improve'' if, in general, the bank 
demonstrates:
    (A) Its service delivery systems are unreasonably inaccessible 
to portions of its assessment area(s), particularly to low- or 
moderate-income geographies or to low- or moderate-income 
individuals;
    (B) To the extent changes have been made, its record of opening 
and closing branches has adversely affected the accessibility its 
delivery systems, particularly in low- or moderate-income 
geographies or to low- or moderate-income individuals;
    (C) Its services (including, where appropriate, business hours) 
vary in a way that inconveniences its assessment area(s), 
particularly low- or moderate-income geographies or low- or 
moderate-income individuals; and
    (D) It provides a limited level of community development 
services.
    (v) Substantial noncompliance. The OCC rates a bank's service 
performance as being in ``substantial noncompliance'' if, in 
general, the bank demonstrates:
    (A) Its service delivery systems are unreasonably inaccessible 
to significant portions of its assessment area(s), particularly to 
low- or moderate-income geographies or to low- or moderate-income 
individuals;
    (B) To the extent changes have been made, its record of opening 
and closing branches has significantly adversely affected the 
accessibility of its delivery systems, particularly in low- or 
moderate-income geographies or to low- or moderate-income 
individuals;
    (C) Its services (including, where appropriate, business hours) 
vary in a way that significantly inconveniences its assessment 
area(s), particularly low- or moderate-income geographies or low- or 
moderate-income individuals; and
    (D) It provides few, if any, community development services.
    (c) Wholesale or limited purpose banks. The OCC assigns each 
wholesale or limited purpose bank's community development 
performance one of the four following ratings.
    (1) Outstanding. The OCC rates a wholesale or limited purpose 
bank's community development performance ``outstanding'' if, in 
general, it demonstrates:
    (i) A high level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Extensive use of innovative or complex qualified 
investments, community development loans, or community development 
services; and

[[Page 52049]]

    (iii) Excellent responsiveness to credit and community 
development needs in its assessment area(s).
    (2) Satisfactory. The OCC rates a wholesale or limited purpose 
bank's community development performance ``satisfactory'' if, in 
general, it demonstrates:
    (i) An adequate level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Occasional use of innovative or complex qualified 
investments, community development loans, or community development 
services; and
    (iii) Adequate responsiveness to credit and community 
development needs in its assessment area(s).
    (3) Needs to improve. The OCC rates a wholesale or limited 
purpose bank's community development performance as ``needs to 
improve'' if, in general, it demonstrates:
    (i) A poor level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Rare use of innovative or complex qualified investments, 
community development loans, or community development services; and
    (iii) Poor responsiveness to credit and community development 
needs in its assessment area(s).
    (4) Substantial noncompliance. The OCC rates a wholesale or 
limited purpose bank's community development performance in 
``substantial noncompliance'' if, in general, it demonstrates:
    (i) Few, if any, community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) No use of innovative or complex qualified investments, 
community development loans, or community development services; and
    (iii) Very poor responsiveness to credit and community 
development needs in its assessment area(s).
    (d) Banks evaluated under the small bank performance standards--
(1) Lending test ratings. (i) Eligibility for a satisfactory lending 
test rating. The OCC rates a small bank's lending performance 
``satisfactory'' if, in general, the bank demonstrates:
    (A) A reasonable loan-to-deposit ratio (considering seasonal 
variations) given the bank's size, financial condition, the credit 
needs of its assessment area(s), and taking into account, as 
appropriate, other lending-related activities such as loan 
originations for sale to the secondary markets and community 
development loans and qualified investments;
    (B) A majority of its loans and, as appropriate, other lending-
related activities, are in its assessment area;
    (C) A distribution of loans to and, as appropriate, other 
lending-related activities for individuals of different income 
levels (including low- and moderate-income individuals) and 
businesses and farms of different sizes that is reasonable given the 
demographics of the bank's assessment area(s);
    (D) A record of taking appropriate action, when warranted, in 
response to written complaints, if any, about the bank's performance 
in helping to meet the credit needs of its assessment area(s); and
    (E) A reasonable geographic distribution of loans given the 
bank's assessment area(s).
    (ii) Eligibility for an ``outstanding'' lending test rating. A 
small bank that meets each of the standards for a ``satisfactory'' 
rating under this paragraph and exceeds some or all of those 
standards may warrant consideration for a lending test rating of 
``outstanding.''
    (iii) Needs to improve or substantial noncompliance ratings. A 
small bank may also receive a lending test rating of ``needs to 
improve'' or ``substantial noncompliance'' depending on the degree 
to which its performance has failed to meet the standard for a 
``satisfactory'' rating.
    (2) Community development test ratings for intermediate small 
banks--(i) Eligibility for a satisfactory community development test 
rating. The OCC rates an intermediate small bank's community 
development performance ``satisfactory'' if the bank demonstrates 
adequate responsiveness to the community development needs of its 
assessment area(s) through community development loans, qualified 
investments, and community development services. The adequacy of the 
bank's response will depend on its capacity for such community 
development activities, its assessment area's need for such 
community development activities, and the availability of such 
opportunities for community development in the bank's assessment 
area(s).
    (ii) Eligibility for an outstanding community development test 
rating. The OCC rates an intermediate small bank's community 
development performance ``outstanding'' if the bank demonstrates 
excellent responsiveness to community development needs in its 
assessment area(s) through community development loans, qualified 
investments, and community development services, as appropriate, 
considering the bank's capacity and the need and availability of 
such opportunities for community development in the bank's 
assessment area(s).
    (iii) Needs to improve or substantial noncompliance ratings. An 
intermediate small bank may also receive a community development 
test rating of ``needs to improve'' or ``substantial noncompliance'' 
depending on the degree to which its performance has failed to meet 
the standards for a ``satisfactory'' rating.
    (3) Overall rating--(i) Eligibility for a satisfactory overall 
rating. No intermediate small bank may receive an assigned overall 
rating of ``satisfactory'' unless it receives a rating of at least 
``satisfactory'' on both the lending test and the community 
development test.
    (ii) Eligibility for an outstanding overall rating. (A) An 
intermediate small bank that receives an ``outstanding'' rating on 
one test and at least ``satisfactory'' on the other test may receive 
an assigned overall rating of ``outstanding.''
    (B) A small bank that is not an intermediate small bank that 
meets each of the standards for a ``satisfactory'' rating under the 
lending test and exceeds some or all of those standards may warrant 
consideration for an overall rating of ``outstanding.'' In assessing 
whether a bank's performance is ``outstanding,'' the OCC considers 
the extent to which the bank exceeds each of the performance 
standards for a ``satisfactory'' rating and its performance in 
making qualified investments and its performance in providing 
branches and other services and delivery systems that enhance credit 
availability in its assessment area(s).
    (iii) Needs to improve or substantial noncompliance overall 
ratings. A small bank may also receive a rating of ``needs to 
improve'' or ``substantial noncompliance'' depending on the degree 
to which its performance has failed to meet the standards for a 
``satisfactory'' rating.
    (e) Strategic plan assessment and rating--(1) Satisfactory 
goals. The OCC approves as ``satisfactory'' measurable goals that 
adequately help to meet the credit needs of the bank's assessment 
area(s).
    (2) Outstanding goals. If the plan identifies a separate group 
of measurable goals that substantially exceed the levels approved as 
``satisfactory,'' the OCC will approve those goals as 
``outstanding.''
    (3) Rating. The OCC assesses the performance of a bank operating 
under an approved plan to determine if the bank has met its plan 
goals:
    (i) If the bank substantially achieves its plan goals for a 
satisfactory rating, the OCC will rate the bank's performance under 
the plan as ``satisfactory.''
    (ii) If the bank exceeds its plan goals for a satisfactory 
rating and substantially achieves its plan goals for an outstanding 
rating, the OCC will rate the bank's performance under the plan as 
``outstanding.''
    (iii) If the bank fails to meet substantially its plan goals for 
a satisfactory rating, the OCC will rate the bank as either ``needs 
to improve'' or ``substantial noncompliance,'' depending on the 
extent to which it falls short of its plan goals, unless the bank 
elected in its plan to be rated otherwise, as provided in Sec.  
25.27(f)(4).

Appendix B to Part 25--CRA Notice

    (a) Notice for main offices and, if an interstate bank, one 
branch office in each state.

Community Reinvestment Act Notice

    Under the Federal Community Reinvestment Act (CRA), the 
Comptroller of the Currency evaluates our record of helping to meet 
the credit needs of this community consistent with safe and sound 
operations. The Comptroller also takes this record into account when 
deciding on certain applications submitted by us.
    Your involvement is encouraged.
    You are entitled to certain information about our operations and 
our performance under the CRA, including, for example, information 
about our branches, such as their location and services provided at 
them; the public section of our most recent CRA

[[Page 52050]]

Performance Evaluation, prepared by the Comptroller; and comments 
received from the public relating to our performance in helping to 
meet community credit needs, as well as our responses to those 
comments. You may review this information today.
    At least 30 days before the beginning of each quarter, the 
Comptroller publishes a nationwide list of the banks that are 
scheduled for CRA examination in that quarter. This list is 
available from the Deputy Comptroller (address). You may send 
written comments about our performance in helping to meet community 
credit needs to (name and address of official at bank) and Deputy 
Comptroller (address). Your letter, together with any response by 
us, will be considered by the Comptroller in evaluating our CRA 
performance and may be made public.
    You may ask to look at any comments received by the Deputy 
Comptroller. You may also request from the Deputy Comptroller an 
announcement of our applications covered by the CRA filed with the 
Comptroller. We are an affiliate of (name of holding company), a 
bank holding company. You may request from the (title of responsible 
official), Federal Reserve Bank of ____ (address) an announcement of 
applications covered by the CRA filed by bank holding companies.
    (b) Notice for branch offices.

