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Proposed Rule2025-13559

Community Reinvestment Act Regulations

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Published

July 18, 2025

Issuing agencies

Treasury DepartmentComptroller of the CurrencyFederal Reserve SystemFederal Deposit Insurance Corporation

Abstract

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) propose to amend their Community Reinvestment Act (CRA) regulations by rescinding the final rule titled "Community Reinvestment Act" published in the Federal Register on February 1, 2024, and replacing it with the agencies' CRA regulations in effect on March 29, 2024, with certain conforming and technical amendments. The agencies are also proposing technical amendments to their regulations implementing the CRA sunshine requirements of the Federal Deposit Insurance Act, and the OCC is proposing technical amendments to its Public Welfare Investments regulation.

Full Text

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<title>Federal Register, Volume 90 Issue 136 (Friday, July 18, 2025)</title>
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[Federal Register Volume 90, Number 136 (Friday, July 18, 2025)]
[Proposed Rules]
[Pages 34086-34139]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13559]

[[Page 34085]]

Vol. 90

Friday,

No. 136

July 18, 2025

Part II

Department of the Treasury

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Office of the Comptroller of the Currency

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12 CFR Parts 24, 25, and 35

Federal Reserve System

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12 CFR Parts 207 and 228

Federal Deposit Insurance Corporation

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12 CFR Parts 345 and 346

Community Reinvestment Act Regulations; Proposed Rule

Federal Register / Vol. 90 , No. 136 / Friday, July 18, 2025 /
Proposed Rules

[[Page 34086]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 24, 25, and 35

[Docket ID OCC-2025-0005]
RIN 1557-AF30

FEDERAL RESERVE SYSTEM

12 CFR Parts 207 and 228

Regulation BB

[Docket No. R-1869]
RIN 7100-AG95

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 345 and 346

RIN 3064-AG13

Community Reinvestment Act Regulations

AGENCY: The Office of the Comptroller of the Currency, Treasury; the
Board of Governors of the Federal Reserve System; and the Federal
Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC) (collectively, the agencies)
propose to amend their Community Reinvestment Act (CRA) regulations by
rescinding the final rule titled ``Community Reinvestment Act''
published in the Federal Register on February 1, 2024, and replacing it
with the agencies' CRA regulations in effect on March 29, 2024, with
certain conforming and technical amendments. The agencies are also
proposing technical amendments to their regulations implementing the
CRA sunshine requirements of the Federal Deposit Insurance Act, and the
OCC is proposing technical amendments to its Public Welfare Investments
regulation.

DATES: Comments must be received on or before August 18, 2025.

ADDRESSES: Comments should be directed to the agencies as follows:
OCC: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal. Please use the title ``Community
Reinvestment Act Regulations'' to facilitate the organization and
distribution of the comments. You may submit comments by any of the
following methods:
<bullet> Federal eRulemaking Portal--<a href="http://Regulations.gov">Regulations.gov</a>: Go to <a href="https://regulations.gov">https://regulations.gov</a>. Enter ``Docket ID OCC-2025-0005'' in the Search Box
and click ``Search.'' Public comments can be submitted via the
``Comment'' box below the displayed document information or by clicking
on the document title and then clicking the ``Comment'' box on the top-
left side of the screen. For help with submitting effective comments
please click on ``Commenter's Checklist.'' For assistance with the
<a href="http://Regulations.gov">Regulations.gov</a> site, please call (877) 378-5457 (toll free) or (703)
454-9859 Monday-Friday, 9 a.m.-5 p.m. EST or email
<a href="/cdn-cgi/l/email-protection#4f3d2a283a232e3b2620213c0f2a3d3a232a222e24262128272a233f2b2a3c24612c2022">[email&#160;protected]</a>.
<bullet> Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, 400 7th Street
SW, suite 3E-218, Washington, DC 20219.
<bullet> Hand Delivery/Courier: 400 7th Street SW, suite 3E-218,
Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2025-0005'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the <a href="http://Regulations.gov">Regulations.gov</a> website without change, including any business or
personal information provided such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this action by the following method:
<bullet> Viewing Comments Electronically--<a href="http://Regulations.gov">Regulations.gov</a>: Go to
<a href="https://regulations.gov">https://regulations.gov</a>. Enter ``Docket ID OCC-2025-0005'' in the
Search Box and click ``Search.'' Click on the ``Documents'' tab and
then the document's title. After clicking the document's title, click
the ``Browse Comments'' tab. Comments can be viewed and filtered by
clicking on the ``Sort By'' drop-down on the right side of the screen
or the ``Refine Results'' options on the left side of the screen.
Supporting materials can be viewed by clicking on the ``Documents'' tab
and filtered by clicking on the ``Sort By'' drop-down on the right side
of the screen or the ``Refine Documents Results'' options on the left
side of the screen.'' For assistance with the <a href="http://Regulations.gov">Regulations.gov</a> site,
please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday,
9 a.m.-5 p.m. EST or email <a href="/cdn-cgi/l/email-protection#cebcaba9bba2afbaa7a1a0bd8eabbcbba2aba3afa5a7a0a9a6aba2beaaabbda5e0ada1a3">[email&#160;protected]</a>.
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
Board: You may submit comments, identified by Docket No. R-1869 and
RIN 7100-AG95, by any of the following methods:
<bullet> Agency Website: <a href="https://www.federalreserve.gov/apps/proposals/">https://www.federalreserve.gov/apps/proposals/</a>. Follow the instructions for submitting comments, including
attachments. Preferred Method.
<bullet> Mail: Ann E. Misback, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue NW,
Washington, DC 20551.
<bullet> Hand Delivery/Courier: Same as mailing address.
<bullet> Other Means: <a href="/cdn-cgi/l/email-protection#84f4f1e6e8ede7e7ebe9e9e1eaf0f7c4e2f6e6aae3ebf2">[email&#160;protected]</a>. You must include the
docket number in the subject line of the message.
Comments received are subject to public disclosure. In general,
comments received will be made available on the Board's website at
<a href="https://www.federalreserve.gov/apps/proposals/">https://www.federalreserve.gov/apps/proposals/</a> without change and will
not be modified to remove personal or business information including
confidential, contact, or other identifying information. Comments
should not include any information such as confidential information
that would be not appropriate for public disclosure. Public comments
may also be viewed electronically or in person in Room M-4365A, 2001 C
St. NW, Washington, DC 20551, between 9 a.m. and 5 p.m. during Federal
business weekdays.
FDIC: You may submit comments, identified by RIN 3064-AG13, by any
of the following methods:
<bullet> Agency Website: <a href="https://www.fdic.gov/resources/regulations/federal-register-publications">https://www.fdic.gov/resources/regulations/federal-register-publications</a>. Follow instructions for
submitting comments on the agency website.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#45262a2828202b31360523212c266b222a33">[email&#160;protected]</a>. Include RIN 3064-AG13 on the
subject line of the message.
<bullet> Mail: Jennifer M. Jones, Deputy Executive Secretary,
Attention: Comments RIN 3064-AG13, Federal Deposit Insurance
Corporation, 550 17th Street NW, Washington, DC 20429.
<bullet> Hand Delivery/Courier: Comments may be hand delivered to
the guard station at the rear of the 550 17th Street NW building
(located on F Street NW) on business days between 7 a.m. and 5 p.m.
Public Inspection: Comments received, including any personal

[[Page 34087]]

information provided, may be posted without change to <a href="https://www.fdic.gov/resources/regulations/federal-register-publications">https://www.fdic.gov/resources/regulations/federal-register-publications</a>.
Commenters should submit only information that the commenter wishes to
make available publicly. The FDIC may review, redact, or refrain from
posting all or any portion of any comment that it may deem to be
inappropriate for publication, such as irrelevant or obscene material.
The FDIC may post only a single representative example of identical or
substantially identical comments, and in such cases will generally
identify the number of identical or substantially identical comments
represented by the posted example. All comments that have been
redacted, as well as those that have not been posted, that contain
comments on the merits of the notice will be retained in the public
comment file and will be considered as required under all applicable
laws. All comments may be accessible under the Freedom of Information
Act.

