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CRA [Community Reinvestment Act] [Folder 3]
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CRA [Community Reinvestment Act] [Folder 3]
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Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/IITLE
DATE
RESTRICTION
AND TYPE
001. memo
Memorandum for the President and Vice President (5 pages)
ca. 05/1999
P5
002. memo
Memorandum for the President and Vice President (5 pages)
ca. 05/1999
P5
COLLECTION:
Clinton Presidential Records
Policy Development
Lisa Green
OA/Box Number: 20587
FOLDER TITLE:
CRA [Community Reinvestment Act] [Folder 3]
2012-0043-S
ms434
RESTRICTION CODES
Presidential Records Act - 144 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA)
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA|
h(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information |(a)(4) of the PRA]
h(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy |(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIA|
PRM. Personal record misfile defined in accordance with 44 U.S.C.
h(9) Release would disclose geological or geophysical information
2201(3).
concerning wells ((b)(9) of the FOIA]
RR. Document will be reviewed upon request.
NATIONAL
COMMUNITY
REINVESTMENT
COALITION
NCRC
Flor
John E Taylor
President 6 CEO
Board of Directors
Ernest E (Gene) Ortega. Champerson
Home Education Livenhood Program
Gail Burks. Vice Champerson
Nevada Fair Housing Conter. Inc
Mr. Gene Sperling
Pete Garcia. Vice Champerson
Chicanos Por La Causa
National Economic Advisor to the President
Elbert Jones. 11., Treasurer
Community Equity Investments, Inc
Office of the President
Anne Peterson. Secretary
White House
The Housing Council
Washington, DC
June 28, 1999
Irvin Henderson, Past Chairperson
Community Reinvestment Association
of North Carolina
Marra Smith Battle-Bey
Dear Mr. Sperling:
Vermont Slauson
Economic Development Corporation
Lee Beaulac
Rural Opportunities, Inc.
Aggie Brose
I attended the meeting at Treasury on Monday, June 28th as part of the
Pittsburgh Community
Reinvestment Group
National Community Reinvestment Coalition group that met with you and
Malcom Bush
Woodstock Institute
Under Secretary Gensler. I wish to take you up on your invitation to make
Dbarmena Downey
suggestions on how the President's New Market's Initiative could increase
Neighborhood of Affordable Housing
Nan Fisher
CRA support and more importantly increase access to credit and capital in
Cahfornia Reinvestment Committee
underserved communities.
Devorab Lee bong
Spring Crech Community Corporation
Mattbew Lee
Inner CIV Press
First, on the New Market's trip, the President should reaffirm, in the presence
Community On the Move
of community reinvestment leaders, his strong commitment to CRA coupled
Engene Lowe
United States Conference of Mayors
with comments on the remarkable success of CRA. One obvious way to
Jesse R' Ornelas
Cabrillo Economic
support this position is to have the president express his zero tolerance for
Development Corporation
Suzy Post
CRA weakening legislation. Toward this end, we would encourage you to
Metropolitan Housing Coalition
invite a local CRA practitioner, along with a community bank partner, to
Rashmi Rangan
Delaware Community
participate in the various days events as you make your New Market's visits
Reinvestment Action Council
Jerry Reynolds
to the various cities.
Fust Nations Development Institute
Shelley Sheeby
Muscatine Center for
Second, the SBA, working in concert with NCRC has produced a new small
Strategic Action. CDC
Hubert Van Tol
business product, named "Community Express" that we feel dramatically
Wisconsin Rural
Development Corporation
increases traditionally underserved people's access to small business lending.
Morris Williams
This product is an obvious match for inclusion in the New Market's Initiative.
Coalition of Neighborhoods
Ted Wysocki
Chicago Association of Neighborhood
Development Organizations (CANDO)
1: Barton Harrey, III
Charperson Emeritus
The Enterprise Foundation
733 15th Street, NW State 5.10
Washington, DC 20005-2112
202 626-8866
Fax: 202 628-9800
E-Mail noremembargte.net
Website www.nerc.org
NATIONAL
COMMUNITY
REINVESTMENT
COALITION
NCRC
Finally, several organizations at the Treasury meeting suggested that you
work more closely with NCRC and myself. I would welcome that opportunity
and I look forward to any collaboration that makes sense for you and the
Administration. NCRC would be pleased to also assist with any logistics that
may arise out of the above suggestions, including coordinating community
speakers for each visit, should you so desire.
Our organization stands ready to support your New Market Initiatives and to
oppose the Bliley Amendment. In turn, we hope you stand ready to include
NCRC in your initiatives.
Sincerely,
Zen John Taylor
President & CEO
Peter A. Weissman
06/29/99 04:56:14 PM
Record Type:
Record
To:
Lisa Green/OPD/EOP@EOP, Melissa G. Green/OPD/EOP, Sarah Rosen Wartell/OPD/EOP@EOP
CC:
Subject: Lisa- pls return this call for Gene
John Taylor
Natl Community Reinvestment Coalition
628-8866
was at your CRA briefing. called to follow up on your offer to
help with New Markets. Faxed you a letter. Lisa will call him.
JUN-25-1999 16:34
ACORN
P.01
€
ACORN
FAX COVER SHEET
TO: The Hon. Gene Sparling
FROM: Chris Saffert
DATE: 6/25/99
FAX # OF RECEIVER: 456-2878
NUMBER OF PAGES INCLUDING COVER: 2
NOTE:
Association of Community Organizations for Reform Now
National Office: 739 8th Street S.E., Washington, D.C. 20003 202-547-2500 FAX 202-546-2483
"
JUN-25-1999 16:34
ACORN
P.02
June 25. 1999
The Hon. Gene Sperling
Director, National Economic Council
White House
Washington, DC 20502
Dear Mr. Sperling:
We write in regard to H.R. 10 and our concerns about its potential impact on the Community
Reinvestment Act (CRA).
We are deeply appreciative of the Clinton Administration's past and current support for CRA
and the law's efforts to increase access to capital in traditionally underserved communities.
CRA has enjoyed significant successes in expanding economic and homeownership opportunities for
residents of low and moderate income and minority neighborhoods. In the range of day-to-day
activities of our organizations, we see first-hand the positive impact of CRA in our communities, and
we are adamantly opposed to any legislation that diminishes the effectiveness of CRA.
We do not consider H.R. 10 to be CRA-neutral because it would alter the structure of the
financial industry in ways that would be harmful to CRA. The bill would encourage additional
concentration in the financial industry and the creation of larger financial conglomerates that would
have fewer ties to local communities, especially lower-income and minority neighborhoods. and be less
responsive to local concerns. It would also result in financial holding companies shifting their assets
into new affiliates and away from their bank and thrift divisions, which are covered by CRA.
To address H.R. 10's negative impact on CRA, we request that the Administration support
amendments that Reps. Luis Gutierrez and Thomas Barrett are seeking to introduce during House
consideration and push for making them in order under the rule for H.R. 10. Rep. Gutierrez'
amendment would extend CRA to bank holding company affiliates that provide banking services. The
Gutierrez Amendment would help preserve the principle that institutions offering basic banking
services should be subject to CRA and stop H.R. 10 from giving an unfair market advantage to
financial institutions that offer such services through affiliates. The amendment would also prevent
H.R. 10 from encouraging financial holding companies to shift their assets into affiliates to avoid CRA
coverage. In addition, it would mark a good first step toward curbing abusive practices by predatory
lenders, some of which are affiliates of bank holding companies. that maintain such an aggressive
presence in communities that are underserved by banks.
The Barrett Amendment would address the problem of insurance redlining by setting basic
data disclosure requirements for insurance companies. Like redlining by banks. insurance redlining
greatly restricts economic opportunities in lower-income areas. Without access to homeowners' or
small business property insurance, minorities and people with lower incomes are prevented from
obtaining mortgages or getting loans to start up a small businesses. The Barrett Amendment would
require insurance companies to provide information about the race, income, and other characteristics
of potential customers by census tract both on policies they choose to underwrite and on applicants
they reject, much like the Home Mortgage Disclosure Act (HMDA) requires for mortgage lenders.
While we know discrimination exists in the property insurance industry, there is very little public data
on industry practices, and the Barrett Amendment would remedy that problem.
Thank you for your attention to our concerns. We look forward to seeing you at the CRA
forum at the Treasury Department on June 28 and discussing these amendments with you in more
detail at that time.
Sincerely,
ACORN
Center for Community Change
National Community Reinvestment Coalition
National League of Cities
National Neighborhood Coalition
NETWORK: A National Catholic Social Justice Lobby
TOTAL P.02
Sarah Rosen Wartell
05/24/99 02:22:59 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
See the distribution list at the bottom of this message
Subject: CRA Burden Hours
As you know, under the Paperwork Reduction Act, agencies are required to periodically assess the time
that it takes to complete their paperwork requirements. In 1995, when the CRA regulations were revised,
estimates of the burden hours on firms were calculated. The four banking agencies (OCC, OTS, Fed, and
FDIC) have recently reestimated the burden hours. The revised numbers will be sent this week to the
Federal Register. Actual publication date is unclear, but they will be laid on the table (and thus in the
public domaine) sometime this week.
In general, I am told by Treasury, the estimates will be significantly higher (4-5 times) than was originally
estimated in 1995. A big part of the difference is attributable to geocoding. It was assumed in 1995 that
there would be readily available software that could be integrated with existing applications to geocode
each loan. Unfortunately, while some software is available, the integration is not seemless and the
calculation takes longer than expected.
There is good news, however. While the estimates for all banks (including small banks) are higher than
expected, the total burden hours for small banks is still very low -- only 10 burden hours per year per
bank. (Note: these numbers do not count time spent undergoing examination for CRA compliance, which
is not counted under the paperwork reduction act.) This is basically consistent with what we have been
saying in response to the small bank exemption -- that streamlining done by the Administration in 1995
dramatically reduced the impact on small institutions.
Treasury will provide us with talking points on this issue BEFORE the estimates are made public.
However, we are not contacting the bank regulators directly as we do not want to leave anyone with the
impression that these estimates were not developed entirely independently and without political pressure.
Please contact me if you have any questions.
Message Sent To:
Melissa G. Green/OPD/EOP@EOP
Roger S. Ballentine/WHO/EOP@EOP
Broderick Johnson/WHO/EOP@EOP
Lisa Green/OPD/EOP@EOP
Paul J. Weinstein Jr./OPD/EOP@EOP
Message Copied To:
Michael Deich/OMB/EOP@EOP
Alan B. Rhinesmith/OMB/EOP@EOP
Theodore Wartell/OMB/EOP@EOP
Edward A. Brigham/OMB/EOP@EOP
Alice Veenstra/OMB/EOP@EOP
Derek A. Chapin/OMB/EOP@EOP
Jefferson B. Hill/OMB/EOP@EOP
Joseph F. Lackey Jr./OMB/EOP@EOP
Michelle A. Enger/OMB/EOP@EOP
Leticia Sierra/OMB/EOP@EOP
Roger S. Ballentine
05/03/99 01:09:47 PM
Record Type:
Record
To:
[email protected]
CC:
See the distribution list at the bottom of this message
Subject: Re: More re CRA-Reply ..]
pls be sure that Steve H. knows this
a
Message Copied To:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Sarah Rosen Wartell/OPD/EOP@EOP
Broderick Johnson/WHO/EOP@EOP
[email protected]
[email protected]
[email protected]
[email protected]
Jonathan A. Kaplan/OPD/EOP@EOP
[email protected]
Lisa Green/OPD/EOP@EOP
[email protected]
[email protected].
Melissa G. Green/OPD/EOP@EOP
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Sarah Rosen Wartell
05/03/99 10:38:44 AM
Record Type:
Record
To:
Sarah Rosen Wartell/OPD/EOP@EOP
CC:
See the distribution list at the bottom of this message
Subject: More re CRA
Also at 8:00, there was a discussion about how we could elevate our profile on CRA during this week's
fight. One suggestion was that Gene go to the event on CRA hosted by the civil rights groups this week.
Query -- Is this a good idea? I understand that neither rubin nor the members will be there.
I thought we had said that we would participate in this IF it was focused solely on CRA, but not if it was
going to bash Fin Mod which we support.
Guidance ASAP please.
Message Copied To:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Roger S. Ballentine/WHO/EOP@EOP
Broderick Johnson/WHO/EOP@EOP
Melissa G. Green/OPD/EOP@EOP
Lisa Green/OPD/EOP@EOP
Jonathan A. Kaplan/OPD/EOP@EOP
[email protected]
05/03/99 01:05:22 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
See the distribution list at the bottom of this message
Subject: More re CRA -Reply
Date: 05/03/1999 01:02 pm (Monday)
From: Michael Barr
To: DOM3.DOPO5(COMSTOCKN, FROMANM, KORNBLUHK, LEVINEM, WATCHOFFICE),
DOM3.DOPO6(BAERG, CARNELLR, GENSLERG, KELLOGGC, SCHRODERM,
TUCKERI), ex.mail("[email protected]",
"[email protected]")
CC: ex.mail("[email protected]", "cliff.kellogg",
"gary.gensler", "gregory.baer", "irma.tucker",
"[email protected]", "karen.kornbluh",
"[email protected]", "marne.levine", "melissa.schroder",
"[email protected]", "michael.barr", "michael.froman",
"neal.comstock", "rick.carnell",
"[email protected]", "watch.office",
"[email protected]"),
Subject: More re CRA -Reply
Civil rights groups want to fly solo.
>>>ex.mail."[email protected]" 05/03/99_10:38am »»
Also at 8:00, there was a discussion about how we could elevate our
profile
on CRA during this week's fight. One suggestion was that Gene go to
the
event on CRA hosted by the civil rights groups this week. Query -- Is
this
a good idea? I understand that neither rubin nor the members will be
there.
I thought we had said that we would participate in this IF it was focused
solely on CRA, but not if it was going to bash Fin Mod which we support.
Guidance ASAP please.
Message Sent To:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Sarah Rosen Wartell/OPD/EOP
Message Copied To:
Broderick Johnson/WHO/EOP
[email protected]
[email protected]
[email protected]
[email protected]
Jonathan A. Kaplan/OPD/EOP
[email protected]
Lisa Green/OPD/EOP
[email protected]
[email protected]
Melissa G. Green/OPD/EOP
[email protected]
[email protected]
[email protected]
[email protected]
Roger S. Ballentine/WHO/EOP
[email protected]
[email protected]
file CRA
THE WHITE HOUSE
NATIONAL ECONOMIC COUNCIL
TO: Gene
FROM: San
PHONE:
FAX:
DATE: 5/3
PAGES TO FOLLOW 5
COMMENTS: RUBIN will discuss
at 800 Memo is badly
Flaved. Written about for
Gudience who's 'is familia ul
technical ISSUED. Desn't
explain tactical benefits of
key recommendation Not
clear why suddenly time pressing
afta stting at Tressury far 10 days.
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TTTLE
DATE
RESTRICTION
AND TYPE
001. memo
Memorandum for the President and Vice President (5 pages)
ca. 05/1999
P5
COLLECTION:
Clinton Presidential Records
Policy Development
Lisa Green
OA/Box Number: 20587
FOLDER TITLE:
CRA [Community Reinvestment Act] [Folder 3]
2012-0043-S
ms434
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
PI National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA|
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency |(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information |(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy |(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
To:
See the distribution list at the bottom of this message
CC:
Subject: CRA memo to president
Date: 05/02/1999 10:19 pm (Sunday)
From: Michael Barr
To: WATCHOFFICE, genslerg, carnellr, baerg, levinem, fromanm,
kornbluhk, comstockn,EX.MAlL."[email protected]"
EX.MAIL."[email protected]", schroderm, kelloggc, tuckeri,
barrm
Subject: CRA memo to president
This draft includes comments from Paul Weinstein, Froman, Gensler, and
me. It currently contains recommendations endorsed by all advisors.
Watchoffice: Please fax to (1) Secretary Rubin; (2) Paul Weinstein; (3)
Sarah Rosen; (4) Gary Gensler.
-
crapotus2.502.wpd
Message Sent To:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Sarah Rosen Wartell/OPD/EOP
[email protected]
Message Copied To:
Sarah Rosen Wartell
05/03/99 10:32:11 AM
Record Type:
Record
To:
Lisa Green/OPD/EOP@EOP
CC:
Subject: Re: CRA memo to president
Forwarded by Sarah Rosen Wartell/OPD/EOP on 05/03/99 10:32 AM
Sarah Rosen Wartell
05/03/99 10:32:00 AM
Record Type:
Record
To:
[email protected]
CC:
See the distribution list at the bottom of this message
bcc:
Records Management@EOP
Subject: Re: CRA memo to president
III
I am told that at the 8:00 meeting, a decision was made to not do a more specific veto threat from the
President, although, if Rubin were asked, he can say that he would recommend a veto if "have and
maintain" is not in the bill.
Attached is some comments (in the 10:15 last night file) that I was putting in before I had heard the news.
Obviously, the memo needs to be revised, since as written, the central question posed is no longer
relevant. We'll await a revised fraft from Treasury.
thanks.
crapotus2.502.wp
[email protected]
[email protected]
05/03/99 08:47:24 AM
Record Type:
Record
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TTTLE
DATE
RESTRICTION
AND TYPE
002. memo
Memorandum for the President and Vice President (5 pages)
ca. 05/1999
P5
COLLECTION:
Clinton Presidential Records
Policy Development
Lisa Green
OA/Box Number: 20587
FOLDER TITLE:
CRA [Community Reinvestment Act] [Folder 3]
2012-0043-S
ms434
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute |(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
h(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
23724
Federal Register/Vol. 64, No. 4/Monday, May 3, 1999/Notices
For the Commission, by the Division of
SMALL BUSINESS ADMINISTRATION
SW 5th Portland, OR. To receive
Market Regulation, pursuant to delegated
comments and testimony from small
authority.¹³
National Small Business Development
businesses and representatives of trade
Margaret H. McFarland,
Center Advisory Board; Public Meeting
associations concerning regulatory
Deputy Secretary.
The U.S. Small Business
enforcement or compliance taken by
[FR Doc. 99-10986 Filed 4-30-99; 8:45 am]
Administration National Small Business
federal agencies. Transcripts of these
BILLING CODE 8010-01-M
Development Center Advisory Board
proceedings will be posted on the
will hold a public meeting on Sunday,
Internet. These transcripts are subject
July 18, 1999, from 9:00 am to 5:00 pm
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SMALL BUSINESS ADMINISTRATION
at the University of Alaska Conference
For further information, please write
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Data Collection Available for Public
such matters as may be presented by
or call Gary P. Peele (312) 353-0880.
Comments and Recommendations
members, staff of the U.S. Small
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ACTION: Notice and request for
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comments.
For further information. please write
BILLING CODE 8025-01-U
or call Ellen Thrasher, U.S. Small
SUMMARY: In accordance with the
Business Administration, 409 Third
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Street, SW, Fourth Floor, Washington,
DEPARTMENT OF STATE
notice announces the Small Business
DC 20416, telephone number (202) 205-
Administration's intentions to request
6817.
[Public Notice #2998]
approval on a new, and/or currently
Shirl Thomas,
approved information collection.
Advisory Committee to the U.S.
Director, External Affairs.
Section of the Inter-American Tropical
DATES: Comments should be submitted
[FR Doc. 99-10942 Filed 4-30-99; 8:45 am]
Tuna Commission (Committee
by July 2. 1999.
BILLING CODE 8025-01-P
Renewal)
FOR FURTHER INFORMATION CONTACT:
Curtis B. Rich, Management Analyst,
The Department of State has renewed
Small Business Administration, 409 3rd
SMALL BUSINESS ADMINISTRATION
the Charter of the Advisory Committee
Street, S.W., Suite 5000, Washington,
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Administration Region I Advisory
Part 1. Part 2 and Guidelines for
Act of 1950 (U.S.C. 953, as amended).
Council located in the geographical area
Applications".
The goal of the Advisory Committee is
of Hartford, CT, will hold a public
to serve the U.S. Section of the IATTC,
Form No: 415.
meeting at 9:30 a.m. on June 24, 1999,
Description of Respondents:
the Department of State, and other
at the Legislative Office Building
Applicants for SBIC Licenses.
agencies of the U.S. Government, as
Broadway Street and Capitol Avenue
Annual Responses: 60.
advisors on matters relating to the
Hartford, CT 06106. The space Is being
Annual Burden: 160.
conservation and management of
provided by the State Government. To
international stocks of tuna and
Title: "SBIC Licensing Application
receive comments and testimony from
dolphins in the eastern tropical Pacific
Management Assessment Form".
small businesses and representatives of
Ocean, in particular, on the
Form No: 415A.
trade associations concerning regulatory
development of U.S. policy and
Description of Respondents:
enforcement or compliance taken by
positions associated with such matters.
Applicants for SBIC Licenses.
federal agencies. Transcripts of these
The Committee is composed of
Annual Responses: 60.
proceedings will be posted on the
representatives of the major U.S. tuna
Annual Burden: 160.
Internet. These transcripts are subject
harvesting, processing, and marketing
Comments: Send all comments
only to limited review by the National
sectors. Additionally, Committee
regarding this information collection to
Ombudsman.
membership includes representatives of
Saunders Miller, Senior Policy Advisor,
For further information, please write
or call Gary P. Peele (312) 353-0880.
recreational fishing Interests and
Office of Investment Division, Small
environmental interests.
Business Administration, 409 3rd Street
Shirl Thomas,
The Advisory Committee will
S.W., Suite 6300, Washington, D.C.
Director, External Affairs.
continue to follow the procedures
20416. Phone No: 202-205-3646.
[FR Doc. 99-11000 Filed 4-30-99; 8:45 am]
prescribed by the Federal Advisory
Send comments regarding whether
BILLING CODE 8025-01-U
Committee Act (FACA). Meetings will
this information collection is necessary
continue to be open to the public unless
for the proper performance of the
a determination is made in accordance
function of the agency, accuracy of
SMALL BUSINESS ADMINISTRATION
with Section 10 of the FACA, 5 U.S.C.
burden estimate, in addition to ways to
552b(c) (1) and (4), that a meeting or a
minimize this estimate, and ways to
Northwestern States Regional Falmess
portion of the meeting should be closed
enhance the quality.
Board Public Hearing
to the public. Notice of each meeting
Jacqueline K. White,
The U.S. Small Business
continues to be provided for publication
Chief, Administrative Information Branch.
Administration Reglon X Advisory
in the Federal Register as far in advance
[FR Doc. 99-10941 Filed 4-30-99; 8:45 am)
Council located in the geographical area
as possible prior to the meeting.
BILLING CODE 8025-01-P
of Portland, OR, will hold a public
For further information on the
meeting at 9:00 a.m. on July 7, 1999, at
renewal of the Advisory Committee,
1317 CFR 200.30-3(a)(12).
the Portland Building Auditorium 120
please contact Brian S. Hallman, Deputy
23618
Federal Register/\ 64, No. /Monday, May 3, 1999 Notices
Insecticide. Active ingredient:
electronic form must be identified by
ADDRESSES: Questions and comments
Pymetrozine: 1,2,4-triazin-3(2H)-
the docket number [OPP-30477].
may be sent to Keith J. Todd, Executive
one,4,5-dihydro-6-methyl-4-[(3-
Electronic comments on this notice may
Secretary, Federal Financial Institutions
pyridinyl methylene)amino] at 98.3%.
be filed online at many Federal
Examination Council, 2000 K Street,
Proposed classification/Use: None. For
Depository Libraries.
NW, Suite 310, Washington, DC 20006,
use only in the manufacture of EPA
Authority: 7 U.S.C. 136.
or by facsimile transmission to (202)
registered insecticidal formulations.
872-7501.
(PM 4)
List of Subjects
FOR FURTHER INFORMATION CONTACT:
6. File Symbol: 100-OER. Applicant:
Environmental protection, Pesticides
OCC: Malloy Harris, National Bank
Novartis Crop Protection. Product
Examiner, Community and Consumer
Name: Acibenzolar-S-Methyl Technical.
and pest, Product registration.
Policy Division, (202) 874-4446; or
Plant activator. Active ingredient: Benzo
Dated: April 22, 1999.
Margaret Hesse, Senior Attorney,
(1,2,3) thiadiazole-7-carbothioic acid-S-
James Jones,
Community and Consumer Law
methyl ester at 98.6%. Proposed
Division, (202) 874-5750, Office of the
classification/Use: None. For
Director, Registration Division, Office of
Comptroller of the Currency, 250 E
formulation into end-use fungicide
Pesticide Programs.
Street, SW., Washington, DC 20219.
products. (PM 22)
[FR Doc. 99-11042 Filed 4-30-99; 8:45 am]
Board: Catherine M.J. Gates, Senior
7. File Symbol: 100-OEE. Applicant:
BILLING CODE 6560-50-F
Review Examiner, (202) 452-3946;
Novartis Crop Protection. Product
James H. Mann, Attorney, (202) 452-
Name: Actigard 50WG. Plant activator.
2412; or Kathleen C. Ryan, Attorney,
Active ingredient: Benzo (1,2,3)
(202) 452-3667, Board of Governors of
thiadiazole-7-carbothioic acid-S-methyl
FEDERAL FINANCIAL INSTITUTIONS
the Federal Reserve System, 20th Street
ester at 50%. Proposed classification/
EXAMINATION COUNCIL
and Constitution Avenue, NW.,
Use: None. For protection against
certain diseases of leafy vegetables,
Community Reinvestment Act;
Washington, DC 20551.
tomato, and tobacco. (PM 22)
Interagency Questions and Answers
FDIC: Robert W. Mooney, Senior Fair
Regarding Community Reinvestment
Lending Specialist, Division of
Notice of approval or denial of an
Compliance and Consumer Affairs,
application to register a pesticide
AGENCY: Federal Financial Institutions
(202) 942-3090; or A. Ann Johnson,
product will be announced in the
Examination Council.
Counsel, Legal Division, (202) 898-
Federal Register. The procedure for
requesting data will be given in the
ACTION: Notice and request for comment.
3573, Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Federal Register if an application is
SUMMARY: The Consumer Compliance
Washington, DC 20429.
approved.
Task Force (we) of the Federal Financial
Comments received within the
OTS: Theresa A. Stark, Project
Institutions Examination Council
specified time period will be considered
Manager, Compliance Policy. (202) 906-
(FFIEC) is supplementing, amending,
before a final decision Is made;
7054; or Richard R. Riese, Project
comments received after the time
and republishing its Interagency
Manager, Compliance Policy, (202) 906-
Questions and Answers Regarding
6134, Office of Thrift Supervision, 1700
specified will be considered only to the
Community Reinvestment, as well as
extent possible without delaying
C Street, NW., Washington, DC 20552.
proposing for comment three new or
processing of the application.