Community Reinvestment Act Notice

    Under the Federal Community Reinvestment Act (CRA), the 
Comptroller of the Currency evaluates our record of helping to meet 
the credit needs of this community consistent with safe and sound 
operations. The Comptroller also takes this record into account when 
deciding on certain applications submitted by us.
    Your involvement is encouraged.
    You are entitled to certain information about our operations and 
our performance under the CRA. You may review today the public 
section of our most recent CRA evaluation, prepared by the 
Comptroller, and a list of services provided at this branch. You may 
also have access to the following additional information, which we 
will make available to you at this branch within five calendar days 
after you make a request to us: (1) A map showing the assessment 
area containing this branch, which is the area in which the 
Comptroller evaluates our CRA performance in this community; (2) 
information about our branches in this assessment area; (3) a list 
of services we provide at those locations; (4) data on our lending 
performance in this assessment area; and (5) copies of all written 
comments received by us that specifically relate to our CRA 
performance in this assessment area, and any responses we have made 
to those comments. If we are operating under an approved strategic 
plan, you may also have access to a copy of the plan.
    [If you would like to review information about our CRA 
performance in other communities served by us, the public file for 
our entire bank is available at (name of office located in state), 
located at (address).]
    At least 30 days before the beginning of each quarter, the 
Comptroller publishes a nationwide list of the banks that are 
scheduled for CRA examination in that quarter. This list is 
available from the Deputy Comptroller (address). You may send 
written comments about our performance in helping to meet community 
credit needs to (name and address of official at bank) and Deputy 
Comptroller (address). Your letter, together with any response by 
us, will be considered by the Comptroller in evaluating our CRA 
performance and may be made public.
    You may ask to look at any comments received by the Deputy 
Comptroller. You may also request from the Deputy Comptroller an 
announcement of our applications covered by the CRA filed with the 
Comptroller. We are an affiliate of (name of holding company), a 
bank holding company. You may request from the (title of responsible 
official), Federal Reserve Bank of ____ (address) an announcement of 
applications covered by the CRA filed by bank holding companies.

0
2. Add 12 CFR part 195 to read as follows:

PART 195--COMMUNITY REINVESTMENT ACT

Subpart A--General
Sec.
195.11 Authority, purposes, and scope.
195.12 Definitions.
Subpart B--Standards for Assessing Performance
Sec.
195.21 Performance tests, standards, and ratings, in general.
195.22 Lending test.
195.23 Investment test.
195.24 Service test.
195.25 Community development test for wholesale or limited purpose 
savings associations.
195.26 Small savings association performance standards.
195.27 Strategic plan.
195.28 Assigned ratings.
195.29 Effect of CRA performance on applications.
Subpart C--Records, Reporting, and Disclosure Requirements
Sec.
195.41 Assessment area delineation.
195.42 Data collection, reporting, and disclosure.
195.43 Content and availability of public file.
195.44 Public notice by savings associations.
195.45 Publication of planned examination schedule.
Appendix A to Part 195--Ratings
Appendix B to Part 195--CRA Notice

    Authority: 12 U.S.C. 1462a, 1463, 1464, 1814, 1816, 1828(c), 
2901 through 2908, and 5412(b)(2)(B).

Subpart A--General


Sec.  195.11   Authority, purposes, and scope.

    (a) Authority. This part is issued under the Community Reinvestment 
Act of 1977 (CRA), as amended (12 U.S.C. 2901 et seq.); section 5, as 
amended, and sections 3, and 4, as added, of the Home Owners' Loan Act 
of 1933 (12 U.S.C. 1462a, 1463, and 1464); and sections 4, 6, and 
18(c), as amended of the Federal Deposit Insurance Act (12 U.S.C. 1814, 
1816, 1828(c)).
    (b) Purposes. In enacting the CRA, the Congress required each 
appropriate Federal financial supervisory agency to assess an 
institution's record of helping to meet the credit needs of the local 
communities in which the institution is chartered, consistent with the 
safe and sound operation of the institution, and to take this record 
into account in the agency's evaluation of an application for a deposit 
facility by the institution. This part is intended to carry out the 
purposes of the CRA by:
    (1) Establishing the framework and criteria by which the 
appropriate Federal banking agency assesses a savings association's 
record of helping to meet the credit needs of its entire community, 
including low- and moderate-income neighborhoods, consistent with the 
safe and sound operation of the savings association; and
    (2) Providing that the appropriate Federal banking agency takes 
that record into account in considering certain applications.
    (c) Scope--(1) General. This part applies to all savings 
associations except as provided in paragraph (c)(2) of this section.
    (2) Certain special purpose savings associations. This part does 
not apply to special purpose savings associations that do not perform 
commercial or retail banking services by granting credit to the public 
in the ordinary course of business, other than as incident to their 
specialized operations. These associations include banker's banks, as 
defined in 12 U.S.C. 24 (Seventh), and associations that engage only in 
one or more of the following activities: Providing cash management 
controlled disbursement services or serving as correspondent 
associations, trust companies, or clearing agents.


Sec.  195.12   Definitions.

    For purposes of this part, the following definitions apply:
    (a) Affiliate means any company that controls, is controlled by, or 
is under common control with another company. The term ``control'' has 
the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company 
is under common control with another company if both companies are 
directly or indirectly controlled by the same company.
    (b) Area median income means:
    (1) The median family income for the MSA, if a person or geography 
is located

[[Page 52051]]

in an MSA, or for the metropolitan division, if a person or geography 
is located in an MSA that has been subdivided into metropolitan 
divisions; or
    (2) The statewide nonmetropolitan median family income, if a person 
or geography is located outside an MSA.
    (c) Assessment area means a geographic area delineated in 
accordance with Sec.  195.41.
    (d) Automated teller machine (ATM) means an automated, unstaffed 
banking facility owned or operated by, or operated exclusively for, the 
savings association at which deposits are received, cash dispersed, or 
money lent.
    (e) [Reserved]
    (f) Branch means a staffed banking facility authorized as a branch, 
whether shared or unshared, including, for example, a mini-branch in a 
grocery store or a branch operated in conjunction with any other local 
business or nonprofit organization.
    (g) Community development means:
    (1) Affordable housing (including multifamily rental housing) for 
low or moderate-income individuals;
    (2) Community services targeted to low- or moderate-income 
individuals;
    (3) Activities that promote economic development by financing 
businesses or farms that meet the size eligibility standards of the 
Small Business Administration's Development Company or Small Business 
Investment Company programs (13 CFR 121.301) or have gross annual 
revenues of $1 million or less; or
    (4) Activities that revitalize or stabilize--
    (i) Low- or moderate-income geographies;
    (ii) Designated disaster areas; or
    (iii) Distressed or underserved, nonmetropolitan middle-income 
geographies designated by the appropriate Federal banking agency based 
on--
    (A) Rates of poverty, unemployment, and population loss; or
    (B) Population size, density, and dispersion. Activities revitalize 
and stabilize geographies designated based on population size, density, 
and dispersion if they help to meet essential community needs, 
including needs of low- and moderate-income individuals.
    (h) Community development loan means a loan that:
    (1) Has as its primary purpose community development; and
    (2) Except in the case of a wholesale or limited purpose savings 
association:
    (i) Has not been reported or collected by the savings association 
or an affiliate for consideration in the savings association's 
assessment as a home mortgage, small business, small farm, or consumer 
loan, unless the loan is for a multifamily dwelling (as defined in 
Sec.  1003.2(n) of this title); and
    (ii) Benefits the savings association's assessment area(s) or a 
broader statewide or regional area that includes the savings 
association's assessment area(s).
    (i) Community development service means a service that:
    (1) Has as its primary purpose community development;
    (2) Is related to the provision of financial services; and
    (3) Has not been considered in the evaluation of the savings 
association's retail banking services under Sec.  195.24(d).
    (j) Consumer loan means a loan to one or more individuals for 
household, family, or other personal expenditures. A consumer loan does 
not include a home mortgage, small business, or small farm loan. 
Consumer loans include the following categories of loans:
    (1) Motor vehicle loan, which is a consumer loan extended for the 
purchase of and secured by a motor vehicle;
    (2) Credit card loan, which is a line of credit for household, 
family, or other personal expenditures that is accessed by a borrower's 
use of a ``credit card,'' as this term is defined in Sec.  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 Sec.  1003.2 of 
this title and that is not an excluded transaction under Sec.  
1003.3(c)(1) through (10) and (13) of this title.
    (m) Income level includes:
    (1) Low-income, which means an individual income that is less than 
50 percent of the area median income or a median family income that is 
less than 50 percent in the case of a geography.
    (2) Moderate-income, which means an individual income that is at 
least 50 percent and less than 80 percent of the area median income or 
a median family income that is at least 50 and less than 80 percent in 
the case of a geography.
    (3) Middle-income, which means an individual income that is at 
least 80 percent and less than 120 percent of the area median income or 
a median family income that is at least 80 and less than 120 percent in 
the case of a geography.
    (4) Upper-income, which means an individual income that is 120 
percent or more of the area median income or a median family income 
that is 120 percent or more in the case of a geography.
    (n) Limited purpose savings association means a savings association 
that offers only a narrow product line (such as credit card or motor 
vehicle loans) to a regional or broader market and for which a 
designation as a limited purpose savings association is in effect, in 
accordance with Sec.  195.25(b).
    (o) Loan location. A loan is located as follows:
    (1) A consumer loan is located in the geography where the borrower 
resides;
    (2) A home mortgage loan is located in the geography where the 
property to which the loan relates is located; and
    (3) A small business or small farm loan is located in the geography 
where the main business facility or farm is located or where the loan 
proceeds otherwise will be applied, as indicated by the borrower.
    (p) Loan production office means a staffed facility, other than a 
branch, that is open to the public and that provides lending-related 
services, such as loan information and applications.
    (q) Metropolitan division means a metropolitan division as defined 
by the Director of the Office of Management and Budget.
    (r) MSA means a metropolitan statistical area as defined by the 
Director of the Office of Management and Budget.
    (s) Nonmetropolitan area means any area that is not located in an 
MSA.
    (t) Qualified investment means a lawful investment, deposit, 
membership share, or grant that has as its primary purpose community 
development.
    (u) Small savings association--(1) Definition. Small savings 
association means a savings association that, as of December 31 of 
either of the prior two calendar years, had assets of less than $1.322 
billion. Intermediate small savings association means a small savings 
association with assets of at least $330 million as of December 31 of 
both of the prior two calendar years and less than $1.322 billion as of 
December 31 of either of the prior two calendar years.
    (2) Adjustment. The dollar figures in paragraph (u)(1) of this 
section shall be adjusted annually and published by the OCC based on 
the year-to-year change in the average of the Consumer Price Index for 
Urban Wage Earners and Clerical

[[Page 52052]]

Workers, not seasonally adjusted, for each twelve-month period ending 
in November, with rounding to the nearest million.
    (v) Small business loan means a loan included in ``loans to small 
businesses'' as defined in the instructions for preparation of the 
Thrift Financial Report (TFR) or Consolidated Reports of Condition and 
Income (Call Report), as appropriate.
    (w) Small farm loan means a loan included in ``loans to small 
farms'' as defined in the instructions for preparation of the TFR or 
Call Report, as appropriate.
    (x) Wholesale savings association means a savings association that 
is not in the business of extending home mortgage, small business, 
small farm, or consumer loans to retail customers, and for which a 
designation as a wholesale savings association is in effect, in 
accordance with Sec.  195.25(b).