FOR FURTHER INFORMATION CONTACT:
OCC: Heidi Thomas, Senior Counsel, or Emily Boyes, Counsel, Chief
Counsel's Office, (202) 649-5490; Onjil T. McEachin, Director for CRA
and Fair Lending Policy, Office of the Chief National Bank Examiner,
(202) 649-5470; or Chandni G. Ohri, Director for Community Development,
Office of Community and Industry Relations, (202) 649-6420, Office of
the Comptroller of the Currency, 400 7th Street SW, Washington, DC
20219. If you are deaf, hard of hearing, or have a speech disability,
please dial 7-1-1 to access telecommunications relay services.
Board: Amal Patel, Senior Counsel, Jaydee DiGiovanni, Counsel, and
Taz George, Manager, Division of Consumer and Community Affairs; Cody
Gaffney, Counsel, Legal Division; at (202) 452-3000. For users of text
telephone systems (TTY) or any TTY-based Telecommunications Relay
Services, please call 711 from any telephone, anywhere in the United
States.
FDIC: Cassandra Duhaney, Counsel, Legal Division,
<a href="/cdn-cgi/l/email-protection#472423322f2629223e0721232e2469202831">[email&#160;protected]</a>; Alys V. Brown, Senior Attorney, Legal Division,
<a href="/cdn-cgi/l/email-protection#e2838e9b80908d958ca284868b81cc858d94">[email&#160;protected]</a>; Patience R. Singleton, Senior Policy Analyst,
Supervisory Policy Branch, Division of Depositor and Consumer
Protection, <a href="/cdn-cgi/l/email-protection#cebebda7a0a9a2abbaa1a08ea8aaa7ade0a9a1b8">[email&#160;protected]</a>; Kristopher M. Rengert, Senior Policy
Analyst, Supervisory Policy Branch, Division of Depositor and Consumer
Protection, <a href="/cdn-cgi/l/email-protection#f09b82959e97958284b096949993de979f86">[email&#160;protected]</a>, Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Introduction

The agencies are proposing to rescind the CRA final rule issued on
October 24, 2023, and published in the Federal Register on February 1,
2024,\1\ as subsequently amended \2\ (2023 CRA Final Rule). The
agencies also are proposing to replace the 2023 CRA Final Rule with
regulations adopted by the agencies and the former Office of Thrift
Supervision (OTS) on May 4, 1995,\3\ as amended,\4\ and as published in
the Electronic Code of Federal Regulations (eCFR) as of March 29, 2024
(1995 CRA regulations), with conforming amendments to the agencies'
definition of ``small bank'' and technical amendments to the OCC's
definition of ``small bank'' and transition provisions. The agencies
are also proposing technical amendments to their regulations
implementing the CRA sunshine requirements of the Federal Deposit
Insurance Act, and the OCC is proposing technical amendments to its
Public Welfare Investments regulation. If adopted, the proposal would
restore certainty in the CRA framework for stakeholders and limit
regulatory burden on banks,\5\ while ensuring that banks continue to
focus on the purpose of the CRA.
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\1\ 89 FR 6574 (Feb. 1, 2024).
\2\ 89 FR 22060 (Mar. 29, 2024).
\3\ 60 FR 22156 (May 4, 1995). The OCC reissued its 1995 CRA
regulation, as amended, with non-substantive changes on December 15,
2021. See 86 FR 71328. For purposes of this SUPPLEMENTARY
INFORMATION, reference to the 1995 CRA regulations includes the
OCC's 2021 CRA final rule.
\4\ See e.g., 70 FR 44256 (Aug. 2, 2005); 75 FR 61035 (Oct. 4,
2010); 82 FR 55734 (Nov. 24, 2017).
\5\ For purposes of this SUPPLEMENTARY INFORMATION, the term
``bank'' includes insured national banks, Federal and State savings
associations, and certain Federal branches of foreign banks as
defined in proposed 12 CFR 25.11; insured State nonmember banks and
certain insured State branches of foreign banks as defined in 12 CFR
345.11; and State member banks and certain uninsured State branches
of foreign banks, as defined in 12 CFR 228.11).
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As explained in greater detail below, banks currently operate under
the framework of the 1995 CRA regulations. Therefore, the agencies
anticipate that transition considerations associated with the proposed
recodification of the 1995 CRA regulations would be de minimis. The
agencies believe the recodification of the 1995 CRA regulations would
best achieve the agencies' objectives at this time, as discussed below.

II. Background

The CRA

Congress enacted the CRA \6\ in 1977 based on its findings that:
``(1) regulated financial institutions are required by law to
demonstrate that their deposit facilities serve the convenience and
needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for
credit services as well as deposit services; and (3) regulated
financial institutions have continuing and affirmative obligation[s] to
help meet the credit needs of the local communities in which they are
chartered.'' \7\ Accordingly, the purpose of the CRA is to require the
agencies to encourage regulated financial institutions \8\ ``to help
meet the credit needs of the local communities in which they are
chartered consistent with the safe and sound operation of the
institutions.'' \9\
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\6\ Public Law 95-128, 91 Stat. 1147 (1977) (codified at 12
U.S.C. 2901 et seq. (as amended)).
\7\ 12 U.S.C. 2901(a).
\8\ The CRA defines ``regulated financial institution,'' to mean
an insured depository institution as defined in 12 U.S.C.
1813(c)(2). See 12 U.S.C. 2902(2).
\9\ 12 U.S.C. 2901(b).
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To achieve this purpose, the CRA requires the agencies to ``assess
[an] institution's record of meeting the credit needs of its entire
community, including low- and moderate-income neighborhoods, consistent
with the safe and sound operation of such institution.'' \10\ Upon
completing this assessment, the statute requires the agencies to
``prepare a written evaluation of the institution's record of meeting
the credit needs of its entire community, including low- and moderate-
income neighborhoods.'' \11\ The statute further provides that each
agency must ``take such record into account in its evaluation of an
application for a deposit facility by such institution.'' \12\
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\10\ 12 U.S.C. 2903(a)(1).
\11\ 12 U.S.C. 2906(a).
\12\ 12 U.S.C. 2903(a)(2).
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The Agencies' Regulatory Framework

The CRA directs the agencies to publish regulations to carry out
the purposes of the CRA.\13\ In general, the agencies' CRA regulations,
first promulgated in 1978, establish the standards under which the
agencies evaluate banks' CRA performance.\14\ The agencies' 1995 CRA
regulations

[[Page 34088]]

significantly revised and clarified the 1978 regulations.\15\
Periodically, the agencies have jointly updated and revised the 1995
CRA regulations with minimal significant alterations to the overall
regulatory framework.\16\ The OCC issued a separate CRA final rule in
May 2020, but rescinded it in December 2021.\17\
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\13\ 12 U.S.C. 2905. Pursuant to Title III of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, Public Law 111-203,
124 Stat. 1376, 1522 (2010), the OTS's CRA rulemaking authority for
all savings associations transferred to the OCC and the OTS's CRA
supervisory authority for State savings associations transferred to
the FDIC. As a result, the OCC's CRA regulation applies to both
State and Federal savings associations, in addition to national
banks, and the FDIC enforces the OCC's CRA regulation with respect
to State savings associations.
\14\ 43 FR 47144 (Oct. 12, 1978).
\15\ See supra note 3.
\16\ For a complete discussion of the agencies' actions with
respect to amending their CRA regulations, see the SUPPLEMENTARY
INFORMATION section of the 2023 CRA Final Rule, 89 FR at 6580.
\17\ On May 20, 2020, the OCC issued a final rule to revise and
update its CRA regulation. 85 FR 34734 (June 5, 2020). On December
15, 2021, the OCC published a subsequent final rule that rescinded
its 2020 CRA regulation and replaced it with a CRA regulation based
on those that the agencies jointly issued in 1995, as amended. See
supra note 3.
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The 2023 CRA Final Rule