SUPPLEMENTARY INFORMATION:
revised questions and answers. The
II. Public Record and Electronic
Interagency Questions and Answers
Background
Submissions
have been prepared by staff of the Office
In 1995, the agencies revised the
The official record for this notice, as
of the Comptroller of the Currency
Community Reinvestment Act (CRA)
well as the public version, has been
(OCC). the Board of Governors of the
regulations by issuing a joint final rule,
established for this notice under docket
Federal Reserve System (Board), the
which was published on May 4. 1995
number [OPP-30477] (including
Federal Deposit Insurance Corporation
(60 FR 22156). See 12 CFR parts 25, 228,
comments and data submitted
(FDIC), and the Office of Thrift
345 and 563e, implementing 12 U.S.C.
electronically as described below). A
Supervision (OTS) (collectively, the
2901 et seq. The agencies published
public version of this record, including
agencies) to answer frequently asked
related clarifying documents on
printed. paper versions of electronic
questions about community
December 20, 1995 (60 FR 66048) and
comments, which does not include any
reinvestment. These Interagency
May 10, 1996 (61 FR 21362).
information claimed as CBI, is available
Questions and Answers contain
The revised regulations are
for inspection from 8:30 a.m. to 4 p.m.,
informal staff guidance for agency
interpreted primarily through
Monday through Friday, excluding legal
personnel, financial institutions, and
"Interagency Questions and Answers
holidays. The official notice record is
the public. We seek public comment on
Regarding Community Reinvestment,"
located at the address in "ADDRESSES"
the proposed questions and answers. In
which provide informal staff guidance
at the beginning of this document.
addition, we Invite public comment on
for use by agency personnel. financial
Electronic comments can be sent
any of the new and revised questions
institutions, and the public, and which
directly to EPA at:
and answers, as well as other
are supplemented periodically. We
[email protected]
community reinvestment issues that are
published our most recent guidance on
not addressed in these Interagency
October 7, 1997 (1997 Interagency
Electronic comments must be
Questions and Answers.
Questions and Answers). See 62 FR
submitted as an ASCII file avoiding the
DATES: Effective date of amended
52105. In addition to Issuing the 1997
use of special characters and any form
Interagency Questions and Answers on
Interagency Questions and Answers, we
of encryption. Comment and data will
Community Reinvestment: May 3, 1999.
proposed several questions and answers
also be accepted on disks In
We request that comments on the
in the accompanying supplementary
Wordperfect 5.1/6.1 or ASCII file
proposed questions and answers be
information. These questions and
format. All comments and data in
submitted on or before: July 2, 1999.
answers were proposed to clarify what
Federal Register 64, No. /Monday, May 3, 1999/Notices
23619
is meant by "primary purpose of
228.12 (I)(1). (j)(1), and (s); 345.12 (i)(1).
dollars involved in the entire project are
community development." We
(j)(1). and (s); and 563e.12 (h)(1), (i)(1).
concentrated on that purpose. For
specifically requested comment
and (r). In response to Inquiries about
example, federal tax-incentive
addressing the proposed questions and
whether certain activities have the
affordable housing projects, where less
answers, as well as general comments
necessary "primary purpose" of
than half the units or half the dollars go
and questions regarding the CRA
community development to qualify as a
into the portion of the project that
regulations. See 62 FR at 52108-09.
community development loan, qualified
represents affordable housing for low- or
We received 44 letters in response to
Investment or community development
moderate-income persons, fall into this
our request for comments in the 1997
service, we proposed four questions and
category. Accordingly, we are adopting
Interagency Questions and Answers.
answers (Q&As) to explain what is
without change the proposed guidance
Comments came from financial
meant by "primary purpose." With one
that emphasizes the quantitative and
institutions (16), community groups
clarifying change, which is discussed
qualitative distinctions to be made
(14), trade associations (6). federal
below, we are adopting the previously
when evaluating eligible community
entities (6). and state/local agencies (2).
proposed Q&A7 addressing §§
.12(i)
development loans, qualified
This document supplements, revises,
and 563e.12(h). Q&A1 addressing
investments, or community
and republishes the 1997 Interagency
§
.22(b)(4), Q&A1 addressing
development services.
Questions and Answers based, in part,
§
.23(e), and Q&A3 addressing
Q&A 7 addressing §§
.12(i) and
on questions and comments received
§
.42(b)(2).
563e.12(h) is based on the preamble to
from examiners, financial institutions,
Twenty commenters addressed topics
the final rule set forth at 60 FR 22,156,
and other interested parties, and on
related to the proposed Q&As. The
22,159 (May 4, 1995), which states that
comments received in response to our
commenters were generally in favor of
activities not designed for the express
request for comments.
the proposed Q&As. Seven commenters
purpose of community development (as
This document adopts the four
supported greater flexibility for
defined in the regulations) are not
questions and answers proposed In 1997
examiners when considering whether to
eligible for consideration as community
and thirteen new questions and
give CRA consideration to certain loans.
development loans or services or
answers, revises seven other questions
(These seven commenters also raised
qualified investments. The preamble
and answers, and proposes three new or
issues regarding the definition of
further states that providing indirect or
revised questions and answers for
"community development" in the
short-term benefits to low- or moderate-
comment. A discussion of these
regulations, which is discussed below.)
Income persons does not make an
questions and answers follows.
Three commenters, however, felt that
activity community development. In
Questions and answers are grouped
examiners rely too heavily on
addition to incorporating this guidance
by the provision of the CRA regulations
mathematical formulas in making this
into these Interagency Questions and
that they discuss and are presented in
determination. such as the amount of
Answers, the answer Identifies the kind
the same order as the regulatory
the low- or moderate-income set-aside,
of information used to determine
provisions. The Interagency Questions
the number of units constructed, or the
whether an activity was designed for the
and Answers employ an abbreviated
number of jobs for low-income persons
express purpose of community
method to cite to the regulations.
actually created. Six commenters
development. The answer adopts a
Because the regulations of the four
supported giving CRA consideration to
simplified threshold rule (i.e., majority)
agencies are substantially identical,
community development loans, even if
and an alternative approach for finding
corresponding sections of the different
50% or less of the proceeds are used for
sufficient bases to conclude that an
regulations usually bear the same suffix.
community development purposes. One
activity possesses the requisite primary
Therefore, the Interagency Questions
commenter suggested, however, that an
purpose.
and Answers typically cite only to the
institution should receive CRA
We are also adopting Q&A1
suffix. For example, the small bank
consideration only for that portion of a
addressing §
.22(b)(4) and Q&A1
performance standards for national
loan or investment expressly devoted to
addressing §
.23(e). which provide
banks appear at 12 CFR 25.26; for
the community development purpose.
guidance on the evaluation of activities
Federal Reserve System member banks
The agencies have generally stated
that have a primary purpose of
supervised by the Board, they appear at
that a "primary purpose" of community
community development, as well as the
12 CFR 228.26; for nonmember state
development exists when the loan,
reporting of community development
banks, at 12 CFR 345.26; and for thrifts,
investment or service is divisible and
loans. This additional guidance
at 12 CFR 563e.26. Accordingly, the
measurable In terms of the number of
emphasizes that once loans or
citation in this document would be to
dollars spent, housing units built, or
Investments are found to possess a
§
.26. In the few instances in which
individuals benefited, and when an
primary purpose of community
the suffix in one of the regulations is
identifiable majority of the dollars
development, examiners may
different, the specific citation for that
expended, units built or individuals
differentiate among community
regulation is provided.
benefited is clearly attributable to one of
development loans or qualified
the community development purposes
investments under the relevant
Adopting Questions and Answers
enumerated in the regulations.
performance criteria. This
Proposed in 1997
However, this answer does not address
differentiation may be based not only on
We are adopting the four questions
other activities that are subject to certain
the differing dollar amounts attributable
and answers addressing "primary
legal or market restraints, such that they
to the underlying community
purpose" of community development
do not reach this threshold, even though
development purpose, but also on a
activities that were proposed in 1997.
they have community development as
loan's innovation or complexity under
The definitions of "community
their purpose and result in real, long-
§
.22(b)(4) or an investment's
development loan," community
term community development benefits.
innovation, complexity, responsiveness
development service," and "qualified
Many of these projects are "designed for
or non-routine characteristics under
investment" all require a "primary
the express purpose" of achieving a
§
.23(e).
purpose of community development."
qualifying community development
Finally, we are adopting Q&A3
See 12 CFR 25.12 (I)(1). (j)(1), and (s);
purpose, even though less than half the
addressing §
.42(b)(2), which
23620
Federal Register/ 64, No. 4/Monday, May 3, 1999/Notices
explains that a loan may be reported as
Do institutions receive consideration
regulations, an Institution's investment
a community development loan if its
for originating or purchasing loans that
in a fund, which In turn Invests in a
express primary purpose is to finance an
are fully guaranteed? We are adopting a
community development project (e.g.,
affordable housing project for low- or
new Q&A, designated as Q&A4
affordable housing for low- and
moderate-income individuals, although,
addressing §
.22(a)(2), to stress that
moderate-Income individuals that
for example, only 40% of the project's
the lending test evaluates an
benefits the institution's assessment
units will actually be occupied by
institution's record of helping to meet
area(s) or a broader statewide or regional
individuals or families with low or
the credit needs of its assessment area(s)
area that includes one or more of the
moderate incomes. Although an
through the origination and purchase of
Institution's assessment area(s)), is a
institution would report the entire
specified types of loans, but that the test
qualified Investment.
amount of the loan, we are expanding
criteria do not take into account
How do examiners evaluate an
upon the answer proposed In 1997 to
whether or not the loans are guaranteed.
institution's qualified investment in a
clarify that examiners may make
What is the range of practices that
fund, the primary purpose of which is
qualitative distinctions among
examiners may consider in evaluating
community development, as that is
community development loans on the
the innovativeness, complexity, or
defined in the CRA regulations? Many
basis of how well each loan advances its
flexibility of an institution's lending?
financial institutions have made
community development purpose.
We have been asked whether
qualified investments in community
contracting programs, under which
development funds that operate
New Questions and Answers
institutions may commit to contracting
regionally or nationally. Examiners,
What is "affordable" housing?
with small business borrowers, may
institutions, and the funds have asked
Institutions and others have asked how
receive consideration under the CRA
for guidance on how to evaluate these
to determine whether a housing
regulations. To date, examiners
investments. We are adopting a new
development will provide "affordable"
generally have not been considering
Q&A, designated as Q&A2 addressing
such programs in reviewing an
$
housing for low- and moderate-Income
.23(e), reiterating guidance
individuals, particularly in a new
institution's CRA performance. New
previously provided in an interagency
project where the units are not yet
Q&A1 addressing §
.22(b)(5)
staff CRA interpretive letter. See
leased or sold, or in other projects
discusses the range of factors that
Interagency Staff CRA Interpretive
where the income of renters cannot be
examiners may consider in evaluating
Letter, published as OCC Interpretive
verified. It has been suggested that a
the innovativeness and flexibility of an
Letter No. 800, supra.
simple formula might be appropriate,
institution's lending practices (and the
The new Q&A explains that
such as if the mortgage payments or
complexity and innovativeness of its
examiners evaluate investments that
rental expenses amount to less than
community development lending). It
benefit an institution's assessment
makes clear that, even though
area(s) or a broader statewide or regional
30% of the income of individuals or
contracting programs are not, standing
area that includes its assessment area(s)
families who are low- or moderate-
alone, considered in connection with a
using the investment test's four
Income (i.e., have an Income that is less
CRA evaluation, such programs may
performance criteria. When determining
than 80% of the area median income).
enhance the success and effectiveness of
the dollar amount of the investment (the
We believe, however. that the critical
a related lending program. Therefore,
first criterion). examiners rely on the
consideration is the extent to which a
certain contracting programs may
figures the institution records according
project is or likely will be utilized by
warrant consideration as examiners
to generally accepted accounting
low- or moderate-income individuals. A
review the innovativeness, complexity,
principles. Even though different
formula based solely on rents as a
and flexibility of an institution's lending
institutions may employ different
percentage of median family income
practices. The Q&A also provides
investment strategies, institutions
may determine this accurately in some
another example of when examiners
making the same dollar amount of
circumstances, but may fail to do so in
may consider related program activities
Investments over the same number of
others. For example, in an area with
in connection with an evaluation of an
years, all other performance criteria
relatively low-cost housing, such a
institution's lending performance.
being equal, would receive the same
formula may result in a calculation
May an institution receive
level of consideration.
above even the median housing cost for
consideration for a qualified investment
The remaining three performance
the area. Therefore, we believe that it is
if it invests indirectly through a fund
criteria-the "qualitative" criteria of
appropriate to look at several factors,
with a community development
innovativeness and complexity,
such as median rents of the assessment
purpose, as that is defined in the CRA
responsiveness, and the degree to which
area and the project, the median home
regulations? We are adopting a new
the investment is not routinely provided
value of either the assessment area, low-
Q&A, designated as Q&A1 addressing
by private investors-will provide the
and moderate-income geographies or the
§
23(a), that incorporates guidance
basis for examiner differentiation among
project, the low- and moderate-income
previously provided in Interagency staff
investments. Examiners also will
population in the area of the project, or
interpretive letters. See, e.g., Interagency
consider factors relevant to the
the past performance record of the
Staff CRA Interpretive Letter, published
institution's CRA performance context,
organization(s) undertaking the project
as OCC Interpretive Letter No. 800,
such as the effect of outstanding long-
in determining whether a housing
(1997 Transfer Binder) Fed. Banking L.
term qualified Investments, the pay-in
development does or likely will benefit
Rep. (CCH), 81-227 (Sept. 11, 1997).
schedule, and the amount of any cash
low- and moderate-income individuals.
In those letters, staff stated that the
call, on the capacity of the institution to
To clarify this position, we are
direct or indirect nature of a qualified
make new investments.
adopting Q&A1 addressing
investment does not affect whether an
How do examiners evaluate an
§§
.12(h)(1) and 563e.12(g)(1),
institution will receive consideration for
institution's activities in connection
which discusses the types of factors that
the Investment during Its CRA
with "Individual Development
examiners consider when determining
evaluation. As long as the primary
Accounts"? Individual Development
whether housing is "affordable" to low-
purpose of the Investment Is community
Accounts (IDAs) generally are matched
and moderate-Income individuals.
development, as defined in the CRA
savings accounts designed to help low-
Federal Register 64, No. Monday, May 3, 1999 Notices
23621
and moderate-income families
Interagency Staff CRA Interpretive
development services sometimes require
accumulate savings for education or job
Letter, published as OCC Interpretive
special expertise and effort on the part
training, down-payment and closing
Letter No. 801, (1997 Transfer Binder)
of the institution and provide a direct
costs on a new home, or start-up capital
Fed. Banking L. Rep. (CCH), I 81-228
benefit to the community that would not
for a small business. Once IDA
(Sept. 11, 1997). Examiners first
otherwise be possible.
participants have successfully funded
determine whether the institution has
We are adopting a new Q&A,
an IDA, their personal IDA savings are
adequately addressed the needs of its
designated as Q&A2 addressing
matched by a public or private entity,
assessment area(s). In doing so,
§
.28, which explains that the
such as a state or local government,
examiners also consider qualified
agencies consider the qualitative aspects
church, foundation, or financial
Investments that benefit a broader
of an Institution's activities when
institution. Participating depositors
statewide or regional area that Includes
measuring the benefits received by the
often receive training in the basics of
the institution's assessment area(s). If
community. These qualitative aspects of
money management, including
examiners find that the institution has
an institution's performance may
budgeting, saving, and credit repair. In
adequately addressed the needs of its
augment the consideration given to an
addition, an entity, such as a
assessment area(s). they will give
institution's performance under the
community organization, typically
consideration to nationwide qualified
quantitative criteria of the regulations,
monitors participants' withdrawals from
investments, community development
resulting in a higher level of
their IDAs.
loans, and community development
performance and rating.
Financial institutions may participate
services.
When collecting and reporting, if
in IDA programs in a number of ways,
Are innovative loan products,
applicable, the gross annual revenue or
including: offering accounts, which may
innovative or complex qualified
income of small business or farm or
be structured as traditional savings
investments, and innovative community
consumer borrowers, do institutions use
accounts; enhancing accounts by
development services necessary for a
the gross annual or the adjusted gross
offering special account benefits,
"satisfactory" or "outstanding" CRA
annual revenue or income? In response
including higher interest rates, ATM
rating? Two commenters expressed
to questions from financial institutions,
services, or waived minimum balance
concern that examiners might discount
we are adopting two new Q&As
requirements; providing funding in the
community development loans if they
clarifying that institutions should
form of matching funds for participants
are not considered to be "innovative."
collect and report gross annual revenue
or operating support for community
As one commenter stated, innovation is
(for small businesses and small farms)
organizations running the IDA program:
only one of the four criteria considered
and gross annual income (for
helping to design and implement IDA
when examiners evaluate an
consumers) rather than adjusted gross
programs, Including developing and
institution's responsiveness to
annual revenue or Income. The new
teaching financial literacy courses; and
community development needs.
We are adopting a new Q&A1,
Q&As are designated as Q&A4
making loans to participants once they
§
.28, to clarify that
addressing §
.42(a)(4) and Q&A3
have achieved their savings goals.
addressing
The extent of each financial
innovative practices are not required for
addressing §
.42(c)(1)(iv).
institution's Involvement in IDAs and
an "outstanding" or "satisfactory"
The purpose of collecting and
the products and services offered in
rating. Innovative loan products,
reporting gross annual revenue data for
small businesses and small farms is to
connection with the accounts will vary.
innovative or complex qualified
Therefore, examiners will evaluate the
Investments, and innovative community
enable examiners and the public to
actual services and products provided
development services may augment
judge whether an institution is lending
consideration of an institution's
to small businesses and farms, or
by each institution in connection with
the IDA programs as one or more of the
performance under the quantitative
whether it is only making small loans to
following: community development
criteria of the performance tests,
larger businesses and farms. Similarly.
services, retail banking services,
resulting in a higher level of
gross annual income information is
qualified investments, home mortgage
performance and rating. The Q&A also
collected from consumer borrowers to
loans, small business loans, consumer
makes clear that the lack of innovative
help examiners determine the
loans. or community development
or complex investments, loans, or
distribution of the institution's
loans. We are adopting a Q&A,
services alone will not result in a
consumer loans based on borrower
designated as Q&A2 addressing
"needs to improve" rating.
characteristics, including the number
§
.24(d). which articulates this
How is performance under the
and amount of consumer loans to low-,
opinion.
quantitative and qualitative
moderate-, middle-; and upper-income
How do examiners evaluate a
performance criteria weighed when
borrowers.
wholesale or limited purpose
examiners assign a CRA rating? The
May an institution keep the compact
institution's qualified investment in a
lending, investment, and service tests
disc that contains its CRA Disclosure
fund that invests in projects nationwide,
each contain a number of performance
Statement, which is distributed by the
the purpose of which is community
criteria designed to measure whether an
FFIEC, in its public file, rather than a
development, as that term is defined in
Institution Is effectively helping to meet
paper copy of the information? Several
the CRA regulations? We are adopting a
the credit needs of its entire community,
institutions asked whether they may
new Q&A. designated as Q&A1
including low- and moderate-income
retain the compact disc that contains the
addressing § .25(e), memorializing
neighborhoods, in a safe and sound
CRA Disclosure Statement provided by
guidance previously provided in
manner. Some of these criteria are
the FFIEC in its public file rather than
interagency staff interpretive letters,
quantitative (number and amount).
a paper copy. We are adopting a new
which clarifies how examiners evaluate
while others are qualitative
Q&A2 addressing §
.43(b)(1). which
qualified Investments made by
(innovativeness, complexity,
clarifies that an institution may keep the
wholesale or limited purpose
responsiveness, or flexibility). The
compact disc (or a duplicate of the
institutions in a community
qualitative performance criteria
compact disc) in its public file at its
development fund that invests in
recognize that certain loans, qualified
main office and the designated branch
projects nationwide. See, e.g.,
Investments, and community
in each state as long as the Institution
23622
Federal Register/Vol. 64, No. /Monday, May 3, 1999 Notices
can readily print the Information upon
that limiting the purpose test to
consistently stated that the mere
request.
activities that, for example, provide Jobs
purchase of stock in the Federal Home
Must an institution's performance fit
in low- and moderate-income areas
Loan Banks (FHLBs) does not have a
each aspect of a particular rating profile
targeted for redevelopment by the
sufficient connection to community
in order to receive that rating? We are
government would exclude financing to
development to be considered as a
adopting a new Q&A1 addressing
open a facility in a low- or moderate-
qualified investment.
Appendix A to Part
-Ratings to
income area that is not targeted by the
Institutions. however, have asked us
clarify that exceptionally strong
government for redevelopment.
about how their activities In connection
performance by an institution in some
We determined that the explanation
with certain specific AHP projects are
aspects of a particular rating profile may
of the purpose test in the 1997
considered during their CRA
compensate for weak performance in
Interagency Questions and Answers was
evaluations. Institutions that are
others, thus permitting the Institution to
incomplete. We are revising the answer
members of a FHLB typically provide a
earn that rating. The Q&A describes
to be less restrictive by stating that an
high level of technical assistance to
retail institutions that use non-branch
activity promotes economic
prospective borrowers in preparing the
delivery systems to obtain deposits and
development if it supports "permanent
application for AHP funds and ensuring
to deliver loans, as an example. Almost
job creation, retention, and/or
that the borrower meets the eligibility
all of the loans originated by such an
improvement for persons who are
criteria. Although an institution does
institution may be outside of its
currently low- or moderate-income, or
not necessarily provide a loan in
assessment area(s). The Q&A assumes,
supports permanent job creation,
connection with an AHP project, it does
for purposes of illustration, that
retention, and/or Improvement either in
disburse the funds for the FHLB and
examiners may find, after considering
low- or moderate-income geographies or
monitor the continued qualified use of
the Institution's performance context
in areas targeted for redevelopment by
the funds. We believe these activities to
and other regulatory considerations, that
Federal, state, local or tribal
be community development services
such an Institution shows weak
governments."
and are revising the second bullet in
performance under the lending test
Examiners will continue to presume
Q&A 3 addressing §§
.12(j) and
criteria applicable to lending activity,
that any loan or investment in or to a
563e.12(i) to so state.
geographic distribution, and borrower
SBDC or SBIC promotes economic
If an institution's employees develop
characteristics within the assessment
development. Funding provided in
or teach financial education curricula
area. It clarifies that the institution may
connection with other SBA programs, as
for low- or moderate-income students,
compensate for such weak performance
well as similar state and local programs,
are such activities community
by exceptionally strong performance in
may also promote economic
development services? We are revising
community development lending in its
development; however, examiners will
the fifth bullet of Q&A3 addressing
assessment area or a broader statewide
make their determinations based on
§§
.12(j) and 563e.12(i) to
or regional area that includes its
business types, funding purposes, and
Incorporate guidance previously
assessment area.
other relevant information.
provided in interagency staff
Consistent with Q&A2 addressing
Interpretive letters. See, e.g., Interagency
Revised Questions and Answers
§
.28, Q&A1 addressing
Staff CRA Interpretive Letter, published
What does "promote economic
§§
.12(h)(3) and 563e.12(g)(3) also
as OCC Interpretive Letter No. 802,
development" mean? The CRA
clarifies that examiners will make
(1997 Transfer Binder) Fed. Banking L.
regulations define the term "community
qualitative assessments in connection
Rep. (CCH), [81-229 (Sept. 17. 1997).
development" to include "activities that
with an institution's community
Specifically, we are clarifying that
promote economic development by
development activities in addition to
institutions may receive CRA
financing businesses or farms that meet
the quantitative assessment of its
consideration for the services provided
the size eligibility standards of the
activities.
by its employees in developing financial
Small Business Administration's
Does "rehabilitation of affordable
education curricula or teaching
Development Company (SBDC) or Small
housing or community facilities"
financial education courses to low- or
Business Investment Company (SBIC)
include the abatement of environmental
moderate-income students.
programs (13 CFR 121.301) or have
hazards, such as lead-based paint, that
Is providing Electronic Transfer
gross annual revenues of $1 million or
are present in the housing or facilities?
Accounts pursuant to the Debt
less." 12 CFR 25.12(h)(3). 228.12(h)(3),
Three commenters asked us to state that
Collection Improvement Act of 1996 a
345.12(h)(3) and 563e.12(g)
loans for the removal of environmental
community development service? The
The 1996 Interagency Questions and
hazards (particularly lead-based paint)
terms, costs, and features of low-cost
Answers included a Q&A, Q&A1
may be community development loans.
accounts offered by financial
addressing §§
.12(h)(3) and
We believe the abatement of
institutions may vary depending on the
563e.12(g)(3). concerning whether all
environmental hazards could be a part
particular needs of the institutions' low-
activities that finance small businesses
of rehabilitating affordable housing or
and moderate-income customers. In
or farms promote economic
community facilities targeted to low-
response to an inquiry we received
development. The 1997 Interagency
and moderate-Income individuals;
concerning whether a particular account
Questions and Answers revised that
rehabilitation of these facilities has
for federal benefits payments would be
Q&A in response to public comments.
already been identified as an example of
considered to be a community
Since publication of the 1997
a community development purpose. To
development service, we are revising
Interagency Questions and Answers, we
clarify this position, we are adding a
Q&A3 addressing §§
.12(j) and
have received 11 comments about this
sentence to Q&A1 addressing
563e.12(i) by amending the seventh
revised Q&A.
§§
.12(i) and 563e.12(h).
bullet to provide an example of one low-
One commenter asserted that the
Are an institution's activities in
cost transaction account targeted to low-
description of the purpose test, i.e., that
connection with the Federal Home Loan
and moderate-Income individuals.
the activity must promote economic
Banks' Affordable Housing Program
Under the provisions of the Debt
development, was too restrictive.
(AHP) considered when the institution's
Collection Improvement Act of 1996
Specifically, the commenter believed
CRA performance is evaluated? We have
relating to electronic payment of federal
Federal Register/ 64, No. /Monday, May 3, 1999/Notices
23623
benefits payments (EFT ''99), codified at
answer by adding the phrase, "or
Accordingly, we are clarifying in Q&A1
31 U.S.C. 3332, insured depository
multifamily housing.' In addition,
that institutions need not report small
institutions may offer basic, low-cost
examiners may also consider loans for
farm loan data as to loans having
"electronic transfer accounts" (ETAs)
multifamily housing as community
original amounts greater than $500,000.
specified in Treasury Department
development loans if they are targeted
What are the data requirements
regulations (63 FR 51490) to recipients
to low- and moderate-income
regarding consumer loans?
of federal benefits payments. These
individuals, or if they benefit middle- or
We have revised Q&A1 addressing
accounts are designed to attract low-
upper-income borrowers as part of a
§
.42(c)(1) to clarify that our
income persons who do not currently
plan to encourage attracting mixed-
questions and answers written with
have account relationships with Insured
income residents to stabilize and create
respect to data collection (and reporting)
depository institutions. A demographic
an economically diverse area out of a
in connection with small business and
and market analysis commissioned by
low- or moderate-income geography.
small farm loans also apply to the
the Treasury Department in connection
How should an institution collect and
collection of consumer loan data.
with EFT "99 concluded that ETA
report the location of a loan made to a
Discussion of Other Comments
account holders are likely to be
small business or small farm if the
Received
primarily individuals with less than
borrower provides an address consisting
of a post office box number or rural
We received several other comments
$10,000 in annual income. Therefore,
the ETA is an account targeted to low-
route and box number?
that are not addressed by specific
and moderate-income individuals and
We adopted Q&A10 addressing
questions and answers.
providing such accounts qualifies as a
§
.42(a) in the 1997 Interagency
Community development. Several
community development service.