Subpart B--Standards for Assessing Performance


Sec.  195.21   Performance tests, standards, and ratings, in general.

    (a) Performance tests and standards. The appropriate Federal 
banking agency assesses the CRA performance of a savings association in 
an examination as follows:
    (1) Lending, investment, and service tests. The appropriate Federal 
banking agency applies the lending, investment, and service tests, as 
provided in Sec. Sec.  195.22 through 195.24, in evaluating the 
performance of a savings association, except as provided in paragraphs 
(a)(2), (3), and (4) of this section.
    (2) Community development test for wholesale or limited purpose 
savings associations. The appropriate Federal banking agency applies 
the community development test for a wholesale or limited purpose 
savings association, as provided in Sec.  195.25, except as provided in 
paragraph (a)(4) of this section.
    (3) Small savings association performance standards. The 
appropriate Federal banking agency applies the small savings 
association performance standards as provided in Sec.  195.26 in 
evaluating the performance of a small savings association or a savings 
association that was a small savings association during the prior 
calendar year, unless the savings association elects to be assessed as 
provided in paragraphs (a)(1), (2), or (4) of this section. The savings 
association may elect to be assessed as provided in paragraph (a)(1) of 
this section only if it collects and reports the data required for 
other savings associations under Sec.  195.42.
    (4) Strategic plan. The appropriate Federal banking agency 
evaluates the performance of a savings association under a strategic 
plan if the savings association submits, and the appropriate Federal 
banking agency approves, a strategic plan as provided in Sec.  195.27.
    (b) Performance context. The appropriate Federal banking agency 
applies the tests and standards in paragraph (a) of this section and 
also considers whether to approve a proposed strategic plan in the 
context of:
    (1) Demographic data on median income levels, distribution of 
household income, nature of housing stock, housing costs, and other 
relevant data pertaining to a savings association's assessment area(s);
    (2) Any information about lending, investment, and service 
opportunities in the savings association's assessment area(s) 
maintained by the savings association or obtained from community 
organizations, state, local, and tribal governments, economic 
development agencies, or other sources;
    (3) The savings association's product offerings and business 
strategy as determined from data provided by the savings association;
    (4) Institutional capacity and constraints, including the size and 
financial condition of the savings association, the economic climate 
(national, regional, and local), safety and soundness limitations, and 
any other factors that significantly affect the savings association's 
ability to provide lending, investments, or services in its assessment 
area(s);
    (5) The savings association's past performance and the performance 
of similarly situated lenders;
    (6) The savings association's public file, as described in Sec.  
195.43, and any written comments about the savings association's CRA 
performance submitted to the savings association or the appropriate 
Federal banking agency; and
    (7) Any other information deemed relevant by the appropriate 
Federal banking agency.
    (c) Assigned ratings. The appropriate Federal banking agency 
assigns to a savings association one of the following four ratings 
pursuant to Sec.  195.28 and appendix A of this part: ``outstanding''; 
``satisfactory''; ``needs to improve''; or ``substantial 
noncompliance,'' as provided in 12 U.S.C. 2906(b)(2). The rating 
assigned by the appropriate Federal banking agency reflects the savings 
association's record of helping to meet the credit needs of its entire 
community, including low- and moderate-income neighborhoods, consistent 
with the safe and sound operation of the savings association.
    (d) Safe and sound operations. This part and the CRA do not require 
a savings association to make loans or investments or to provide 
services that are inconsistent with safe and sound operations. To the 
contrary, the appropriate Federal banking agency anticipates savings 
associations can meet the standards of this part with safe and sound 
loans, investments, and services on which the savings associations 
expect to make a profit. Savings associations are permitted and 
encouraged to develop and apply flexible underwriting standards for 
loans that benefit low- or 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 savings association 
under this part, the appropriate Federal banking agency considers, as a 
factor, low-cost education loans originated by the savings association 
to borrowers, particularly in its assessment area(s), who have an 
individual income that is less than 50 percent of the area median 
income. For purposes of this paragraph, ``low-cost education loans'' 
means any education loan, as defined in section 140(a)(7) of the Truth 
in Lending Act (15 U.S.C. 1650(a)(7)) (including a loan under a state 
or local education loan program), originated by the savings association 
for a student at an ``institution of higher education,'' as that term 
is generally defined in sections 101 and 102 of the Higher Education 
Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing regulations 
published by the U.S. Department of Education, with interest rates and 
fees no greater than those of comparable education loans offered 
directly by the U.S. Department of Education. Such rates and fees are 
specified in section 455 of the Higher Education Act of 1965 (20 U.S.C. 
1087e).
    (f) Activities in cooperation with minority- or women-owned 
financial institutions and low-income credit unions. In assessing and 
taking into account the record of a nonminority-owned and nonwomen-
owned savings association under this part, the appropriate Federal 
banking agency considers as a factor capital investment, loan 
participation, and other ventures undertaken by the savings association 
in cooperation with minority- and women-owned financial institutions 
and low-

[[Page 52053]]

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


Sec.  195.22   Lending test.

    (a) Scope of test. (1) The lending test evaluates a savings 
association's record of helping to meet the credit needs of its 
assessment area(s) through its lending activities by considering a 
savings association's home mortgage, small business, small farm, and 
community development lending. If consumer lending constitutes a 
substantial majority of a savings association's business, the 
appropriate Federal banking agency will evaluate the savings 
association's consumer lending in one or more of the following 
categories: Motor vehicle, credit card, other secured, and other 
unsecured loans. In addition, at a savings association's option, the 
appropriate Federal banking agency will evaluate one or more categories 
of consumer lending, if the savings association has collected and 
maintained, as required in Sec.  195.42(c)(1), the data for each 
category that the savings association elects to have the appropriate 
Federal banking agency evaluate.
    (2) The appropriate Federal banking agency considers originations 
and purchases of loans. The appropriate Federal banking agency will 
also consider any other loan data the savings association may choose to 
provide, including data on loans outstanding, commitments and letters 
of credit.
    (3) A savings association may ask the appropriate Federal banking 
agency to consider loans originated or purchased by consortia in which 
the savings association participates or by third parties in which the 
savings association has invested only if the loans meet the definition 
of community development loans and only in accordance with paragraph 
(d) of this section. The appropriate Federal banking agency will not 
consider these loans under any criterion of the lending test except the 
community development lending criterion.
    (b) Performance criteria. The appropriate Federal banking agency 
evaluates a savings association's lending performance pursuant to the 
following criteria:
    (1) Lending activity. The number and amount of the savings 
association's home mortgage, small business, small farm, and consumer 
loans, if applicable, in the savings association's assessment area(s);
    (2) Geographic distribution. The geographic distribution of the 
savings association's home mortgage, small business, small farm, and 
consumer loans, if applicable, based on the loan location, including:
    (i) The proportion of the savings association's lending in the 
savings association's assessment area(s);
    (ii) The dispersion of lending in the savings association's 
assessment area(s); and
    (iii) The number and amount of loans in low-, moderate-, middle-, 
and upper-income geographies in the savings association's assessment 
area(s);
    (3) Borrower characteristics. The distribution, particularly in the 
savings association's assessment area(s), of the savings association's 
home mortgage, small business, small farm, and consumer loans, if 
applicable, based on borrower characteristics, including the number and 
amount of:
    (i) Home mortgage loans to low-, moderate-, middle-, and upper-
income individuals;
    (ii) Small business and small farm loans to businesses and farms 
with gross annual revenues of $1 million or less;
    (iii) Small business and small farm loans by loan amount at 
origination; and
    (iv) Consumer loans, if applicable, to low-, moderate-, middle-, 
and upper-income individuals;
    (4) Community development lending. The savings association's 
community development lending, including the number and amount of 
community development loans, and their complexity and innovativeness; 
and
    (5) Innovative or flexible lending practices. The savings 
association's use of innovative or flexible lending practices in a safe 
and sound manner to address the credit needs of low- or moderate-income 
individuals or geographies.
    (c) Affiliate lending. (1) At a savings association's option, the 
appropriate Federal banking agency will consider loans by an affiliate 
of the savings association, if the savings association provides data on 
the affiliate's loans pursuant to Sec.  195.42.
    (2) The appropriate Federal banking agency considers affiliate 
lending subject to the following constraints:
    (i) No affiliate may claim a loan origination or loan purchase if 
another institution claims the same loan origination or purchase; and
    (ii) If a savings association elects to have the appropriate 
Federal banking agency consider loans within a particular lending 
category made by one or more of the savings association's affiliates in 
a particular assessment area, the savings association shall elect to 
have the appropriate Federal banking agency consider, in accordance 
with paragraph (c)(1) of this section, all the loans within that 
lending category in that particular assessment area made by all of the 
savings association's affiliates.
    (3) The appropriate Federal banking agency does not consider 
affiliate lending in assessing a savings association's performance 
under paragraph (b)(2)(i) of this section.
    (d) Lending by a consortium or a third party. Community development 
loans originated or purchased by a consortium in which the savings 
association participates or by a third party in which the savings 
association has invested:
    (1) Will be considered, at the savings association's option, if the 
savings association reports the data pertaining to these loans under 
Sec.  195.42(b)(2); and
    (2) May be allocated among participants or investors, as they 
choose, for purposes of the lending test, except that no participant or 
investor:
    (i) May claim a loan origination or loan purchase if another 
participant or investor claims the same loan origination or purchase; 
or
    (ii) May claim loans accounting for more than its percentage share 
(based on the level of its participation or investment) of the total 
loans originated by the consortium or third party.
    (e) Lending performance rating. The appropriate Federal banking 
agency rates a savings association's lending performance as provided in 
appendix A of this part.


Sec.  195.23   Investment test.