On May 5, 2022, the agencies issued a joint notice of proposed
rulemaking to modernize their regulations implementing the CRA.\18\
After considering public comments received, the agencies issued the
2023 CRA Final Rule on October 24, 2023.
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\18\ 87 FR 33884 (June 3, 2022).
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Under the 2023 CRA Final Rule, as fully implemented: \19\
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\19\ For a complete overview of the 2023 CRA Final Rule, see the
SUPPLEMENTARY INFORMATION section of the rule, 89 FR at 6574-6579.
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<bullet> Large banks (institutions with assets of at least $2
billion as of December 31 in both of the prior two calendar years)
would be subject to four performance tests: the Retail Lending Test;
the Retail Services and Products Test; the Community Development
Financing Test; and the Community Development Services Test.
<bullet> Intermediate banks (institutions with assets of at least
$600 million as of December 31 in both of the prior two calendar years
and less than $2 billion as of December 31 in either of the prior two
calendar years) would be subject to two performance tests: the Retail
Lending Test and the Intermediate Bank Community Development Test.
<bullet> Small banks (institutions with assets less than $600
million as of December 31 in either of the prior two calendar years)
would be subject to the Small Bank Lending Test.
<bullet> Limited purpose banks (institutions that do not extend
closed-end home mortgage loans, small business loans, small farm loans,
or automobile loans to customers, except on an incidental and
accommodation basis) would be subject to the Community Development
Financing Test for Limited Purpose Banks.
<bullet> Generally, banks operating under an approved strategic
plan would be subject to the same performance tests they would have
been subject to in the absence of a plan; the plan itself could include
additions or modifications to tailor the applicable performance tests
to the bank's business model.
<bullet> The agencies would continue to evaluate banks' performance
in the areas surrounding their main office, branches, or deposit-taking
remote service facilities (i.e., facility-based assessment areas). In
addition, the agencies would evaluate the retail lending performance of
certain large banks in areas outside their facility-based assessment
areas where they have concentrations of retail loans (i.e., retail
lending assessment areas) and the retail lending performance of large
banks and certain intermediate and small banks in the nationwide area
outside their facility-based assessment areas and retail lending
assessment areas (i.e., outside retail lending areas). Further, the
agencies would consider community development loans, community
development investments, and community development services both inside
and outside of a bank's facility-based assessment areas.
<bullet> Large banks would be required to collect, maintain, and
report certain data to enable evaluation under the applicable
performance tests.
<bullet> With respect to community development:
[cir] The rule specified in detail the categories of bank
activities that would qualify for CRA consideration as a community
development loan, community development investment, or community
development service;
[cir] The agencies would provide an illustrative, non-exhaustive
list of examples of loans, investments, and services that qualify for
community development consideration and a process for banks to inquire
whether a particular loan, investment, or service is eligible for
consideration; and
[cir] The agencies would consider impact and responsiveness factors
when evaluating a bank's community development loans, community
development investments, and community development services.
As adopted, the 2023 CRA Final Rule would have become effective on
April 1, 2024; however, most substantive provisions of the rule would
not have become applicable until January 1, 2026, or January 1, 2027.
During this transition period, the 2023 CRA Final Rule specified that
the 1995 CRA regulations, as reproduced in Appendix G of the 2023 CRA
Final Rule, would remain applicable.
On March 21, 2024, the agencies issued a supplemental rule to the
2023 CRA Final Rule.\20\ The supplemental rule extended the
applicability dates of the facility-based assessment area and public
file provisions of the 2023 CRA Final Rule from April 1, 2024, to
January 1, 2026. The supplemental rule also included some technical,
non-substantive amendments to the 2023 CRA Final Rule and related
regulations and corrected a citation to the OCC's CRA regulation.
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\20\ See supra note 2.
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Several plaintiffs jointly filed suit against the agencies in the
U.S. District Court for the Northern District of Texas challenging
aspects of the 2023 CRA Final Rule on February 5, 2024,\21\ and
subsequently requested a preliminary injunction on February 9,
2024.\22\ On March 29, 2024, the district court granted plaintiffs'
request and enjoined the agencies from enforcing the 2023 CRA Final
Rule against the plaintiffs, pending resolution of the litigation. The
district court's order also extended the 2023 CRA Final Rule's
effective date of April 1, 2024, along with all other implementation
dates, day for day for each day the injunction remains in place.\23\
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\21\ Complaint, Tex. Bankers Ass'n v. Office of the Comptroller
of the Currency, No. 2:24-cv-00025-Z (N.D. Tex. Feb. 5, 2024), ECF
No. 4.
\22\ Plaintiffs' Motion for a Preliminary Injunction, Tex.
Bankers Ass'n v. Office of the Comptroller of the Currency, No.
2:24-cv-00025-Z (N.D. Tex. Feb. 9, 2024), ECF No. 19.
\23\ Tex. Bankers Ass'n v. Office of the Comptroller of the
Currency, 728 F. Supp. 3d 412 (N.D. Tex. 2024).
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On April 18, 2024, the agencies appealed the district court's
preliminary injunction to the U.S. Court of Appeals for the Fifth
Circuit.\24\ However, on March 28, 2025, during the pendency of the
appeal, the agencies made an unopposed motion to stay the appeal
pending completion of a new rulemaking that would propose rescinding
the enjoined 2023 CRA Final Rule and reinstating the CRA framework that
existed prior to the 2023 CRA Final Rule.\25\ The agencies publicly
announced this intention the same day.\26\ On April 1, 2025, the Fifth

[[Page 34089]]

Circuit granted the agencies' motion.\27\ In light of this preliminary
injunction, the agencies are not supervising for, or applying, any
provisions of the 2023 CRA Final Rule.
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\24\ Defendants' Notice of Appeal, Tex. Bankers Ass'n v. Office
of the Comptroller of the Currency, No. 2:24-cv-00025-Z (N.D. Tex.
Apr. 18, 2024), ECF No. 79.
\25\ Defendants-Appellants' Unopposed Motion to Stay Pending
Completion of New Rulemaking Proceedings, Tex. Bankers Ass'n v. Bd.
of Governors of the Fed. Reserve Sys., No. 24-10367 (5th Cir. Mar.
28, 2025), ECF No. 165.
\26\ See OCC, ``Agencies Announce Intent to Rescind 2023
Community Reinvestment Act Final Rule'' (Mar. 28, 2025), <a href="https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-ia-2025-26.html">https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-ia-2025-26.html</a>; Board, ``Agencies Announce Intent to Rescind 2023 Community
Reinvestment Act Final Rule'' (Mar. 28, 2025), <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250328a.htm">https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250328a.htm</a>;
FDIC, ``Agencies Announce Intent to Rescind 2023 Community
Reinvestment Act Final Rule'' (Mar. 28, 2025), <a href="https://www.fdic.gov/news/press-releases/2025/agencies-announce-intent-rescind-2023-community-reinvestment-act-final">https://www.fdic.gov/news/press-releases/2025/agencies-announce-intent-rescind-2023-community-reinvestment-act-final</a>.
\27\ Order, Tex. Bankers Ass'n v. Bd. of Governors of the Fed.
Reserve Sys., No. 24-10367 (5th Cir. Apr. 1, 2025), ECF No. 174.
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III. Proposed Rescission of 2023 CRA Final Rule

The agencies' reconsideration of the 2023 CRA Final Rule is
precipitated primarily by the uncertainty created by the pending
litigation.\28\ Specifically, since the injunction was entered, the
agencies have observed confusion and inconsistent understandings among
stakeholders regarding the status of the CRA regulatory and supervisory
landscape.
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\28\ The agencies also note that a change in agency priorities
at the FDIC and OCC has taken place since the agencies adopted the
2023 CRA Final Rule.
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Accordingly, the agencies have reconsidered the status of the CRA
regulatory framework with two major objectives in mind: (1) restoring
certainty in the CRA regulatory framework for stakeholders; and (2)
limiting regulatory burden on banks. Further, the agencies took into
account that any changes to the proposed CRA regulatory framework must
continue to focus on the CRA's purpose--encouraging banks to help meet
the credit needs of the local communities in which they are chartered
consistent with the safe and sound operation of the banks. The
agencies' assessment of these objectives, as well as additional
considerations that informed the agencies' reconsideration of the CRA
regulatory framework, are discussed below.

Agency Objectives

Restoring Certainty. The agencies believe that returning to the
regulatory framework established by the 1995 CRA regulations is the
most effective way to provide certainty regarding the applicable CRA
requirements. Since the issuance of the preliminary injunction
enjoining the 2023 CRA Final Rule, the agencies' observations are that
not all stakeholders understand whether they should prepare to comply
with the 2023 CRA Final Rule or even which regulatory framework is
currently applicable. Proceeding with the litigation, particularly
given its early stage, would maintain these uncertain circumstances for
an indefinite period and would therefore be inconsistent with the
objective of restoring certainty in the CRA regulatory framework.
The agencies also understand that despite the fact that the 2023
CRA Final Rule is now enjoined and might not go into effect, banks
might be devoting resources toward preparing for the 2023 CRA Final
Rule that could otherwise be allocated toward helping to meet the
credit needs of banks' communities. Returning to the 1995 CRA
regulations at this time, in the agencies' view, would confirm for
banks that they do not need to allocate resources for this purpose.
Thus, this approach could better facilitate the purpose of the CRA--
encouraging banks to meet the credit needs of the local communities in
which they are chartered consistent with the safe and sound operation
of those banks.
The agencies' view that returning to the framework established by
the 1995 CRA regulations would best restore certainty is also informed
by the circumstances preceding the litigation. The agencies have
individually and collectively engaged in several iterations of
information gatherings and CRA rulemaking processes since 2018 aimed at
modernizing the CRA framework and increasing the clarity and
consistency of CRA evaluations. These efforts have resulted in a
shifting CRA regulatory landscape, in particular, for national banks
and savings associations.\29\ This regulatory environment may have
affected the planning, development, and management of banks' CRA
programs, which can require multi-year strategies to align qualifying
activities with CRA performance evaluation periods. Continuing the
litigation would prolong the period during which banks will need to
consider impending changes in the regulatory framework while managing
their CRA programs. Further, if the litigation continues, banks may
need to anticipate and plan for potential contingencies in which all or
a part of the 2023 CRA Final Rule could eventually become applicable.
In light of this context, the agencies believe that returning to the
1995 CRA regulations at this time would restore much needed certainty
for banks and other stakeholders.
---------------------------------------------------------------------------