Questions and Answers answering this
commenters suggested that the current
Under the lending test, how will
question. In response to this Q&A, we
definition of "community development"
examiners evaluate home mortgage
received nine comments. Several
does not Include all the types of
loans to middle- or upper-income
commenters questioned the accuracy
activities that Institutions engage in and
individuals in a low- or moderate-
and usefulness of data collected and/or
that should be considered as having a
income geography? We received 24
reported without the census tract or
community development purpose.
letters commenting on Q&A5 addressing
block numbering area (BNA). One
Before adopting the definition of
§
.22(b) (2) & (3). The commenters
commenter stated that we should allow
"community development" in the
generally were in agreement that loans
institutions more lead time when
revised regulations in 1995, the agencies
to middle- or upper-income individuals
providing interpretations of data
received and considered a number of
in a low- or moderate-income geography
collection and reporting provisions to
comments on the characteristics of
should receive CRA consideration.
allow the institutions to change their
activities with community development
Some commenters were concerned that
reporting systems, if necessary. We
purposes. The agencies also committed
requiring that there be a revitalization or
believe that data collection according to
to conduct a complete review of the
stabilization plan for the area may be
this Q&A results in the most accurate
regulations in 2002. See 60 FR 22,177.
too restrictive, especially in rural
data, even though in some cases no
We will ensure that comments on the
communities, where a formal plan may
information about census tract or BNA
definition of "community development"
not exist. However, a "formal" plan is
is provided, but agree that sufficient
are considered at that time.
not necessary. An Informal plan, such as
time should be provided to Implement
Loan-to-deposit ratio. Two
town council resolutions, or a plan
changes to data collection procedures,
commenters raised issues regarding the
developed by a private entity, such as a
whenever possible.
use of a loan-to-deposit ratio as a
community-based development
In addition to formal comments on
measure of performance In the small
organization, may be sufficient
the Q&As, regulated institutions
institution performance test. One stated
evidence, so long as it offers evidence of
requested clarification about whether an
that the loan-to-deposit ratio should not
a plan for development designed to
institution should report the census
be the only indicator of performance.
ensure economic diversity among the
tract or block numbering area (BNA) of
The other suggested that, due to their
prospective residents and not just
a location, If known, even If there is no
volatility, public funds should be
displacement of low- and moderate-
street address for that location. We are
subtracted from the deposit side of the
income individuals.
amending Q&A10 addressing
ratio prior to calculation.
One commenter stated that examiners
§
.42(a) to clarify that If the census
The first concern, the relative
should compare an institution's
tract or BNA is known, It should be
importance of the loan-to-deposit ratio
percentage of lending to low- and
reported, even If the institution does not
in the overall rating of a small
moderate-income households to the
know the street address for that
Institution, is one that the agencies
aggregate percentage of lending by all
particular location (or there is no street
routinely address in examiner training.
reporting institutions to these
address). We are also revising the Q&A
As a general matter, we agree that the
households and to the percentage of
to delete obsolete 1997 data collection
loan-to-deposit ratio Is not the only
low- and moderate-income households
instructions.
indicator of lending activity
in the area. The agencies' examination
What small business and small farm
performance. However, there may be
procedures already suggest that
data should be reported?
cases in which a loan-to-deposit ratio is
examiners may perform these types of
We are making a technical change to
so low that it indicates that the
comparisons and others, if appropriate,
Q&A1 addressing §
.42(b)(1). The
institution is not lending. In such cases,
to help them explain examination
regulations define a "small farm loan"
the proportion of lending inside the
findings.
as those included in "loans to small
institution's assessment area, together
One commenter asked whether
farms" as defined In the Instructions for
with the geographic and borrower
multifamily housing loans in low- and
preparation of the Consolidated Report
distribution of those loans, will not
moderate-income geographies would be
of Condition and Income or the Thrift
excuse the low level of lending overall.
considered In the same fashion as loans
Financial Report. These Instructions
The second concern, the subtraction
for single family housing. In response to
define such loans as having original
of public funds from the calculations of
the comment. we are clarifying the
amounts of $500,000 or less.
loan-to-deposit ratios, Is a performance
23624
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
context issue. We believe that examiners
in the context of institutions that obtain
area that includes the institution's
have the flexibility to consider the level
deposits and deliver products and
assessment area(s).
of public funds on deposit, and their
services through non-branch systems,
The text of the proposed Q&A follows:
volatility, in determining whether a
such as the Internet. We are adopting
Sections
.12(I) and 563e.12(h)
particular loan-to-deposit ratlo is
Q&A1 addressing Appendix A to Part
reasonable.
-Ratings, and are proposing a
Proposed Q5. Must there be some
Letters of credit. One commenter
revision to Q&A5 addressing
immediate or direct benefit to the
asserted that lenders should receive
§§
.12(i) and 563e.12(h), which may
institution's assessment area(s) to
consideration under the CRA
be particularly relevant to Issues arising
satisfy the regulations' requirement that
regulations for providing letters of credit
in this context. Furthermore, we expect
qualified investments and community
because institutions often use letters of
to address comments relating to out-of-
development loans or services benefit an
credit to meet small business needs.
assessment area activities through
institution's assessment area(s) or a
Q&A1 addressing §
.22(a)(2)
materials issued for public comment
broader statewide or regional area that
specifically addresses this issue and
includes the institution's assessment
later this year.
permits information about letters of
area(s)?
credit to be used by examiners to
Proposed Questions and Answers and
Proposed A5. No. The regulations, for
enhance their understanding of an
Request for Comment
example, recognize that community
institution's performance.
development organizations and
Must there be some immediate or
Loans to nonprofit organizations. One
programs are frequently efficient and
direct benefit to the institution's
commenter suggested that loans under
effective ways for institutions to
assessment area(s) to satisfy the
$1 million for business purposes, or
promote community development.
regulations' requirement that qualified
under $500,000 for farm purposes, made
These organizations and programs often
investments and community
to nonprofit organizations, should be
operate on a local, statewide, or even
development loans or services benefit an
considered community development
multi-state basis. Therefore, an
institution's assessment area(s) or a
loans even though they are secured by
Institution's activity Is considered a
broader statewide or regional area that
real property. Under the CRA
community development loan or service
includes the assessment Q&A5
regulations, these loans often must be
or a qualified investment if It supports
addressing §§
.12(i) and 563e.12(h)
counted as loans to small businesses or
an organization or activity that covers
in the 1997 Interagency Questions and
small farms rather than community
an area that is larger than, but is located
Answers states that there does not need
development loans, depending on the
in, the broader statewide or regional
to be a direct benefit to the Institution's
type of property securing the loan.
area that Includes the Institution's
Q&A1 addressing §
.12(u) addresses
assessment area(s) to satisfy the
assessment area(s). The institution's
instances in which loans to nonprofit
regulation's requirement that qualified
assessment area need not receive an
investments and community
organizations may be considered as
Immediate or direct benefit from the
community development loans.
development loans or services benefit
Institution's specific participation in the
The number and dollar amount of
an institution's assessment area(s) or a
broader organization or activity,
community development loans is a
broader statewide or regional area that
provided the purpose, mandate, or
includes the institution's assessment
criterion under the lending test that is
function of the organization or activity
meant to capture any loans for a
area, provided the purpose, mandate, or
includes serving geographies or
community development purpose that
function of the organization or activity
individuals located within the statewide
are otherwise not reported as home
includes serving geographies or
or regional area that includes the
mortgage, small business or small farm
individuals located within the
institution's assessment area.
loans. Institutions may wish to highlight
institution's assessment area.
Furthermore, the regulations permit a
the community development purpose of
The Q&A addresses organizations and
wholesale or limited purpose institution
particular loans that are considered as
activities, operating statewide or
to consider community development
home mortgage, small business or small
regionally, that may ultimately have a
loans, community development
farm loans during an examination. Such
direct benefit on an assessment area.
services, and qualified investments
information may be relevant to the
However, It does not specifically
wherever they are located, as long as the
examiners' evaluation of qualitative
address local community development
Institution has otherwise adequately
lending test criteria or to the
organizations or activities serving a
addressed the credit needs within its
performance context within which
locale somewhere in the broader
assessment area(s).
community development loans are
statewide or regional area surrounding
In addition to general comments
evaluated. The regulation is clear,
an institution's assessment area(s),
agreeing or disagreeing with the
however, that, except for loans for
which may not benefit low- and
proposed revisions to this Q&A, we
multifamily housing targeted for low-
moderate-income areas or individuals
would like comments on whether
and moderate-income individuals, home
located inside the assessment area(s).
community development organizations
mortgage, small farm. and small
We are proposing to revise that Q&A to
and programs that operate on a local,
business loans may not be reported as
address both types of organizations or
statewide, or even multi-state basis
community development loans.
activities. The proposed Q&A would
ultimately provide benefit to all
Assessment areas and non-branch
clarify that an Institution's assessment
surrounding areas.
delivery systems. We received several
area(s) need not receive an Immediate or
May an institution receive
letters requesting clarification of how
direct benefit from the institution's
consideration under the investment test
examiners evaluate a retail institution's
specific participation in a community
for mortgage-backed securities backed
lending, Investment, and service
development organization or activity
by home mortgages that the same
activities outside the Institution's
provided the purpose, mandate, or
institution originated or purchased? We
assessment area(s) and the broader
activity benefits the broader statewide
have received inquiries about whether
statewide or regional area that Includes
or regional area by servicing geographies
examiners will consider as qualified
its assessment area(s). This question has
or individuals located somewhere
Investments mortgage-backed securities
been of special concern to commenters
within the broader statewide or regional
backed by home mortgages to low- and
Federal Register/Vol. 64, No. 34/Monday, May 3, 1999/Notices
23625
moderate-income individuals that the
note Is written. Distinguishing
loans outstanding. The text of the first
investing institution initially originated
refinancings and renewals on this basis
alternative proposed Q&A follows:
or purchased.
is consistent with the guidance
Section
.42(a)-Alternative I:
The revised regulations. at 12 CFR
provided by the Board in connection
.23(b). provide that activities
with home mortgage loan data reporting
Proposed Q5: Should institutions
considered under the lending or service
pursuant to the Home Mortgage
collect and report data about small
tests may not be considered under the
Disclosure Act (HMDA) regulation (12
business and small farm loans that are
investment test. Examiners consider the
CFR part 203).
refinanced or renewed?
home mortgages underlying mortgage-
Commenters asserted that small
Proposed A5: No. When an Institution
backed securities, If originated or
business and small farm lending
extends the term of one of Its existing
purchased by the institution, under the
practices are sufficiently different from
small business or small farm loans in
lending test when they examine an
home mortgage lending practices that
the same or a lesser amount as the
institution. Therefore, examiners would
renewals and refinancings of small
existing obligation, the institution
not be permitted also to consider as
business and small farm loans should be
should not report this event as a small
qualified Investments mortgage-backed
treated differently from renewals and
business or small farm loan origination.
securities, purchased or securitized by
refinancings of home mortgage loans for
If an institution increases the amount of
an institution, that are backed primarily
CRA reporting and evaluation purposes.
a small business or small farm loan
or exclusively by loans that the
Further, they suggested that there is
when it extends the term of the loan,
institution originated or purchased.
very little distinction between
however, it should report the amount of
because the examiners would be
refinancings and renewals of small
the increase as a small business or small
considering the same activities under
business and small farm loans. Based on
farm loan origination. The institution
both the lending and investment tests.
these comments and other inquiries
should report only the amount of the
To clarify our opinion, we are
from financial institutions. we propose
increase; the original or remaining
proposing. and requesting public
that refinancings and renewals of small
amount of the loan is not reported again
comment specifically on, the following
business and small farm loans be treated
as an origination. For example. a
question and answer:
uniformly for CRA purposes. To that
financial institution extends a loan (as
Section
.23(b)
end, we are proposing two alternative
opposed to a line of credit) for $25,000;
revised Q&A5s addressing §
.42(a).
principal payments have resulted in a
Proposed Q2: If home mortgage loans
to low-and moderate-income borrowers
Alternative I: The first proposed Q&A
present outstanding balance of $15,000.
have been considered under an
states that, for CRA purposes, financial
The customer requests an additional
institution's lending test, may the
institutions should report neither
$5,000. which is approved, and a new
institution that originated or purchased
renewals nor refinancings of small
note is written for $20,000. In this
business and small farm loans as loan
example, the institution should report
them also receive consideration under
originations. However, If institutions
the $5,000 increase.
the investment test if it subsequently
purchases mortgage-backed securities
increase the amount of a small business
An institution may provide "other
that are primarily or exclusively backed
or small farm loan or line of credit, the
loan data," including information about
by such loans?
amount of the increase should be
small business or small farm loans
Proposed A2: No. Because the
reported as a loan origination.
outstanding, to examiners for
institution received lending test
Institutions should continue to report
consideration as part of the institution's
consideration for the loans that underlie
home mortgage loans according to the
lending test performance evaluation.
the securities, the institution may not
instructions provided In 12 CFR part
Alternative II: Several Institutions
also receive consideration under the
203.
have stressed that ongoing credit
Investment test for its purchase of the
Reporting neither renewals nor
availability is important to the economic
securities. Of course, an institution may
refinancings of small business or small
condition of small businesses and small
receive investment test consideration for
loans reflects that the lending test's
farms, as well as the community as a
purchases of mortgage-backed securities
performance criteria emphasize loan
whole. These institutions suggested that
that are backed by loans to low-and
originations and purchases. Renewals
both refinancings and renewals of small
moderate-income individuals as long as
and refinancings, especially If made
business and small farm loans should be
the securities are not backed primarily
frequently, would Inflate the actual
considered by examiners when
or exclusively by loans that the same
amounts of small business and small
evaluating an institution's small
institution originated or purchased.
farm lending. In addition, we believe
business and small farm lending
Should renewals and refinancings of
that recordkeeping and reporting burden
performance. The second alternative
small business and small farm loans be
of large institutions will be lessened If
proposed Q&A would take these
collected and reported? Six commenters
they need not collect and report
concerns into consideration.
inquired whether loans to small
information about small business and
Because small business and small
businesses and small farms, when
small farm loan refinancings and
farm loan refinancings and renewals are
renewed or refinanced, should be
renewals.
nearly indistinguishable, Alternative II,
reported for CRA purposes. The 1997
If this proposed Q&A is adopted,
like Alternative I, would not treat small
Interagency Questions and Answers, at
institutions would not collect or report
business and small farm refinancings
Q&A5 addressing §
.42(a), provided
as loan originations data on either small
and renewals differently. Institutions
guidance that "refinancing" such loans
business and small farm loan
would collect and report data about
should be reported as originations, but
refinancings or renewals. However, any
both reflnancings and renewals as loan
that "renewing" them should not.
institution could bring to its examiners'
originations. However, because
According to the guidance, the primary
attention data on small business and
institutions often write small business
distinction between "refinancing" and
small farm loan refinancing or renewals
and small farm loans for short terms and
"renewing" a loan Is that, in connection
by providing "other loan data" pursuant
refinance or renew them at the end of
with a loan refinancing, the existing
to
§
22(a)(2), including Information
the term, in order to avoid Inflation of
obligation or note is satisfied, and a new
about its small business and small farm
amounts actually lent, Institutions
23626
Federal Register/Vol. 64, No. /Monday, May 3, 1999/Notices
would be limited to reporting only one
institutions? Which alternative is less
provide clear, understandable
origination per year.
burdensome?
regulations and to comply with the
The text of the second alternative
Which alternative (including the
spirit of the SBREFA, the agencies have
proposed Q&A follows:
guidance currently in effect) best
compiled the Interagency Questions and
Section
42(a)-Alternative II:
promotes accurate data that reflects the
Answers. The Interagency Questions
Proposed Q5: Should institutions
actual lending activity of financial
and Answers serve the same purpose as
collect and report data about small
institutions?
the compliance guide described in the
business and small farm loans that are
Depending on what final guidance we
SBREFA by providing guidance on a
refinanced or renewed?
eventually adopt, we understand that
variety of issues of particular concern to
Proposed A5: An institution should
we may have to make conforming
small banks and thrifts.
collect information about small business
changes to other Q&As.
and small farm loans that they refinance
Until a new Q&A has been adopted
The text of the Interagency Questions
and Answers follows:
or renew as loan originations. (A
through publication in the Federal
refinancing generally occurs when the
Register, the existing Q&A5 addressing
Text of the Interagency Questions and
existing loan obligation or note is
§
.42(a) remains in effect. This
Answers
satisfied, and a new note is written,
means that, for the time being, financial
institutions will continue to collect and
Interagency Questions and Answers
while a renewal refers to an extension
report data about small business and
Regarding Community Reinvestment
of the term of a loan.) When reporting
small farm loan refinancings, but not
Table of Contents
small business and small farm loan data,
renewals.
however, an institution may only report
This document provides answers to
one origination per loan per year unless
General Comments
questions pertaining to the following
an increase In the loan amount Is
provisions and topics of the CRA regulations:
In addition to the specific request for
granted.
comments on the proposed questions
§
.11-Authority, Purposes, and Scope
If an Institution increases the amount
and answers, we invite public comment
§
.11(c) Scope
of a small business or small farm loan
on the new and revised questions and
25.11(c)(3), 228.11(c)(3) & 345.11(c)(3)
when it extends the term of the loan, it
answers. We also Invite public comment
Certain special purpose banks
should always report the amount of the
on a continuing basis on any issues
§
12-Definitions
increase as a small business or small
raised by the CRA and these Interagency
farm loan origination. The institution
§
.12(a) Affiliate
Questions and Answers. If, after reading
should report only the amount of the
§§
.12(f) & 563e.12(e) Branch
the Interagency Questions and Answers,
increase If the original or remaining
§§
.12(h) & 563e.12(g) Community
financial institutions, examiners,
amount of the loan has already been
development
community organizations, or other
§§
.12(h)(1) & 563e.12(g)(1) Affordable
reported one time that year. For
interested parties have unanswered
housing (Including multifamily rental
example, a financial Institution makes a
questions or comments about the
housing) for low- or moderate-Income
loan (as opposed to a line of credit) for
agencies' community reinvestment
Individuals
$25,000; principal payments have
regulations, they should submit them to
§§
12(h)(3) & 563e.12(g)(3) Activities
resulted in a present outstanding
the agencies or the FFIEC. We will
that promote economic development by
balance of $15,000. The customer
consider addressing such questions in
financing businesses or farms that meet
requests an additional $5,000. which is
future revisions to the Interagency
certain size eligibility standards
approved, and a new note is written for
§§
.12(i) & 563e.12(h) Community
Questions and Answers.
$20,000. In this example, the institution
development loan
should report the $5,000 increase. The
Small Business Regulatory Enforcement
§§
.12(j) & 563e.12(i) Community
bank may also report the renewal or
Fairness Act of 1996 (SBREFA)
development service
§§
.12(k) & 563e.12(j) Consumer loan
refinancing of the $15,000 balance one
The SBREFA requires an agency, for
§§
.12(m) & 563e.12(1) Home mortgage
time that year.
each rule for which it prepares a final
loan
An institution may provide "other
regulatory flexibility analysis, to publish
§§
.12(n) & 563e.12(m) Income level
loan data," including information about
one or more compliance guides to help
§§
.12(o) & 563e.12(n) Limited purpose
small business or small farm loans
small entities understand how to
Institution
outstanding, to examiners for
comply with the rule.
§§
.12(s) & 563e.12(r) Qualified
consideration as part of the institution's
Pursuant to section 605(b) of the
Investment
lending test performance evaluation.
Regulatory Flexibility Act, the agencies
§
.12(t) Small Institution
In addition to general comments
certified that their proposed CRA rule
§
12(u) Small business loan
about these proposed questions and
would not have a significant economic
§
.12(w) Wholesale institution
answers, we would also appreciate
impact on a substantial number of small
§
.21-Performance Tests, Standards,
receiving your views on the following
entities and invited public comments on
and Ratings, in General
questions:
that determination. See 58 FR 67478
§
.21(a) Performance tests and standards
Are there other fair and meaningful
(Dec. 21, 1993): 59 FR 51250 (Oct. 7,
§
.21(b) Performance context
alternative methods of collecting data
1994). In response to public comment,
§
.21(b)(2) Information maintained by
on small business and small farm loan
the agencies voluntarily prepared a final
the institution or obtained from
renewals and reflnancings? If so, please
regulatory flexibility analysis for the
community contacts
describe.
joint final rule, although the analysis
§
.21(b)(4) Institutional capacity and
Does allowing collection and
was not required because it supported
constraints
reporting data of one renewal or
the agencies' earlier certification
§
21(b)(5) Institution's past
performance and the performance of
refinancing per year make sense?
regarding the proposed rule. Because a
similarly situated lenders
Will these proposed questions and
regulatory flexibility analysis was not
answers increase or decrease
required, section 212 of the SBREFA
§
.22-Lending Test
substantially the data collection and
does not apply to the final CRA rule.
§
22(a) Scope of test
reporting burden of financial
However, in their continuing efforts to
§
.22(a)(1) Types of loans considered
Federal Register/ 64, No. Monday, May 3, 1999/Notices
23627
§
22(a)(2) Loan originations and
§
41-Assessment Area Delineation
correspondent banks, trust companies,
purchases/other loan data
§
41(a) In general
or clearing agents or engage only in
§
22(b) Performance criteria
§
.41(c) Geographic area(s) for
specialized services, such as cash
§
22(b)(1) Lending activity
institutions other than wholesale or
management controlled disbursement
§
.22(b)(2) & (3) Geographic
limited purpose institutions
services. A financial institution,
distribution and borrower characteristics
§
.41(c)(1) Generally consist of one or
however, does not become a special
§
22(b)(4) Community development
more MSAs or one or more contiguous
purpose bank merely by ceasing to make
lending
political subdivisions
§
.22(b)(5) Innovative or flexible
loans and, instead, making investments
§
.41(d) Adjustments to geographic
lending practices
area(s)
and providing other retail banking
§
22(c) Affiliate lending
§
.41(e) Limitations on delineation of an
services.
§
.22(c)(1) In general
assessment area
Q2. To be a special purpose bank,
§
22(c)(2) Constraints on affiliate
§
.41(e)(3) May not arbitrarily exclude
must a bank limit its activities in its
lending
low- or moderate-income geographies
charter?
§
.22(c)(2)(i) No affiliate may claim a
$
.41(e)(4) May not extend
A2. No. A special purpose bank may,
loan origination or loan purchase If
substantially beyond a CMSA boundary
but is not required to, limit the scope of
another Institution claims the same loan
or beyond a state boundary unless
its activities in its charter, articles of
origination or purchase
located In a multistate MSA
association or other corporate
§
.22(c)(2)(II) If an institution elects to
§
.42(a) Loan information required to be
have its supervisory agency consider
collected and maintained
organizational documents. A bank that
loans within a particular lending
§
.42(a)(2) Loan amount at origination
does not have legal limitations on its
category made by one or more of the
§
.42(a)(3) The loan location
activities, but has voluntarily limited its
institution's affiliates in a particular
§
42(a)(4) Indicator of gross annual
activities, however, would no longer be
assessment area, the Institution shall
revenue
exempt from Community Reinvestment
elect to have the agency consider all
§
.42(b) Loan information required to be
Act (CRA) requirements if it
loans within that lending category In that
reported
subsequently engaged in activities that
particular assessment area made by all of
§
.42(b)(1) Small business and small
involve granting credit to the public in
the institution's affiliates
farm loan data
the ordinary course of business. A bank
§
.22(d) Lending by a consortium or a
§
.42(b)(2) Community development
third party
loan data
that believes it is exempt from CRA as
§
42(b)(3) Home mortgage loans
a special purpose bank should seek
§
.23-Investment Test
§
42(c) Optional data collection and
confirmation of this status from its
§
.23(a) Scope of test
maintenance
supervisory agency.
§
23(b) Exclusion
§
42(c)(1) Consumer loans
.23(e) Performance criteria
§
§
.12-Definitions
§
42(c)(1)(iv) Income of borrower
§
.42(c)(2) Other loan data
§
.24-Service Test
§
12(a) Affiliate
§
.42(d) Data on affiliate lending
§
24(d) Performance criteria-retail
Q1. Does the definition of "affiliate"
banking services
§
.43-Content and Availability of Public
include subsidiaries of an institution?
§
.24(d)(3) Availability and
File
A1. Yes, "affiliate" includes any
effectiveness of alternative systems for
§
.43(a) Information available to the
company that controls, is controlled by.
delivering retail banking services
public
or is under common control with
§
.43(a)(1) Public comments
§
.25-Community Development Test for
.43(b) Additional Information available
another company. An institution's
§
Wholesale or Limited Purpose Institutions
to the public
subsidiary is controlled by the
§
.25(d) Indirect activities
§
.43(b)(1) Institutions other than small
Institution and is, therefore, an affiliate.
§
.25(e) Benefit to assessment area(s)
Institutions
§§
.12(f) & 563e. 12(e) Branch
§
.25(f) Community development
§
.43(c) Location of public information
performance rating
Q1. Do the definitions of "branch,"
§
44-Public Notice by Institutions
"automated teller machine (ATM)." and
§
.26-Small Institution Performance
§
.45-Publication of Planned
Standards
"remote service facility (RSF)" include
Examination Schedule
mobile branches, ATMs, and RSFs?
§
26(a) Performance criteria
§
26(a)(1) Loan-to-deposit ratio
-Ratings
A1. Yes. Staffed mobile offices that
Appendix A to Part
are authorized as branches are
§
.26(a)(2) Percentage of lending within
Appendix B to Part
-CRA Notice
assessment area(s)
considered "branches" and mobile
§
.26(a)(3) and (4) Distribution of
The body of the Interagency
ATMs and RSFs are considered "ATMs"
lending within assessment area(s) by
Questions and Answers Regarding
and "RSFs."
borrower income and geographic
Community Reinvestment follows:
Q2. Are loan production offices
location
§
.11-Authority, Purposes, and
(LPOs) branches for purposes of the
§
26(b) Performance rating
Scope
CRA?
§
.27-Strategic Plan
A2. LPOs and other offices are not
§
.11(c) Scope
"branches" unless they are authorized
§
27(c) Plans in general
§
.27(f) Plan content
25.11(c)(3), 228.11(c)(3) &
as branches of the institution through
§
.27(f)(1) Measurable goals
345.11(c)(3) Certain special purpose
the regulatory approval process of the
§
.27(g) Plan approval
banks.
institution's supervisory agency.
§
.27(g)(2) Public participation
Q1. Is the list of special purpose
§§
12(h) & 563e.12(g) Community
banks exclusive?
§
.28-Assigned Ratings
A1. No, there may be other examples
Development
§
28(a) Ratings in general
of special purpose banks. These banks
Q1. Are community development
§
29-Effect of CRA Performance on
engage in specialized activities that do
activities limited to those that promote
Applications
not Involve granting credit to the public
economic development?
§
.29(a) CRA performance
in the ordinary course of business.
A1. No. Although the definition of
§
.29(b) Interested partles
Special purpose banks typically serve as
"communIty development" includes
23628
Federal Register / 64, No. Monday, May 3, 1999 Notices
activities that promote economic
that funds affordable housing for
farms that meet these size eligibility
development by financing small
middle-income people or areas, as well
standards considered to be community
businesses or farms, the rule does not
as low- and moderate-income people or
development?
limit community development loans
areas, has as its primary purpose
A1. No. To be considered as
and services and qualified investments
community development.