    (a) Scope of test. The investment test evaluates a savings 
association's record of helping to meet the credit needs of its 
assessment area(s) through qualified investments that benefit its 
assessment area(s) or a broader statewide or regional area that 
includes the savings association's assessment area(s).
    (b) Exclusion. Activities considered under the lending or service 
tests may not be considered under the investment test.
    (c) Affiliate investment. At a savings association's option, the 
appropriate Federal banking agency will consider, in its assessment of 
a savings association's investment performance, a qualified investment 
made by an affiliate of the savings association, if the qualified 
investment is not claimed by any other institution.
    (d) Disposition of branch premises. Donating, selling on favorable 
terms, or making available on a rent-free basis a

[[Page 52054]]

branch of the savings association that is located in a predominantly 
minority neighborhood to a minority depository institution or women's 
depository institution (as these terms are defined in 12 U.S.C. 
2907(b)) will be considered as a qualified investment.
    (e) Performance criteria. The appropriate Federal banking agency 
evaluates the investment performance of a savings association pursuant 
to the following criteria:
    (1) The dollar amount of qualified investments;
    (2) The innovativeness or complexity of qualified investments;
    (3) The responsiveness of qualified investments to credit and 
community development needs; and
    (4) The degree to which the qualified investments are not routinely 
provided by private investors.
    (f) Investment performance rating. The appropriate Federal banking 
agency rates a savings association's investment performance as provided 
in appendix A of this part.


Sec.  195.24   Service test.

    (a) Scope of test. The service test evaluates a savings 
association's record of helping to meet the credit needs of its 
assessment area(s) by analyzing both the availability and effectiveness 
of a savings association's systems for delivering retail banking 
services and the extent and innovativeness of its community development 
services.
    (b) Area(s) benefitted. Community development services must benefit 
a savings association's assessment area(s) or a broader statewide or 
regional area that includes the savings association's assessment 
area(s).
    (c) Affiliate service. At a savings association's option, the 
appropriate Federal banking agency will consider, in its assessment of 
a savings association's service performance, a community development 
service provided by an affiliate of the savings association, if the 
community development service is not claimed by any other institution.
    (d) Performance criteria--retail banking services. The appropriate 
Federal banking agency evaluates the availability and effectiveness of 
a savings association's systems for delivering retail banking services, 
pursuant to the following criteria:
    (1) The current distribution of the savings association's branches 
among low-, moderate-, middle-, and upper-income geographies;
    (2) In the context of its current distribution of the savings 
association's branches, the savings association's record of opening and 
closing branches, particularly branches located in low- or moderate-
income geographies or primarily serving low- or 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 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 savings association provides community 
development services; and
    (2) The innovativeness and responsiveness of community development 
services.
    (f) Service performance rating. The appropriate Federal banking 
agency rates a savings association's service performance as provided in 
appendix A of this part.


Sec.  195.25   Community development test for wholesale or limited 
purpose savings associations.

    (a) Scope of test. The appropriate Federal banking agency assesses 
a wholesale or limited purpose savings association's record of helping 
to meet the credit needs of its assessment area(s) under the community 
development test through its community development lending, qualified 
investments, or community development services.
    (b) Designation as a wholesale or limited purpose savings 
association. In order to receive a designation as a wholesale or 
limited purpose savings association, a savings association shall file a 
request, in writing, with the appropriate Federal banking agency, at 
least three months prior to the proposed effective date of the 
designation. If the appropriate Federal banking agency approves the 
designation, it remains in effect until the savings association 
requests revocation of the designation or until one year after the 
appropriate Federal banking agency notifies the savings association 
that the appropriate Federal banking agency has revoked the designation 
on its own initiative.
    (c) Performance criteria. The appropriate Federal banking agency 
evaluates the community development performance of a wholesale or 
limited purpose savings association pursuant to the following criteria:
    (1) The number and amount of community development loans (including 
originations and purchases of loans and other community development 
loan data provided by the savings association, such as data on loans 
outstanding, commitments, and letters of credit), qualified 
investments, or community development services;
    (2) The use of innovative or complex qualified investments, 
community development loans, or community development services and the 
extent to which the investments are not routinely provided by private 
investors; and
    (3) The savings association's responsiveness to credit and 
community development needs.
    (d) Indirect activities. At a savings association's option, the 
appropriate Federal banking agency will consider in its community 
development performance assessment:
    (1) Qualified investments or community development services 
provided by an affiliate of the savings association, if the investments 
or services are not claimed by any other institution; and
    (2) Community development lending by affiliates, consortia and 
third parties, subject to the requirements and limitations in Sec.  
195.22(c) and (d).
    (e) Benefit to assessment area(s)--(1) Benefit inside assessment 
area(s). The appropriate Federal banking agency considers all qualified 
investments, community development loans, and community development 
services that benefit areas within the savings association's assessment 
area(s) or a broader statewide or regional area that includes the 
savings association's assessment area(s).
    (2) Benefit outside assessment area(s). The appropriate Federal 
banking agency considers the qualified investments, community 
development loans, and community development services that benefit 
areas outside the savings association's assessment area(s), if the 
savings association has adequately addressed the needs of its 
assessment area(s).
    (f) Community development performance rating. The appropriate 
Federal banking agency rates a savings association's community 
development performance as provided in appendix A of this part.


 Sec.  195.26   Small savings association performance standards.

    (a) Performance criteria--(1) Small savings associations that are 
not intermediate small savings associations.

[[Page 52055]]

The appropriate Federal banking agency evaluates the record of a small 
savings association that is not, or that was not during the prior 
calendar year, an intermediate small savings association, of helping to 
meet the credit needs of its assessment area(s) pursuant to the 
criteria set forth in paragraph (b) of this section.
    (2) Intermediate small savings associations. The appropriate 
Federal banking agency evaluates the record of a small savings 
association that is, or that was during the prior calendar year, an 
intermediate small savings association, of helping to meet the credit 
needs of its assessment area(s) pursuant to the criteria set forth in 
paragraphs (b) and (c) of this section.
    (b) Lending test. A small savings association's lending performance 
is evaluated pursuant to the following criteria:
    (1) The savings association's loan-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 savings association's assessment 
area(s);
    (3) The savings association's record of lending to and, as 
appropriate, engaging in other lending-related activities for borrowers 
of different income levels and businesses and farms of different sizes;
    (4) The geographic distribution of the savings association's loans; 
and
    (5) The savings association's record of taking action, if 
warranted, in response to written complaints about its performance in 
helping to meet credit needs in its assessment area(s).
    (c) Community development test. An intermediate small savings 
association's community development performance also is evaluated 
pursuant to the following criteria:
    (1) The number and amount of community development loans;
    (2) The number and amount of qualified investments;
    (3) The extent to which the savings association provides community 
development services; and
    (4) The savings association's responsiveness through such 
activities to community development lending, investment, and services 
needs.
    (d) Small savings association performance rating. The appropriate 
Federal banking agency rates the performance of a savings association 
evaluated under this section as provided in appendix A of this part.


Sec.  195.27   Strategic plan.

    (a) Alternative election. The appropriate Federal banking agency 
will assess a savings association's record of helping to meet the 
credit needs of its assessment area(s) under a strategic plan if:
    (1) The savings association has submitted the plan to the 
appropriate Federal banking agency as provided for in this section;
    (2) The appropriate Federal banking agency has approved the plan;
    (3) The plan is in effect; and
    (4) The savings association has been operating under an approved 
plan for at least one year.
    (b) Data reporting. The appropriate Federal banking agency's 
approval of a plan does not affect the savings association's 
obligation, if any, to report data as required by Sec.  195.42.
    (c) Plans in general--(1) Term. A plan may have a term of no more 
than five years, and any multi-year plan must include annual interim 
measurable goals under which the appropriate Federal banking agency 
will evaluate the savings association's performance.
    (2) Multiple assessment areas. A savings association with more than 
one assessment area may prepare a single plan for all of its assessment 
areas or one or more plans for one or more of its assessment areas.
    (3) Treatment of affiliates. Affiliated institutions may prepare a 
joint plan if the plan provides measurable goals for each institution. 
Activities may be allocated among institutions at the institutions' 
option, provided that the same activities are not considered for more 
than one institution.
    (d) Public participation in plan development. Before submitting a 
plan to the appropriate Federal banking agency for approval, a savings 
association shall:
    (1) Informally seek suggestions from members of the public in its 
assessment area(s) covered by the plan while developing the plan;
    (2) Once the savings association has developed a plan, formally 
solicit public comment on the plan for at least 30 days by publishing 
notice in at least one newspaper of general circulation in each 
assessment area covered by the plan; and
    (3) During the period of formal public comment, make copies of the 
plan available for review by the public at no cost at all offices of 
the savings association in any assessment area covered by the plan and 
provide copies of the plan upon request for a reasonable fee to cover 
copying and mailing, if applicable.
    (e) Submission of plan. The savings association shall submit its 
plan to the appropriate Federal banking agency at least three months 
prior to the proposed effective date of the plan. The savings 
association shall also submit with its plan a description of its 
informal efforts to seek suggestions from members of the public, any 
written public comment received, and, if the plan was revised in light 
of the comment received, the initial plan as released for public 
comment.
    (f) Plan content--(1) Measurable goals. (i) A savings association 
shall specify in its plan measurable goals for helping to meet the 
credit needs of each assessment area covered by the plan, particularly 
the needs of low- and moderate-income geographies and low- and 
moderate-income individuals, through lending, investment, and services, 
as appropriate.
    (ii) A savings association shall address in its plan all three 
performance categories and, unless the savings association has been 
designated as a wholesale or limited purpose savings association, shall 
emphasize lending and lending-related activities. Nevertheless, a 
different emphasis, including a focus on one or more performance 
categories, may be appropriate if responsive to the characteristics and 
credit needs of its assessment area(s), considering public comment and 
the savings association's capacity and constraints, product offerings, 
and business strategy.
    (2) Confidential information. A savings association may submit 
additional information to the appropriate Federal banking agency on a 
confidential basis, but the goals stated in the plan must be 
sufficiently specific to enable the public and the appropriate Federal 
banking agency to judge the merits of the plan.
    (3) Satisfactory and outstanding goals. A savings association shall 
specify in its plan measurable goals that constitute ``satisfactory'' 
performance. A plan may specify measurable goals that constitute 
``outstanding'' performance. If a savings association submits, and the 
appropriate Federal banking agency approves, both ``satisfactory'' and 
``outstanding'' performance goals, the appropriate Federal banking 
agency will consider the savings association eligible for an 
``outstanding'' performance rating.
    (4) Election if satisfactory goals not substantially met. A savings 
association may elect in its plan that, if the savings association 
fails to meet substantially its plan goals for a satisfactory rating, 
the appropriate Federal banking agency will evaluate the savings 
association's performance under the lending,

[[Page 52056]]

investment, and service tests, the community development test, or the 
small savings association performance standards, as appropriate.
    (g) Plan approval--(1) Timing. The appropriate Federal banking 
agency will act upon a plan within 60 calendar days after it receives 
the complete plan and other material required under paragraph (e) of 
this section. If the appropriate Federal banking agency fails to act 
within this time period, the plan shall be deemed approved unless the 
appropriate Federal banking agency extends the review period for good 
cause.
    (2) Public participation. In evaluating the plan's goals, the 
appropriate Federal banking agency considers the public's involvement 
in formulating the plan, written public comment on the plan, and any 
response by the savings association to public comment on the plan.
    (3) Criteria for evaluating plan. The appropriate Federal banking 
agency evaluates a plan's measurable goals using the following 
criteria, as appropriate:
    (i) The extent and breadth of lending or lending-related 
activities, including, as appropriate, the distribution of loans among 
different geographies, businesses and farms of different sizes, and 
individuals of different income levels, the extent of community 
development lending, and the use of innovative or flexible lending 
practices to address credit needs;
    (ii) The amount and innovativeness, complexity, and responsiveness 
of the savings association's qualified investments; and
    (iii) The availability and effectiveness of the savings 
association's systems for delivering retail banking services and the 
extent and innovativeness of the savings association's community 
development services.
    (h) Plan amendment. During the term of a plan, a savings 
association may request the appropriate Federal banking agency to 
approve an amendment to the plan on grounds that there has been a 
material change in circumstances. The savings association shall develop 
an amendment to a previously approved plan in accordance with the 
public participation requirements of paragraph (d) of this section.
    (i) Plan assessment. The appropriate Federal banking agency 
approves the goals and assesses performance under a plan as provided 
for in appendix A of this part.


