§__.26(b) Small Institution Purchases of Consortium Loans
§__.26(b) – 3 Q: When evaluating a small institution’s lending performance, will examiners consider, at the institution’s request, community development loans originated or purchased by a consortium in which the institution participates or by a third party in which the institution has invested? A3. Yes. However, a small institution that elects to have examiners consider community development…
§__.26(b) Small Institution Loan Originations and Purchases
§__.26(b) – 4 Q: Under the small institution lending test performance standards, will examiners consider both loan originations and purchases? A4. Yes, consistent with the other assessment methods in the regulation, examiners will consider both loans originated and purchased by the institution. Likewise, examiners may consider any other loan data the small institution chooses to provide, including…
§__.26(b) Small Institution Qualified Investments
§__.26(b) – 5 Q: Under the small institution lending test performance standards, how will qualified investments be considered for purposes of determining whether a small institution receives a satisfactory CRA rating? A5. The small institution lending test performance standards focus on lending and other lending-related activities. Therefore, examiners will consider only lending- related qualified investments for the…
§__.26(b)(1) Loan-to-Deposit Ratio Calculation
§__.26(b)(1) – 1 Q: How is the loan-to-deposit ratio calculated? A1. A small institution’s loan-to-deposit ratio is calculated in the same manner that the Uniform Bank Performance Report (UBPR) determines the ratio. It is calculated by dividing the institution’s net loans and leases by its total deposits. The ratio is found in the Liquidity and Investment Portfolio section…
§__.26(b)(1) Loan-to-Deposit Ratio Reasonableness
§__.26(b)(1) – 2 Q: How is the “reasonableness” of a loan-to-deposit ratio evaluated? A2. No specific ratio is reasonable in every circumstance, and each small institution’s ratio is evaluated in light of information from the performance context, including the institution’s capacity to lend, demographic and economic factors present in the assessment area(s), and the lending opportunities available in…
§__.26(b)(1) Off-shore Loans in Loan-to-Deposit Ratio
§__.26(b)(1) – 3 Q: If an institution makes a large number of loans off-shore, will examiners segregate the domestic loan-to-deposit ratio from the foreign loan-to-deposit ratio? A3. No. Examiner will look at the institution’s net loan-to-deposit ratio for the whole institution, without any adjustments. Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016
§__26(b)(2) Small Institution Lending Percentage in Assessment Area
§__.26(b)(2) – 1 Q: Must a small institution have a majority of its lending in its assessment area(s) to receive a satisfactory performance rating? A1. No. The percentage of loans and, as appropriate, other lending-related activities located in the institution’s assessment area(s) is but one of the performance criteria upon which small institutions are evaluated. If…
§__.26(b)(3) & (4) Small Institution Loan Distribution Performance
§__.26(b)(3) & (4) – 1 Q: How will a small institution’s performance be assessed under these lending distribution criteria [borrower income and geographic location]? A1. Distribution of loans, like other small institution performance criteria, is considered in light of the performance context. For example, a small institution is not required to lend evenly throughout its assessment area(s)…
§__.26(c) Intermediate Small Institution Community Development Test Flexibility
§__.26(c) – 1 Q: How will the community development test be applied flexibly for intermediate small institutions? A1. Generally, intermediate small institutions engage in a combination of community development loans, qualified investments, and community development services. An institution may not simply ignore one or more of these categories of community development, nor do the regulations prescribe a…
§__.26(c)(3) Intermediate Small Institution Service Evaluation
§__.26(c)(3) – 1 Q: What will examiners consider when evaluating the provision of community development services by an intermediate small institution? A1. In addition to the examples listed in Q&A § .12(i) – 3, examiners will consider retail banking services as community development services if they provide benefit to low- or moderate-income individuals. Examples include: low-cost deposit…