"community development" under
to those activities. Community
§§ 12(h)(3) and 563e.12(g)(3), a
§§
112(h)(1) & 3e.12(g)(1)
development also includes community-
loan, Investment or service, whether
or tribal-based child care, educational,
Affordable Housing (Including
made directly or through an
Multifamily Rental Housing) for Low- or
health, or social services targeted to
intermediary, must meet both a size test
Moderate-Income Individuals
low- or moderate-income persons,
and a purpose test. An activity meets
affordable housing for low- or moderate-
Q1. When determining whether a
the size requirement if it finances
income individuals, and activities that
project is "affordable housing for low- or
entities that either meet the size
revitalize or stabilize low- or moderate-
moderate-income individuals, thereby
eligibility standards of the Small
income areas.
meeting the definition of "community
Business Administration's Development
Q2. Must a community development
development," will it be sufficient to use
Company (SBDC) or Small Business
activity occur inside a low- or moderate-
a formula that relates the cost of
Investment Company (SBIC) programs,
income area in order for an institution
ownership, rental or borrowing to the
or have gross annual revenues of $1
to receive CRA consideration for the
income levels in the area as the only
million or less. To meet the purpose
activity?
factor, regardless of whether the users,
test, the activity must promote
A2. No. Community development
likely users, or beneficiaries of that
economic development. An activity is
includes activities outside of low- and
affordable housing are low- or
considered to promote economic
moderate-income areas that provide
moderate-income individuals?
development if it supports permanent
affordable housing for, or community
A1. The concept of "affordable
job creation, retention, and/or
services targeted to, low- or moderate-
housing" for low- or moderate-Income
improvement for persons who are
income individuals and activities that
individuals does hinge on whether low-
currently low- or moderate-income, or
promote economic development by
or moderate-income individuals benefit,
supports permanent job creation,
financing small businesses and farms.
or are likely to benefit, from the
retention, and/or improvement either in
Activities that stabilize or revitalize
housing. It would be inappropriate to
low- or moderate-Income geographies or
particular low- or moderate-income
give consideration to a project that
In areas targeted for redevelopment by
areas (including by creating. retaining,
exclusively or predominately houses
Federal, state, local or tribal
or improving Jobs for low- or moderate-
families that are not low- or moderate-
governments. The agencies will
income persons) also qualify as
income simply because the rents or
presume that any loan to or investment
community development, even if the
housing prices are set according to a
in a SBDC or SBIC promotes economic
activities are not located in these low-
particular formula.
development.
or moderate-income areas. One example
For projects that do not yet have
In addition to their quantitative
is financing a supermarket that serves as
occupants, and for which the income of
assessment of the amount of a financial
an anchor store in a small strip mall
the potential occupants is not knowable
institution's community development
located at the edge of a middle-income
in advance, examiners will review
activities, examiners must make
area, if the mall stabilizes the adjacent
factors such as demographic, economic
qualitative assessments of an
low-income community by providing
and market data to determine the
institution's leadership in community
needed shopping services that are not
likelihood that the housing will
development matters and the
otherwise available In the low-income
"primarily" accommodate low- or
complexity, responsiveness, and impact
community.
moderate-income individuals. For
of the community development
Q3. Does the regulation provide
example, examiners may look at median
activities of the institution. In reaching
flexibility in considering performance in
rents of the assessment area and the
a conclusion about the Impact of an
high-cost areas?
project; the median home value of either
institution's community development
A3. Yes, the flexibility of the
the assessment area, low- or moderate-
activities, examiners may, for example,
performance standards allows
Income geographies or the project; the
determine that a loan to a small
examiners to account in their
low- or moderate-income population in
business in a low- or moderate-income
evaluations for conditions in high-cost
the area of the project; or the past
geography that provides needed jobs
areas. Examiners consider lending and
performance record of the
and services in that area may have a
services to individuals and geographies
organization(s) undertaking the project.
greater impact and be more responsive
of all income levels and businesses of
Further, such a project could receive
to the community credit needs than
all sizes and revenues. In addition, the
consideration if its express, bona fide
does a loan to a small business in the
flexibility in the requirement that
intent, as stated, for example, In a
same geography that does not directly
community development loans,
prospectus, loan proposal or community
provide additional jobs or services to
community development services, and
action plan, is community development.
the community.
qualified investments have as their
"primary" purpose community
§§
12(h)(3) and 563c. 12(g)(3)
§§
12(i) and 563e. 12(h) Community
Activities That Promote Economic
development allows examiners to
Development Loan
account for conditions in high-cost
Development by Financing Businesses
Q1. What are examples of community
areas. For example, examiners could
or Farms That Meet Certain Size
development loans?
take into account the fact that activities
Eligibility Standards
A1. Examples of community
address a credit shortage among middle-
Q1. "Community development"
development loans include, but are not
income people or areas caused by the
includes activities that promote
limited to, loans to:
disproportionately high cost of building,
economic development by financing
Borrowers for affordable housing
maintaining or acquiring a house when
businesses or farms that meet certain
rehabilitation and construction,
determining whether an Institution's
size eligibility standards. Are all
including construction and permanent
loan to or Investment in an organization
activities that finance businesses and
financing of multifamily rental property
Federal Register 64, No. /Monday, May 3, Notices
23629
serving low- and moderate-income
Multifamily dwelling loans, however,
even multi-state basis. Therefore, an
persons;
may be considered as community
institution's activity is considered a
Not-for-profit organizations serving
development loans as well as home
community development loan or service
primarily low- and moderate-income
mortgage loans. See also Q&A2
or a qualified Investment if it supports
housing or other community
addressing § .42(b)(2).
an organization or activity that covers
development needs;
Q3. Do secured credit cards or other
an area that is larger than, but includes,
Borrowers to construct or
credit card programs targeted to low- or
the institution's assessment area(s). The
rehabilitate community facilities that
moderate-income individuals qualify as
institution's assessment area need not
are located In low- and moderate-
community development loans?
receive an immediate or direct benefit
income areas or that serve primarily
A3. No. Credit cards issued to low- or
from the institution's specific
low- and moderate-income individuals;
moderate-Income individuals for
participation in the broader organization
Financial intermediaries including
household, family, or other personal
or activity, provided the purpose,
Community Development Financial
expenditures, whether as part of a
mandate, or function of the organization
Institutions (CDFIs). Community
program targeted to such Individuals or
or activity includes serving geographies
Development Corporations (CDCs),
otherwise, do not qualify as community
or individuals located within the
minority- and women-owned financial
development loans because they do not
institution's assessment area.
institutions, community loan funds or
have as their primary purpose any of the
Furthermore, the regulations permit a
pools, and low-income or community
activities included in the definition of
wholesale or limited purpose Institution
development credit unions that
"community development."
to consider community development
primarily lend or facilitate lending to
Q4. The regulation indicates that
loans, community development
promote community development.
community development includes
services, and qualified investments
Local, state, and tribal governments
"activities that revitalize or stabilize
wherever they are located, as long as the
for community development activities;
low- or moderate-income geographies."
institution has otherwise adequately
and
Do all loans in a low- to moderate-
addressed the credit needs within its
Borrowers to finance environmental
income geography have a stabilizing
assessment area(s).
clean-up or redevelopment of an
effect?
Q6. What is meant by a "regional
industrial site as part of an effort to
A4. No. Some loans may provide only
area" in the requirement that a
revitalize the low- or moderate-income
indirect or short-term benefits to low- or
community development loan must
community in which the property is
moderate-income individuals in a low-
benefit the institution's assessment
located.
or moderate-income geography. These
area(s) or a broader statewide or
The rehabilitation of affordable
loans are not considered to have a
regional area that includes the
housing or community facilities,
community development purpose. For
institution's assessment area(s)?
referred to above, may include the
example, a loan for upper-income
A6. A "regional area" may be as small
abatement of environmental hazards,
housing in a distressed area is not
as a city or county or as large as a
such as lead-based paint. that are
considered to have a community
multistate area. For example, the "mid-
present in the housing or facilities.
development purpose simply because of
Atlantic states" may comprise a regional
Q2. If a retail institution that is not
the indirect benefit to low- or moderate-
area. When examiners evaluate
required to report under the Home
income persons from construction jobs
community development loans that
Mortgage Disclosure Act (HMDA) makes
or the Increase in the local tax base that
benefit a regional area that Includes the
affordable home mortgage loans that
supports enhanced services to low- and
institution's assessment area, however,
would be HMDA-reportable home
moderate-Income area residents. On the
the examiners will consider the size of
mortgage loans if it were a reporting
other hand, a loan for an anchor
the regional area and the actual or
institution, or if a small institution that
business in a distressed area (or a
potential benefit to the institution's
is not required to collect and report loan
nearby area), that employs or serves
assessment area(s). In most cases, the
data under CRA makes small business
residents of the area, and thus stabilizes
larger the regional area, the more diffuse
and small farm loans and consumer
the area, may be considered to have a
the benefit will be to the Institution's
loans that would be collected and/or
community development purpose. For
assessment area(s). Examiners may view
reported if the institution were a large
example, in an underserved, distressed
loans with more direct benefits to an
institution, may the institution have
area, a loan for a pharmacy that
institution's assessment area(s) as more
these loans considered as community
employs, and provides supplies to,
responsive to the credit needs of the
development loans?
residents of the area promotes
area(s) than loans for which the actual
A2. No. Although small Institutions
community development.
benefit to the assessment area(s) Is
are not required to report or collect
Q5. Must there be some immediate or
uncertain or for which the benefit is
information on small business and small
direct benefit to the institution's
diffused throughout a larger area that
farm loans and consumer loans, and
assessment area(s) to satisfy the
includes the assessment area(s).
some institutions are not required to
regulations' requirement that qualified
Q7. What is meant by the term
report information about their home
investments and community
"primary purpose" as that term is used
mortgage loans under HMDA, if these
development loans or services benefit an
to define what constitutes a community
institutions are retail institutions, the
institution's assessment area(s) or a
development loan, a qualified
agencies will consider in their CRA
broader statewide or regional area that
investment or a community
evaluations the institutions' originations
includes the institution's assessment
development service?
and purchases of loans that would have
area(s)?
A7. A loan, investment or service has
been collected or reported as small
A5. No. The regulations, for example,
as its primary purpose community
business, small farm, consumer or home
recognize that community development
development when it is designed for the
mortgage loans, had the institution been
organizations and programs are
express purpose of revitalizing or
a collecting and reporting institution
frequently efficient and effective ways
stabilizing low- or moderate-income
under the CRA or the HMDA. Therefore,
for Institutions to promote community
areas, providing affordable housing for,
these loans will not be considered as
development. These organizations and
or community services targeted to, low-
community development loans.
programs often operate on a statewide or
or moderate-income persons, or
23630
Federal Register 64, No. Monday, May 3, /Notices
promoting economic development by
finances affordable housing is related to
Providing other financial services
financing small businesses and farms
the provision of financial services.
with the primary purpose of community
that meet the requirements set forth in
Providing technical assistance about
development, such as low-cost bank
§§
.12(h) or 563e.12(g). To
financial services to community-based
accounts, including "Electronic Transfer
determine whether an activity is
groups. local or tribal government
Accounts" provided pursuant to the
designed for an express community
agencies, or intermediaries that help to
Debt Collection Improvement Act of
development purpose, the agencies
meet the credit needs of low- and
1996, or free government check cashing
apply one of two approaches. First, if a
moderate-income individuals or small
that increases access to financial
majority of the dollars or beneficiaries of
businesses and farms is also providing
services for low- or moderate-income
the activity are identifiable to one or
financial services. By contrast, activities
individuals.
more of the enumerated community
that do not take advantage of the
Examples of technical assistance
development purposes, then the activity
employees' financial expertise, such as
activities that might be provided to
will be considered to possess the
neighborhood cleanups, do not involve
community development organizations
requisite primary purpose.
the provision of financial services.
include:
Alternatively, where the measurable
Q2. Are personal charitable activities
Serving on a loan review
portion of any benefit bestowed or
provided by an institution's employees
committee;
dollars applied to the community
or directors outside the ordinary course
Developing loan application and
development purpose is less than a
of their employment considered
underwriting standards;
majority of the entire activity's benefits
community development services?
Developing loan processing
or dollar value, then the activity may
A2. No. Services must be provided as
systems;
still be considered to possess the
a representative of the institution. For
Developing secondary market
requisite primary purpose if (1) the
example, if a financial institution's
vehicles or programs;
express, bona fide intent of the activity,
director. on her own time and not as a
Assisting in marketing financial
services, including development of
as stated, for example, in a prospectus,
representative of the Institution,
advertising and promotions,
loan proposal, or community action
volunteers one evening a week at a local
plan, is primarily one or more of the
publications, workshops and
community development corporation's
conferences;
enumerated community development
financial counseling program, the
Furnishing financial services
purposes; (2) the activity is specifically
institution may not consider this
training for staff and management;
structured (given any relevant market or
activity a community development
Contributing accounting/
legal constraints or performance context
service.
bookkeeping services; and
factors) to achieve the expressed
Q3. What are examples of community
Assisting in fund raising, including
community development purpose; and
development services?
soliciting or arranging Investments.
(3) the activity accomplishes, or is
A3. Examples of community
reasonably certain to accomplish, the
development services include, but are
§
.12(k) & 563e.12(j) Consumer Loan
community development purpose
not limited to, the following:
Q1. Are home equity loans considered
involved. The fact that an activity
Providing technical assistance on
"consumer loans"?
provides indirect or short-term benefits
financial matters to nonprofit, tribal or
A1. Home equity loans made for
to low- or moderate-income persons
government organizations serving low-
purposes other than home purchase,
does not make the activity community
and moderate-income housing or
home improvement or refinancing home
development, nor does the mere
economic revitalization and
purchase or home Improvement loans
presence of such Indirect or short-term
development needs;
are consumer loans If they are extended
benefits constitute a primary purpose of
Providing technical assistance on
to one or more individuals for
community development. Financial
financial matters to small businesses or
household, family, or other personal
institutions that want examiners to
community development organizations,
expenditures.
consider certain activities under either
including organizations and individuals
Q2. May a home equity line of credit
approach should be prepared to
who apply for loans or grants under the
be considered a "consumer loan" even
demonstrate the activities'
Federal Home Loan Banks' Affordable
if part of the line is for home
qualifications.
Housing Program:
improvement purposes?
Lending employees to provide
A2. If the predominant purpose of the
§§
.12(j) and 563e.12(i) Community
financial services for organizations
line is home improvement, the line may
Development Service
facilitating affordable housing
only be reported under HMDA and may
Q1. In addition to meeting the
construction and rehabilitation or
not be considered a consumer loan.
definition of "community development"
development of affordable housing:
However, the full amount of the line
in the regulation, community
Providing credit counseling. home-
may be considered a "consumer loan" If
development services must also be
buyer and home-maintenance
its predominant purpose is for
related to the provision of financial
counseling. financial planning or other
household, family. or other personal
services. What is meant by "provision of
financial services education to promote
expenditures, and to a lesser extent
financial services"?
community development and affordable
home improvement, and the full amount
A1. Providing financial services
housing:
of the line has not been reported under
means providing services of the type
Establishing school savings
HMDA. This is the case even though
generally provided by the financial
programs and developing or teaching
there may be "double counting" because
services industry. Providing financial
financial education curricula for low- or
part of the line may also have been
services often involves informing
moderate-income individuals;
reported under HMDA.
community members about how to get
Providing electronic benefits
Q3. How should an institution collect
or use credit or otherwise providing
transfer and point of sale terminal
or report information on loans the
credit services or information to the
systems to improve access to financial
proceeds of which will be used for
community. For example, service on the
services, such as by decreasing costs, for
multiple purposes?
board of directors of an organization
low- or moderate-income Individuals;
A3. If an institution makes a single
that promotes credit availability or
and
loan or provides a line of credit to a
Federal Register/Vol. 64, No. /Monday, May 3, 1999/Notices
23631
customer to be used for both consumer
this service as a retail banking service.
area median family incomes or an order
and small business purposes, consistent
Examiners will consider an institution's
form through the FFIEC's home page on
with the Call Report and TFR
mortgage brokerage services when
the Internet at "http://www.ffiec.gov/".
instructions, the institution should
evaluating the range of services
§
.12(o) & Limited
determine the major (predominant)
provided to low-, moderate-, middle-
Purpose Institution
component of the loan or the credit line
and upper-income geographies and the
and collect or report the entire loan or
degree to which the services are tailored
Q1. What constitutes a "narrow
credit line in accordance with the
to meet the needs of those geographies.
product line" in the definition of
regulation's specifications for that loan
Alternatively, an institution's mortgage
"limited purpose institution"?
A1. An Institution offers a narrow
type.
brokerage service may be considered a
community development service If the
product line by limiting its lending
§
.12(m) & 563e. Home
primary purpose of the service is
activities to a product line other than a
Mortgage Loan
community development. An institution
traditional retail product line required
Q1. Does the term "home mortgage
wishing to have its mortgage brokerage
to be evaluated under the lending test
loan" include loans other than "home
service considered as a community
(i.e., home mortgage, small business,
purchase loans"?
development service must provide
and small farm loans). Thus, an
A1. Yes. "Home mortgage loan"
sufficient information to substantiate
institution engaged only in making
includes a "home improvement loan" as
credit card or motor vehicle loans offers
that its primary purpose is community
well as a "home purchase loan," as both
development and to establish the extent
a narrow product line, while an
terms are defined In the HMDA
of the services provided.
institution limiting its lending activities
regulation, Regulation C. 12 CFR part
to home mortgages is not offering a
203. This definition also includes
§
.12(n) & 563e.12(m) Income Level
narrow product line.
multifamily (five-or-more families)
Q1. Where do institutions find income
Q2. What factors will the agencies
dwelling loans, loans for the purchase of
level data for geographies and
consider to determine whether an
manufactured homes, and refinancings
individuals?
institution that, if limited purpose,
of home improvement and home
A1. The Income levels for
makes loans outside a narrow product
purchase loans.
geographies, i.e., census tracts and block
line, or, if wholesale, engages in retail
Q2. Some financial institutions broker
numbering areas, are derived from
lending, will lose its limited purpose or
home mortgage loans. They typically
Census Bureau information and are
wholesale designation because of too
take the borrower's application and
updated every ten years. Institutions
much other lending?
perform other settlement activities;
may contact their regional Census
A2. Wholesale institutions may
however, they do not make the credit
Bureau office or the Census Bureau's
engage In some retail lending without
decision. The broker institutions may
Income Statistics Office at (301) 763-
losing their designation If this activity is
also initially fund these mortgage loans,
8576 to obtain Income levels for
incidental and done on an
then immediately assign them to
geographies. See Appendix A of these
accommodation basis. Similarly. limited
another lender. Because the broker
Interagency Questions and Answers for
purpose institutions continue to meet
institution does not make the credit
a list of the regional Census Bureau
the narrow product line requirement if
decision, under Regulation C (HMDA),
offices. The income levels for
they provide other types of loans on an
they do not record the loans on their
individuals are derived from
infrequent basis. In reviewing other
HMDA-LARs, even if they fund the
information calculated by the
lending activities by these institutions,
loans. May an institution receive any
Department of Housing and Urban
the agencies will consider the following
consideration under CRA for its home
Development (HUD) and updated
factors:
mortgage loan brokerage activities?
annually. Institutions may contact HUD
Is the other lending provided as an
A2. Yes. A financial Institution that
at (800) 245-2691 to request a copy of
incident to the institution's wholesale
funds home mortgage loans but
"FY [year number, e.g., 1996] Median
lending?
immediately assigns the loans to the
Family Incomes for States and their
Are the loans provided as an
lender that made the credit decisions
Metropolitan and Nonmetropolitan
accommodation to the institution's
may present information about these
Portions."
wholesale customers?
loans to examiners for consideration
Alternatively, institutions may obtain
Are the loans made only
under the lending test as "other loan
a list of the 1990 Census Bureau-
infrequently to the limited purpose
data." Under Regulation C, the broker
calculated and the annually updated
institution's customers?
Institution does not record the loans on
HUD median family Incomes for
Does only an insignificant portion
its HMDA-LAR because it does not
metropolitan statistical areas (MSAs)
of the institution's total assets and
make the credit decisions, even if it
and statewide nonmetropolitan areas by
income result from the other lending?
funds the loans. An institution electing
calling the Federal Financial Institution
How significant a role does the
to have these home mortgage loans
Examination Council's (FFIEC's) HMDA
Institution play in providing that type(s)
considered must maintain information
Help Line at (202) 452-2016. A free
of loan(s) in the institution's assessment
about all of the home mortgage loans
copy will be faxed to the caller through
area(s)?
that it has funded in this way.
the "fax-back" system. Institutions may
Does the institution hold itself out
Examiners will consider this other loan
also call this number to have "faxed-
as offering that type(s) of loan(s)?
data using the same criteria by which
back" an order form, from which they
Does the lending test or the
home mortgage loans originated or
may order a list providing the median
community development test present a
purchased by an institution are
family income level, as a percentage of
more accurate picture of the
evaluated.
the appropriate MSA or
institution's CRA performance?
Institutions that do not provide
nonmetropolitan median family income,
Q3. Do "niche institutions" qualify as
funding but merely take applications
of every census tract and block
limited purpose (or wholesale)
and provide settlement services for
numbering area (BNA). This list costs
institutions?
another lender that makes the credit
$50. Institutions may also obtain the list
A3. Generally, no. Institutions that are
decisions will receive consideration for
of MSA and statewide nonmetropolitan
in the business of lending to the public,
23632
Federal Register/Vol. 64, No. /Monday, May 3, 1999 Notices
but specialize in certain types of retail
Institutions (CDFIs). Community
provided the loan at below-market
loans (for example, home mortgage or
Development Corporations (CDCs),
interest rates or "bought down" the
small business loans) to certain types of
minority- and women-owned financial
interest rate to the borrower. Is the lost
borrowers (for example, to high-end
institutions, community loan funds, and
income resulting from the lower interest
Income level customers or to
low- income or community
rate or buy-down a qualified
corporations or partnerships of licensed
development credit unions) that
investment?
professional practitioners) ("niche
primarily lend or facilitate lending in
A6. No. The agencies will, however,
institutions") generally would not
low- and moderate-income areas or to
consider the innovativeness and
qualify as limited purpose (or
low- and moderate-income individuals
complexity of the community
wholesale) institutions.
in order to promote community
development loan within the bounds of
development, such as a CDFI that
safe and sound banking practices.
§
12(s) & 563e.12(r) Qualified
promotes economic development on an
Q7. Will the agencies consider as a
Investment
Indian reservation; Organizations
qualified investment the wages or other
Q1. Does the CRA regulation provide
engaged in affordable housing
compensation of an employee or
authority for institutions to make
rehabilitation and construction,
director who provides assistance to a
investments?
including multifamily rental housing;
community development organization
A1. No. The CRA regulation does not
Organizations, including, for
on behalf of the institution?
provide authority for Institutions to
example, Small Business Investment
A7. No. However, the agencies will
make investments that are not otherwise
Companies (SBICs) and specialized
consider donated labor of employees or
allowed by Federal law.
SBICs, that promote economic
directors of a financial institution in the
Q2. Are mortgage-backed securities or
development by financing small
service test if the activity is a
municipal bonds "qualified
businesses;
community development service.
investments"?
Facilities that promote community
A2. As a general rule, mortgage-
$
.12(t) Small Institution
development in low- and moderate-
backed securities and municipal bonds
income areas for low- and moderate-
Q1. How are the "total bank and thrift
are not qualified investments because
income individuals, such as youth
assets" of a holding company
they do not have as their primary
programs, homeless centers, soup
determined?
purpose community development, as
kitchens, health care facilities, battered
A1. "Total banking and thrift assets"
defined in the CRA regulations.
women's centers, and alcohol and drug
of a holding company are determined by
Nonetheless, mortgage-backed securities
recovery centers;
combining the total assets of all banks
or municipal bonds designed primarily
Projects eligible for low-income
and/or thrifts that are majority-owned
to finance community development
housing tax credits;
by the holding company. An institution
generally are qualified investments.
State and municipal obligations,
is majority-owned If the holding
Municipal bonds or other securities
such as revenue bonds, that specifically
company directly or indirectly owns
with a primary purpose of community
support affordable housing or other
more than 50 percent of its outstanding
development need not be housing-
community development;
voting stock.
related. For example, a bond to fund a
Not-for-profit organizations serving
Q2. How are Federal and State branch
community facility or park or to provide
low- and moderate- income housing or
assets of a foreign bank calculated for
sewage services as part of a plan to
other community development needs,
purposes of the CRA?
redevelop a low-income neighborhood
such as counseling for credit, home-
A2. A Federal or State branch of a
is a qualified Investment. Housing-
ownership, home maintenance, and
foreign bank is considered a small
related bonds or securities must
other financial services education; and
institution if the Federal or State branch
primarily address affordable housing
Organizations supporting activities
has less than $250 million in assets and
(including multifamily rental housing)
essential to the capacity of low- and
the total assets of the foreign bank's or
needs in order to qualify.
moderate-income individuals or
its holding company's U.S. bank and
Q3. Are Federal Home Loan Bank
geographies to utilize credit or to
thrift subsidiaries that are subject to the
stocks and membership reserves with
sustain economic development, such as,
CRA are less than $1 billion. This
the Federal Reserve Banks "qualified
for example, day care operations and job
calculation includes not only FDIC-
investments"?
training programs that enable people to
Insured bank and thrift subsidiaries, but
A3. No. Federal Home Loan Bank
work.
also the assets of any FDIC-insured
(FHLB) stock and membership reserves
Q5. Will an institution receive
branch of the foreign bank and the
with the Federal Reserve Banks do not
consideration for charitable
assets of any uninsured Federal or State
have a sufficient connection to
contributions as "qualified
branch (other than a limited branch or
community development to be qualified
investments"?
a Federal agency) of the foreign bank
investments. However, FHLB member
A5. Yes, provided they have as their
that results from an acquisition
institutions may receive CRA
primary purpose community
described in section 5(a)(8) of the
consideration for technical assistance
development as defined in the
International Banking Act of 1978 (12
they provide on behalf of applicants and
regulations. A charitable contribution,
U.S.C. 3103(a)(8)).
recipients of funding from the FHLB's
whether in cash or an in-kind
contribution of property, is included in
§
.12(u) Small Business Loan
Affordable Housing Program. See Q&A 3
addressing §§
.12(j) and
the term "grant." A qualified investment
Q1. Are loans to nonprofit
Q4. What are examples of qualified
is not disqualified because an
organizations considered small business
investments?
institution receives favorable treatment
loans or are they considered community
A4. Examples of qualified
for it (for example, as a tax deduction
development loans?
investments include, but are not limited
or credit) under the Internal Revenue
A1. To be considered a small business
to, investments, grants, deposits or
Code.
loan, a loan must meet the definition of
shares in or to:
Q6. An institution makes or
"loan to small business" in the
Financial Intermediaries (including,
participates in a community
Instructions In the "Consolidated
Community Development Financial
development loan. The institution
Reports of Conditions and Income" (Call
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
23633
Report) and "Thrift Financial Reports"
business, small farm, or consumer loans
the business opportunities addressed by
(TFR). In general, a loan to a nonprofit
to retail customers?
lenders not subject to the CRA.
organization, for business or farm
A1. The agencies will consider
Institutions are not required, however,
purposes, where the loan is secured by
whether:
to prepare a needs assessment. If an
nonfarm nonresidential property and
The institution holds Itself out to
institution provides information to
the original amount of the loan is $1
the retail public as providing such
examiners, the agencies will not expect
million or less, if a business loan, or
loans; and
information other than what the
$500,000 or less, if a farm loan, would
The institution's revenues from
institution normally would develop to
be reported in the Call Report and TFR
extending such loans are significant
prepare a business plan or to identify
as a small business or small farm loan.
when compared to Its overall
potential markets and customers,
If a loan to a nonprofit organization is
operations.
including low- and moderate-income
reportable as a small business or small
A wholesale institution may make
persons and geographies in its
farm loan, It cannot also be considered
some retail loans without losing its
assessment area(s). The agencies will
as a community development loan,
wholesale designation as described
not evaluate an institution's efforts to
except by a wholesale or limited
above in Q&A2 addressing §§
.12(o)
ascertain community credit needs or
purpose Institution. Loans to nonprofit
and 563e.12(n).
rate an institution on the quality of any
organizations that are not small business
information it provides.