Sec.  195.28   Assigned ratings.

    (a) Ratings in general. Subject to paragraphs (b) and (c) of this 
section, the appropriate Federal banking agency assigns to a savings 
association a rating of ``outstanding,'' ``satisfactory,'' ``needs to 
improve,'' or ``substantial noncompliance'' based on the savings 
association's performance under the lending, investment and service 
tests, the community development test, the small savings association 
performance standards, or an approved strategic plan, as applicable.
    (b) Lending, investment, and service tests. The appropriate Federal 
banking agency assigns a rating for a savings association assessed 
under the lending, investment, and service tests in accordance with the 
following principles:
    (1) A savings association that receives an ``outstanding'' rating 
on the lending test receives an assigned rating of at least 
``satisfactory'';
    (2) A savings association that receives an ``outstanding'' rating 
on both the service test and the investment test and a rating of at 
least ``high satisfactory'' on the lending test receives an assigned 
rating of ``outstanding''; and
    (3) No savings association may receive an assigned rating of 
``satisfactory'' or higher unless it receives a rating of at least 
``low satisfactory'' on the lending test.
    (c) Effect of evidence of discriminatory or other illegal credit 
practices. (1) The appropriate Federal banking agency's evaluation of a 
savings association's CRA performance is adversely affected by evidence 
of discriminatory or other illegal credit practices in any geography by 
the savings association or in any assessment area by any affiliate 
whose loans have been considered as part of the savings association's 
lending performance. In connection with any type of lending activity 
described in Sec.  195.22(a), evidence of discriminatory or other 
credit practices that violate an applicable law, rule, or regulation 
includes, but is not limited to:
    (i) Discrimination against applicants on a prohibited basis in 
violation, for example, of the Equal Credit Opportunity Act or the Fair 
Housing Act;
    (ii) Violations of the Home Ownership and Equity Protection Act;
    (iii) Violations of section 5 of the Federal Trade Commission Act;
    (iv) Violations of section 8 of the Real Estate Settlement 
Procedures Act; and
    (v) Violations of the Truth in Lending Act provisions regarding a 
consumer's right of rescission.
    (2) In determining the effect of evidence of practices described in 
paragraph (c)(1) of this section on the savings association's assigned 
rating, the appropriate Federal banking agency considers the nature, 
extent, and strength of the evidence of the practices; the policies and 
procedures that the savings association (or affiliate, as applicable) 
has in place to prevent the practices; any corrective action that the 
savings association (or affiliate, as applicable) has taken or has 
committed to take, including voluntary corrective action resulting from 
self-assessment; and any other relevant information.


Sec.  195.29   Effect of CRA performance on applications.

    (a) CRA performance. Among other factors, the appropriate Federal 
banking agency takes into account the record of performance under the 
CRA of each applicant savings association, and for applications under 
section 10(e) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)), of 
each proposed subsidiary savings association, in considering an 
application for:
    (1) The establishment of a domestic branch or other facility that 
would be authorized to take deposits;
    (2) The relocation of the main office or a branch;
    (3) The merger or consolidation with or the acquisition of the 
assets or assumption of the liabilities of an insured depository 
institution requiring appropriate Federal banking agency approval under 
the Bank Merger Act (12 U.S.C. 1828(c));
    (4) A Federal thrift charter; and
    (5) Acquisitions subject to section 10(e) of the Home Owners' Loan 
Act (12 U.S.C. 1467a(e)).
    (b) Charter application. An applicant for a Federal thrift charter 
shall submit with its application a description of how it will meet its 
CRA objectives. The appropriate Federal banking agency takes the 
description into account in considering the application and may deny or 
condition approval on that basis.
    (c) Interested parties. The appropriate Federal banking agency 
takes into account any views expressed by interested parties that are 
submitted in accordance with the applicable comment procedures in 
considering CRA performance in an application listed in paragraphs (a) 
and (b) of this section.
    (d) Denial or conditional approval of application. A savings 
association's record of performance may be the basis for denying or 
conditioning approval of an application listed in paragraph (a) of this 
section.
    (e) Insured depository institution. For purposes of this section, 
the term ``insured depository institution'' has the

[[Page 52057]]

meaning given to that term in 12 U.S.C. 1813.

Subpart C--Records, Reporting, and Disclosure Requirements


Sec.  195.41   Assessment area delineation.

    (a) In general. A savings association shall delineate one or more 
assessment areas within which the appropriate Federal banking agency 
evaluates the savings association's record of helping to meet the 
credit needs of its community. The appropriate Federal banking agency 
does not evaluate the savings association's delineation of its 
assessment area(s) as a separate performance criterion, but the 
appropriate Federal banking agency reviews the delineation for 
compliance with the requirements of this section.
    (b) Geographic area(s) for wholesale or limited purpose savings 
associations. The assessment area(s) for a wholesale or limited purpose 
savings association must consist generally of one or more MSAs or 
metropolitan divisions (using the MSA or metropolitan division 
boundaries that were in effect as of January 1 of the calendar year in 
which the delineation is made) or one or more contiguous political 
subdivisions, such as counties, cities, or towns, in which the savings 
association has its main office, branches, and deposit-taking ATMs.
    (c) Geographic area(s) for other savings associations. The 
assessment area(s) for a savings association other than a wholesale or 
limited purpose savings association must:
    (1) Consist generally of one or more MSAs or metropolitan divisions 
(using the MSA or metropolitan division boundaries that were in effect 
as of January 1 of the calendar year in which the delineation is made) 
or one or more contiguous political subdivisions, such as counties, 
cities, or towns; and
    (2) Include the geographies in which the savings association has 
its main office, its branches, and its deposit-taking ATMs, as well as 
the surrounding geographies in which the savings association has 
originated or purchased a substantial portion of its loans (including 
home mortgage loans, small business and small farm loans, and any other 
loans the savings association chooses, such as those consumer loans on 
which the savings association elects to have its performance assessed).
    (d) Adjustments to geographic area(s). A savings association may 
adjust the boundaries of its assessment area(s) to include only the 
portion of a political subdivision that it reasonably can be expected 
to serve. An adjustment is particularly appropriate in the case of an 
assessment area that otherwise would be extremely large, of unusual 
configuration, or divided by significant geographic barriers.
    (e) Limitations on the delineation of an assessment area. Each 
savings association's assessment area(s):
    (1) Must consist only of whole geographies;
    (2) May not reflect illegal discrimination;
    (3) May not arbitrarily exclude low- or moderate-income 
geographies, taking into account the savings association's size and 
financial condition; and
    (4) May not extend substantially beyond an MSA boundary or beyond a 
state boundary unless the assessment area is located in a multistate 
MSA. If a savings association serves a geographic area that extends 
substantially beyond a state boundary, the savings association shall 
delineate separate assessment areas for the areas in each state. If a 
savings association serves a geographic area that extends substantially 
beyond an MSA boundary, the savings association shall delineate 
separate assessment areas for the areas inside and outside the MSA.
    (f) Savings associations serving military personnel. 
Notwithstanding the requirements of this section, a savings association 
whose business predominantly consists of serving the needs of military 
personnel or their dependents who are not located within a defined 
geographic area may delineate its entire deposit customer base as its 
assessment area.
    (g) Use of assessment area(s). The appropriate Federal banking 
agency uses the assessment area(s) delineated by a savings association 
in its evaluation of the savings association's CRA performance unless 
the appropriate Federal banking agency determines that the assessment 
area(s) do not comply with the requirements of this section.


Sec.  195.42   Data collection, reporting, and disclosure.

    (a) Loan information required to be collected and maintained. A 
savings association, except a small savings association, shall collect, 
and maintain in machine readable form (as prescribed by the appropriate 
Federal banking agency) until the completion of its next CRA 
examination, the following data for each small business or small farm 
loan originated or purchased by the savings association:
    (1) A unique number or 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 savings 
association, except a small savings association or a savings 
association that was a small savings association during the prior 
calendar year, shall report annually by March 1 to the appropriate 
Federal banking agency in machine readable form (as prescribed by the 
agency) the following data for the prior calendar year:
    (1) Small business and small farm loan data. For each geography in 
which the savings association originated or purchased a small business 
or small farm loan, the aggregate number and amount of loans:
    (i) With an amount at origination of $100,000 or less;
    (ii) With amount at origination of more than $100,000 but less than 
or equal to $250,000;
    (iii) With an amount at origination of more than $250,000; and
    (iv) To businesses and farms with gross annual revenues of $1 
million or less (using the revenues that the savings association 
considered in making its credit decision);
    (2) Community development loan data. The aggregate number and 
aggregate amount of community development loans originated or 
purchased; and
    (3) Home mortgage loans. If the savings association is subject to 
reporting under part 1003 of this title, the location of each home 
mortgage loan application, origination, or purchase outside the MSAs in 
which the savings association has a home or branch office (or outside 
any MSA) in accordance with the requirements of part 1003 of this 
title.
    (c) Optional data collection and maintenance--(1) Consumer loans. A 
savings association may collect and maintain in machine readable form 
(as prescribed by the appropriate Federal banking agency) data for 
consumer loans originated or purchased by the savings association for 
consideration under the lending test. A savings association may 
maintain data for one or more of the following categories of consumer 
loans: Motor vehicle, credit card, other secured, and other unsecured. 
If the savings association maintains data for loans in a certain 
category, it shall maintain data for all loans originated or purchased 
within that category. The savings association shall maintain data 
separately for each category, including for each loan:
    (i) A unique number or alpha-numeric symbol that can be used to 
identify the relevant loan file;