\29\ See supra note 17.
---------------------------------------------------------------------------

Limiting Regulatory Burden. When issuing the 2023 CRA Final Rule,
the agencies sought to balance the increased regulatory burden imposed
by the revised framework with benefits associated with the agencies'
policy objectives for updating the CRA framework. The agencies also
recognized that a subset of banks would have additional regulatory
requirements under the 2023 CRA Final Rule relative to the 1995 CRA
regulations. Furthermore, all banks would have incurred near-term costs
associated with reviewing the 2023 CRA Final Rule to ensure that their
policies; procedures; and data collection, maintenance, and reporting
processes would be compliant.
In contrast, because banks are currently subject to and examined
under the 1995 CRA regulations, the agencies expect that any new
regulatory burden associated with recodifying those regulations will be
de minimis. Further, the 1995 CRA regulations represent an established
regulatory framework that is familiar to CRA stakeholders.\30\
Therefore, although the agencies' reasons for modernizing the CRA
framework remain valid, the agencies believe that replacing the 2023
CRA Final Rule with the 1995 CRA regulations would better limit overall
regulatory burden on banks at this time given the totality of the
circumstances.
---------------------------------------------------------------------------

\30\ See, e.g., Laurie Goodman, et al., ``Under the Current CRA
Rules, Banks Earn Most of Their CRA Credit through Community
Development and Single-Family Mortgage Lending,'' Urban Institute
(July 9, 2020), <a href="https://www.urban.org/urban-wire/under-current-cra-rules-banks-earn-most-their-cra-credit-through-community-development-and-single-family-mortgage-lending">https://www.urban.org/urban-wire/under-current-cra-rules-banks-earn-most-their-cra-credit-through-community-development-and-single-family-mortgage-lending</a>; Daniel Ringo, Board,
```Revitalize or Stabilize': Does Community Development Financing
Work?,'' Finance and Economics Discussion Series 2020-029 (Apr.
2020), <a href="https://www.federalreserve.gov/econres/feds/files/2020029pap.pdf">https://www.federalreserve.gov/econres/feds/files/2020029pap.pdf</a>.
---------------------------------------------------------------------------

For all the foregoing reasons, the agencies believe that the need
to restore certainty and limit regulatory burden supports the decision
to propose rescission of the 2023 CRA Final Rule and recodify the 1995
CRA regulations. Further, the agencies believe that recodifying the
1995 CRA regulations will continue to support the purpose of the CRA.

Additional Agency Considerations

The following considerations also informed the agencies' review of
the CRA regulatory framework and the proposal to return to the 1995 CRA
regulations.
Change in Policy. The agencies acknowledge that rescinding the 2023
CRA Final Rule would represent a change in policy. However, the
agencies note that many of the provisions in the 2023 CRA Final Rule
were included in, or substantially based on, the 1995 CRA regulations
or reflected existing agency supervisory policies. With respect to
those provisions of the 2023 CRA Final Rule, the proposal therefore
does not reflect a significant change in policy. These provisions
include: many aspects of the regulatory definitions; facility-

[[Page 34090]]

based assessment areas; the Small Bank Performance Test; the
Intermediate Bank Community Development Test; the effect of CRA
performance on applications; the public file requirements; the public
notice requirements; and some data collection, maintenance, and
reporting requirements. Moreover, rescinding the 2023 CRA Final Rule
and recodifying the 1995 CRA regulations would not, in practice, result
in a change for banks because the agencies are currently applying the
1995 CRA regulations to banks.
Further, the agencies believe that any reliance interests vested in
the 2023 CRA Final Rule are as yet de minimis because the rule was
enjoined prior to its effective and applicability dates. Put simply,
the 2023 CRA Final Rule has never applied to any bank.
Transition Issues. The agencies believe that transition
considerations associated with implementing the proposal would likewise
be de minimis. The agencies currently evaluate bank CRA performance
under the 1995 CRA regulations because the 2023 CRA Final Rule never
took effect. Therefore, the agencies expect that a recodification of
the 1995 CRA regulations will have a negligible transitional impact on
all CRA stakeholders.

Alternatives Considered

Although there are potential alternatives to rescinding the 2023
CRA Final Rule and returning to the 1995 CRA regulations, the agencies
believe that these alternatives do not best meet the agencies'
objectives in reconsidering the CRA framework at this time.
One alternative the agencies considered was maintaining the 2023
CRA Final Rule. However, the agencies believe that this alternative
would be unviable. As discussed above, maintaining the 2023 CRA Final
Rule would potentially require continuing with protracted litigation,
thereby extending the current uncertainty related to the applicable CRA
regulatory framework. Ultimately, that litigation could result in
changes to or a voiding of the 2023 CRA Final Rule, imposing further
uncertainty over an extended period. As also discussed above, the
agencies believe that maintaining the 2023 CRA Final Rule could result
in banks expending resources to implement the rule without knowing
whether all or part of the rule would survive the legal challenge.
Another alternative the agencies considered was proposing to
replace the 2023 CRA Final Rule with a new CRA framework that is
materially different from the framework contained in the 2023 CRA Final
Rule. However, proposing to establish a materially revised framework
would involve undertaking an extensive regulatory process, which would
not be consistent with the agencies' objective of restoring certainty
in the near term. The agencies believe that recodifying the 1995 CRA
regulations at this time would provide a more predictable environment
and best position stakeholders to manage any possible future regulatory
developments.
Lastly, the agencies reviewed the option of proposing targeted
amendments to the 2023 CRA Final Rule. However, the agencies considered
that, because the 2023 CRA Final Rule is structured in a comprehensive,
layered format with interdependent provisions, removing only certain
provisions would be incompatible with the operational structure of the
rule. For example, proposing to remove the retail lending assessment
area provision would also require the agencies to propose related
changes to provisions concerning: the Retail Lending Test overall;
outside retail lending areas; affiliate lending; strategic plans;
public file requirements; appendix A of the 2023 CRA Final Rule
(Calculations for the Retail Lending Test); the manner in which
conclusions and ratings are calculated for all applicable performance
tests under appendices C and D; and data collection, maintenance, and
reporting requirements.
Furthermore, by proposing to amend the 2023 CRA Final Rule instead
of rescinding it and replacing it with the 1995 CRA regulations, an
established CRA framework, the agencies would be embarking upon a
potentially lengthy period of rulemaking-related activities, thereby
continuing the uncertainty for CRA stakeholders. Therefore, the
agencies do not believe that it is feasible to amend the 2023 CRA Final
Rule in a way that meets the agencies' objectives of restoring
certainty.
Accordingly, the agencies believe that rescinding the entire 2023
CRA Final Rule and recodifying the 1995 CRA regulations is the best
approach at this time to accomplish the agencies' objectives of
restoring certainty and limiting regulatory burden while meeting the
purpose of the CRA--encouraging banks to help meet the credit needs of
the local communities in which they are chartered consistent with the
safe and sound operation of those banks.

IV. Description of the Proposed Rule

The proposal would recodify the 1995 CRA regulations currently
applicable to banks, as published in the eCFR as of March 29, 2024,
with updated asset-size thresholds for the definition of ``small bank''
to reflect the agencies' inflation adjustments for 2025.\31\ (As
described elsewhere in this SUPPLEMENTARY INFORMATION, the OCC's
proposed regulatory text also includes technical amendments to its
definition of ``small bank'' and its transition provisions.) As such,
the proposal includes the provisions described below.
---------------------------------------------------------------------------

\31\ The agencies annually adjust the CRA asset-size thresholds
based on the annual percentage change in a measure of the Consumer
Price Index. The bank asset-size thresholds set forth in this
proposed rule are accurate through December 31, 2025. See 89 FR
106480 (Dec. 30, 2024) (Board and FDIC); OCC Bulletin 2024-36 (Dec.
23, 2024), <a href="https://www.occ.treas.gov/news-issuances/bulletins/2024/bulletin-2024-36.html">https://www.occ.treas.gov/news-issuances/bulletins/2024/bulletin-2024-36.html</a> (OCC).
---------------------------------------------------------------------------

Standards for Assessing Performance

The proposal provides the following different methods to evaluate a
bank's CRA performance depending on bank asset size and business
strategy:
<bullet> Small banks that are not intermediate small banks--defined
as banks with assets of less than $402 million as of December 31 of
either of the prior two calendar years--would be evaluated under a
lending test and may receive an ``Outstanding'' rating based only on
their retail lending performance. Qualified investments, services, and
delivery systems that enhance credit availability in a bank's
assessment areas may be considered for an ``Outstanding'' rating, but
only if the bank meets or exceeds the lending test criteria in the
small bank performance standards.
<bullet> Intermediate small banks--defined as small banks with
assets of at least $402 million as of December 31 of both of the prior
two calendar years and less than $1.609 billion as of December 31 of
either of the prior two calendar years--would be evaluated under the
lending test for small banks and a community development test. The
intermediate small bank community development test would evaluate all
community development activities combined.