§
21-Performance Tests,
or small farm loans for Call Report and
Q2. Will examiners conduct
Standards, and Ratings, in General
TFR purposes may be considered as
community contact interviews as part of
community development loans if they
§
.21(a) Performance Tests and
the examination process?
A2. Yes. Examiners will consider
meet the regulatory definition.
Standards
Information obtained from interviews
Q2. Are loans secured by commercial
Q1. Are all community development
real estate considered small business
with local community, civic, and
activities weighted equally by
government leaders. These interviews
loans?
examiners?
provide examiners with knowledge
A2. Yes, depending on their principal
A1. No. Examiners will consider the
regarding the local community, Its
amount. Small business loans include
responsiveness to credit and community
economic base, and community
loans secured by "nonfarm
development needs, as well as the
development initiatives. To ensure that
nonresidential properties," as defined in
innovativeness and complexity of an
information from local leaders is
the Call Report and TFR, in amounts
institution's community development
considered-particularly in areas where
less than $1 million.
lending, qualified investments, and
the number of potential contacts may be
Q3. Are loans secured by nonfarm
community development services.
limited-examiners may use
residential real estate to finance small
These criteria include consideration of
information obtained through an
businesses "small business loans'?
the degree to which they serve as a
interview with a single community
A3. No. Loans secured by nonfarm
catalyst for other community
contact for examinations of more than
residential real estate that are used to
development activities. The criteria are
one institution in a given market. In
finance small businesses are not
designed to add a qualitative element to
addition, the agencies will consider
included as "small business" loans for
the evaluation of an institution's
information obtained from Interviews
Call Report and TFR purposes. The
performance.
conducted by other agency staff and by
agencies recognize that many small
businesses are financed by loans
§
.21(b) Performance Context
the other agencies. In order to augment
contacts previously used by the agencies
secured by residential real estate. If
Q1. Is the performance context
and foster a wider array of contacts, the
these loans promote community
essentially the same as the former
agencies will share community contact
development, as defined in the
regulation's needs assessment?
information.
regulation, they may be considered as
A1. No. The performance context is a
community development loans.
broad range of economic, demographic,
§
.21(b)(4) Institutional Capacity
Otherwise, at an Institution's option, the
and institution- and community-specific
and Constraints
institution may collect and maintain
information that an examiner reviews to
Q1. Will examiners consider factors
data separately concerning these loans
understand the context in which an
outside of an institution's control that
and request that the data be considered
institution's record of performance
prevent it from engaging in certain
in its CRA evaluation as "Other Secured
should be evaluated. The agencies will
activities?
Lines/Loans for Purposes of Small
provide examiners with much of this
A1. Yes. Examiners will take into
Business."
information prior to the examination.
account statutory and supervisory
Q4. Are credit cards issued to small
The performance context is not a formal
limitations on an Institution's ability to
businesses considered "small business
or written assessment of community
engage in any lending, investment, and
loans"?
credit needs.
service activities. For example, a savings
A4. Credit cards issued to a small
association that has made few or no
§
.21(b)(2) Information Maintained
business or to Individuals to be used,
by the Institution or Obtained From
qualified investments due to Its limited
with the institution's knowledge, as
investment authority may still receive a
business accounts are small business
Community Contacts
low satisfactory rating under the
loans if they meet the definitional
Q1. Will examiners consider
investment test if it has a strong lending
requirements in the Call Report or TFR
performance context information
record.
instructions.
provided by institutions?
AI. Yes. An institution may provide
§
.21(b)(5) Institution's Past
§
.12(w) Wholesale Institution
Performance and the Performance of
examiners with any information it
Q1. What factors will the agencies
deems relevant, including information
Similarly Situated Lenders
consider in determining whether an
on the lending, Investment, and service
Q1. Can an institution's assigned
institution is In the business of
opportunities in its assessment area(s).
rating be adversely affected by poor past
extending home mortgage, small
This Information may include data on
performance?
23634
Federal Register/Vol. 64, No. /Monday, May 3, Notices
A1. Yes. The agencies will consider
performance If consumer loans were
manipulate business operations or
an institution's past performance in its
excluded.
present information in an artificial light
overall evaluation. For example, an
that does not accurately reflect an
§
.22(a)(2) Loan Originations and
institution's past performance may
institution's overall record of lending
Purchases/Other Loan Data
support a rating of "substantial
performance.
noncompliance" If the institution has
Q1. How are lending commitments
(such as letters of credit) evaluated
§
.22(b)(1) Lending Activity
not improved performance rated as
"needs to improve."
under the regulation?
Q1. How will the agencies apply the
Q2. How will examiners consider the
A1. The agencies consider lending
lending activity criterion to discourage
performance of similarly situated
commitments (such as letters of credit)
an institution from originating loans
lenders?
only at the option of the institution.
that are viewed favorably under CRA in
A2. The performance context section
Commitments must be legally binding
the institution itself and referring other
of the regulation permits the
between an institution and a borrower
loans, which are not viewed as
performance of similarly situated
in order to be considered. Information
favorably, for origination by an affiliate?
lenders to be considered, for example,
about lending commitments will be
A1. Examiners will review closely
as one of a number of considerations in
used by examiners to enhance their
institutions with (1) a small number and
evaluating the geographic distribution of
understanding of an institution's
amount of home mortgage loans with an
an institution's loans to low-
performance.
unusually good distribution among low-
moderate-,
Q2. Will examiners review application
and moderate-Income areas and low-
middle-, and upper-income geographies.
data as part of the lending test?
and moderate-income borrowers and (2)
This analysis, as well as other analyses,
A2. Application activity is not a
a policy of referring most, but not all, of
may be used, for example, where groups
performance criterion of the lending
their home mortgage loans to affiliated
of contiguous geographies within an
test. However, examiners may consider
institutions. If an institution is making
institution's assessment area(s) exhibit
this information in the performance
loans mostly to low- and moderate-
abnormally low penetration. In this
context analysis because this
income individuals and areas and
regard, the performance of similarly
Information may give examiners insight
referring the rest of the loan applicants
situated lenders may be analyzed if such
on, for example, the demand for loans.
to an affiliate for the purpose of
an analysis would provide accurate
Q3. May a financial institution receive
receiving a favorable CRA rating,
insight into the Institution's lack of
consideration under CRA for
examiners may conclude that the
performance in those areas. The
modification, extension, and
Institution's lending activity is not
regulation does not require the use of a
consolidation agreements (MECAs), in
satisfactory because it has
specific type of analysis under these
which it obtains loans from other
inappropriately attempted to influence
circumstances. Moreover, no ratio
institutions without actually purchasing
the rating. In evaluating an institution's
developed from any type of analysis is
or refinancing the loans, as those terms
lending, examiners will consider
linked to any lending test rating.
have been interpreted under CRA?
legitimate business reasons for the
A3. Yes. In some states, MECAs,
allocation of the lending activity.
§
.22-Lending Test
which are not considered loan
refinancings because the existing loan
§
.22(b)(2) & (3) Geographic
§
.22(a) Scope of Test
Distribution and Borrower
obligations are not satisfied and
§
.22(a)(1) Types of Loans
Characteristics
replaced, are common. Although these
Considered
transactions are not considered to be
Q1. How do the geographic
Q1. If a large retail institution is not
purchases or refinancings, as those
distribution of loans and the
required to collect and report home
terms have been interpreted under CRA,
distribution of lending by borrower
mortgage data under the HMDA, will the
they do achieve the same results. An
characteristics interact in the lending
agencies still evaluate the institution's
institution may present Information
test?
home mortgage lending performance?
about its MECA activities to examiners
A1. Examiners generally will consider
A1. Yes. The agencies will sample the
for consideration under the lending test
both the distribution of an Institution's
institution's home mortgage loan files in
as "other loan data."
loans among geographies of different
order to assess its performance under
Q4: Do institutions receive
income levels and among borrowers of
the lending test criteria.
consideration for originating or
different Income levels and businesses
Q2. When will examiners consider
purchasing loans that are fully
of different sizes. The importance of the
consumer loans as part of an
guaranteed?
borrower distribution criterion,
institution's CRA evaluation?
A4: Yes. The lending test evaluates an
particularly in relation to the geographic
A2. Consumer loans will be evaluated
institution's record of helping to meet
distribution criterion, will depend on
if the institution so elects; and an
the credit needs of its assessment area(s)
the performance context. For example,
institution that elects not to have its
through the origination or purchase of
distribution among borrowers with
consumer loans evaluated will not be
specified types of loans. The test does
different income levels may be more
viewed less favorably by examiners than
not take into account whether or not
important in areas without identifiable
one that does. However, if consumer
such loans are guaranteed.
geographies of different income
loans constitute a substantial majority of
categories. On the other hand,
the institution's business, the agencies
§
.22(b) Performance Criteria
geographic distribution may be more
will evaluate them even if the
Q1. How will examiners apply the
important in areas with the full range of
institution does not so elect. The
performance criteria in the lending test?
geographies of different Income
agencies Interpret "substantial majority"
A1. Examiners will apply the
categories.
to be so significant a portion of the
performance criteria reasonably and
Q2. Must an institution lend to all
institution's lending activity by number
fairly, in accord with the regulations,
portions of its assessment area?
or dollar volume of loans that the
the examination procedures, and this
A2. The term "assessment area"
lending test evaluation would not
Guidance. In doing so, examiners will
describes the geographic area within
meaningfully reflect its lending
disregard efforts by an institution to
which the agencies assess how well an
Federal Register Vol. 64, No. 84 Monday, May 3. 1999 Notices
23635
institution has met the specific
Loans to low- and moderate-income
A1. Yes. When evaluating the
performance tests and standards in the
persons and small businesses and farms
Institution's record of community
rule. The agencies do not expect that
outside of an institution's assessment
development lending under
simply because a census tract or block
area(s), however, will not compensate
§
.22(b)(4), it is appropriate to give
numbering area is within an
for poor lending performance within the
greater weight to the amount of the loan
institution's assessment area(s) the
institution's assessment area(s).
that is targeted to the intended
institution must lend to that census tract
Q5. Under the lending test, how will
community development purpose. For
or block numbering area. Rather the
examiners evaluate home mortgage
example, consider two $10 million
agencies will be concerned with
loans to middle- or upper-income
projects (with a total of 100 units each)
conspicuous gaps in loan distribution
individuals in a low- or moderate-
that have as their express primary
that are not explained by the
income geography?
purpose affordable housing and are
performance context. Similarly, if an
A5. Examiners will consider these
located in the same community. One of
institution delineated the entire county
home mortgage loans under the
these projects sets aside 40% of Its units
in which It Is located as its assessment
performance criteria of the lending test,
for low-income residents and the other
area, but could have delineated its
i.e., by number and amount of home
project allocates 65% of its units for
assessment area as only a portion of the
mortgage loans, whether they are inside
low-income residents. An institution
county, it will not be penalized for
or outside the financial institution's
would report both loans as $10 million
lending only in that portion of the
assessment area(s), their geographic
community development loans under
county. so long as that portion does not
distribution, and the Income levels of
the
§
.42(b)(2) aggregate reporting
reflect illegal discrimination or
the borrowers. Examiners will use
obligation. However, transaction
arbitrarily exclude low- or moderate-
information regarding the financial
complexity, Innovation and all other
income geographies. The capacity and
institution's performance context to
relevant considerations being equal, an
constraints of an institution, its business
determine how to evaluate the loans
examiner should also take into account
decisions about how it can best help to
under these performance criteria.
that the 65% project provides more
meet the needs of its assessment area(s).
Depending on the performance context,
affordable housing for more people per
including those of low- and moderate-
examiners could view home mortgage
dollar expended.
income neighborhoods, and other
loans to middle-income individuals in a
Under $
.22(b)(4), the extent of
aspects of the performance context, are
low-income geography very differently.
CRA consideration an institution
all relevant to explain why the
For example, if the loans are for homes
receives for its community development
institution is serving or not serving
or multifamily housing located in an
loans should bear a direct relation to the
portions of its assessment area(s).
area for which the local, state, tribal, or
benefits received by the community and
Q3. Will examiners take into account
Federal government or a community-
the innovation or complexity of the
loans made by affiliates when
based development organization has
loans required to accomplish the
evaluating the proportion of an
developed a revitalization or
activity. not simply to the dollar amount
institution's lending in its assessment
stabilization plan (such as a Federal
expended on a particular transaction. By
area(s)?
enterprise community or empowerment
applying all lending test performance
A3. Examiners will not take into
zone) that includes attracting mixed-
criteria, a community development loan
account loans made by affiliates when
income residents to establish a
of a lower dollar amount could meet the
determining the proportion of an
stabilized, economically diverse
credit needs of the Institution's
institution's lending in its assessment
neighborhood, examiners may give more
community to a greater extent than a
area(s), even if the institution elects to
consideration to such loans, which may
community development loan with a
have its affiliate lending considered in
be viewed as serving the low- or
higher dollar amount, but with less
the remainder of the lending test
moderate-income community's needs as
innovation, complexity, or impact on
evaluation. However, examiners may
well as serving those of the middle- or
the community.
consider an institution's business
upper-income borrowers. If, on the other
§
.22(b)(5) Innovative or Flexible
strategy of conducting lending through
hand, no such plan exists and there is
an affiliate in order to determine
no other evidence of governmental
Lending Practices
whether a low proportion of lending in
support for a revitalization or
Q1. What is the range of practices that
the assessment area(s) should adversely
stabilization project in the area and the
examiners may consider in evaluating
affect the institution's lending test
loans to middle- or upper-income
the innovativeness or flexibility of an
rating.
borrowers significantly disadvantage or
institution's lending?
Q4. When will examiners consider
primarily have the effect of displacing
A1. In evaluating the innovativeness
loans (other than community
low- or moderate-income residents.
or flexibility of an institution's lending
development loans) made outside an
examiners may view these loans simply
practices (and the complexity and
institution's assessment area(s)?
as home mortgage loans to middle- or
Innovativeness of its community
A4. Consideration will be given for
upper-income borrowers who happen to
development lending). examiners will
loans to low- and moderate-income
reside in a low- or moderate-income
not be limited to reviewing the overall
persons and small business and farm
geography and weigh them accordingly
variety and specific terms and
loans outside of an institution's
in their evaluation of the Institution.
conditions of the credit products
assessment area(s). provided the
themselves. In connection with the
institution has adequately addressed the
§
.22(b)(4) Community Development
evaluation of an Institution's lending,
needs of borrowers within its
Lending
examiners also may give consideration
assessment area(s). The agencies will
Q1. When evaluating an institution's
to related innovations when they
apply this consideration not only to
record of community development
augment the success and effectiveness
loans made by large retail institutions
lending, may an examiner distinguish
of the institution's lending under its
being evaluated under the lending test,
among community development loans
community development loan programs
but also to loans made by small
on the basis of the actual amount of the
or, more generally, its lending under its
Institutions being evaluated under the
loan that advances the community
loan programs that address the credit
small institution performance standards.
development purpose?
needs of low- and moderate-income
23636
Federal Register/Vol. 64, No. 84/Monday, May 3, /Notices
geographies or individuals. For
However, an institution can count as a
required to include all home mortgage
example:
purchase a loan originated by an
loans in Its assessment area of another
In connection with a community
affiliate that the institution
affiliate institution subject to the CRA.
development loan program, a bank may
subsequently purchases, or count as an
However, all loans of a particular type
establish a technical assistance program
origination a loan later sold to an
made by any affiliate in the Institution's
under which the bank, directly or
affiliate, provided the same loans are
assessment area(s) must either be
through third parties, provides
not sold several times to inflate their
counted by the lending Institution or by
affordable housing developers and other
value for CRA purposes.
another affiliate institution that is
loan recipients with financial consulting
§
.22(c)(2)(ii) If an institution
subject to the CRA. This reading reflects
services. Such a technical assistance
elects to have its supervisory agency
the fact that a holding company may, for
program may. by itself, constitute a
consider loans within a particular
business reasons, choose to transact
community development service
lending category made by one or more
different aspects of its business in
eligible for consideration under the
of the institution's affiliates in a
different subsidiary institutions.
service test of the CRA regulations. In
particular assessment area, the
However, the method by which loans
addition, the technical assistance may
institution shall elect to have the agency
are allocated among the institutions for
be favorably considered as an
consider all loans within that lending
CRA purposes must reflect actual
innovation that augments the success
category in that particular assessment
business decisions about the allocation
and effectiveness of the related
area made by all of the institution's
of banking activities among the
community development loan program.
affiliates.
institutions and should not be designed
In connection with a small business
Q1. How is this constraint on affiliate
solely to enhance their CRA evaluations.
lending program in a low- or moderate-
lending applied?
A1. This constraint prohibits "cherry-
§
.22(d) Lending by a Consortium or
income area and consistent with safe
and sound lending practices, a bank
picking" affiliate loans within any one
a Third Party
may implement a program under which,
category of loans. The constraint
Q1. Will equity and equity-type
in addition to providing financing, the
requires an institution that elects to
investments in a third party receive
bank also contracts with the small
have a particular category of affiliate
consideration under the lending test?
lending In a particular assessment area
A1. If an institution has made an
business borrowers. Such a contracting
considered to include all loans of that
arrangement would not, standing alone,
equity or equity-type investment in a
qualify for CRA consideration. However,
type made by all of its affiliates in that
third party, community development
it may be favorably considered as an
particular assessment area. For example,
loans made by the third party may be
assume that an institution has one or
innovation that augments the loan
considered under the lending test. On
program's success and effectiveness,
more affiliates, such as a mortgage bank
the other hand, asset-backed and debt
and improves the program's ability to
that makes loans in the institution's
securities that do not represent an
assessment area. If the institution elects
serve community development purposes
equity-type interest in a third party will
not be considered under the lending test
by helping to promote economic
to include the mortgage bank's home
development through support of small
mortgage loans, It must include all of
unless the securities are booked by the
business activities and revitalization or
mortgage bank's home mortgage loans
purchasing institution as a loan. For
made in its assessment area. The
stabilization of low- or moderate-income
example, if an institution purchases
institution cannot elect to Include only
stock in a community development
geographies.
those low- and moderate-income home
corporation ("CDC") that primarily
§
.22(c) Affiliate Lending
mortgage loans made by the mortgage
lends in low- and moderate-income
§
bank affiliate and not home mortgage
areas or to low- and moderate-Income
.22(c)(1) In General
loans to middle- and upper-income
individuals in order to promote
Q1. If an institution elects to have
individuals or areas.
community development, the institution
loans by its affiliate(s) considered, may
Q2. How is this constraint applied if
may claim a pro rata share of the CDC's
it elect to have only certain categories of
an institution's affiliates are also
loans as community development loans.
loans considered?
insured depository institutions subject
The institution's pro rata share is based
A1. Yes. An institution may elect to
to the CRA?
on its percentage of equity ownership in
have only a particular category of its
A2. Strict application of this
the CDC. Q&A1 addressing §
.23(b)
affiliate's lending considered. The basic
constraint against "cherry-picking" to
provides information concerning
categories of loans are home mortgage
loans of an affiliate that is also an
consideration of an equity or equity-
loans, small business loans, small farm
Insured depository institution covered
type investment under the Investment
loans, community development loans,
by the CRA would produce the
test and both the lending and
and the five categories of consumer
anomalous result that the other
investment tests.
loans (motor vehicle loans, credit card
institution would, without its consent,
Q2. How will examiners evaluate
loans, home equity loans, other secured
not be able to count its own loans.
loans made by consortia or third parties
loans, and other unsecured loans).
Because the agencies did not intend to
under the lending test?
§
.22(c)(2) Constraints on Affiliate
deprive an institution subject to the
A2. Loans originated or purchased by
Lending
CRA of receiving consideration for its
consortia in which an institution
own lending, the agencies read this
participates or by third parties in which
§
22(c)(2)(i) No Affiliate May Claim
constraint slightly differently in cases
an Institution Invests will only be
a Loan Origination or Loan Purchase if
involving a group of affiliated
considered if they qualify as community
Another Institution Claims the Same
institutions, some of which are subject
development loans and will only be
Loan Origination or Purchase
to the CRA and share the same
considered under the community
Q1. How is this constraint on affiliate
assessment area(s). In those
development criterion of the lending
lending applied?
circumstances, an institution that elects
test. However, loans originated directly
A1. This constraint prohibits one
to include all of its mortgage affiliate's
on the books of an institution or
affiliate from claiming a loan origination
home mortgage loans In Its assessment
purchased by the institution are
or purchase claimed by another affiliate.
area would not automatically be
considered to have been made or
Federal Register 64, No. 84/Monday, May 3,
23637
purchased directly by the institution,
individuals in the Institution's
evaluating an institution's record of
even if the institution originated or
assessment area(s) or a broader
making qualified investments. For
purchased the loans as a result of its
statewide or regional area(s) that
Instance, an examiner should take into
participation In a loan consortium.
includes the Institution's assessment
account that a targeted mortgage-backed
These loans would be considered under
area(s).
security that qualifies as an affordable
all the lending test criteria appropriate
housing issue that has only 60% of Its
§
.23(b) Exclusion
to them depending on the type of loan.
face value supported by loans to low- or
Q3. In some circumstances, an
Q1. Even though the regulations state
moderate-income borrowers would not
institution may invest in a third party,
that an activity that is considered under
provide as much affordable housing for
such as a community development
the lending or service tests cannot also
low- and moderate-income individuals
bank, that is also an insured depository
be considered under the investment test,
as a targeted mortgage-backed security
institution and is thus subject to CRA
may parts of an activity be considered
with 100% of its face value supported
requirements. If the investing institution
under one test and other parts be
by affordable housing loans to low- and
considered under another test?
requests its supervisory agency to
moderate-income borrowers. The
consider its pro rata share of community
A1. Yes, in some Instances the nature
examiner should describe any
development loans made by the third
of an activity may make it eligible for
differential weighting (or other
consideration under more than one of
party, as allowed under 12 CFR
adjustment), and its basis In the Public
.22(d), may the third party also
the performance tests. For example,
Evaluation. However, no matter how a
receive consideration for these loans?
certain investments and related support
qualified investment is handled for
A3. Yes, as long as the financial
provided by a large retail institution to
purposes of §
.23(e)(1), it will also
institution and the third party are not
a CDC may be evaluated under the
be evaluated with respect to the
affiliates. The regulations state, at 12
lending, investment. and service tests.
qualitative performance criteria set forth
Under the service test, the institution
CFR
.22(c)(2)(i), that two affiliates
in
§
.23(e)(2), (3) and (4). By
may not both claim the same loan
may receive consideration for any
applying all criteria, a qualified
origination or loan purchase. However,
community development services that it
investment of a lower dollar amount
if the financial institution and the third
provides to the CDC. such as service by
may be weighed more heavily under the
an executive of the institution on the
party are not affiliates, the third party
Investment Test than a qualified
CDC's board of directors. If the
may receive consideration for the
investment with a higher dollar amount,
institution makes an investment in the
community development loans it
but with fewer qualitative
CDC that the CDC uses to make
originates, and the financial Institution
enhancements.
that invested in the third party may also
community development loans, the
Q2: How do examiners evaluate an
receive consideration for its pro rata
Institution may receive consideration
institution's qualified investment in a
under the lending test for its pro-rata
share of the same community
fund, the primary purpose of which is
development loans under 12 CFR
share of community development loans
community development, as that is
.22(d).
made by the CDC. Alternatively, the
defined in the CRA regulations?
institution's investment may be
A2. When evaluating qualified
§
23-Investment Test
considered under the investment test,
investments that benefit an institution's
§
assuming It is a qualified investment. In
assessment area(s) or a broader
.23(a) Scope of Test
addition. an institution may elect to
statewide or regional area that includes
Q1: May an institution receive
have a part of Its investment considered
its assessment area(s), examiners will
consideration under the CRA
under the lending test and the
look at the following four performance
regulations if it invests indirectly
remaining part considered under the
criteria:
through a fund, the purpose of which is
investment test. If the investing
(1) The dollar amount of qualified
community development, as that is
institution opts to have a portion of its
investments;
defined in the CRA regulations?
investment evaluated under the lending
(2) The innovativeness or complexity
A1. Yes, the direct or Indirect nature
test by claiming a share of the CDC's
of qualified Investments;
of the qualified Investment does not
community development loans, the
(3) The responsiveness of qualified
affect whether an institution will
amount of investment considered under
Investments to credit and community
receive consideration under the CRA
the investment test will be offset by that
development needs; and
regulations because the regulations do
portion. Thus, the institution would
(4) The degree to which the qualified
not distinguish between "direct" and
only receive consideration under the
investments are not routinely provided
"indirect" investments. Thus, an
Investment test for the amount of its
by private investors.
institution's investment in an equity
investment multiplied by the percentage
With respect to the first criterion.
fund that, in turn, invests in projects
of the CDC's assets that meet the
examiners will determine the dollar
that, for example, provide affordable
definition of a qualified investment.
amount of qualified investments by
housing to low- and moderate-income
relying on the figures recorded by the
individuals, would receive
§
.23(e) Performance Criteria
institution according to generally
consideration as a qualified investment
Q1. When applying the performance
accepted accounting principles (GAAP).
under the CRA regulations, provided the
criteria of §
.23(e), may an examiner
Although institutions may exercise a
investment benefits one or more of the
distinguish among qualified investments
range of Investment strategies, including
institution's assessment area(s) or a
based on how much of the investment
short-term investments, long-term
broader statewide or regional area(s)
actually supports the underlying
investments, investments that are
that includes one or more of the
community development purpose?
immediately funded, and investments
institution's assessment area(s).