[[Page 52058]]

    (ii) The loan amount at origination or purchase;
    (iii) The loan location; and
    (iv) The gross annual income of the borrower that the savings 
association considered in making its credit decision.
    (2) Other loan data. At its option, a savings association may 
provide other information concerning its lending performance, including 
additional loan distribution data.
    (d) Data on affiliate lending. A savings association that elects to 
have the appropriate Federal banking agency consider loans by an 
affiliate, for purposes of the lending or community development test or 
an approved strategic plan, shall collect, maintain, and report for 
those loans the data that the savings association would have collected, 
maintained, and reported pursuant to paragraphs (a), (b), and (c) of 
this section had the loans been originated or purchased by the savings 
association. For home mortgage loans, the savings association shall 
also be prepared to identify the home mortgage loans reported under 
part 1003 of this title by the affiliate.
    (e) Data on lending by a consortium or a third-party. A savings 
association that elects to have the appropriate Federal banking agency 
consider community development loans by a consortium or third party, 
for purposes of the lending or community development tests or an 
approved strategic plan, shall report for those loans the data that the 
savings association would have reported under paragraph (b)(2) of this 
section had the loans been originated or purchased by the savings 
association.
    (f) Small savings associations electing evaluation under the 
lending, investment, and service tests. A savings association that 
qualifies for evaluation under the small savings association 
performance standards but elects evaluation under the lending, 
investment, and service tests shall collect, maintain, and report the 
data required for other savings associations pursuant to paragraphs (a) 
and (b) of this section.
    (g) Assessment area data. A savings association, except a small 
savings association or a savings association that was a small savings 
association during the prior calendar year, shall collect and report to 
the appropriate Federal banking agency by March 1 of each year a list 
for each assessment area showing the geographies within the area.
    (h) CRA Disclosure Statement. The appropriate Federal banking 
agency prepares annually for each savings association that reports data 
pursuant to this section a CRA Disclosure Statement that contains, on a 
state-by-state basis:
    (1) For each county (and for each assessment area smaller than a 
county) with a population of 500,000 persons or fewer in which the 
savings association reported a small business or small farm loan:
    (i) The number and amount of small business and small farm loans 
reported as originated or purchased located in low-, moderate-, middle-
, and 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 savings 
association reported a small business or small farm loan; and
    (iv) The number and amount of small business and small farm loans 
to businesses and farms with gross annual revenues of $1 million or 
less;
    (2) For each county (and for each assessment area smaller than a 
county) with a population in excess of 500,000 persons in which the 
savings association reported a small business or small farm loan:
    (i) The number and amount of small business and small farm loans 
reported as originated or purchased located in geographies with median 
income relative to the area median income of less than 10 percent, 10 
or more but less than 20 percent, 20 or more but less than 30 percent, 
30 or more but less than 40 percent, 40 or more but less than 50 
percent, 50 or more but less than 60 percent, 60 or more but less than 
70 percent, 70 or more but less than 80 percent, 80 or more but less 
than 90 percent, 90 or more but less than 100 percent, 100 or more but 
less than 110 percent, 110 or more but less than 120 percent, and 120 
percent or more;
    (ii) A list grouping each geography in the county or assessment 
area according to whether the median income in the geography relative 
to the area median income is less than 10 percent, 10 or more but less 
than 20 percent, 20 or more but less than 30 percent, 30 or more but 
less than 40 percent, 40 or more but less than 50 percent, 50 or more 
but less than 60 percent, 60 or more but less than 70 percent, 70 or 
more but less than 80 percent, 80 or more but less than 90 percent, 90 
or more but less than 100 percent, 100 or more but less than 110 
percent, 110 or more but less than 120 percent, and 120 percent or 
more;
    (iii) A list showing each geography in which the savings 
association reported a small business or small farm loan; and
    (iv) The number and amount of small business and small farm loans 
to businesses and farms with gross annual revenues of $1 million or 
less;
    (3) The number and amount of small business and small farm loans 
located inside each assessment area reported by the savings association 
and the number and amount of small business and small farm loans 
located outside the assessment area(s) reported by the savings 
association; and
    (4) The number and amount of community development loans reported 
as originated or purchased.
    (i) Aggregate disclosure statements. The appropriate Federal 
banking agency, in conjunction with the Board of Governors of the 
Federal Reserve System and the Federal Deposit Insurance Corporation or 
the OCC, as appropriate, prepares annually, for each MSA or 
metropolitan division (including an MSA or metropolitan division that 
crosses a state boundary) and the nonmetropolitan portion of each 
state, an aggregate disclosure statement of small business and small 
farm lending by all institutions subject to reporting under this part 
or parts 25, 228, or 345 of this title. These disclosure statements 
indicate, for each geography, the number and amount of all small 
business and small farm loans originated or purchased by reporting 
institutions, except that the appropriate Federal banking agency may 
adjust the form of the disclosure if necessary, because of special 
circumstances, to protect the privacy of a borrower or the competitive 
position of an institution.
    (j) Central data depositories. The appropriate Federal banking 
agency makes the aggregate disclosure statements, described in 
paragraph (i) of this section, and the individual savings association 
CRA Disclosure Statements, described in paragraph (h) of this section, 
available to the public at central data depositories. The appropriate 
Federal banking agency publishes a list of the depositories at which 
the statements are available.


Sec.  195.43   Content and availability of public file.

    (a) Information available to the public. A savings association 
shall maintain a public file that includes the following information:
    (1) All written comments received from the public for the current 
year and each of the prior two calendar years that specifically relate 
to the savings association's performance in helping to meet community 
credit needs, and any response to the comments by the savings 
association, if neither the comments nor the responses contain

[[Page 52059]]

statements that reflect adversely on the good name or reputation of any 
persons other than the savings association or publication of which 
would violate specific provisions of law;
    (2) A copy of the public section of the savings association's most 
recent CRA Performance Evaluation prepared by the appropriate Federal 
banking agency. The savings association shall place this copy in the 
public file within 30 business days after its receipt from the 
appropriate Federal banking agency;
    (3) A list of the savings association's branches, their street 
addresses, and geographies;
    (4) A list of branches opened or closed by the savings association 
during the current year and each of the prior two calendar years, their 
street addresses, and geographies;
    (5) A list of services (including hours of operation, available 
loan and deposit products, and transaction fees) generally offered at 
the savings association's branches and descriptions of material 
differences in the availability or cost of services at particular 
branches, if any. At its option, a savings association may include 
information regarding the availability of alternative systems for 
delivering retail banking services (e.g., ATMs, ATMs not owned or 
operated by or exclusively for the savings association, banking by 
telephone or computer, loan production offices, and bank-at-work or 
bank-by-mail programs);
    (6) A map of each assessment area showing the boundaries of the 
area and identifying the geographies contained within the area, either 
on the map or in a separate list; and
    (7) Any other information the savings association chooses.
    (b) Additional information available to the public--(1) Savings 
associations other than small savings associations. A savings 
association, except a small savings association or a savings 
association that was a small savings association during the prior 
calendar year, shall include in its public file the following 
information pertaining to the savings association and its affiliates, 
if applicable, for each of the prior two calendar years:
    (i) If the savings association has elected to have one or more 
categories of its consumer loans considered under the lending test, for 
each of these categories, the number and amount of loans:
    (A) To low-, moderate-, middle-, and upper-income individuals;
    (B) Located in low-, moderate-, middle-, and upper-income census 
tracts; and
    (C) Located inside the savings association's assessment area(s) and 
outside the savings association's assessment area(s); and
    (ii) The savings association's CRA Disclosure Statement. The 
savings association shall place the statement in the public file within 
three business days of its receipt from the appropriate Federal banking 
agency.
    (2) Savings associations required to report Home Mortgage 
Disclosure Act (HMDA) data. A savings association required to report 
home mortgage loan data pursuant part 1003 of this title shall include 
in its public file a written notice that the institution's HMDA 
Disclosure Statement may be obtained on the Consumer Financial 
Protection Bureau's (Bureau's) website at www.consumerfinance.gov/hmda. 
In addition, a savings association that elected to have the appropriate 
Federal banking agency consider the mortgage lending of an affiliate 
shall include in its public file the name of the affiliate and a 
written notice that the affiliate's HMDA Disclosure Statement may be 
obtained at the Bureau's website. The savings association shall place 
the written notice(s) in the public file within three business days 
after receiving notification from the Federal Financial Institutions 
Examination Council of the availability of the disclosure statement(s).
    (3) Small savings associations. A small savings association or a 
savings association that was a small savings association during the 
prior calendar year shall include in its public file:
    (i) The savings association's loan-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 savings associations by 
paragraph (b)(1) of this section, if the savings association has 
elected to be evaluated under the lending, investment, and service 
tests.
    (4) Savings associations with strategic plans. A savings 
association that has been approved to be assessed under a strategic 
plan shall include in its public file a copy of that plan. A savings 
association need not include information submitted to the appropriate 
Federal banking agency on a confidential basis in conjunction with the 
plan.
    (5) Savings associations with less than satisfactory ratings. A 
savings association that received a less than satisfactory rating 
during its most recent examination shall include in its public file a 
description of its current efforts to improve its performance in 
helping to meet the credit needs of its entire community. The savings 
association shall update the description quarterly.
    (c) Location of public information. A savings association shall 
make available to the public for inspection upon request and at no cost 
the information required in this section as follows:
    (1) At the main office and, if an interstate savings association, 
at one branch office in each state, all information in the public file; 
and
    (2) At each branch:
    (i) A copy of the public section of the savings association's most 
recent CRA Performance Evaluation and a list of services provided by 
the branch; and
    (ii) Within five calendar days of the request, all the information 
in the public file relating to the assessment area in which the branch 
is located.
    (d) Copies. Upon request, a savings association shall provide 
copies, either on paper or in another form acceptable to the person 
making the request, of the information in its public file. The savings 
association may charge a reasonable fee not to exceed the cost of 
copying and mailing (if applicable).
    (e) Updating. Except as otherwise provided in this section, a 
savings association shall ensure that the information required by this 
section is current as of April 1 of each year.


Sec.  195.44   Public notice by savings associations.