<bullet> Large banks--those banks with assets of at least $1.609
billion as of December 31 of both of the prior two calendar years--
would be evaluated under separate lending, investment, and service
tests. The lending and service tests would consider both retail and
community development activities, and the investment test would focus
on qualified investments. To facilitate the agencies' CRA analysis,
large banks would be required to report annually certain data on
community development loans, small business loans, and small

[[Page 34091]]

farm loans. Small banks and intermediate small banks would not be
required to report these data unless they opt into being evaluated
under the large bank lending tests.
<bullet> Designated wholesale banks (those engaged in only
incidental retail lending) and limited purposes banks (those offering a
narrow product line to a regional or broader market) would be evaluated
under a standalone community development test.
<bullet> Banks of any size could elect to be evaluated under a
strategic plan that sets out measurable, annual goals for lending,
investment, and service activities to achieve a ``Satisfactory'' or an
``Outstanding'' rating. A strategic plan would need to be developed
with community input and approved by the appropriate Federal financial
supervisory agency.
The proposal provides that the agencies could also consider
applicable performance context information to develop their analyses
and conclusions when conducting CRA examinations.\32\ Performance
context would comprise a broad range of economic, demographic, and
bank- and community-specific information that examiners review to
calibrate a bank's CRA evaluation to its communities. Consistent with
the statute, the proposed regulations would not require banks to make
loans or investments or to provide services that are inconsistent with
safe and sound operations.\33\
---------------------------------------------------------------------------

\32\ See proposed 12 CFR __.21(b).
\33\ See proposed 12 CFR __.21(d).
---------------------------------------------------------------------------

Assigned Ratings

In general, the agencies would assign banks' CRA ratings under the
applicable performance tests and standards (e.g., for large banks, the
lending, investment, and service tests).\34\ The evaluation of a bank's
CRA performance would be adversely affected by evidence of
discriminatory or other illegal credit practices.\35\
---------------------------------------------------------------------------

\34\ See proposed 12 CFR __.28(a) and (b).
\35\ See proposed 12 CFR __.28(c).
---------------------------------------------------------------------------

Assessment Areas

The proposal would require a bank to delineate one or more
assessment areas in which the bank's record of meeting its CRA
obligations is evaluated. Specifically, the proposed regulatory text
would require a bank to delineate assessment areas generally consisting
of (1) one or more metropolitan statistical areas (MSAs) or
metropolitan divisions or (2) one or more contiguous political
subdivisions \36\ in which the bank has its main office, branches, and,
as applicable, deposit-taking automated teller machines (ATMs) \37\ or
remote service facilities (RSFs),\38\ as well as the surrounding
geographies \39\ (i.e., census tracts) in which the bank has originated
or purchased a substantial portion of its loans (including home
mortgage loans, small business loans, small farm loans, and any other
loans the bank chooses, such as consumer loans, on which the bank
elects to have its performance assessed).\40\
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\36\ Political subdivisions include cities, counties, towns,
townships, and Indian reservations. See Sec. __.41(c)(1)--1,
Interagency Questions and Answers Regarding Community Reinvestment,
81 FR 48506 (July 25, 2016).
\37\ See proposed 12 CFR 25.41(c)(2) (OCC); proposed 12 CFR
228.41(c)(2) (Board).
\38\ See proposed 12 CFR 345.41(c)(2) (FDIC).
\39\ See proposed 12 CFR __.41.
\40\ See proposed 12 CFR __.41.
---------------------------------------------------------------------------

Qualifying Activities

The proposal, along with the Interagency Questions and Answers
Regarding Community Reinvestment, provide detailed information,
including applicable definitions and descriptions, regarding activities
that are eligible for CRA consideration in the evaluation of a bank's
CRA performance. Banks that are evaluated under a performance test that
includes a review of their retail activities would be assessed in
connection with retail lending activity (e.g., home mortgage loans,
small business loans, small farm loans, and consumer loans) \41\ and,
where applicable, retail banking service activities (e.g., the current
distribution of a bank's branches in geographies of different income
levels, and the availability and effectiveness of the bank's
alternative systems for delivering banking services to low- and
moderate-income geographies and individuals).\42\
---------------------------------------------------------------------------

\41\ See proposed 12 CFR __.12(j), (l), (v), and (w).
\42\ See generally proposed 12 CFR __.21 through __.27; see also
proposed 12 CFR __.24(d).
---------------------------------------------------------------------------

Banks evaluated under a performance test that includes a review of
their community development activities would be assessed with respect
to community development lending, qualified investments, and community
development services, which must have a primary purpose of community
development.\43\
---------------------------------------------------------------------------

\43\ See proposed 12 CFR __.12(g), (h), (i), and (t); see also
proposed 12 CFR __.21 through __.27.
---------------------------------------------------------------------------

Other Provisions

The proposal also includes the following provisions:
<bullet> The agencies would be required to consider the effect of a
bank's CRA performance on certain banking applications.\44\ In
connection with a banking application, interested parties could submit
comments regarding the bank's CRA performance. Furthermore, a bank's
CRA performance could be the basis for denying or conditioning approval
of such applications.
---------------------------------------------------------------------------

\44\ See proposed 12 CFR __.29. The covered applications are
aligned with the definition of ``application for a deposit
facility'' found in 12 U.S.C. 2902(3).
---------------------------------------------------------------------------

<bullet> A bank would be required to collect, maintain, and report
certain data to enable agencies to evaluate its CRA performance.\45\
Small banks and intermediate small banks would generally be exempt from
these requirements.
---------------------------------------------------------------------------

\45\ See proposed 12 CFR __.42.
---------------------------------------------------------------------------

<bullet> A bank would be required to maintain certain information
related to CRA performance in its public file.\46\ The proposed public
file provision specifies what information must be included, where
information in the public file must be made available for public
inspection, and the provision of copies.
---------------------------------------------------------------------------

\46\ See proposed 12 CFR __.43.
---------------------------------------------------------------------------

<bullet> A bank would be required to maintain the proposed public
notice contained in appendix B in the public lobby of its main office
and in each of its branches.\47\
---------------------------------------------------------------------------

\47\ See proposed 12 CFR __.44.
---------------------------------------------------------------------------

<bullet> As required by the CRA,\48\ a bank could receive positive
CRA consideration for low-cost education loans provided to low-income
borrowers and activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions.\49\
---------------------------------------------------------------------------

\48\ 12 U.S.C. 2903(b) and (d).
\49\ See proposed 12 CFR __.21(e) and (f).
---------------------------------------------------------------------------

<bullet> The agencies would be required to publish a schedule of
planned CRA examinations.\50\
---------------------------------------------------------------------------

\50\ See proposed 12 CFR __.45.
---------------------------------------------------------------------------

OCC Provisions

As in the OCC's 1995 CRA regulation, the proposal includes
provisions that apply only to the OCC. Specifically, the proposed OCC
regulation includes two transition provisions that have been applicable
since January 1, 2022, the effective date of the OCC's 2021 CRA final
rule, with technical corrections. First, in assessing a bank's
performance, the OCC would consider any investment, loan, or service
that is eligible for CRA consideration at the time the bank conducted
the activity.\51\ Second, a strategic plan in effect as of December 31,
2021, would remain in effect, except that provisions of the plan that
are not consistent with the OCC's CRA regulation in effect as of
January 1, 2022, are void, unless amended. These transition provisions
are necessary

[[Page 34092]]

because the OCC had adopted and then rescinded the final rule it issued
in 2020. In both these provisions, the OCC proposes a technical
amendment to apply them to savings associations as well as national
banks. This change would correct a drafting error in the OCC's 2021 CRA
final rule.\52\
---------------------------------------------------------------------------

\51\ See proposed 12 CFR __.51.
\52\ See supra note 3.
---------------------------------------------------------------------------

In addition, the proposal includes subpart E, Prohibition Against
Use of Interstate Branches Primarily for Deposit Production. This
subpart implements section 109 of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994, 12 U.S.C. 1835a, which only
applies to certain national banks and Federal branches of a foreign
bank. Subpart E redesignates but does not amend subpart F of the 2023
CRA Final Rule. The Board and the FDIC include these provisions in
separate regulations.\53\
---------------------------------------------------------------------------

\53\ See 12 CFR 208.7 (Board); 12 CFR part 369 (FDIC).