A1. Yes. Although §
.23(e)(1)
with a binding, up-front commitment
Similarly, an institution may receive
speaks in terms of the dollar amount of
that are funded over a period of time,
consideration for a direct qualified
qualified Investments, the criterion
institutions making the same dollar
Investment in a nonprofit organization
permits an examiner to weight certain
amount of investments over the same
that, for example, supports affordable
Investments differently or to make other
number of years, all other performance
housing for low- and moderate-income
appropriate distinctions when
criteria being equal, would receive the
23638
Federal Register/Vol. 64, No. /Monday, May 3, 1999/Notices
same level of consideration. Examiners
institution participation in IDA
party community development
will include both new and outstanding
programs comes in a varlety of forms,
organizations may be considered as
investments in this determination. The
including providing retail banking
qualified Investments or as community
dollar amount of qualified investments
services to IDA account holders,
development loans or both (provided
also will include the dollar amount of
providing matching dollars or operating
there is no double counting), at the
legally binding commitments recorded
funds to an IDA program, designing or
institution's option, as described above
by the institution according to GAAP.
implementing IDA programs, providing
in the discussion regarding §§
.22(d)
The extent to which qualified
consumer financial education to IDA
and
.23(b).
investments receive consideration,
account holders or prospective account
§
.25(e) Benefit to Assessment
however, depends on how examiners
holders, or other means. The extent of
Area(s)
evaluate the Investments under the
financial institutions' involvement in
remaining three performance criteria-
IDAs and the products and services they
Q1. How do examiners evaluate a
innovativeness and complexity,
offer in connection with the accounts
wholesale or limited purpose
responsiveness, and degree to which the
will vary. Thus, subject to §
.23(b),
institution's qualified investment in a
investment is not routinely provided by
examiners evaluate the actual services
fund that invests in projects nationwide
private investors. Examiners also will
and products provided by an institution
and which has a primary purpose of
consider factors relevant to the
in connection with IDA programs as one
community development, as that is
institution's CRA performance context,
or more of the following: community
defined in the regulations?
such as the effect of outstanding long-
development services, retail banking
A1. If examiners find that a wholesale
term qualified investments, the pay-In
services, qualified investments, home
or limited purpose institution has
schedule, and the amount of any cash
mortgage loans, small business loans,
adequately addressed the needs of its
call, on the capacity of the institution to
consumer loans, or community
assessment area(s), they will give
make new investments.
development loans.
consideration to qualified Investments,
as well as community development
§
.24-Service Test
§
.24(d)(3) Availability and
loans and community development
Effectiveness of Alternative Systems for
§
.24(d) Performance Criteria-
services, by that institution nationwide.
Retail Banking Services
Delivering Retail Banking Services
In determining whether an institution
Q1. How do examiners evaluate the
Q1. How will examiners evaluate
has adequately addressed the needs of
availability and effectiveness of an
alternative systems for delivering retail
its assessment area(s), examiners will
institution's systems for delivering retail
banking services?
consider qualified Investments that
banking services?
A1. The regulation recognizes the
benefit a broader statewide or regional
multitude of ways in which an
area that includes the institution's
A1. Convenient access to full service
institution can provide services, for
assessment area(s).
branches within a community is an
important factor in determining the
example, ATMs, banking by telephone
§
availability of credit and non-credit
or computer, and bank-by-mail
.25(f) Community Development
services. Therefore, the service test
programs. Delivery systems other than
Performance Rating
branches will be considered under the
Q1. Must a wholesale or limited
performance standards place primary
regulation to the extent that they are
purpose institution engage in all three
emphasis on full service branches while
effective alternatives to branches in
categories of community development
still considering alternative systems,
such as automated teller machines
providing needed services to low- and
activities (lending, investment and
moderate-income areas and individuals.
service) to perform well under the
("ATMs"). The principal focus is on an
institution's current distribution of
The list of systems in the regulation is
community development test?
not intended to be inclusive.
A1. No, a wholesale or limited
branches; therefore, an Institution is not
required to expand its branch network
Q2. Are debit cards considered under
purpose institution may perform well
or operate unprofitable branches. Under
the service test as an alternative delivery
under the community development test
the service test, alternative systems for
system?
by engaging in one or more of these
delivering retail banking services, such
A2. By themselves, no. However, if
activities.
debit cards are a part of a larger
as ATMs, are considered only to the
§
.26-Small Institution
extent that they are effective alternatives
combination of products, such as a
Performance Standards
comprehensive electronic banking
in providing needed services to low-
service, that allows an institution to
§
.26(a) Performance Criteria
and moderate-income areas and
deliver needed services to low- and
individuals.
Q1. May examiners consider, under
moderate-income areas and individuals
Q2. How do examiners evaluate an
one or more of the performance criteria
institution's activities in connection
In its community, the overall delivery
of the small institution performance
with Individual Development Accounts
system that includes the debit card
standards, lending-related activities,
feature would be considered an
(IDAs)?
such as community development loans
A2. Although there is no standard
alternative delivery system.
and lending-related qualified
IDA program, IDAs typically are deposit
§
.25 Community Development Test
investments, when evaluating a small
accounts targeted to low- and moderate-
for Wholesale or Limited Purpose
institution?
income families that are designed to
Institutions
A1. Yes. Examiners can consider
help them accumulate savings for
"lending-related activities," including
education or job-training. down-
§
.25(d) Indirect Activities
community development loans and
payment and closing costs on a new
Q1. How are investments in third
lending-related qualified investments,
home, or start-up capital for a small
party community development
when evaluating the first four
business. Once participants have
organizations considered under the
performance criteria of the small
successfully funded an IDA, their
community development test?
institution performance test. Although
personal IDA savings are matched by a
A1. Similar to the lending test for
lending-related activities are specifically
public or private entity. Financial
retail institutions, Investments in third
mentioned In the regulation In
Federal Register 64, No. /Monday, May 3, 1999/Notices
23639
connection with only the first three
§
.26(a)(1) Loan-to-deposit Ratio
performance only under this criterion.
criteria (i.e., loan-to-deposit ratio,
Q1. How is the loan-to-deposit ratio
The effect on the overall performance
percentage of loans in the institution's
calculated?
rating of the institution, however, is
assessment area, and lending to
A1. A small institution's loan-to-
considered in light of the performance
borrowers of different incomes and
deposit ratio is calculated in the same
context, including information
businesses of different sizes), examiners
manner that the Uniform Bank
regarding economic conditions, loan
can also consider these activities when
demand, the institution's size, financial
Performance Report/Uniform Thrift
they evaluate the fourth criteria-
Performance Report (UBPR/UTPR)
condition and business strategies, and
geographic distribution of the
determines the ratio. It is calculated by
branching network and other aspects of
Institution's loans.
the institution's lending record.
dividing the institution's net loans and
Q2. What is meant by "as
leases by its total deposits. The ratio is
§
.26(a)(3) & (4) Distribution of
appropriate" when referring to the fact
found in the Liquidity and Investment
Lending Within Assessment Area(s) by
that lending-related activities will be
Portfolio section of the UBPR and
Borrower Income and Geographic
considered, "as appropriate," under the
UTPR. Examiners will use this ratio to
Location
various small institution performance
calculate an average since the last
criteria?
Q1. How will a small institution's
A2. "As appropriate" means that
examination by adding the quarterly
performance be assessed under these
lending-related activities will be
loan-to-deposit ratios and dividing the
lending distribution criteria?
considered when it is necessary to
total by the number of quarters.
A1. Distribution of loans, like other
determine whether an institution meets
Q2. How is the "reasonableness" of a
small institution performance criterla, is
or exceeds the standards for a
loan-to-deposit ratio evaluated?
considered in light of the performance
satisfactory rating. Examiners will also
A2. No specific ratio is reasonable in
context. For example, a small Institution
consider other lending-related activities
every circumstance, and each small
is not required to lend evenly
Institution's ratio is evaluated In light of
at an institution's request.
throughout its assessment area(s) or in
Q3. When evaluating a small
information from the performance
any particular geography. However, in
institution's lending performance, will
context, including the institution's
order to meet the standards for
examiners consider, at the institution's
capacity to lend, demographic and
satisfactory performance under this
request, community development loans
economic factors present in the
criterion, conspicuous gaps in a small
originated or purchased by a consortium
assessment area, and the lending
institution's loan distribution must be
in which the institution participates or
opportunities available in the
adequately explained by performance
by a third party in which the institution
assessment area(s). If a small
context factors such as lending
has invested?
institution's loan-to-deposit ratio
opportunities in the institution's
A3. Yes. However, a small institution
appears unreasonable after considering
assessment area(s), the institution's
that elects to have examiners consider
this information, lending performance
product offerings and business strategy,
community development loans
may still be satisfactory under this
and Institutional capacity and
originated or purchased by a consortium
criterion taking into consideration the
constraints. In addition, it may be
or third party must maintain sufficient
number and the dollar volume of loans
impracticable to review the geographic
Information on its share of the
sold to the secondary market or the
distribution of the lending of an
community development loans so that
number and amount and Innovativeness
institution with few demographically
the examiners may evaluate these loans
or complexity of community
distinct geographies within an
under the small institution performance
development loans and lending-related
assessment area. If sufficient
criteria.
qualified investments.
information on the income levels of
Q4. Under the small institution
Q3. If an institution makes a large
individual borrowers or the revenues or
performance standards, will examiners
number of loans off-shore, will
sizes of business borrowers is not
consider both loan originations and
examiners segregate the domestic loan-
available, examiners may use proxies
purchases?
to-deposit ratio from the foreign loan-to-
such as loan size for estimating
A4. Yes. consistent with the other
deposit ratio?
borrower characteristics, where
assessment methods in the regulation,
A3. No. Examiners will look at the
appropriate.
examiners will consider both loans
Institution's net loan-to-deposit ratio for
the whole institution, without any
§
.26(b) Performance Rating
originated and purchased by the
institution. Likewise, examiners may
adjustments.
Q1. How can a small institution
consider any other loan data the small
achieve an "outstanding" performance
§
.26(a)(2) Percentage of Lending
institution chooses to provide,
rating?
Within Assessment Area(s)
including data on loans outstanding,
Al. A small institution that meets
commitments and letters of credit.
Q1. Must a small institution have a
each of the standards for a "satisfactory"
Q5. Under the small Institution
majority of its lending in its assessment
rating and exceeds some or all of those
performance standards, how will
area(s) to receive a satisfactory
standards may warrant an
qualified investments be considered for
performance rating?
"outstanding" performance rating. In
purposes of determining whether a
A1. No. The percentage of loans and,
assessing performance at the
small institution receives a satisfactory
as appropriate, other lending-related
"outstanding" level, the agencies
CRA rating?
activities located in the bank's
consider the extent to which the
A5. The small institution performance
assessment area(s) is but one of the
institution exceeds each of the
standards focus on lending and other
performance criteria upon which small
performance standards and, at the
lending-related activities. Therefore,
institutions are evaluated. If the
institution's option, its performance in
examiners will consider only lending-
percentage of loans and other lending
making qualified investments and
related qualified investments for the
related activities in an institution's
providing services that enhance credit
purposes of determining whether the
assessment area(s) is less than a
availability in its assessment area(s). In
small institution receives a satisfactory
majority, then the institution does not
some cases, a small Institution may
CRA rating.
meet the standards for satisfactory
qualify for an "outstanding"
23640
Federal Register/Vol. 64, No. 4/Monday, May 3, 1999/Notices
performance rating solely on the basis of
A2. The agencies will coordinate
resulting in a higher level of
its lending activities, but only if its
review of and action on the joint plan.
performance rating.
performance materially exceeds the
Each agency will evaluate the
Q2. How is performance under the
standards for a "satisfactory" rating,
measurable goals for those affiliates for
quantitative and qualitative
particularly with respect to the
which it is the primary regulator.
performance criteria weighed when
penetration of borrowers at all income
examiners assign a CRA rating?
§
.27(f) Plan Content
levels and the dispersion of loans
A2. The lending, Investment, and
throughout the geographies in its
§
.27(f)(1) Measurable Goals
service tests each contain a number of
assessment area(s) that display Income
performance criteria designed to
Q1. How should "measurable goals"
variation. An institution with a high
measure whether an institution is
be specified in a strategic plan?
loan-to-deposit ratio and a high
effectively helping to meet the credit
percentage of loans in its assessment
A1. Measurable goals (e.g., number of
needs of its entire community,
area(s), but with only a reasonable
loans. dollar amount, geographic
including low- and moderate-income
penetration of borrowers at all income
location of activity. and benefit to low-
neighborhoods, in a safe and sound
and moderate-income areas or
levels or a reasonable dispersion of
manner. Some of these performance
individuals) must be stated with
loans throughout geographies of
criteria are quantitative, such as number
differing Income levels in its assessment
sufficient specificity to permit the
and amount, and others, such as the use
area(s), generally will not be rated
public and the agencies to quantify what
of innovative or flexible lending
"outstanding" based only on its lending
performance will be expected. However,
practices, the innovativeness or
performance. However, the institution's
institutions are provided flexibility in
complexity of qualified investments,
specifying goals. For example, an
and the innovativeness and
performance in making qualified
investments and Its performance in
institution may provide ranges of
responsiveness of community
providing branches and other services
lending amounts in different categories
development services, are qualitative.
and delivery systems that enhance
of loans. Measurable goals may also be
The performance criteria that deal with
credit availability in its assessment
linked to funding requirements of
these qualitative aspects of performance
area(s) may augment the institution's
certain public programs or indexed to
recognize that these loans, qualified
satisfactory rating to the extent that it
other external factors as long as these
investments, and community
may be rated "outstanding."
mechanisms provide a quantifiable
development services sometimes require
standard.
Q2. Will a small institution's qualified
special expertise and effort on the part
investments, community development
§
.27(g) Plan Approval
of the institution and provide a benefit
loans, and community development
to the community that would not
§
.27(g)(2) Public Participation
services be considered if they do not
otherwise be possible. As such, the
directly benefit its assessment area(s)?
Q1. How will the public receive notice
agencies consider the qualitative aspects
of an institution's activities when
A2. Yes. These activities are eligible
of a proposed strategic plan?
for consideration if they benefit a
measuring the benefits received by a
A1. An institution submitting a
broader statewide or regional area that
community. An institution's
strategic plan for approval by the
includes a small institution's
performance under these qualitative
agencies is required to solicit public
assessment area(s). as discussed more
criteria may augment the consideration
comment on the plan for a period of
fully in Q&A6 addressing §§
.12(i)
given to an institution's performance
thirty (30) days after publishing notice
and 563e.12(h).
under the quantitative criteria of the
of the plan at least once in a newspaper
regulations, resulting in a higher level of
§
.27-Strategic Plan
of general circulation. The notice should
performance and rating.
be sufficiently prominent to attract
§
.27(c) Plans in General
public attention and should make clear
§
.28(a) Ratings in General
Q1. To what extent will the agencies
that public comment is desired. An
Q1. How are institutions with
provide guidance to an institution
institution may, in addition, provide
domestic branches in more than one
during the development of its strategic
notice to the public in any other manner
state assigned a rating?
plan?
it chooses.
A1. The evaluation of an institution
A1. An institution will have an
that maintains domestic branches in
§
.28-Assigned Ratings
opportunity to consult with and provide
more than one state ("multistate
information to the agencies on a
Q1. Are innovative lending practices,
institution") will Include a written
proposed strategic plan. Through this
innovative or complex qualified
evaluation and rating of its CRA record
process, an institution is provided
investments, and innovative community
of performance as a whole and in each
guidance on procedures and on the
development services required for a
state in which it has a domestic branch.
Information necessary to ensure a
"satisfactory" or "outstanding" CRA
The written evaluation will contain a
complete submission. For example, the
rating?
separate presentation on a multistate
agencies will provide guidance on
A1. No. Moreover, the lack of
institution's performance for each
whether the level of detail as set out in
innovative lending practices, innovative
metropolitan statistical area and the
the proposed plan would be sufficient to
or complex qualified investments, or
nonmetropolitan area within each state,
permit agency evaluation of the plan.
innovative community development
If it maintains one or more domestic
However, the agencies' guidance during
services alone will not result in a
branch offices in these areas. This
plan development and, particularly.
"needs to improve" CRA rating.
separate presentation will contain
prior to the public comment period, will
However, the use of innovative lending
conclusions, supported by facts and
not include commenting on the merits
practices, innovative or complex
data, on performance under the
of a proposed strategic plan or on the
qualified investments, and innovative
performance tests and standards in the
adequacy of measurable goals.
community development services may
regulation. The evaluation of a
Q2. How will a joint strategic plan be
augment the consideration given to an
multistate institution that maintains a
reviewed if the affiliates have different
institution's performance under the
domestic branch in two or more states
primary Federal supervisors?
quantitative criteria of the regulations,
in a multistate metropolitan area will
Federal Register / 64, No. 84 Monday, May 3, 1999 Notices
23641
include a written evaluation (containing
COMPOSITE RATING POINT
financially troubled institution is being
the same information described above)
REQUIREMENTS-Continued
acquired.
and rating of its CRA record of
[Add points from three tests]
§
.29(b) Interested Parties
performance in the multistate
metropolitan area. In such cases, the
Rating
Total points
Q1. What consideration is given to
statewide evaluation and rating will be
comments from interested parties in
adjusted to reflect performance in the
Satisfactory
11 through 19.
reviewing an application?
portion of the state not within the
Needs to Improve
5 through 10
A1. Materials relating to CRA
multistate metropolitan statistical area.
Substantial Noncompliance
0 through 4.
performance received during the
Q2. How are institutions that operate
Note: There is one exception to the Com-
applications process can provide
within only a single state assigned a
valuable information. Written
posite Rating matrix. An institution may not re-
rating?
ceive a rating of "satisfactory" unless it re-
comments, which may express either
A2. An institution that operates
ceives at least "low satisfactory" on the lend-
support for or opposition to the
within only a single state ("single-state
ing test. Therefore, the total points are capped
application, are made a part of the
at three times the lending test score.
institution") will be assigned a rating of
record in accordance with the agencies'
its CRA record based on its performance
§
.29-Effect of CRA Performance
procedures, and are carefully
within that state. In assigning this
on Applications
considered in making the agencies'
rating, the agencies will separately
decision. Comments should be
§
.29(a) CRA Performance
present a single-state institution's
supported by facts about the applicant's
performance for each metropolitan area
Q1. What weight is given to an
performance and should be as specific
in which the institution maintains one
institution's CRA performance
as possible in explaining the basis for
or more domestic branch offices. This
examination in reviewing an
supporting or opposing the application.
separate presentation will contain
application?
These comments must be submitted
conclusions, supported by facts and
A1. In cases in which CRA
within the time limits provided under
data, on the single-state institution's
performance is a relevant factor,
the agencies' procedures.
performance under the performance
information from a CRA performance
Q2. Is an institution required to enter
tests and standards in the regulation.
examination of the institution is a
into agreements with private parties?
Q3. How do the agencies weight
particularly important consideration in
A2. No. Although communications
performance under the lending,
the applications process because it
between an institution and members of
investment and service test for large
represents a detailed evaluation of the
its community may provide a valuable
retail institutions?
institution's CRA performance by its
method for the institution to assess how
A3. A rating of "outstanding." "high
Federal supervisory agency. In this
best to address the credit needs of the
satisfactory,' "low satisfactory.' "needs
light, an examination is an important,
community, the CRA does not require
to improve, or "substantial
and often controlling, factor in the
an institution to enter into agreements
noncompliance," based on a judgment
consideration of an institution's record.
with private parties. These agreements
supported by facts and data, will be
In some cases, however, the
are not monitored or enforced by the
assigned under each performance test.
examination may not be recent or a
agencies.
Points will then be assigned to each
specific Issue raised In the application
§
.41-Assessment Area
rating as described in the first matrix set
process, such as progress in addressing
Delineation
forth below. A large retail institution's
weaknesses noted by examiners,
overall rating under the lending.
progress in implementing commitments
§
.41(a) In General
investment and service tests will then
previously made to the reviewing
Q1. How do the agencies evaluate
be calculated in accordance with the
agency. or a supported allegation from
"assessment areas" under the revised
second matrix set forth below. which
a commenter. Is relevant to CRA
CRA regulations compared to how they
Incorporates the rating principles in the
performance under the regulation and
evaluated "local communities" that
regulation.
was not addressed in the examination.
institutions delineated under the
In these circumstances, the applicant
original CRA regulations?
POINTS ASSIGNED FOR PERFORMANCE
should present sufficient information to
A1. The revised rule focuses on the
UNDER LENDING, INVESTMENT AND
supplement its record of performance
distribution and level of an Institution's
SERVICE TESTS
and to respond to the substantive issues
lending, investments, and services
raised in the application proceeding.
rather than on how and why an
Lend-
Invest-
Service
Q2. What consideration is given to an
institution delineated Its "local
ing
ment
institution's commitments for future
community" or assessment area(s) in a
Outstanding
12
6
6
action in reviewing an application by
particular manner. Therefore, the
High Satisfactory
9
4
4 those agencies that consider such
agencies will not evaluate an
Low Satisfactory
6
3
3 commitments?
institution's delineation of its
Needs to Im-
A2. Commitments for future action
assessment area(s) as a separate
prove
3
1
1
are not viewed as part of the CRA record
performance criterion as they did under
Substantial Non-
of performance. In general, institutions
the original regulation. Rather, the
compliance
0
0
0
cannot use commitments made in the
agencies will only review whether the
applications process to overcome a
assessment area delineated by the
COMPOSITE RATING POINT
seriously deficient record of CRA
institution complies with the limitations
REQUIREMENTS
performance. However, commitments
set forth in the regulations at
for improvements in an institution's
§
41(e).
[Add points from three tests]
performance may be appropriate to
Q2. If an institution elects to have the
Rating
Total points
address specific weaknesses in an
agencies consider affiliate lending, will
otherwise satisfactory record or to
this decision affect the Institution's
Outstanding
20 or over.
address CRA performance when a
assessment area(s)?
23642
Federal Register/Vol. 64, No. 4/Monday, May 3, 1999/Notices
A2. If an Institution elects to have the
entire political subdivisions. Because
CMSA. Similarly, an assessment area
lending activities of Its affiliates
census tracts and block numbering areas
may not extend substantially across
considered in the evaluation of the
are the common geographic areas used
state boundaries unless the assessment
institution's lending, the geographies in
consistently nationwide for data
area is located in a multistate MSA. An
which the affiliate lends do not affect
collection, the agencies require that
Institution may not delineate a whole
the Institution's delineation of
assessment areas be made up of whole
state as its assessment area unless the
assessment area(s).
geographies. If including an entire
entire state is contained within a CMSA.
Q3. Can a financial institution
political subdivision would create an
These limitations apply to wholesale
identify a specific ethnic group rather
area that Is larger than the area the
and limited purpose Institutions as well
than a geographic area as its assessment
institution can reasonably be expected
as other institutions.
area?
to serve, an Institution may, but is not
An institution shall delineate separate
A3. No, assessment areas must be
required to, adjust the boundarles of its
assessment areas for the areas inside
based on geography.
assessment area to Include only portlons
and outside a CMSA (or MSA if the
of the political subdivision. For
MSA is not located in a CMSA) if the
§
.41(c) Geographic Area(s) for
example, this adjustment is appropriate
area served by the institution's branches
Institutions Other Than Wholesale or
if the assessment area would otherwise
outside the CMSA (or MSA) extends
Limited Purpose Institutions
be extremely large, of unusual
substantially beyond the CMSA (or
§
.41(c)(1) Generally Consist of One
configuration, or divided by significant
MSA) boundary. Similarly, the
or More MSAs or One or More
geographic barriers (such as a river,
institution shall delineate separate
Contiguous Political Subdivisions
mountain, or major highway system).
assessment areas for the areas inside
When adjusting the boundaries of their
and outside of a state If the institution's
Q1. Besides cities, towns, and
counties, what other units of local
assessment areas, Institutions must not
branches extend substantially beyond
government are political subdivisions
arbitrarily exclude low- or moderate-
the boundary of one state (unless the
for CRA purposes?
Income geographies or set boundaries
assessment area is located in a
that reflect illegal discrimination.
multistate MSA). In addition, the
A1. Townships and Indian
Institution should also delineate
reservations are political subdivisions
§
.41(e) Limitations on Delineation
separate assessment areas If It has
for CRA purposes. Institutions should
of an Assessment Area
branches in areas within the same state
be aware that the boundaries of
§
townships and Indian reservations may
.41(e)(3) May Not Arbitrarily
that are widely separate and not at all
not be consistent with the boundaries of
Exclude Low- or Moderate-income
contiguous. For example, an institution
the census tracts or block numbering
Geographies
that has its main office in New York
City and a branch in Buffalo, New York,
areas ("geographies") In the area. In
Q1. How will examiners determine
and each office serves only the
these cases, institutions must ensure
whether an institution has arbitrarily
immediate areas around it, should
that their assessment area(s) consists
excluded low- or moderate-income
delineate two separate assessment areas.
only of whole geographies by adding
geographies?
Q2. Can an institution delineate one
any portions of the geographies that lie
A1. Examiners will make this
assessment area that consists of an MSA
outside the political subdivision to the
determination on a case-by-case basis
and two large counties that abut the
delineated assessment area(s).
after considering the facts relevant to
MSA but are not adjacent to each other?
Q2. Are wards, school districts, voting
the institution's assessment area
A2. As a general rule, an institution's
districts, and water districts political
delineation. Information that examiners
assessment area should not extend
subdivisions for CRA purposes?
will consider may include:
substantially beyond the boundary of an
A2. No. However, an Institution that
Income levels in the institution's
MSA If the MSA Is not located in a
determines that it predominantly serves
assessment area(s) and surrounding
CMSA. Therefore, the MSA would be a
an area that is smaller than a city, town
geographies;
separate assessment area, and because
or other political subdivision may
Locations of branches and deposit-
the two abutting counties are not
delineate as its assessment area the
taking ATMs;
adjacent to each other and, In this
larger political subdivision and then, in
Loan distribution in the
example, extend substantlally beyond
accordance with §
.41(d),
adjust
the
Institution's assessment area(s) and
the boundary of the MSA, the
boundarles of the assessment area to
surrounding geographies;
Institution would delineate each county
include only the portion of the political
The institution's size;
as a separate assessment area (so, in this
subdivision that It reasonably can be
The Institution's financial
example, there would be three
expected to serve. The smaller area that
condition: and
assessment areas). However, If the MSA
the institution delineates must consist
The business strategy, corporate
and the two counties were in the same
of entire geographies, may not reflect
structure and product offerings of the
CMSA, then the institution could
illegal discrimination, and may not
institution.
delineate only one assessment area
arbitrarily exclude low- or moderate-
§
.41(e)(4) May Not Extend
including them all.
income geographies.
Substantially Beyond a CMSA Boundary
§
.42-Data Collection, Reporting,
§
.41(d) Adjustments to Geographic
or Beyond a State Boundary Unless
and Disclosure
Area(s)
Located in a Multistate MSA
Q1. When must an institution collect
Q1. When may an institution adjust
Q1. What are the maximum limits on
and report data under the CRA
the boundaries of an assessment area to
the size of an assessment area?
regulations?
include only a portion of a political
A1. An institution shall not delineate
A1. All Institutions except small
subdivision?
an assessment area extending
institutions are subject to data collection
A1. Institutions must Include whole
substantially across the boundaries of a
and reporting requirements. A small
geographies (i.e., census tracts or block
consolidated metropolitan statistical
Institution is a bank or thrift that, as of
numbering areas) In their assessment
area (CMSA) or the boundaries of an
December 31 of either of the prior two
areas and generally should include
MSA, If the MSA Is not located In a
calendar years, had total assets of less
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
23643
than $250 million and was independent
Q4. Should renewals of lines of credit
A7. No. However, small institutions
or an affiliate of a holding company
be reported?
must be prepared to identify those
that, as of December 31 of either of the
A4. No. Similar to loan renewals,
loans, Investments and services to be
prior two calendar years, had total
renewals of lines of credit are not
evaluated under the community
banking and thrift assets of less than $1
considered loan originations and should
development test.
billion.
not be reported.
§
.42(a) Loan Information Required
For example:
Q5. When should merging institutions
to be Collected and Maintained
collect data?