    A savings association shall provide in the public lobby of its main 
office and each of its branches the appropriate public notice set forth 
in appendix B of this part. Only a branch of a savings association 
having more than one assessment area shall include the bracketed 
material in the notice for branch offices. Only a savings association 
that is an affiliate of a holding company shall include the last two 
sentences of the notices.


 Sec.  195.45   Publication of planned examination schedule.

    The appropriate Federal banking agency publishes at least 30 days 
in advance of the beginning of each calendar quarter a list of savings 
associations scheduled for CRA examinations in that quarter.

Appendix A to Part 195--Ratings

    (a) Ratings in general. (1) In assigning a rating, the 
appropriate Federal banking agency evaluates a savings association's 
performance under the applicable performance criteria in this part, 
in accordance with Sec. Sec.  195.21 and 195.28. This includes 
consideration of low-cost education loans provided to low-income 
borrowers and activities in cooperation with minority- or women-
owned financial institutions and low-income credit unions, as well 
as

[[Page 52060]]

adjustments on the basis of evidence of discriminatory or other 
illegal credit practices.
    (2) A savings association's performance need not fit each aspect 
of a particular rating profile in order to receive that rating, and 
exceptionally strong performance with respect to some aspects may 
compensate for weak performance in others. The savings association's 
overall performance, however, must be consistent with safe and sound 
banking practices and generally with the appropriate rating profile 
as follows.
    (b) Savings associations evaluated under the lending, 
investment, and service tests--(1) Lending performance rating. The 
appropriate Federal banking agency assigns each savings 
association's lending performance one of the five following ratings.
    (i) Outstanding. The appropriate Federal banking agency rates a 
savings association's lending performance ``outstanding'' if, in 
general, it demonstrates:
    (A) Excellent responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A substantial majority of its loans are made in its 
assessment area(s);
    (C) An excellent geographic distribution of loans in its 
assessment area(s);
    (D) An excellent distribution, particularly in its assessment 
area(s), of loans among individuals of different income levels and 
businesses (including farms) of different sizes, given the product 
lines offered by the savings association;
    (E) An excellent record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Extensive use of innovative or flexible lending practices in 
a safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and
    (G) It is a leader in making community development loans.
    (ii) High satisfactory. The appropriate Federal banking agency 
rates a savings association's lending performance ``high 
satisfactory'' if, in general, it demonstrates:
    (A) Good responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A high percentage of its loans are made in its assessment 
area(s);
    (C) A good geographic distribution of loans in its assessment 
area(s);
    (D) A good distribution, particularly in its assessment area(s), 
of loans among individuals of different income levels and businesses 
(including farms) of different sizes, given the product lines 
offered by the savings association;
    (E) A good record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Use of innovative or flexible lending practices in a safe 
and sound manner to address the credit needs of low- or 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 savings association's lending performance ``low 
satisfactory'' if, in general, it demonstrates:
    (A) Adequate responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) An adequate percentage of its loans are made in its 
assessment area(s);
    (C) An adequate geographic distribution of loans in its 
assessment area(s);
    (D) An adequate distribution, particularly in its assessment 
area(s), of loans among individuals of different income levels and 
businesses (including farms) of different sizes, given the product 
lines offered by the savings association;
    (E) An adequate record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Limited use of innovative or flexible lending practices in a 
safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and
    (G) It has made an adequate level of community development 
loans.
    (iv) Needs to improve. The appropriate Federal banking agency 
rates a savings association's lending performance ``needs to 
improve'' if, in general, it demonstrates:
    (A) Poor responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A small percentage of its loans are made in its assessment 
area(s);
    (C) A poor geographic distribution of loans, particularly to 
low- or moderate-income geographies, in its assessment area(s);
    (D) A poor distribution, particularly in its assessment area(s), 
of loans among individuals of different income levels and businesses 
(including farms) of different sizes, given the product lines 
offered by the savings association;
    (E) A poor record of serving the credit needs of highly 
economically disadvantaged areas in its assessment area(s), low-
income individuals, or businesses (including farms) with gross 
annual revenues of $1 million or less, consistent with safe and 
sound operations;
    (F) Little use of innovative or flexible lending practices in a 
safe and sound manner to address the credit needs of low- or 
moderate-income individuals or geographies; and
    (G) It has made a low level of community development loans.
    (v) Substantial noncompliance. The appropriate Federal banking 
agency rates a savings association's lending performance as being in 
``substantial noncompliance'' if, in general, it demonstrates:
    (A) A very poor responsiveness to credit needs in its assessment 
area(s), taking into account the number and amount of home mortgage, 
small business, small farm, and consumer loans, if applicable, in 
its assessment area(s);
    (B) A very small percentage of its loans are made in its 
assessment area(s);
    (C) A very poor geographic distribution of loans, particularly 
to low- or 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 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 savings association's investment 
performance one of the five following ratings.
    (i) Outstanding. The appropriate Federal banking agency rates a 
savings association's investment performance ``outstanding'' if, in 
general, it demonstrates:
    (A) An excellent level of qualified investments, particularly 
those that are not routinely provided by private investors, often in 
a leadership position;
    (B) Extensive use of innovative or complex qualified 
investments; and
    (C) Excellent responsiveness to credit and community development 
needs.
    (ii) High satisfactory. The appropriate Federal banking agency 
rates a savings association's investment performance ``high 
satisfactory'' if, in general, it demonstrates:
    (A) A significant level of qualified investments, particularly 
those that are not routinely provided by private investors, 
occasionally in a leadership position;
    (B) Significant use of innovative or complex qualified 
investments; and
    (C) Good responsiveness to credit and community development 
needs.
    (iii) Low satisfactory. The appropriate Federal banking agency 
rates a savings association's investment performance ``low 
satisfactory'' if, in general, it demonstrates:
    (A) An adequate level of qualified investments, particularly 
those that are not routinely provided by private investors, although 
rarely in a leadership position;
    (B) Occasional use of innovative or complex qualified 
investments; and
    (C) Adequate responsiveness to credit and community development 
needs.
    (iv) Needs to improve. The appropriate Federal banking agency 
rates a savings

[[Page 52061]]

association's investment performance ``needs to improve'' if, in 
general, it demonstrates:
    (A) A poor level of qualified investments, particularly those 
that are not routinely provided by private investors;
    (B) Rare use of innovative or complex qualified investments; and
    (C) Poor responsiveness to credit and community development 
needs.
    (v) Substantial noncompliance. The appropriate Federal banking 
agency rates a savings association's investment performance as being 
in ``substantial noncompliance'' if, in general, it demonstrates:
    (A) Few, if any, qualified investments, particularly those that 
are not routinely provided by private investors;
    (B) No use of innovative or complex qualified investments; and
    (C) Very poor responsiveness to credit and community development 
needs.
    (3) Service performance rating. The appropriate Federal banking 
agency assigns each savings association's service performance one of 
the five following ratings.
    (i) Outstanding. The appropriate Federal banking agency rates a 
savings association's service performance ``outstanding'' if, in 
general, the savings association demonstrates:
    (A) Its service delivery systems are readily accessible to 
geographies and individuals of different income levels in its 
assessment area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has improved the accessibility of its delivery 
systems, particularly in low- or 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 savings association's service performance ``high 
satisfactory'' if, in general, the savings association demonstrates:
    (A) Its service delivery systems are accessible to geographies 
and individuals of different income levels in its assessment 
area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has not adversely affected the accessibility of 
its delivery systems, particularly in low- and moderate-income 
geographies and to 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 savings association's service performance ``low 
satisfactory'' if, in general, the savings association demonstrates:
    (A) Its service delivery systems are reasonably accessible to 
geographies and individuals of different income levels in its 
assessment area(s);
    (B) To the extent changes have been made, its record of opening 
and closing branches has generally not adversely affected the 
accessibility of its delivery systems, particularly in low- and 
moderate-income geographies and to low- and 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 savings association's service performance ``needs to 
improve'' if, in general, the savings association demonstrates:
    (A) Its service delivery systems are unreasonably inaccessible 
to portions of its assessment area(s), particularly to low- or 
moderate-income geographies or to low- or moderate-income 
individuals;
    (B) To the extent changes have been made, its record of opening 
and closing branches has adversely affected the accessibility of its 
delivery systems, particularly in low- or moderate-income 
geographies or to low- or moderate-income individuals;
    (C) Its services (including, where appropriate, business hours) 
vary in a way that inconveniences its assessment area(s), 
particularly low- or moderate-income geographies or low- or 
moderate-income individuals; and
    (D) It provides a limited level of community development 
services.
    (v) Substantial noncompliance. The appropriate Federal banking 
agency rates a savings association's service performance as being in 
``substantial noncompliance'' if, in general, the savings 
association demonstrates:
    (A) Its service delivery systems are unreasonably inaccessible 
to significant portions of its assessment area(s), particularly to 
low- or moderate-income geographies or to low- or moderate-income 
individuals;
    (B) To the extent changes have been made, its record of opening 
and closing branches has significantly adversely affected the 
accessibility of its delivery systems, particularly in low- or 
moderate-income geographies or to low- or moderate-income 
individuals;
    (C) Its services (including, where appropriate, business hours) 
vary in a way that significantly inconveniences its assessment 
area(s), particularly low- or moderate-income geographies or low- or 
moderate-income individuals; and
    (D) It provides few, if any, community development services.
    (c) Wholesale or limited purpose savings associations. The 
appropriate Federal banking agency assigns each wholesale or limited 
purpose savings association's community development performance one 
of the four following ratings.
    (1) Outstanding. The appropriate Federal banking agency rates a 
wholesale or limited purpose savings association's community 
development performance ``outstanding'' if, in general, it 
demonstrates:
    (i) A high level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Extensive use of innovative or complex qualified 
investments, community development loans, or community development 
services; and
    (iii) Excellent responsiveness to credit and community 
development needs in its assessment area(s).
    (2) Satisfactory. The appropriate Federal banking agency rates a 
wholesale or limited purpose savings association's community 
development performance ``satisfactory'' if, in general, it 
demonstrates:
    (i) An adequate level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Occasional use of innovative or complex qualified 
investments, community development loans, or community development 
services; and
    (iii) Adequate responsiveness to credit and community 
development needs in its assessment area(s).
    (3) Needs to improve. The appropriate Federal banking agency 
rates a wholesale or limited purpose savings association's community 
development performance as ``needs to improve'' if, in general, it 
demonstrates:
    (i) A poor level of community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) Rare use of innovative or complex qualified investments, 
community development loans, or community development services; and
    (iii) Poor responsiveness to credit and community development 
needs in its assessment area(s).
    (4) Substantial noncompliance. The appropriate Federal banking 
agency rates a wholesale or limited purpose savings association's 
community development performance in ``substantial noncompliance'' 
if, in general, it demonstrates:
    (i) Few, if any, community development loans, community 
development services, or qualified investments, particularly 
investments that are not routinely provided by private investors;
    (ii) No use of innovative or complex qualified investments, 
community development loans, or community development services; and
    (iii) Very poor responsiveness to credit and community 
development needs in its assessment area(s).
    (d) Savings associations evaluated under the small savings 
association performance standard--(1)Lending test ratings. (i) 
Eligibility for a satisfactory lending test rating. The appropriate 
Federal banking agency rates a small savings association's lending 
performance ``satisfactory'' if, in general, the savings association 
demonstrates:

