1. Review the institution’s stated assessment area(s) to ensure that it:
a. Consists of one or more MSAs/MDs or contiguous political subdivisions (i.e., counties, cities, or towns);
b. Includes the geographies where the institution has its main office, branches, and deposittaking (Automated Teller Machines) ATMs, as well as the surrounding geographies in which the institution originated or purchased a substantial portion of its loans;
c. Consists only of whole census tracts;
d. Consists of separate delineations for areas that extend substantially across MSA/MD or state boundaries unless the assessment area is in a multistate MSA/MD;
e. Does not reflect illegal discrimination; and
f. Does not arbitrarily exclude any low- or moderate-income area(s) taking into account the institution’s size, branching structure, and financial condition.
2. If the assessment area(s) does not coincide with the boundaries of an MSA/MD or political subdivision(s), assess whether the adjustments to the boundaries were made because the assessment area would otherwise be too large for the institution to reasonably serve, have an unusual configuration, or include significant geographic barriers.
3. If the assessment area(s) fails to comply with the applicable criteria described above, develop, based on discussions with management, a revised assessment area(s) that complies with the criteria. Use this assessment area(s) to evaluate the institution’s performance, but do not otherwise consider the revision in determining the institution’s rating.
SOURCE: Large Institution CRA Examination Procedures | OCC, FRB, and FDIC | April 2014