Data collection
A5. Three scenarios of data collection
Q1. Must institutions collect and
Institution's
required for fol-
Date
asset size
lowing calendar
responsibilities for the calendar year of
report data on all commercial loans
($ million)
year?
a merger and subsequent data reporting
under $1 million at origination?
(million)
responsibilities are described below.
A1. No. Institutions that are not
Two institutions are exempt from
exempt from data collection and
12/31/94
$240
No.
CRA collection and reporting
reporting are required to collect and
12/31/95
260
No.
requirements because of asset size. The
report only those commercial loans that
12/31/96
230
No.
12/31/97
280
No.
Institutions merge. No data collection is
they capture in the Call Report,
12/31/98
260
Yes, beginning
required for the year In which the
Schedule RC-C, Part II, and in the TFR,
merger takes place, regardless of the
Schedule SB. Small business loans are
1/01/99.
resulting asset size. Data collection
defined as those whose original
All institutions that are subject to the
would begin after two consecutive years
amounts are $1 million or less and that
data collection and reporting
in which the combined institution had
were reported as either "Loans secured
requirements must report the data for a
year-end assets of at least $250 million
by nonfarm or nonresidential real
or was part of a holding company that
estate" or "Commercial and Industrial
calendar year by March 1 of the
subsequent year. In the example, above,
had year-end banking and thrift assets of
loans" in Part I of the Call Report or
the institution would report the data
at least $1 billion.
TFR.
collected for calendar year 1999 by
Institution A, an institution
Q2. For loans defined as small
March 1. 2000.
required to collect and report the data,
business loans, what information should
The Board of Governors of the Federal
and Institution B, an exempt institution,
be collected and maintained?
Reserve System is handling the
merge. Institution A is the surviving
A2. Institutions that are not exempt
processing of the reports for all of the
institution. For the year of the merger,
from data collection and reporting are
primary regulators. The reports should
data collection is required for Institution
required to collect and maintain in a
be submitted in a prescribed electronic
A's transactions. Data collection is
standardized, machine readable format
format on a timely basis. The mailing
optional for the transactions of the
information on each small business loan
address for submitting these reports is:
previously exempt institution. For the
originated or purchased for each
Attention: CRA Processing. Board of
following year, all transactions of the
calendar year:
Governors of the Federal Reserve
surviving institution must be collected
A unique number or alpha-numeric
System, 1709 New York Avenue, N.W.,
and reported.
symbol that can be used to identify the
5th Floor, Washington, DC 20006.
Two Institutions that each are
relevant loan file;
Q2. Should an Institution develop its
required to collect and report the data
The loan amount at origination; The
own program for data collection, or will
merge. Data collection is required for
loan location; and
the regulators require a certain format?
the entire year of the merger and for
An indicator whether the loan was
A2. An institution may use the free
subsequent years so long as the
to a business with gross annual
software that is provided by the FFIEC
surviving Institution is not exempt. The
revenues of $1 million or less.
to reporting institutions for data
surviving institution may file either a
The location of the loan must be
collection and reporting or develop its
consolidated submission or separate
maintained by census tract or block
own program. Those institutions that
submissions for the year of the merger
numbering area. In addition,
develop their own programs must
but must file a consolidated report for
supplemental Information contained in
follow the precise format for the new
subsequent years.
the file specifications includes a date
CRA data collection and reporting rules.
Q6. Can small Institutions get a copy
associated with the origination or
This format may be obtained by
of the data collection software even
purchase and whether a loan was
contacting the CRA Assistance Line at
though they are not required to collect
originated or purchased by an affiliate.
(202) 872-7584.
or report data?
The same requirements apply to small
Q3. How should an institution report
A6. Yes. Any Institution that is
farm loans.
data on lines of credit?
interested in receiving a copy of the
Q3. Will farm loans need to be
A3. Institutions must collect and
software may send a written request to:
segregated from business loans?
report data on lines of credit in the same
Attn.: CRA Processing. Board of
A3. Yes.
way that they provide data on loan
Governors of the Federal Reserve
Q4. Should institutions collect and
originations. Lines of credit are
System, 1709 New York Ave, N.W., 5th
report data on all agricultural loans
considered originated at the time the
Floor. Washington, DC 20006.
under $500,000 at origination?
line Is approved or Increased; and an
They may also call the CRA
A4. Institutions are to report those
increase is considered a new
Assistance Line at (202) 872-7584 or
farm loans that they capture in the Call
origination. Generally, the full amount
send Internet e-mail to
Report, Schedule RC-C, Part II and
of the credit line is the amount that is
[email protected].
Schedule SB of the TFR. Small farm
considered originated. In the case of an
Q7. If a small institution is designated
loans are defined as those whose
Increase to an existing line, the amount
a wholesale or limited purpose
original amounts are $500,000 or less
of the Increase is the amount that is
Institution, must it collect data that it
and were reported as either "Loans to
considered originated and that amount
would not otherwise be required to
finance agricultural production and
should be reported.
collect because it is a small Institution?
other loans to farmers" or "Loans
23644
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
secured by farmland" In Part I of the
on the entire line as a community
Information available, It should assign a
Call Report and TFR.
development loan. If the line does not
census tract or block numbering area to
Q5. Should institutions collect and
qualify as a community development
that location (geocode) and report that
report data about small business and
loan, the Institution has the option of
Information as required under the
small farm loans that are refinanced or
collecting and maintaining (but not
regulation.
renewed?
reporting) the entire line of credit as
For loans originated or purchased in
A5. An Institution collects and reports
"Other Secured Lines/Loans for
1998 or later, If the institution cannot
information about refinancings but does
Purposes of Small Business."
determine the borrower's street address,
not collect and report Information about
Q8. When collecting small business
and does not know the census tract or
renewals. A refinancing typically
and small farm data for CRA purposes,
block numbering area, the institution
Involves the satisfaction of an existing
may an institution collect and report
should report the borrower's state,
obligation that is replaced by a new
information about loans to small
county, MSA, If applicable, and "NA,"
obligation undertaken by the same
businesses and small farms located
for "not available," in lieu of a census
borrower. When an Institution
outside the United States?
tract or block numbering area code.
refinances a loan, it is considered a new
A8. At an Institution's option, It may
origination, and loan data should be
collect data about small business and
§
.42(a)(2) Loan Amount at
collected and reported, If otherwise
small farm loans located outside the
Origination
required. Consistent with HMDA,
United States; however, it cannot report
Q1. When an institution purchases a
however, If under the original loan
this data because the CRA data
small business or small farm loan,
agreement, the institution is
collection software will not accept data
which amount should the institution
unconditionally obligated to refinance
concerning loan locations outside the
collect and report-the original amount
the loan, or Is obligated to refinance the
United States.
of the loan or the amount at purchase?
loan subject to conditions within the
Q9. Is an institution that has no small
A1. When collecting and reporting
borrower's control, the Institution
farm or small business loans required to
information on purchased small
would not report these events as
report under CRA?
business and small farm loans, an
originations.
A9. Each institution subject to data
institution collects and reports the
For purposes of the CRA data
reporting requirements must, at a
amount of the loan at origination, not at
collection and reporting requirements,
minimum, submit a transmittal sheet,
the time of purchase. This is consistent
an extension of the maturity of an
definition of its assessment area(s), and
with the Call Report's and TFR's use of
existing loan is a renewal, and is not
a record of Its community development
the "original amount of the loan" to
considered a loan origination.
loans. If the Institution does not have
determine whether a loan should be
Therefore, Institutions should not
community development loans to
reported as a "loan to a small business"
collect and report data on loan
report, the record should be sent with
or a "loan to a small farm" and in which
renewals.
"0" in the community development
loan size category a loan should be
Q6. Does a loan to the "fishing
loan composite data fields. An
reported. When assessing the volume of
industry" come under the definition of
institution that has not purchased or
small business and small farm loan
a small farm loan?
originated any small business or small
purchases for purposes of evaluating
A6. Yes. Instructions for Part I of the
farm loans during the reporting period
lending test performance under CRA,
Call Report and Schedule SB of the TFR
would not submit the composite loan
however, examiners will evaluate an
Include loans "made for the purpose of
records for small business or small farm
Institution's activity based on the
financing fisheries and forestries,
loans.
amounts at purchase.
including loans to commercial
Q10. How should an Institution
Q2. How should an Institution collect
flshermen" as a component of the
collect and report the location of a loan
data about multiple loan originations to
definition for "Loans to finance
made to a small business or farm If the
the same business?
agricultural production and other loans
borrower provides an address that
A2. If an institution makes multiple
to farmers." Part II of Schedule RC-C of
consists of a post office box number or
originations to the same business, the
the Call Report and Schedule SB of the
a rural route and box number?
loans should be collected and reported
TFR, which serve as the basis of the
A10. Prudent banking practices
as separate originations rather than
definition for small business and small
dictate that an institution know the
combined and reported as they are on
farm loans in the revised regulation,
location of its customers and loan
the Call Report or TFR, which reflect
capture both "Loans to finance
collateral. Therefore, Institutions
loans outstanding, rather than
agricultural production and other loans
typically will know the actual location
originations. However, if Institutions
to farmers" and "Loans secured by
of their borrowers or loan collateral
make multiple originations to the same
farmland."
beyond an address consisting only of a
business solely to inflate artificially the
Q7. How should an institution report
post office box.
number Or volume of loans evaluated for
a home equity line of credit, part of
Many borrowers have street addresses
CRA lending performance, the agencies
which is for home improvement
In addition to post office box numbers
may combine these loans for purposes
purposes, but the predominant part of
or rural route and box numbers.
of evaluation under the CRA.
which is for small business purposes?
Institutions should ask their borrowers
Q3. How should an institution collect
A7. The institution has the option of
to provide the street address of the main
data pertaining to credit cards issued to
reporting the portion of the home equity
business facility or farm or the location
small businesses?
line that is for home improvement
where the loan proceeds otherwise will
A3. If an institution agrees to issue
purposes under HMDA. That portion of
be applied. Moreover, in many cases in
credit cards to a business' employees,
the loan would then be considered
which the borrower's address consists
all of the credit card lines opened on a
when examiners evaluate home
only of a rural route number or post
particular date for that single business
mortgage lending. If the line meets the
office box, the Institution knows the
should be reported as one small
regulatory definition of a "communIty
location (i.e., the census tract or block
business loan origination rather than
development loan," the Institution
numbering area) of the borrower or loan
reporting each individual credit card
should collect and report Information
collateral. Once the Institution has this
line, assuming the criteria in the "small
Federal Register/Vol. 64, No. /Monday, May 3, 1999/Notices
23645
business loan" definition in the
information may not be included in the
numbering area in which the institution
regulation are met. The credit card
loans to businesses and farms with gross
originated or purchased at least one
program's "amount at origination" is the
annual revenues of $1 million or less
small business or small farm loan
sum of all of the employee/business
when reporting this data.
during the prior year:
credit cards" credit limits opened on a
Q3. What gross revenue should an
The number and amount of loans
particular date. If subsequently issued
Institution use In determining the gross
originated or purchased with original
credit cards Increase the small business
annual revenue of a start-up business?
amounts of $100,000 or less;
credit line, the added amount is
A3. The institution should use the
The number and amount of loans
reported as a new origination.
actual gross annual revenue to date
originated or purchased with original
§
.42(a)(3) The Loan Location
(Including $0 if the new business has
amounts of more than $100,000 but less
had no revenue to date). Although a
than or equal to $250,000;
Q1. Which location should an
start-up business will provide the
The number and amount of loans
institution record if a small business
Institution with forma projected
originated or purchased with original
loan's proceeds are used in a variety of
revenue figures, these figures may not
amounts of more than $250,000 but not
locations?
accurately reflect actual gross revenue.
more than $1 million, as to small
A1. The institution should record the
Q4: When collecting and reporting the
business loans, or $500,000. as to small
loan location by either the location of
gross annual revenue of small business
farm loans; and
the business headquarters or the
or farm borrowers, do institutions
To the extent that information is
location where the greatest portion of
collect and report the gross annual
available, the number and amount of
the proceeds are applied, as Indicated
revenue or the adjusted gross annual
loans to businesses and farms with gross
by the borrower.
revenue of its borrowers?
annual revenues of $1 million or less
§
.42(a)(4) Indicator of Gross
A4: Institutions collect and report the
(using the revenues the institution
Annual Revenue
gross annual revenue, rather than the
considered in making its credit
adjusted gross annual revenue, of their
Q1. When indicating whether a small
decision).
small business or farm borrowers. The
business borrower had gross annual
purpose of this data collection is to
§
.42(b)(2) Community Development
revenues of $1 million or less, upon
enable examiners and the public to
Loan Data
what revenues should an institution
judge whether the institution is lending
Q1. What information about
rely?
to small businesses and farms or
A1. Generally, an institution should
community development loans must
rely on the revenues that it considered
whether It is only making small loans to
institutions report?
in making Its credit decision. For
larger businesses and farms.
A1. Institutions subject to data
example, in the case of affiliated
The regulation does not require
reporting requirements must report the
Institutions to request or consider
businesses, such as a parent corporation
aggregate number and amount of
revenue information when making a
and its subsidiary, If the Institution
community development loans
considered the revenues of the entity's
loan; however, if Institutions do gather
originated and purchased during the
this Information from their borrowers,
parent or a subsidiary corporation of the
prior calendar year.
parent as well, then the institution
the agencies expect them to collect and
Q2. If a loan meets the definition of
would aggregate the revenues of both
report the borrowers' gross annual
a home mortgage, small business, or
corporations to determine whether the
revenue for purposes of CRA. The CRA
small farm loan AND qualifies as a
revenues are $1 million or less.
regulations similarly do not require
community development loan, where
Alternatively, if the institution
institutions to verify revenue amounts;
should It be reported? Can FHA, VA and
considered the revenues of only the
thus, institutions may rely on the gross
SBA loans be reported as community
annual revenue amount provided by
entity to which the loan is actually
development loans?
extended, the Institution should rely
borrowers in the ordinary course of
A2. Except for multifamily affordable
business. If an institution does not
solely upon whether gross annual
housing loans, which may be reported
revenues are above or below $1 million
collect gross annual revenue
by retail Institutions both under HMDA
Information for its small business and
for that entity. However, If the
as home mortgage loans and as
small farm borrowers, the Institution
Institution considered and relied on
community development loans, In order
would not indicate on the CRA data
revenues or income of a cosigner or
to avoid double counting, retail
collection software that the gross annual
guarantor that is not an affiliate of the
institutions must report loans that meet
revenues of the borrower are $1 million
borrower, the institution should not
the definitions of home mortgage, small
adjust the borrower's revenues for
or less. (See Q&A2 regarding
business, or small farm loans only in
§
.42(a)(4).)
reporting purposes.
those respective categories even If they
Q2. If an institution that is not exempt
§
.42(b) Loan Information Required
also meet the definition of community
from data collection and reporting does
to be Reported
development loans. As a practical
not request or consider revenue
matter, this is not a disadvantage for
§
.42(b)(1) Small Business and
information to make the credit decision
retail Institutions because any affordable
Small Farm Loan Data
regarding a small business or small farm
housing mortgage, small business, small
loan, must the institution collect
Q1. For small business and small
farm or consumer loan that would
revenue Information in connection with
farm loan information that is collected
otherwise meet the definition of a
that loan?
and maintained, what data should be
community development loan will be
A2. No. In those Instances, the
reported?
considered elsewhere in the lending
Institution should enter the code
A1. Each Institution that is not
test. Any of these types of loans that
Indicating "revenues not known" on the
exempt from data collection and
occur outside the institution's
individual loan portion of the data
reporting is required to report in
assessment area can receive
collection software or on an internally
machine-readable form annually by
consideration under the borrower
developed system. Loans for which the
March 1 the following information,
characteristic criteria of the lending test.
Institution did not collect revenue
aggregated for each census tract or block
See Q&A4 under §
.22(b)(2) & (3).
23646
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
Limited purpose and wholesale
collect data for one or more of the
The regulation does not require
Institutions also must report loans that
following categories of consumer loans:
institutions to request or consider
meet the definitions of home mortgage,
motor vehicle, credit card, home equity,
income information when making a
small business, or small farm loans in
other secured, and other unsecured. If
loan; however, If institutions do gather
those respective categories; however,
an institution collects data for loans in
this information from their borrowers,
they must also report any loans from
a certain category, it must collect data
the agencies expect them to collect the
those categories that meet the regulatory
for all loans originated or purchased
borrowers' gross annual Income for
definition of "community development
within that category. The Institution
purposes of CRA. The CRA regulations
loans" as community development
must maintain these data separately for
similarly do not require institutions to
loans. There is no double counting
each category for which It chooses to
verify Income amounts; thus,
because wholesale and limited purpose
collect data. The data collected and
Institutions may rely on the gross
Institutions are not subject to the
maintained should include for each
annual Income amount provided by
lending test and, therefore, are not
loan:
borrowers in the ordinary course of
evaluated on their level and distribution
A unique number or alpha-numeric
business.
of home mortgage, small business, small
symbol that can be used to identify the
§
.42(c)(2) Other Loan Data
farm and consumer loans.
relevant loan file:
Q3. When the primary purpose of a
The loan amount at origination or
Q1. Schedule RC-C, Part II of the Call
loan is to finance an affordable housing
purchase;
Report and schedule SB of the TFR do
The loan location; and
not allow financial institutions to report
project for low-or moderate-income
individuals, but, for example, only 40%
The gross annual Income of the
loans for commercial and industrial
of the units in question will actually be
borrower that the Institution considered
purposes that are secured by residential
in making its credit decision.
real estate. Loans extended to small
occupied by individuals or families with
low or moderate incomes, should the
Generally, guidance given with
businesses with gross annual revenues
entire loan amount be reported as a
respect to data collection of small
of $1 million or less may, however, be
community development loan?
business and small farm loans,
secured by residential real estate. Is
including. for example, guidance
there a way to collect this information
A3. Yes. As long as the primary
regarding collecting loan location data,
on the software to supplement an
purpose of the loan is a community
development purpose, the full amount
and whether to collect data in
institution's small business lending data
of the Institution's loan should be
connection with refinanced or renewed
at the time of examination?
included in its reporting of aggregate
loans, will also apply to consumer
A1. Yes. If these loans promote
loans.
community development, as defined in
amounts of community development
the regulation, the institution should
lending. However, as noted in Q&A1
§
.42(c)(1)(iv) Income of Borrower
collect and report information about
addressing §
.22(b)(4),
examiners
Q1. If an institution does not consider
these loans as community development
may make qualitative distinctions
income when making an underwriting
loans. Otherwise, at an institution's
among community development loans
decision in connection with a consumer
option, it may collect and maintain data
on the basis of the extent to which the
loan, must it collect income
concerning loans, purchases, and lines
loan advances the community
information?
of credit extended to small businesses
development purpose.
A1. No. Further, If the institution
and secured by residential real estate for
§
.42(b)(3) Home Mortgage Loans
routinely collects, but does not verify. a
consideration in the CRA evaluation of
borrower's Income when making a
its small business lending. To facilitate
Q1. Must Institutions that are not
credit decision, it need not verify the
this optional data collection, the
required to collect home mortgage loan
Income for purposes of data
software distributed free-of-charge by
data by the HMDA collect home
maintenance.
the FFIEC provides that an Institution
mortgage loan data for purposes of the
Q2. May an institution list "0" in the
may collect this information to
CRA?
income field on consumer loans made
supplement its small business lending
A1. No. If an institution is not
to employees when collecting data for
data by choosing loan type, "Other
required to collect home mortgage loan
CRA purposes as the institution would
Secured Lines/Loans for Purposes of
data by the HMDA, the institution need
be permitted to do under HMDA?
Small Business," in the individual loan
not collect home mortgage loan data
A2. Yes.
data. (The title of the loan type, "Other
under the CRA. Examiners will sample
Q3. When collecting the gross annual
Secured Lines of Credit for Purposes of
these loans to evaluate the institution's
Income of consumer borrowers, do
Small Business," which was found in
home mortgage lending. If an institution
institutions collect the gross annual
the instructions accompanying the 1996
wants to ensure that examiners consider
income or the adjusted gross annual
data collection software, is being
all of its home mortgage loans, the
income of the borrowers?
changed to "Other Secured Lines/Loans
institution may collect and maintain
A3. Institutions collect the gross
for Purposes of Small Business" in order
data on these loans.
annual Income, rather than the adjusted
to accurately reflect that lines of credit
§
.42(c) Optional Data Collection
gross annual Income, of consumer
and loans may be reported under this
and Maintenance
borrowers. The purpose of Income data
loan type.) This information should be
collection in connection with consumer
maintained at the institution but should
§
.42(c)(1) Consumer Loans
loans is to enable examiners to
not be submitted for central reporting
Q1. What are the data requirements
determine the distribution, particularly
purposes.
regarding consumer loans?
in the Institution's assessment area(s), of
Q2. Must an institution collect data
A1. There are no data reporting
the institution's consumer loans, based
on loan commitments and letters of
requirements for consumer loans.
on borrower characteristics, including
credit?
Institutions may, however, opt to collect
the number and amount of consumer
A2. No. Institutions are not required
and maintain data on consumer loans. If
loans to low-, moderate-, middle-, and
to collect data on loan commitments
an Institution chooses to collect
upper-income borrowers, as determined
and letters of credit. Institutions may,
information on consumer loans, It may
on the basis of gross annual Income.
however, provide for examiner
Federal Register/Vol. 64, No. 4/Monday, May 3, 1999/Notices
23647
consideration information on letters of
responding to comments may help to
In a paper copy. or in another format
credit and commitments.
foster a dialogue with members of the
acceptable to the requestor, within 5
Q3. Are commercial and consumer
community or to present relevant
calendar days, as required by
leases considered loans for purposes of
information to an institution's Federal
§
.43(c)(2)(ii).
CRA data collection?
financial supervisory agency. If an
§
.43(c) Location of Public
A3. Commercial and consumer leases
institution responds in writing to a
Information
are not considered small business or
letter in the public file, the response
small farm loans or consumer loans for
must also be placed in that file, unless
Q1. What is an institution's "main
purposes of the data collection
the response reflects adversely on any
office"?
requirements in 12 CFR §
.42(a)
&
person or placing it in the public file
A1. An Institution's main office is the
(c)(1). However, If an Institution wishes
violates a law.
main, home, or principal office as
to collect and maintain data about
Q3. May an Institution include a
designated In its charter.
leases, the institution may provide this
response to its CRA Performance
§
44-Public Notice by Institutions
data to examiners as "other loan data"
Evaluation In its public file?
under
12
CFR
§
.42(c)(2) for
A3. Yes. However, the format and
Q1. Are there any placement or size
consideration under the lending test.
content of the evaluation, as transmitted
requirements for an institution's public
§
.42(d) Data on affiliate lending
by the supervisory agency, may not be
notice?
altered or abridged in any manner. In
A1. The notice must be placed in the
Q1. If an institution elects to have an
addition, an institution that received a
institution's public lobby, but the size
affiliate's home mortgage lending
less than satisfactory rating during its
and placement may vary. The notice
considered in its CRA evaluation, what
most recent examination must Include
should be placed In a location and be of
data must the institution make available
in its public file a description of its
a sufficient size that customers can
to examiners?
current efforts to improve its
easily see and read it.
A1. If the affiliate is a HMDA reporter,
performance in helping to meet the
§
.45-Publication of Planned
the institution must identify those loans
credit needs of its entire community.
Examination Schedule
reported by its affiliate under 12 CFR
The institution must update the
part 203 (Regulation C. implementing
Q1. Where will the agencies publish
description on a quarterly basis.
HMDA). At its option. the institution
the planned examination schedule for
may either provide examiners with the
§
.43(b) Additional Information
the upcoming calendar quarter?
affiliate's entire HMDA Disclosure
Available to the Public
A1. The agencies may use the Federal
Statement or just those portions
§
.43(b)(1) Institutions Other Than
Register, a press release, the Internet, or
covering the loans in its assessment
Small Institutions
other existing agency publications for
area(s) that it is electing to consider. If
disseminating the list of the institutions
the affiliate is not required by HMDA to
Q1. Must an institution that elects to
scheduled to for CRA examinations
report home mortgage loans, the
have affiliate lending considered
during the upcoming calendar quarter.
include data on this lending in its
Institution must provide sufficient data
Interested parties should contact the
concerning the affiliate's home mortgage
public file?
appropriate Federal financial
loans for the examiners to apply the
A1. Yes. The lending data to be
supervisory agency for information on
contained in an Institution's public file
performance tests.
how the agency is publishing the
covers the lending of the Institution's
planned examination schedule.
§
.43-Content and Availability of
affiliates, as well as of the Institution
Q2. Is inclusion on the list of
Public File
itself, considered in the assessment of
institutions that are scheduled to
the Institution's CRA performance. An
§
.43(a) Information Available to the
undergo CRA examinations in the next
institution that has elected to have
Public
calendar quarter determinative of
mortgage loans of an affiliate considered
whether an institution will be examined
§
.43(a)(1) Public Comments
must Include either the affiliate's
in that quarter?
Q1. What happens to comments
HMDA Disclosure Statements for the
A2. No. The agencies attempt to
received by the agencies?
two prior years or the parts of the
determine as accurately as possible
A1. Comments received by a Federal
Disclosure Statements that relate to the
which Institutions will be examined
financial supervisory agency will be on
institution's assessment area(s), at the
during the upcoming calendar quarter.
file at the agency for use by examiners.
Institution's option.
However, whether an Institution's name
Those comments are also available to
Q2. May an institution retain the
appears on the published list does not
the public unless they are exempt from
compact disc provided by the Federal
conclusively determine whether the
disclosure under the Freedom of
Financial Institution Examination
institution will be examined during that
Information Act.
Council that contains its CRA
quarter. The agencies may need to defer
Q2. Is an institution required to
Disclosure Statement in its public file,
a planned examination or conduct an
respond to public comments?
rather than printing a hard copy of the
unforeseen examination because of
A2. No. All institutions should review
CRA Disclosure Statement for retention
scheduling difficulties or other
comments and complaints carefully to
in its public file?
circumstances.
determine whether any response or
A2. Yes, if the Institution can readily
other action is warranted. A small
print out from the compact disc (or a
Appendix A to Part
-Ratings
institution subject to the small
duplicate of the compact disc) its CRA
Q1. Must an institution's performance
institution performance standards is
Disclosure Statement for a consumer
fit each aspect of a particular rating
specifically evaluated on Its record of
when the public file is requested. If the
profile in order to receive that rating?
taking action, if warranted, in response
request is at a branch other than the
A1. No. Exceptionally strong
to written complaints about Its
main office or the one designated
performance in some aspects of a
performance in helping to meet the
branch in each state that holds the
particular rating profile may
credit needs In Its assessment area(s)
complete public file, the bank should
compensate for weak performance in
(§
.26(a)(5)). For all Institutions,
provide the CRA Disclosure Statement
others. For example, a retail Institution
23648
Federal Register/Vol. 64, No. 84/Monday, May 3, 1999/Notices
that uses non-branch delivery systems
Louisiana, Mississippi, Texas
must be received not later than May 18,
to obtain deposits and to deliver loans
Denver
1999.
may have almost all of its loans outside
A. Federal Reserve Bank of Chicago
(303) 969-7750
the institution's assessment area.