[[Page 52062]]

    (A) A reasonable loan-to-deposit ratio (considering seasonal 
variations) given the savings association's size, financial 
condition, the credit needs of its assessment area(s), and taking 
into account, as appropriate, other lending-related activities such 
as loan originations for sale to the secondary markets and community 
development loans and qualified investments;
    (B) A majority of its loans and, as appropriate, other lending-
related activities, are in its assessment area;
    (C) A distribution of loans to and, as appropriate, other 
lending-related activities for individuals of different income 
levels (including low- and moderate-income individuals) and 
businesses and farms of different sizes that is reasonable given the 
demographics of the savings association's assessment area(s);
    (D) A record of taking appropriate action, when warranted, in 
response to written complaints, if any, about the savings 
association's performance in helping to meet the credit needs of its 
assessment area(s); and
    (E) A reasonable geographic distribution of loans given the 
savings association's assessment area(s).
    (ii) Eligibility for an ``outstanding'' lending test rating. A 
small savings association that meets each of the standards for a 
``satisfactory'' rating under this paragraph and exceeds some or all 
of those standards may warrant consideration for a lending test 
rating of ``outstanding.''
    (iii) Needs to improve or substantial noncompliance ratings. A 
small savings association may also receive a lending test rating of 
``needs to improve'' or ``substantial noncompliance'' depending on 
the degree to which its performance has failed to meet the standard 
for a ``satisfactory'' rating.
    (2) Community development test ratings for intermediate small 
savings associations--(i) Eligibility for a satisfactory community 
development test rating. The appropriate Federal banking agency 
rates an intermediate small savings association's community 
development performance ``satisfactory'' if the savings association 
demonstrates adequate responsiveness to the community development 
needs of its assessment area(s) through community development loans, 
qualified investments, and community development services. The 
adequacy of the savings association's response will depend on its 
capacity for such community development activities, its assessment 
area's need for such community development activities, and the 
availability of such opportunities for community development in the 
savings association's assessment area(s).
    (ii) Eligibility for an outstanding community development test 
rating. The appropriate Federal banking agency rates an intermediate 
small savings association's community development performance 
``outstanding'' if the savings association demonstrates excellent 
responsiveness to community development needs in its assessment 
area(s) through community development loans, qualified investments, 
and community development services, as appropriate, considering the 
savings association's capacity and the need and availability of such 
opportunities for community development in the savings association's 
assessment area(s).
    (iii) Needs to improve or substantial noncompliance ratings. An 
intermediate small savings association may also receive a community 
development test rating of ``needs to improve'' or ``substantial 
noncompliance'' depending on the degree to which its performance has 
failed to meet the standards for a ``satisfactory'' rating.
    (3) Overall rating--(i) Eligibility for a satisfactory overall 
rating. No intermediate small savings association may receive an 
assigned overall rating of ``satisfactory'' unless it receives a 
rating of at least ``satisfactory'' on both the lending test and the 
community development test.
    (ii) Eligibility for an outstanding overall rating. (A) An 
intermediate small savings association that receives an 
``outstanding'' rating on one test and at least ``satisfactory'' on 
the other test may receive an assigned overall rating of 
``outstanding.''
    (B) A small savings association that is not an intermediate 
small savings association that meets each of the standards for a 
``satisfactory'' rating under the lending test and exceeds some or 
all of those standards may warrant consideration for an overall 
rating of ``outstanding.'' In assessing whether a savings 
association's performance is ``outstanding,'' the appropriate 
Federal banking agency considers the extent to which the savings 
association exceeds each of the performance standards for a 
``satisfactory'' rating and its performance in making qualified 
investments and its performance in providing branches and other 
services and delivery systems that enhance credit availability in 
its assessment area(s).
    (iii) Needs to improve or substantial noncompliance overall 
ratings. A small savings association may also receive a rating of 
``needs to improve'' or ``substantial noncompliance'' depending on 
the degree to which its performance has failed to meet the standards 
for a ``satisfactory'' rating.
    (e) Strategic plan assessment and rating--(1) Satisfactory 
goals. The appropriate Federal banking agency approves as 
``satisfactory'' measurable goals that adequately help to meet the 
credit needs of the savings association's assessment area(s).
    (2) Outstanding goals. If the plan identifies a separate group 
of measurable goals that substantially exceed the levels approved as 
``satisfactory,'' the appropriate Federal banking agency will 
approve those goals as ``outstanding.''
    (3) Rating. The appropriate Federal banking agency assesses the 
performance of a savings association operating under an approved 
plan to determine if the savings association has met its plan goals:
    (i) If the savings association substantially achieves its plan 
goals for a satisfactory rating, the appropriate Federal banking 
agency will rate the savings association's performance under the 
plan as ``satisfactory.''
    (ii) If the savings association exceeds its plan goals for a 
satisfactory rating and substantially achieves its plan goals for an 
outstanding rating, the appropriate Federal banking agency will rate 
the savings association's performance under the plan as 
``outstanding.''
    (iii) If the savings association fails to meet substantially its 
plan goals for a satisfactory rating, the appropriate Federal 
banking agency will rate the savings association as either ``needs 
to improve'' or ``substantial noncompliance,'' depending on the 
extent to which it falls short of its plan goals, unless the savings 
association elected in its plan to be rated otherwise, as provided 
in Sec.  195.27(f)(4).

Appendix B to Part 195--CRA Notice

    (a) Notice for main offices and, if an interstate savings 
association, one branch office in each state.

Community Reinvestment Act Notice

    Under the Federal Community Reinvestment Act (CRA), the [Office 
of the Comptroller of the Currency (OCC) or Federal Deposit 
Insurance Corporation (FDIC)] evaluates our record of helping to 
meet the credit needs of this community consistent with safe and 
sound operations. The [OCC or FDIC] also takes this record into 
account when deciding on certain applications submitted by us.
    Your involvement is encouraged.
    You are entitled to certain information about our operations and 
our performance under the CRA, including, for example, information 
about our branches, such as their location and services provided at 
them; the public section of our most recent CRA Performance 
Evaluation, prepared by the [OCC or FDIC]; and comments received 
from the public relating to our performance in helping to meet 
community credit needs, as well as our responses to those comments. 
You may review this information today.
    At least 30 days before the beginning of each quarter, the [OCC 
or FDIC] publishes a nationwide list of the savings associations 
that are scheduled for CRA examination in that quarter. This list is 
available from the [OCC Deputy Comptroller (address) or FDIC 
appropriate regional director (address)]. You may send written 
comments about our performance in helping to meet community credit 
needs to (name and address of official at savings association) and 
the [OCC Deputy Comptroller (address) or FDIC appropriate regional 
director (address)]. Your letter, together with any response by us, 
will be considered by the [OCC or FDIC] in evaluating our CRA 
performance and may be made public.
    You may ask to look at any comments received by the [OCC Deputy 
Comptroller or FDIC appropriate regional director]. You may also 
request from the [OCC Deputy Comptroller or FDIC appropriate 
regional director] an announcement of our applications covered by 
the CRA filed with the [OCC or FDIC]. We are an affiliate of (name 
of holding company), a savings and loan holding company. You may 
request from the (title of responsible official), Federal Reserve 
Bank of ____ (address) an announcement of applications covered by 
the CRA filed by savings and loan holding companies.
    (b) Notice for branch offices.

Community Reinvestment Act Notice

    Under the Federal Community Reinvestment Act (CRA), the [Office 
of the

[[Page 52063]]

Comptroller of the Currency (OCC) or Federal Deposit Insurance 
Corporation (FDIC)] evaluates our record of helping to meet the 
credit needs of this community consistent with safe and sound 
operations. The [OCC or FDIC] also takes this record into account 
when deciding on certain applications submitted by us.
    Your involvement is encouraged.
    You are entitled to certain information about our operations and 
our performance under the CRA. You may review today the public 
section of our most recent CRA evaluation, prepared by the [OCC or 
FDIC] and a list of services provided at this branch. You may also 
have access to the following additional information, which we will 
make available to you at this branch within five calendar days after 
you make a request to us: (1) A map showing the assessment area 
containing this branch, which is the area in which the [OCC or FDIC] 
evaluates our CRA performance in this community; (2) information 
about our branches in this assessment area; (3) a list of services 
we provide at those locations; (4) data on our lending performance 
in this assessment area; and (5) copies of all written comments 
received by us that specifically relate to our CRA performance in 
this assessment area, and any responses we have made to those 
comments. If we are operating under an approved strategic plan, you 
may also have access to a copy of the plan.
    [If you would like to review information about our CRA 
performance in other communities served by us, the public file for 
our entire savings association is available at (name of office 
located in state), located at (address).]
    At least 30 days before the beginning of each quarter, the [OCC 
or FDIC] publishes a nationwide list of the savings associations 
that are scheduled for CRA examination in that quarter. This list is 
available from the [OCC Deputy Comptroller (address) or FDIC 
appropriate regional office (address)]. You may send written 
comments about our performance in helping to meet community credit 
needs to (name and address of official at savings association) and 
the [OCC or FDIC]. Your letter, together with any response by us, 
will be considered by the [OCC or FDIC] in evaluating our CRA 
performance and may be made public.
    You may ask to look at any comments received by the [OCC Deputy 
Comptroller or FDIC appropriate regional director]. You may also 
request an announcement of our applications covered by the CRA filed 
with the [OCC Deputy Comptroller or FDIC appropriate regional 
director]. We are an affiliate of (name of holding company), a 
savings and loan holding company. You may request from the (title of 
responsible official), Federal Reserve Bank of ____ (address) an 
announcement of applications covered by the CRA filed by savings and 
loan holding companies.

Michael J. Hsu,
Acting Comptroller of the Currency.
[FR Doc. 2021-19738 Filed 9-16-21; 8:45 am]
BILLING CODE 4810-33-P

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