---------------------------------------------------------------------------

V. Other Proposed Amendments

CRA Sunshine Regulations

The agencies are proposing conforming changes to their regulations
implementing the CRA sunshine requirements of the Federal Deposit
Insurance Act \54\ (CRA Sunshine Regulations).\55\ The CRA Sunshine
Regulations currently cross-reference to the agencies' CRA regulations
in appendix G of the 2023 CRA Final Rule. The proposed amendments would
remove all references to appendix G so that the CRA Sunshine
Regulations would instead cross-reference to the proposed
recodification of each agency's respective 1995 CRA regulation.
---------------------------------------------------------------------------

\54\ Codified at 12 U.S.C. 1831y.
\55\ 12 CFR parts 35 (OCC); 12 CFR 207 (Regulation G) (Board);
and 12 CFR 346 (FDIC).
---------------------------------------------------------------------------

OCC Amendments

The OCC is proposing several clarifying amendments and a technical
correction to the definition of ``small bank'' in 12 CFR 25.12(u).
First, the OCC proposes to clarify that the dollar amounts included in
the definition would only apply for calendar year 2025. Second, the OCC
proposes to indicate that the annual adjustments to the thresholds
included in the definition are published on the OCC's website. Since
2020, the OCC has announced the new asset-size thresholds for this
definition each year by publication of an OCC Bulletin on <a href="http://OCC.gov">OCC.gov</a> and
does not amend Sec. 25.12(u) with the new thresholds. Together, these
proposed amendments would ensure that stakeholders are informed that
the asset-size thresholds in the definition are not current for years
other than 2025 and direct stakeholders to where they can obtain the
current thresholds. The OCC intends for these amendments to provide
additional clarity and transparency. Third, the OCC is proposing to
remove ``appropriate Federal banking agency'' in the definition so that
the provision provides that only the OCC updates this asset-size
threshold annually. Part 25 defines ``appropriate Federal banking
agency'' to be the OCC and the FDIC. However, only the OCC updates the
asset-size thresholds in the ``small bank'' definition of part 25.
In addition, the OCC is proposing conforming amendments to its
Public Welfare Investment regulation, 12 CFR part 24. Part 24 currently
refers to the OCC's CRA regulation, 12 CFR part 25, as appendix G of
the 2023 CRA Final Rule. The proposed amendment would remove all
references to appendix G so that part 24 would instead cross-reference
to the proposed recodification of the OCC's 1995 CRA regulation.\56\
---------------------------------------------------------------------------

\56\ The Board's public welfare investment regulation does not
cite to its CRA regulation and thus does not need to be amended. See
12 CFR 208.22. The FDIC does not have public welfare investment
regulations.
---------------------------------------------------------------------------

VI. Request for Comments

The agencies request feedback on all aspects of the proposed
rule.\57\
---------------------------------------------------------------------------

\57\ The agencies note that they are currently engaged in the
review of all their regulations under the Economic Growth and
Regulatory Paperwork Reduction Act (EGRPRA), 12 U.S.C. 3311, which,
in general, requires the agencies to conduct a review of their
regulations not less frequently than once every 10 years to identify
outdated or otherwise unnecessary regulatory requirements imposed on
banks. As part of this review, the agencies are requesting comment
on their CRA regulations. See: <a href="https://egrpra.ffiec.gov/federal-register-notices/fedreg-index.html">https://egrpra.ffiec.gov/federal-register-notices/fedreg-index.html</a>. The agencies generally expect to
consider any EGRPRA comments received on their CRA regulations
separately from this rulemaking.
---------------------------------------------------------------------------

VII. Regulatory Analysis

Regulatory Flexibility Act

OCC. The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA),
requires an agency to consider the impact of its proposed rules on
small entities. In connection with a proposed rule, the RFA generally
requires an agency to prepare an Initial Regulatory Flexibility
Analysis (IRFA) describing the impact of the rule on small entities,
unless the head of the agency certifies that the proposed rule will not
have a significant economic impact on a substantial number of small
entities and publishes such certification along with a statement
providing the factual basis for such certification in the Federal
Register. An IRFA must contain: (1) a description of the reasons why
action by the agency is being considered; (2) a succinct statement of
the objectives of, and legal basis for, the proposed rule; (3) a
description of and, where feasible, an estimate of the number of small
entities to which the proposed rule will apply; (4) a description of
the projected reporting, recordkeeping, and other compliance
requirements of the proposed rule, including an estimate of the classes
of small entities that will be subject to the requirements and the type
of professional skills necessary for preparation of the report or
record; (5) an identification, to the extent practicable, of all
relevant Federal rules that may duplicate, overlap with, or conflict
with the proposed rule; and (6) a description of any significant
alternatives to the proposed rule that accomplish its stated
objectives.
The OCC currently supervises 1,030 institutions (commercial banks,
trust companies, Federal savings associations, and branches or agencies
of foreign banks),\58\ of which approximately 609 are small entities
under the RFA.\59\
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\58\ Based on data accessed using the OCC's Financial
Institutions Data Retrieval System on May 8, 2025.
\59\ The OCC bases its estimate of the number of small entities
on the Small Business Administration's size thresholds for
commercial banks and savings institutions, and trust companies,
which are $850 million and $47 million, respectively. Consistent
with the General Principles of Affiliation, 13 CFR 121.103(a), the
OCC counted the assets of affiliated financial institutions when
determining if it should classify an OCC-supervised institution as a
small entity. The OCC used average quarterly assets in 2024 to
determine size because a ``financial institution's assets are
determined by averaging the assets reported on its four quarterly
financial statements for the preceding year.'' See footnote 8 of the
U.S. Small Business Administration's Table of Size Standards.
---------------------------------------------------------------------------

Because of the preliminary injunction enjoining the 2023 CRA Final
Rule, the OCC used the 1995 CRA regulations as the baseline in its RFA
analysis. Using this baseline, the OCC estimates the cost of the
proposal to be de minimis because the proposed rule would return to the
1995 regulation, which is currently applicable to banks. Therefore, the
OCC certifies that this proposal, if adopted, will not have a
significant economic impact on a substantial number of small entities.
Accordingly, an initial Regulatory Flexibility Analysis is not
required.
Board. The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA),
requires an agency to consider whether the rules it proposes will have
a significant economic impact on a substantial number of small
entities. In connection with a proposed rule, the RFA generally
requires an agency to prepare an Initial

[[Page 34093]]

Regulatory Flexibility Analysis (IRFA) describing the impact of the
rule on small entities, unless the head of the agency certifies that
the proposal will not have a significant economic impact on a
substantial number of small entities and publishes such certification
along with a statement providing the factual basis for such
certification in the Federal Register. An IRFA must contain (i) a
description of the reasons why action by the agency is being
considered; (ii) a succinct statement of the objectives of, and legal
basis for, the proposal; (iii) a description of, and, where feasible,
an estimate of the number of small entities to which the proposal will
apply; (iv) a description of the projected reporting, recordkeeping,
and other compliance requirements of the proposal, including an
estimate of the classes of small entities that will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record; (v) an identification, to the
extent practicable, of all relevant Federal rules that may duplicate,
overlap with, or conflict with the proposal; and (vi) a description of
any significant alternatives to the proposal that accomplish its stated
objectives and minimize any significant economic impact of the proposal
on small entities.
The Board is providing an IRFA with respect to the proposal. The
Board invites comment on all aspects of this IRFA.
1. Reasons Action Is Being Considered
The Board proposes to rescind the 2023 CRA Final Rule and replace
it with the 1995 CRA regulations, with conforming amendments to the
definition of ``small bank.'' Together with the other agencies, the
Board believes that the proposal would restore certainty in the CRA
framework for stakeholders and limit regulatory burden on banks, while
ensuring that banks continue to focus on the purpose of the CRA. As
described above, banks currently operate under the framework of the
1995 regulations.
2. Objectives of and Legal Basis for the Proposal
Section 806 of the CRA (12 U.S.C. 2905) requires the Board to
publish regulations to carry out the purposes of the CRA.
The Board's and the other agencies' reconsideration of the 2023 CRA
Final Rule is precipitated primarily by the uncertainty created by the
pending litigation. Accordingly, the agencies have reconsidered the
status of the CRA regulatory framework with two major objectives in
mind: (1) restoring certainty in the CRA regulatory framework for
stakeholders; and (2) limiting regulatory burden on banks. Further, the
agencies took into account that any changes to the proposed CRA
regulatory framework must continue to focus on the CRA's purpose--
encouraging banks to help meet the credit needs of the local
communities in which they are chartered consistent with the safe and
sound operation of the banks. The agencies' assessment of these