(Philip Jackson, Applications Officer)
Assume that an examiner, after
Arizona, Colorado, Nebraska, New Mexico,
230 South LaSalle Street, Chicago,
consideration of performance context
North Dakota, South Dakota, Utah, Wyoming
Illinois 60690-1413:
and other applicable regulatory criteria,
Detroit
1. Edward Salomon, Chicago, Illinois
concludes that the institution has weak
(313) 259-1875
and Salvatore Scambiatterra (also
performance under the lending test
known as Sam Scott), Park Ridge,
criteria applicable to lending activity.
Michigan, Ohio, West Virginia
Illinois, individually and as voting
geographic distribution, and borrower
Kansas City
trustees of shares in a voting trust), to
characteristics within the assessment
(913) 551-6711
acquire additional voting shares of
area. The Institution may compensate
Greater Chicago Financial Corp.,
for such weak performance by
Arkansas, lowa, Kansas, Minnesota,
Chicago, Illinois, and thereby indirectly
exceptionally strong performance in
Missouri, Oklahoma
acquire Austin Bank of Chicago,
community development lending in its
Los Angeles
Chicago, Illinois.
assessment area or a broader statewide
(818) 904-6339
Board of Governors of the Federal Reserve
or regional area that includes its
California
System, April 28, 1999.
assessment area.
Robert deV. Frierson,
New York
Appendix B to Part
-CRA Notice
Associate Secretary of the Board.
(212) 264-4730
[FR Doc. 99-11033 Filed 4-30-99; 8:45 am]
Q1. What agency information should
New York, Puerto Rico
BILLING CODE 6210-01-F
be added to the CRA notice form?
A1. The following information should
Philadelphia
be added to the form:
(215) 597-8313 or (215) 597-8312
FEDERAL RESERVE SYSTEM
OCC-supervised Institutions only: The
Delaware, Maryland, New Jersey,
Pennsylvania
Formations of, Acquisitions by, and
address of the deputy comptroller of the
Mergers of Bank Holding Companies
district in which the institution is
Seattle
located should be Inserted in the
(206) 728-5314
The companies listed in this notice
appropriate blank. These addresses can
have applied to the Board for approval,
be found at 12 CFR 4.5(a).
Alaska, Hawali, Idaho, Montana, Nevada,
pursuant to the Bank Holding Company
Oregon, Washington
OCC-, FDIC-, and Board-supervised
Act of 1956 (12 U.S.C. 1841 et seq.)
institutions: "Officer in Charge of
End of Text of the Interagency
(BHC Act). Regulation Y (12 CFR Part
Supervision" is the title of the
Questions and Answers
225), and all other applicable statutes
responsible official at the appropriate
Dated: April 27, 1999.
and regulations to become a bank
Federal Reserve Bank.
holding company and/or to acquire the
Keith J. Todd,
assets or the ownership of, control of, or
Appendix A-Regional Offices of the Bureau
Executive Secretary, Federal Financial
the power to vote shares of a bank or
of the Census
Institutions Examination Council.
bank holding company and all of the
To obtain median family Income levels of
[FR Doc. 99-10841 Filed 4-30-99; 8:45 am]
banks and nonbanking companies
census tracts, MSAs, block numbering areas
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P;
owned by the bank holding company,
and statewide nonmetropolitan areas, contact
6720-01-P
including the companies listed below.
the appropriate regional office of the Bureau
The applications listed below. as well
of the Census as Indicated below. The list
as other related filings required by the
shows the states covered by each regional
FEDERAL RESERVE SYSTEM
Board, are available for Immediate
office.
Change in Bank Control Notices;
Inspection at the Federal Reserve Bank
Atlanta
indicated. The application also will be
Acquisitions of Shares of Banks or
(404) 730-3833
available for inspection at the offices of
Bank Holding Companies
the Board of Governors. Interested
Alabama, Florida, Georgia
The notificants listed below have
persons may express their views in
Boston
applied under the Change in Bank
writing on the standards enumerated in
(617) 424-0510
Control Act (12 U.S.C. 1817(j)) and §
the BHC Act (12 U.S.C. 1842(c)). If the
225.41 of the Board's Regulation Y (12
proposal also involves the acquisition of
Connecticut, Maine, Massachusetts, New
Hampshire, Rhode Island, Vermont
CFR 225.41) to acquire a bank or bank
a nonbanking company, the review also
holding company. The factors that are
includes whether the acquisition of the
Charlotte
considered in acting on the notices are
nonbanking company complies with the
(704) 344-6144
set forth in paragraph 7 of the Act (12
standards in section 4 of the BHC Act.
U.S.C. 1817(j)(7)).
Unless otherwise noted, nonbanking
District of Columbia, Kentucky, North
The notices are available for
activities will be conducted throughout
Carolina, South Carolina, Tennessee,
immediate inspection at the Federal
the United States.
Virginia
Reserve Bank indicated. The notices
Unless otherwise noted, comments
Chicago
also will be available for Inspection at
regarding each of these applications
(708) 562-1740
the offices of the Board of Governors.
must be received at the Reserve Bank
Illinois, Indiana, Wisconsin
Interested persons may express their
Indicated or the offices of the Board of
views in writing to the Reserve Bank
Governors not later than May 28, 1999.
Dallas
indicated for that notice or to the offices
A. Federal Reserve Bank of Atlanta
(214) 640-4470 or (800) 835-9752
of the Board of Governors. Comments
(Lois Berthaume, Vice President) 104
Peter A. Weissman
CRAS
05/04/99 04:33:17 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
Subject: 1999-5-4 Remarks by the President on Financial Privacy and Consumer Protection
Forwarded by Peter A. Weissman/OPD/EOP on 05/04/99 04:32 PM
Jason H. Schechter
05/04/99 04:04:42 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
Subject: 1999-5-4 Remarks by the President on Financial Privacy and Consumer Protection
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 4, 1999
REMARKS BY THE PRESIDENT
ON FINANCIAL PRIVACY AND CONSUMER PROTECTION
Presidential Hall
2:54 P.M. EDT
THE PRESIDENT: Thank you very much, Mari. I just wish
we could have found someone with a little energy to make this
presentation. (Laughter.)
Hillary and I are really delighted to have all of you
here, and delighted to be part of this announcment today, because
it's SO important. And I would like to say a special word of
appreciation to Secretary Rubin. You know, most people think of
a Treasury Secretary as someone who's out there trying to keep
the economy going, and he's done a reasonable job of that, I
think. (Laughter.) And they think of Bob Rubin as this sort of
big, Wall Street-type brilliant person.
But one of the reasons that I wanted him to come and
work here is that he actually understands how big economic
decisions affect individual people at all levels of income and
all different circumstances in life. And I think it's a good
thing for a country to have a Treasury Secretary that understands
the big issues, and then cares about how they impact individual
citizens. And I'm very grateful for that. (Applause.)
I want to thank Senator Bryan and Congressmen Bentsen,
Gonzalez, Inslee, Kanjorski, Markey, Lee, Roybal-Allard, and
Waters for being here and Senator Sarbanes, who can't be here,
and Congressman LaFalce, who's done so much on this, who is here
today. And I thank Chairman Levitt, Chairman Pitofsky,
Commissioner Thompson, Assistant Attorney General Jim Robinson.
Before I get into the substance of our proposals today,
I would like to say just a few words about the terrible tornado
devastation in Oklahoma and Kansas, which I'm sure all of you
have seen the reports of, and perhaps even the gripping pictures
of.
Some of the most powerful tornadoes ever recorded swept
through these states last night. At least 45 people are dead,
and the wreckage is still being examined. Whole communities have
been leveled. Homes and possessions have been turned into
splinters and rubble.
I have already spoken with the governor of Oklahoma,
Frank Keating, to tell him that I've declared Oklahoma a federal
disaster area, and we have just completed a similar declaration
for the state of Kansas, and I look forward to talking to
Governor Graves later today. I had a good talk with James Lee
Witt, our FEMA director -- who is now in Oklahoma, with Buddy
Young, his regional director and they are working on what we
can do to provide all the necessary support for people.
We have to make sure everyone's accounted for and that
the beginning cleanup can start. Local and state officials, fire
and police, emergency services, National Guard personnel have
already worked through the night, and are doing a terrific job of
dealing with an incredibly difficult situation. We're here
talking about how people feel when something has been stolen from
them. A lot of our fellow Americans have had everything taken
from them in those two states, and I know that they will be in
your prayers.
The people of Oklahoma City, in particular, have
suffered too much devastation in recent years, and they've been
hit very, very hard by this.
So we'll have more to say
about that in the days ahead.
I would like to just put this issue briefly into
historical perspective, to emphasize the importance that I feel
the entire Congress, without regard to party, should attach to
this matter.
We've been at this experiment in Government for 223
years now. We started with a Constitution that was rooted in
certain basic values and written by some incredibly brilliant
people who understood that times would change, and that
definitions of fundamental things like liberty and privacy would
change, and that circumstances would require people to rise to
the challenges of each new era by applying the old values in
practical ways.
This happened at the dawn of the 20th Century. Mari
mentioned Justice Brandeis. He said, when we change from being
an agricultural to an industrial society that laws built under
simpler conditions of living could not handle the complex
relations of the modern industrial world.
He and the leaders of the Progressive movement, about
100 years ago, therefore, fought to adapt our institutions to new
markets - - to update vital protections for our citizens, to
uphold the right to privacy, which Brandeis said was the right
most valued by civilized men.
Now, that's what's happening today; we're in the midst
of another vast economic transformation. Once again, the laws
that govern dynamic markets - - markets so dynamic they could not
have been imagined 200 years ago - - are out of date.
I just read just parenthetically - - I read yesterday
a quote that said that 60 years ago, the prices in London for
most basic commodities were the same that they were in 1660,
before the outbreak of the great London fire. In the last 60
years, most of us have seen prices go up a thousand-fold. Thank
goodness it hasn't happened in the last six years, we're
(laughter) maybe in a different thing.
But the pace of change is very different - - not just
the nature of change, but the very pace of it. So once again, we
have to respond, applying our oldest values in practical ways
that allow them to be preserved and enhanced in modern times.
We all know that technology and competition have
revolutionized the financial services industry. I think most of
us believe that, by and large, these changes have been very good.
But many people, as you've heard, don't have the
knowledge to properly evaluate what is truly a dizzying array of
options. Some are falling victim to new abusive practices.
Others are being left out of the financial marketplace
altogether.
That is why today I am proud to announce our new
Financial Privacy and Consumer Protection Initiative, to give all
Americans both the tools and the confidence they need to fully
participate in a thriving but highly complex 21st century
economy.
This initiative is based on five key principles, and it
draws on several important proposals developed by the members of
Congress who are here today, and some who are not, whom Hillary
mentioned.
The first, clearly, is that we have to do more to
protect every American's financial privacy. The Vice President
led our efforts to identify areas where privacy is at risk, and
financial areas came up over and over and over again as a matter
of great concern.
The technological revolution now makes it easier than
ever for people to mine your private, financial data for their
profit. While some of your private financial information is
protected under existing federal law, your bank or broker or
insurance company could still share with affiliated firms
information on what you buy with checks and credit cards or
sell this information to the highest bidder. This law, to put it
mildly, is outdated and should be changed to give you the
right to control your financial information, to let you decide
whether you want to share private information with anyone else.
I look forward to working with members in the House and the
Senate on this issue.
To enhance financial privacy, we must also protect the
sanctity of medical records. With the growing number of mergers
between insurance companies and banks, lenders potentially can
gain access to the private medical information contained in
insurance forms. So we propose to severely restrict the sharing
of medical information within financial services conglomerates.
You should not have to worry that the results of your
latest physical exam will be used to deny you a home mortgage or
a credit card. There are many other important protections for
medical records that ought to be put in place. Because Congress
has given me the authority to act if it does not do SO by August,
one way or another, we will protect the privacy of medical
records this year.
Second, we must require greater public disclosure and
enhance every consumer's right to know. As the First Lady just
pointed out although everyime I hear it I shake my head
consumers received nearly four billion credit card solicitations
last year.
Some offers contain new traps for the unwary. For
example, sometimes credit card companies advertise low interest
rates known as teaser rates, to reel in consumers who then are
surprised with unexpected interest rate hikes. We believe any
marketing of teaser rates for credit cards should include equally
prominent notice of their expiration date, their eventual annual
percentage rate, and any penalties, that apply.
Millions of consumers have also found out the hard way
that making only minimum payments rarely helps retire debt and
almost always results in very large interest payments. So we
will require clear notice of how long and how costly repayment
would be if the consumer makes only the minimum payment.
Third, we have to do more to combat consumer fraud. As
Mari Frank discovered the hard way, it is remarkably easy now for
a thief to take out huge loans in someone else's name, run up
enormous credit card debts, and tap into bank accounts. Last
October, Congress passed - - and I was pleased to sign - - the
Identity Theft and Assumption Deterrence Act. It's a good law,
but we need to give it sharp teeth. So today I'm instructing the
Treasury and Justice Departments to give higher priority to cases
involving identity theft, particularly those involving organized
crime groups, with the goal of increasing the number of
prosecutions, both at the state and federal levels. And Treasury
will convene a national summit on identity theft and work with
the private sector to make it harder to steal someone else's
identity in the first place.
We'll also crack down on fraud committed over the
Internet. If we want to seize the Internet's full potential we
have to stay ahead of those who would use this open medium to
manipulate stock prices, commit fraud in on-line auctions or
perpetuate any other type of financial scam. That's why I've
asked the Justice Department to step up prosecutions, to develop
a national center for tracking Internet fraud, and to train
state, local and federal law enforcement officers on how to
recognize and root out these schemes.
I find that law enforcement, compared to people who are
doing criminal activity in this area, are rather like parents
trying to keep up with their children on the computer.
(Laugter.) It is an endless effort, and we need to organize and
systematize a continuous training and retraining effort so that
we can stay ahead of the curve.
Chairman Levitt is launching an expanded effort to arm
investors with the information they need to protect themselves
against online securities fraud. Listen to this: complaints of
Internet fraud have tripled in the past six months. Just in the
last six months. Therefore, I will work with the congress and
Chairman Levitt to provide the additional resources for the SEC
necessary for enforcement, beyond what I have already requested
in our balanced budget.
Fourth, we must provide financial services for those
who have been denied access to credit and basic banking services
for too long. Today I'm proud to announce that the Treasury
Department will soon make available, through private banks,
low-fee bank accounts for those who receive federal benefits like
Social Security.
Unfortunately, there are some in Congress who would
have us effectively limit, rather than expand, access to
financial services in underserved communities. As the Senate
debates this issue this week, I want to reiterate what I said in
my veto letter to Congress. We will oppose any effort to weaken
or undermine the continued relevance of the Community
Reinvestment Act. (Applause.)
While that act has been on the law for well over 20
years now, over 90 percent of the lending under it has occurred
in the last six years, in our administration. I'm very proud of
that. It has not done anything to hurt bank profits, and we
ought to stay with it. (Applause.) I know that leaders of the
civil rights community spoke today on this subject, and I just
want to applaud them and to encourage them to stay at it.
Finally, as has already been said, we have to increase
the financial literacy of the American people. It's no enough to
know how to balance a check book anymore. Even those fortunate
to have the help of accountants sometimes have a hard time
understanding all the ins and outs of investing in an IRA, paying
off credit card debt, or refinancing a mortgage.
So today I'm directing my National Economic Council
Gene Sperling is here today with us -- to work with our agencies
to develop a plan to help all Americans improve their financial
literacy. I think Hillary said, it adds a year of income to
people if they have this kind of training in high school.
School is, of course, the best place to start learning
about personal finance. The Department of Education will help
all our schools find effective lesson plans and other tools to
integrate financial literacy into their basic curriculum.
So that's what we're trying to do: protect privacy,
enhance disclosure, combat fraud, increase access, expand
education. These principles are the same ones we used to harness
the power and benefits of the industrial revolution. They are
just as vital today, if not more so, than they were a century
ago. It's time now to use them to seize the enormous potential
of the information revolution for every American citizen.
If we work together we can help all our families have
the benefits of new choices and new technologies. We can help
our people thrive in the 21st Century, and all we have to do is
to remember how we got here over the last 200 plus years. Thank
you very much. (Applause. )
END
3:08 P.M. EDT
Message Sent To:
LISA GREEN
ONLY
6- 2230
34 4 pres aly pges only
NATL_ECONOMIC_COUNCIL
002
10/14 19 20:35
T202 6220605
TAX POLICY
002
TAX INCENTIVES FOR THE DISTRICT OF COLUMBIA
"RISING TIDE"
te proposed incentives would provide windfall benefits for investment already made, would
lostly benefit large businesses already located in DC, and would be inefficient in revitalizing
resent Law
arious Federal tax incentives already are available to stimulate redevelopment in the District of
olumbia. The incentives are generally available through December 31, 2002.
An employment credit is provided equal to 20 percent of the first $15,000 of wages paid
to residents who work within the DC Zone.
Small DC Zone businesses are permitted to deduct up to $20,000 in additional expenses
per year for certain equipment costs.
DC Zone businesses may borrow up to $15 million of the proceeds of tax-exempt private
activity bonds issued by the District of Columbia to finance capital costs in the DC Zone.
A zero-percent tax rate applies to capital gains on the sale of certain DC business property
and assets held for more than five years.
Individuals are entitled to a $5,000 tax credit for the purchase of a principal residence
anywhere in DC.
Proposal
To qualify, a business must invest at least $25 million on real and tangible property in the
DC Zone, employ 400 or more people, pay either property or income taxes to the District, and
locate the corporate headquarters in the DC Zone. A qualified business would be eligible for:
Tax-exempt bond financing without the $15 million project and $150 million State caps,
including a rifle shot provision allowing investment already made in the MCI Center, and
An expanded wage credit at a 20 percent rate for employees working in the DC EZ (with
a $2 million annual cap).
These incentives would be available only through December 31, 2003.
General Talking Points
The MCI Center rifle shot provides tax-exempt financing under conditions not available
to any other such facility in the country because there is no commitment of public funds
to pay for the project, no public ownership of the land and facility, and financing is for a
land already owned and a structure that already exists.
This is a pure windfall with no economic stimulus likely to result.
NATL ECONOMIC COUNCIL
003/004
10/14
is
20:35
202 6220605
TAX POLICY
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Rifleshot provisions typically have been rejected this decade by the tax-writing
committees and the Treasury as poor policy. Also, the Administration has
criticized special interest provisions in recent tax bills.
It is conceivable that these incentives would shift some other economic activity into the
DC Zone, but the combined qualifications of 400 employees, $25 million of investment
and headquarters in the DC Zone are significant restrictions. Also, given the lead times
necessary for large commitments of capital and the proposal's sunset date of 2003, it is
likely only investment already planned would benefit. As a result, the incentive is likcly
mostly to benefit only large businesses already located in the DCZone for activity that
they're already undertaking. Not surprisingly, the large businesses that could benefit
include many of the private sector supporters listed on the executive summary.
The provisions are all retroactive to January 1, 1999 and are thus pure windfalls for early
1999 activities.
Background on Abe Pollin
t is unclear that Mr. Pollin needs any tax incentive to make his venture financially viable, based
n the following information:
When Pollin bought bis professional basketball team, he paid a then-record $1.1 million
for the Baltimore Bullets of the National Basketball Association. He added to his empire
in 1972 by buying the National Hockey League expansion franchise Capitals for $6
million.
According to Financial World magazine's annual survey, Pollin's $1 million investment
in the Bullets was worth $129 million in 1997. The renamed Wizards franchise,
Financial World estimates, posts an operating income of more than $4 million a year.
The average franchise value in the NBA is $148 million, according to Financial World,
with an average operating income of $11 million
The Capitals are worth $84 million and are marginally profitable at about $500,000 a
year, according to the magazine. By comparison, the average NHL franchise is worth $90
million and has an operating income of $3.5 million.
The MCI Center cost $200 million to build. MCI Communications Corp. is paying Pollin
$44 million over 10 years for the right to attach its name to the arena, according to
Financial World. The arena's 10 "founders suites," priced at $1 million each, were the
first to sell. Also, 110 luxury suites, priced between $100,000 and $175,000 a year, and
3,000 club seats. priced at $7,500 each a year, have been sold
In 1997, the Wizards raised ticket prices to a range between $19 and $75. compared with
$12 to $50 the previous year in US Airways Arena. Capitals' ticket prices now range from
$19 to $60, compared with $12 and $45.
NATL ECONOMIC COUNCIL
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TAX POLICY
004
Georgetown University's men's basketball team also will play at MCI Center, and Pollin
has a lease agreement with a WNBA franchise that will help fill seats in the dead of
summer. In addition, the arena will host dozens of concerts and other events such Bruce
Springsteen concerts. Tickets are priced from $15 to $100. Pollin also benefits from
revenue from the arena's retail leases, signage and concessions.
According to Financial World, the net value of the Portland Trail Blazers jumped to $179
million from $137 million after the team opened its new 21,000-seat arena in 1995.
Mr. Pollin recently sold the Washington Capitals and a small minority stake in the MCI
Center and the Wizards to Ted Leonsis for $200 million.
At the time of the sale, Mr. Pollin's son was quoted as saying his father's holdings made
economic sense. "He's got a lot of debt, but he's doing o.k."
Mr. Pollin used personal funds and private debt financing to build the MCI Center.
Apparently, according to news reports, efforts to have the arena built with public funds
were scuttled when Robert Johnson offered to build a downtown arena himself in
exchange for an option on the two teams.
COUNCIL
LISA GREEN
ONLY
6- - 2230
34 pges only
NATL ECONOMIC COUNCIL
I
002
10/14
19
20:35
202 6220605
TAX POLICY
I
002
TAX INCENTIVES FOR THE DISTRICT OF COLUMBIA
"RISING TIDE"
e proposed incentives would provide windfall benefits for investment already made, would
stly benefit large businesses already located in DC, and would be inefficient in revitalizing
resent Law
arious Federal tax incentives already are available to stimulate redevelopment in the District of
olumbia. The incentives are generally available through December 31, 2002.
An employment credit is provided equal to 20 percent of the first $15,000 of wages paid
to residents who work within the DC Zone.
Small DC Zone businesses are permitted to deduct up to $20,000 in additional expenses
per year for certain equipment costs.
DC Zonc businesses may borrow up to $15 million of the proceeds of tax-exempt private
activity bonds issued by the District of Columbia to finance capital costs in the DC Zone.
A zero-percent tax rate applies to capital gains on the sale of certain DC business property
and assets held for more than five years.
Individuals are entitled to a $5,000 tax credit for the purchase of a principal residence
anywhere in DC.
Proposal
To qualify, a business must invest at least $25 million on real and tangible property in the
DC Zone, employ 400 or more people, pay either property or income taxes to the District, and
locate the corporate headquarters in the DC Zone. A qualified business would be eligible for:
Tax-exempt bond financing without the $15 million project and $150 million State caps,
including a rifle shot provision allowing investment already made in the MCI Center, and
An expanded wage credit at a 20 percent rate for employees working in the DC EZ (with
a $2 million annual cap).
These incentives would be available only through December 31, 2003.
General Talking Points
The MCI Center rifle shot provides tax-exempt financing under conditions not available
to any other such facility in the country because there is no commitment of public funds
to pay for the project, no public ownership of the land and facility, and financing is for a
land already owned and a structure that already exists.
This is a pure windfall with no economic stimulus likely to result.
I
001
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Fx
:
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CFR
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04/29/99 18:21 $ 481 L UD 9% D 13
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NO. 061 P001
US Dept of
Brian Turetsky
Housing &
Special Assistant to the Secretary for
Urban
Policy & Programs
Development
202/708-0614 x3981
Fax
708-0270 X 4348
To: Michael Dertch
From: Janquie Lawing
Fax: 395-6088
Pages: 3
Phone:
Date: March 10, 1999
Re:
CC:
Urgent
For Review
Please Comment
Please Reply
Please Recycle
Comments:
CRA Draft
04/29/99
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MOUND
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE OFFICE OF THE SECRETARY
WASHINGTON DC 20410-0001
The Honorable Paul S. Sarbanes
Banking Minority Member
Committee on Banking,
Housing and Urban Affairs
United States Senate
Washington, DC 20510-6075
Dear Senator Sarbanes:
I am writing to express my very strong concems about provisions in the "Financial
Services Modernization Act of 1999" as reported by the Banking Committee that would weaken
the Community Reinvestment Act (CRA).
CRA is an important tool for stimulating the flow of capital to the residents of credit
starved urban and rural areas. By improving access to mortgage credit for thousands of hard
working modest income families, CRA has played a key role in boosting homeownership to
record levels. Lenders tells us that the new loan activity CRA helps to generate is both prudent
and profitable and occurs without virtually any cost to the taxpayer.
When HUD provides public investment in low and moderate income areas through
Community Development Block Grants (CDBG), HOME Investment Partnership Program
(HOME) and other programs, CRA often serves as a vital development partner. Public
investment, combined with the "leveraging" of private funds encouraged by CRA, is a winning
combination when it comes to housing and community development.
The Committee bill would reduce CRA's effectiveness in three important respects. First,
it would provide a "safe harbor" that effectively exempts banks and thrift institutions with a
satisfactory or better CRA agency rating from public comment on their expansion plans. Second,
it would exempt from CRA banks with less than $100 million in assets that operate in non-
metropolitan areas. Third, it does not include the modest adjustments to the CRA statute that are
in the House bill reported by the House Banking and Financial Services Committee, even bank
holding companies that have banks with "unsatisfactory" CRA ratings and are not meeting the
credit needs of their existing market areas would be allowed to expand their powers and
affiliations under the legislation.
In closing, CRA has played a vital role in improving the prospects for working families,
minorities, and the residents of underserved areas. I am very concerned that any weakening of
CRA could reverse the substantial progress we have made over the last five years. As President
04/29/99 18:21
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Clinton and Secretary Rubin have made clear, the President will veto this legislation if it were
presented to him in its current form. I encourage you to vigorously oppose the "safe harbor" and
"small bank" provisions in the Committee bill and to work to include a CRA provision to help
ensure that the new configurations created by the pending financial modernization bill do not
diminish the effectiveness of this critically important statute.
Sincerely,
Andrew Cuomo
Peter A. Weissman
04/28/99 01:03:05 PM
Record Type:
Record
To:
Barbara B. Hunt/WHO/EOP@EOP
CC:
Lisa Green/OPD/EOP@EOP, Sarah Rosen/OPD/EOP@EOP, Brian A. Barreto/OPD/EOP
bcc:
Subject: Re: for the CRA call
Barbara-
anytime b/w 2-3 pm is fine.
you should also invite Gary Gensler, undersecretary at treasury to participate in the call (622-2035 - Anna
Hart is his assistant)
I want it very clear that Mickey or whoever else from IGA will run the call and Gene will get on for a few
minutes, but as we discussed, I do not want the Mayors to have the expectation that Gene will be on for
the whole call. thanks for all your help on this.
You can use the NEC conference line
202-757-2104 code 3939
it has a capacity of 30 people.
Barbara B. Hunt
Barbara B. Hunt
04/28/99 11:53:30 AM
Record Type:
Record
To:
Peter A. Weissman/OPD/EOP@EOP
CC:
Subject: Re: for the CRA call
Peter:
Paul is available anytime between 2:00 and 3:00 and so is every one else. Would you give me a time to
work and I will begin to call the Mayors
Also, I was told to ask if we could use your number for the conference call instead of going throught the
operator?
please get back to me, thanks