§__24(e) Community Development Services by Affiliates or Third Parties
§__.24(e) – 1 Q: Under what conditions may an institution receive consideration for community development services offered by affiliates or third parties? A1. At an institution’s option, the Agencies will consider services performed by an affiliate or by a third party on the institution’s behalf under the service test if the services provided enable the institution to…
§__.24(e) Quantitative and Qualitative Factors in Service Evaluation
§__.24(e) – 2 Q: In evaluating community development services, what quantitative and qualitative factors do examiners review? A2. The community development services criteria are important factors in the evaluation of a large institution’s service test performance. According to the regulation, the Agencies evaluate the extent to which the financial institution provides community development services as well as…
§__.25(a) Credit Card Bank Exemption
§__.25(a) – 1 Q: How can certain credit card banks help to meet the credit needs of their communities without losing their exemption from the definition of “bank” in the Bank Holding Company Act (BHCA), as amended by the Competitive Equality Banking Act of 1987 (CEBA)? A1. Although the BHCA restricts institutions known as CEBA credit card…
§__.25(d) Investments in Third-Party Community Development Organizations
§__.25(d) – 1 Q: How are investments in third-party community development organizations considered under the community development test? A1. Similar to the lending test for retail institutions, investments in third-party community development organizations may be considered as qualified investments or as community development loans or both (provided there is no double counting), at the institution’s option, as described…
§__.25(e) Wholesale or Limited Purpose Institution Investment in Nationwide Fund
§__.25(e) – 1 Q: How do examiners evaluate a wholesale or limited purpose institution’s qualified investment in a fund that invested in projects nationwide and which has a primary purpose of community development, as this is defined in the regulations? A1. If examiners find that a wholesale or limited purpose institution has adequately addressed the needs of its…
§__.25(f) Wholesale or Limited Purpose Institution Performance Rating
§__.25(f) – 1 Q: Must a wholesale or limited purpose institution engage in all three categories of community development activities (lending, investment, and service) to perform well under the community development test? A1. No, a wholesale or limited purpose institution may perform well under the community development test by engaging in one or more of these activities….
§__.26 Small Institution Performance Standards for Affiliate Activities
§__.26 – 1 Q: When evaluating a small or intermediate small institution’s performance, will examiners consider, at the institution’s request, retail and community development loans originated or purchased by affiliates, qualified investments made by affiliates, or community development services provided by affiliates? A1. Yes. However, a small institution that elects to have examiners consider affiliate activities must…
§__.26(a)(2) Intermediate Small Institution Determination
§__.26(a)(2) – 1 Q: When is an institution examined as an intermediate small institution? A1. When a small institution has met the intermediate small institution asset threshold delineated in 12 CFR .12(u)(1) for two consecutive calendar year-ends, the institution may be examined under the intermediate small institution examination procedures. The regulation does not specify an additional lag period…
§__.26(b) Small Institution Lending-Related Activities
§__.26(b) – 1 Q: May examiners consider, under one or more of the performance criteria of the small institution performance standards, lending-related activities, such as community development loans and lending-related qualified investments, when evaluating a small institution? A1. Yes. Examiners can consider “lending-related activities,” including community development loans and lending-related qualified investments, when evaluating the first four…
§__.26(b) Appropriate Small Institution Lending-Related Activities
§__.26(b) – 2 Q: What is meant by “as appropriate” when referring to the fact that lending-related activities will be considered, “as appropriate,” under the various small institutions performance criteria? A2. “As appropriate” means that lending-related activities will be considered when it is necessary to determine whether an institution meets or exceeds the standards for a satisfactory…