objectives, as well as additional considerations that informed the
agencies' reconsideration of the CRA regulatory framework, are
discussed in section III of this SUPPLEMENTARY INFORMATION.
3. Description and Estimate of the Number of Small Entities
Board-supervised institutions that would be subject to the proposed
rule are State member banks (as defined in section 3(d)(2) of the
Federal Deposit Insurance Act) and uninsured State branches of foreign
banks (other than limited branches) resulting from certain acquisitions
under the International Banking Act. Banks that do not perform
commercial or retail banking services by granting credit to the public
in the ordinary course of business would not be subject to the
proposal.
The Board generally uses the industry-specific size standards
adopted by the SBA for purposes of estimating the number of small
entities to which a proposal would apply.\60\ The SBA has adopted size
standards that provide that depository institutions with average assets
of less than $850 million over the preceding year (based on the
institution's four quarterly financial statements) are considered small
entities.\61\ The Board estimates that approximately 446 Board-
supervised small entities would be subject to the proposed rule.\62\
---------------------------------------------------------------------------

\60\ See 13 CFR 121.201. Consistent with the SBA's General
Principles of Affiliation, the Board generally includes the assets
of all domestic and foreign affiliates toward the applicable size
threshold when determining whether to classify a particular entity
as a small entity. See 13 CFR 121.103.
\61\ See 13 CFR 121.201 (sectors 522110-522180).
\62\ The Board's estimate is based on total assets reported on
Forms FR Y-9 (Consolidated Financial Statements for Holding
Companies) and FFIEC 041 (Consolidated Reports of Condition and
Income) for 2024.
---------------------------------------------------------------------------

4. Description of Compliance Requirements
The proposal would recodify the 1995 CRA regulations currently
applicable to banks, with updated asset-size thresholds for the
definition of ``small bank'' to reflect the agencies' inflation
adjustments for 2025. In general, the CRA framework establishes the
performance tests and standards that the Board uses to assess a bank's
CRA performance and adopts related requirements (including reporting,
recordkeeping, disclosure, and other compliance requirements) to
facilitate CRA evaluations. A fuller description of the proposal,
including reporting, recordkeeping, disclosure, and other compliance
requirements, is provided in sections IV and VII (Paperwork Reduction
Act) of this SUPPLEMENTARY INFORMATION.
5. Duplicative, Overlapping, and Conflicting Rules
The Board is not aware of any federal rules that may duplicate,
overlap with, or conflict with the proposal.
6. Significant Alternatives Considered
As an alternative to the proposal, the Board (together with the
other agencies) considered maintaining the 2023 CRA Final Rule,
proposing to replace the 2023 CRA Final Rule with a new CRA framework
that is materially different from the framework contained in the 2023
CRA rule, and proposing targeted amendments to the 2023 CRA Final Rule.
The agencies' analysis of each of these alternatives is discussed in
section III of this SUPPLEMENTARY INFORMATION.
FDIC. The RFA generally requires an agency, in connection with a
proposed rule, to prepare and make available for public comment an
initial regulatory flexibility analysis that describes the impact of
the proposed rule on small entities.\63\ However, an IRFA is not
required if the agency certifies that the proposed rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities. The Small Business Administration (SBA) has defined
``small entities'' to include banking organizations with total assets
of less than or equal to $850 million.\64\ Generally, the FDIC
considers a significant economic impact to be a quantified effect in
excess of 5 percent of total annual salaries and benefits or

[[Page 34094]]

2.5 percent of total noninterest expenses. The FDIC believes that
effects in excess of one or more of these thresholds typically
represent significant economic impacts for FDIC-supervised
institutions. The FDIC believes that the proposed rule is unlikely to
have a significant impact on a substantial number of small entities.
The FDIC's rationale for its determination is discussed below.
---------------------------------------------------------------------------

\63\ 5 U.S.C. 601 et seq.
\64\ The SBA defines a small banking organization as having $850
million or less in assets, where an organization's ``assets are
determined by averaging the assets reported on its four quarterly
financial statements for the preceding year.'' See 13 CFR 121.201
(as amended by 87 FR 69118, effective December 19, 2022). In its
determination, the ``SBA counts the receipts, employees, or other
measure of size of the concern whose size is at issue and all of its
domestic and foreign affiliates.'' See 13 CFR 121.103. Following
these regulations, the FDIC uses an insured depository institution's
affiliated and acquired assets, averaged over the preceding four
quarters, to determine whether the insured depository institution is
``small'' for the purposes of RFA.
---------------------------------------------------------------------------

As of December 31, 2024, there are 2,854 FDIC-supervised IDIs, of
which 2,122 are ``small entities'' under the RFA.\65\ Of these, 2,116
are subject to the CRA and covered by the proposal. As discussed in the
Supplementary Information, the proposal would return the CRA
examination framework to the framework in place prior to the adoption
of the 2023 CRA Final Rule. The 2023 CRA Final Rule was enjoined by
court order on March 29, 2024, therefore it never went into effect and
small entities have instead been subject to the CRA framework in the
proposed rule. Thus, if the proposal is adopted, small entities would
experience no change in their CRA examination framework. Therefore, the
FDIC certifies that the proposed rule will not have a significant
impact on a substantial number of small entities.
---------------------------------------------------------------------------

\65\ FDIC Call Report Data, December 31, 2024.
---------------------------------------------------------------------------

The FDIC invites comments on all aspects of the supporting
information provided in this RFA section. The FDIC is particularly
interested in comments on any significant effects on small entities
that the agency has not identified.

OCC Unfunded Mandates Reform Act

The OCC has analyzed the proposed rule under the factors in the
Unfunded Mandates Reform Act of 1995 (UMRA).\66\ Under this analysis,
the OCC considered whether the proposed rule includes a Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year ($187 million as adjusted annually for
inflation). Pursuant to section 202 of the UMRA,\67\ if a proposed rule
meets this UMRA threshold, the OCC would need to prepare a written
statement that includes, among other things, a cost-benefit analysis of
the proposal.
---------------------------------------------------------------------------

\66\ 2 U.S.C. 1531 et seq.
\67\ 2 U.S.C. 1532.
---------------------------------------------------------------------------

Because the 2023 CRA Final Rule did not take effect, the OCC used
the 1995 CRA regulations as the baseline in its UMRA analysis. Using
this baseline, the OCC estimates the cost of the proposal to be de
minimis because the proposed rule would return to the 1995 regulation,
which is currently applicable to banks. Therefore, the OCC concludes
that the proposed rule would not result in an expenditure of $187
million or more annually by state, local, and tribal governments, or by
the private sector, and thus would not meet the UMRA threshold.
Accordingly, the OCC has not prepared the written statement described
in UMRA.

Riegle Community Development and Regulatory Improvement Act of 1994

Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994, 12 U.S.C. 4802(a), in determining
the effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions, the agencies will
consider, consistent with principles of safety and soundness and the
public interest: (1) any administrative burdens that the proposed rule
would place on depository institutions, including small depository
institutions and customers of depository institutions; and (2) the
benefits of the proposed rule. The agencies request comment on any
administrative burdens that the proposed rule would place on depository
institutions, including small depository institutions, and their
customers, and the benefits of the proposed rule that the agencies
should consider in determining the effective date and administrative
compliance requirements for a final rule.

Executive Orders 12866 and 14192

Executive Order 12866, as amended, provides that the Office of
Information and Regulatory Affairs (OIRA) will review all ``significant
regulatory actions'' as defined therein. OIRA has determined that this
proposal is not a ``significant regulatory action'' for purposes of
Executive Order 12866. The proposal, if finalized as proposed, is not
expected to be an Executive Order 14192 regulatory action.

Plain Language

Section 722 of the Gramm-Leach-Bliley Act requires the agencies to
use plain language in all proposed and final rules published after
January 1, 2000. The agencies invite comment on how to make this
proposed rule easier to understand.
For example:
<bullet> Have the agencies organized the material to inform your
needs? If not, how could the agencies present the proposed rule more
clearly?
<bullet> Are the requirements in the proposed rule clearly stated?
If not, how could the proposal be more clearly stated?
<bullet> Does the proposed regulation contain technical language or
jargon that is not clear? If so, which language requires clarification?
<bullet> Would a different format (grouping and order of sections,
use of headings, paragraphing) make the proposed regulation easier to
understand? If so, what changes would achieve that?
<bullet> Is this section format adequate? If not, which of the
sections should be changed and how?
<bullet> What other changes can the agencies incorporate to make
the proposed regulation easier to understand?

Paperwork Reduction Act

Certain provisions of the proposed rule contain ``collections of
information'' within the meaning of the Paperwork Reduction Act (PRA)
