§__.29(b) Requirements to Enter Agreements with Private Parties
§__.29(b) – 2 Q: Is the institution required to enter into agreements with private parties? A2. No. Although communications between an institution and members of its community may provide a valuable method for the institution to assess how best to address the credit needs of the community, the CRA does not require an institution to enter into…
§__.41(a) Evaluation of Assessment Areas
§__.41(a) – 1 Q: How do the Agencies evaluate “assessment areas” under the CRA regulations? A1. The rule focuses on the distribution and level of an institution’s lending, investments, and services rather than on how and why an institution delineated its assessment area(s) in a particular manner. Therefore, the Agencies will not evaluate an institution’s delineation of…
§__.41(a) Institution Affiliate Impact on Assessment Areas
§__.41(a) – 2 Q: If an institution elects to have the Agencies consider affiliate lending, will this decision affect the institution’s assessment area(s)? A2. If an institution elects to have the lending activities of its affiliates considered in the evaluation of the institution’s lending, the geographies in which the affiliate lends do not affect the institution’s delineation…
§__.41(a) Selecting a Specific Racial or Ethnic Group in Place of Assessment Area
§__.41(a) – 3 Q: Can a financial institution identify a specific racial or ethnic group rather than a geographic area as its assessment area? A3. No, assessment areas must be based on geography. The only exception to the requirement to delineate an assessment area based on geography is that an institution, the business of which predominantly consists…
§__.41(c)(1) Other Units of Local Governments as Political Subdivisions
§__.41(c)(1) – 1 Q: Besides cities, towns, and counties, what other units of local government are political subdivisions for CRA purposes? A1. Townships and Indian reservations are political subdivisions for CRA purposes. Institutions should be aware that the boundaries of townships and Indian reservations may not be consistent with the boundaries of the census tracts (i.e., geographies)…
§__.41(c)(1) Wards and Districts as Political Subdivisions
§__.41(c)(1) – 2 Q: Are wards, school districts, voting districts, and water districts political subdivisions for CRA purposes? A2. No. However, an institution that determines that it predominantly serves an area that is smaller than a city, town, or other political subdivision may delineate as its assessment area the larger political subdivision and then, in accordance with…
§__.41(d) Adjustment to the Boundaries of an Assessment Area
§__.41(d) – 1 Q: When may an institution adjust the boundaries of an assessment area to include only a portion of a political subdivision? A1. Institutions must include whole geographies (i.e., census tracts) in their assessment areas and generally should include entire political subdivisions. Because census tracts are the common geographic areas used consistently nationwide for data collection,…
§__.41(e)(3) Arbitrary Exclusion of LMI Geographies in an Assessment Area
§__.41(e)(3) – 1 Q: How will examiners determine whether an institution has arbitrarily excluded low- or moderate-income geographies? A1. Examiners will make this determination on a case-by-case basis after considering the facts relevant to the institution’s assessment area delineation. Information that examiners will consider may include income levels in the institution’s assessment area(s) and surrounding geographies; locations of…
§__.41(e)(4) Maximum Size Limits on an Assessment Area
§__.41(e)(4) – 1 Q: What are the maximum limits on the size of an assessment area? A1. An institution may not delineate an assessment area extending substantially across the boundaries of an MSA unless the MSA is in a combined statistical area (CSA)). Although more than one MSA in a CSA may be delineated as a single…
§__.41(3) & (4) Inclusion of an MSA and Adjacent Counties in a Single Assessment Area
§__.41(e)(4) – 2 Q: May an institution delineate one assessment area that consists of an MSA and two large counties that abut the MSA but are not adjacent to each other? A2. As a general rule, an institution’s assessment area should not extend substantially beyond the boundary of an MSA. Therefore, the MSA would be a separate…