of 1995, 44 U.S.C. 3501 through 3521. In accordance with the
requirements of the PRA, the agencies may not conduct or sponsor, and
the respondent is not required to respond to, an information collection
unless it displays a currently valid OMB control number. The
information collections contained in the proposed rule have been
submitted to OMB for review and approval by the OCC and the FDIC under
section 3507(d) of the PRA, 44 U.S.C. 3507(d), and Sec. 1320.11 of
OMB's implementing regulations, 5 CFR part 1320. The Board reviewed the
proposed rule under the authority delegated to the Board by OMB. The
agencies are proposing to extend for three years, with revision, these
information collections.
Title of Information Collection: OCC, Community Reinvestment Act;
Board, Reporting, Recordkeeping, and Disclosure Requirements Associated
with Regulation BB; FDIC, Community Reinvestment Act.
OMB Control Numbers: OCC 1557-0160; Board 7100-0197; FDIC 3064-
0092.
Frequency of Response: On occasion.
Affected Public: Businesses or other for-profits.
Respondents:
OCC: National banks, Federal savings associations, Federal branches
and agencies.
FDIC: All insured state nonmember banks, insured state-licensed
branches of foreign banks, insured state savings associations, and bank
service providers.
Board: All state member banks (as defined in 12 CFR 208.2(g)), bank
holding companies (as defined in 12

[[Page 34095]]

U.S.C. 1841), savings and loan holding companies (as defined in 12
U.S.C. 1467a), foreign banking organizations (as defined in 12 CFR
211.21(o)), foreign banks that do not operate an insured branch, state
branch or state agency of a foreign bank (as defined in 12 U.S.C.
3101(11) and (12)), Edge or agreement corporations (as defined in 12
CFR 211.1(c)(2) and (3)), and bank service providers.
The information collection requirements in the proposed rule are as
follows:

Reporting Requirements

Sec. __.25(b)--Request for designation as a wholesale or a limited
purpose bank. The appropriate Federal banking agency would assess a
wholesale or a limited purpose banks record of helping to meet the
credit needs of its assessment area(s) under the community development
test for wholesale or limited purpose banks through its community
development lending, qualified investments, or community development
services.\68\ In order to receive a designation as a wholesale or
limited purpose bank, a bank would be required to file a request, in
writing, with the appropriate Federal banking agency at least three
months prior to the proposed effective date of the designation.\69\
---------------------------------------------------------------------------

\68\ Proposed 12 CFR __.25(a).
\69\ Proposed 12 CFR __.25(b).
---------------------------------------------------------------------------

Sec. __.27--Strategic plan. A bank could elect to be assessed
under a strategic plan if the bank has submitted the plan to the
appropriate Federal banking agency as provided for in proposed Sec.
__.27, the appropriate Federal banking agency has approved the plan,
the plan is in effect, and the bank has been operating under an
approved plan for at least one year.\70\ The appropriate Federal
banking agency's approval of a plan would not affect the bank's
obligation, if any, to comply with the data reporting requirements
under proposed Sec. __.42.\71\ The plan could have a term of no more
than five years and any multiyear plan would be required to include
annual interim measurable goals; a bank with more than one assessment
area could prepare a single plan for all of its assessment areas or one
or more plans for one or more of its assessment areas; and affiliated
institutions could prepare a joint plan if the plan provides measurable
goals for each institution.\72\ Before submitting a plan to the
appropriate Federal banking agency or amending a plan during its term,
a bank would be required to seek suggestions from members of the public
in its assessment area(s), formally solicit public comment for at least
30 days, and during the period of formal public comment make copies of
the plan available for public review at its offices in assessment areas
covered by the plan at no cost and by mail for a reasonable cost.\73\
The bank would be required to submit its plan to the appropriate
Federal banking agency at least three months prior to the proposed
effective date of the plan and also submit with its plan a description
of its informal efforts to seek suggestions from members of the public,
any written public comment received, and, if the plan was revised in
light of the comment received, the initial plan as released for public
comment.\74\ A strategic plan would be required to include measurable
goals for helping meet the credit needs of each assessment area covered
by the plan, addressing lending, investment, and service activities, as
appropriate.\75\ A bank could submit additional information to the
appropriate Federal banking agency on a confidential basis, but the
goals stated in the plan would be required to be sufficiently specific
to enable the public and the appropriate Federal banking agency to
judge the merits of the plan.\76\ A plan would be required to specify
goals that constitute ``Satisfactory'' performance and could specify
goals that constitute ``Outstanding'' performance.\77\ If a bank fails
to meet substantially its own goals for ``Satisfactory'' performance,
the bank could elect in its plan to be evaluated under the applicable
performance test(s) specified in the regulation.\78\ The appropriate
Federal banking agency would act upon a plan within 60 calendar days
after the agency receives the complete plan and other material that
would be required under proposed Sec. __.27(e).\79\ During the term of
a plan, a bank could request the appropriate Federal banking agency to
approve an amendment to the plan on grounds that there has been a
material change in circumstances and the bank would be required to
develop an amendment to a previously approved plan in accordance with
the public participation requirements of proposed Sec. __.27(d).\80\
The appropriate Federal banking agency would approve the goals and
assesses performance under a plan as provided for in appendix A
(Ratings).\81\
---------------------------------------------------------------------------

\70\ Proposed 12 CFR __.27(a)(1) and (e).
\71\ Proposed 12 CFR __.27(b).
\72\ Proposed 12 CFR __.27(c).
\73\ Proposed 12 CFR __.27(d) and (h).
\74\ Proposed 12 CFR __.27(e).
\75\ Proposed 12 CFR __.27(f)(1).
\76\ Proposed 12 CFR __.27(f)(2).
\77\ Proposed 12 CFR __.27(f)(3).
\78\ Proposed 12 CFR __.27(f)(4).
\79\ Proposed 12 CFR __.27(g).
\80\ Proposed 12 CFR __.27(h).
\81\ Proposed 12 CFR __.27(i).
---------------------------------------------------------------------------

Sec. __.42(b)(1)-(3)--Loan information required to be reported. A
bank, except a small bank or a bank that was a small bank during the
prior calendar year, would be required to report annually by March 1 to
the appropriate Federal banking agency in machine-readable form (as
prescribed by the agency) the following data for the preceding calendar
year.\82\
---------------------------------------------------------------------------

\82\ Proposed 12 CFR __.42(b).
---------------------------------------------------------------------------

Small business and small farm loan data. For each geography in
which the bank originated or purchased a small business or a small farm
loan, it would be required to report the aggregate number and amount of
loans:
<bullet> with an amount at origination of $100,000 or less;
<bullet> with an amount at origination of more than $100,000 but
less than or equal to $250,000;
<bullet> with an amount at origination of more than $250,000; and
<bullet> to businesses and farms with gross annual revenues of $1
million or less (using the revenues that the bank considered in making
its credit decision).\83\
---------------------------------------------------------------------------

\83\ Proposed 12 CFR __.42(b)(1).
---------------------------------------------------------------------------

Community development loan data. The aggregate number and aggregate
amount of community development loans originated or purchased in the
preceding calendar year.\84\
---------------------------------------------------------------------------

\84\ Proposed 12 CFR __.42(b)(2).
---------------------------------------------------------------------------

Home mortgage loans. If the bank is subject to reporting of home
mortgage loan data under Regulation C, it would be required to report
annually by March 1 to the appropriate Federal banking agency in
machine-readable form (as prescribed by the agency) certain home
mortgage loan data.\85\ The paperwork burden for providing this data is
associated with other clearances.\86\
---------------------------------------------------------------------------

\85\ Proposed 12 CFR __.42(b)(3).
\86\ See HMDA Loan/Application Register (FR HMDA LAR; OMB No.
7100-0247 (Board) and OMB No. 3170-0008 (Consumer Financial
Protection Bureau [CFPB])).
---------------------------------------------------------------------------

Sec. __.42(d)--Data on affiliate lending. A bank that elected to
have the appropriate Federal banking agency consider loans by an
affiliate, for purposes of the lending test or the community
development test or an approved strategic plan, would be required to
collect, maintain, and report for those loans the data that the bank
would have collected, maintained, and reported pursuant to proposed
Sec. __.42(a)-(c) had the loans been originated or purchased by the
bank. For home mortgage loans, the bank would also be required to be
prepared to

[[Page 34096]]

identify the home mortgage loans reported under Regulation C by the
affiliate.\87\
---------------------------------------------------------------------------

\87\ Proposed 12 CFR __.42(d).
---------------------------------------------------------------------------

Sec. __.42(e)--Data on lending by a consortium or a third party. A
bank that elects to have the appropriate Federal banking agency
consider community development loans made by a consortium or a third
party, for purposes of the lending test or the community development
test or an approved strategic plan, must report for those loans the
data that the bank would have reported under proposed Sec. __.42(b)(2)
had the loans been originated or purchased by the bank.\88\
---------------------------------------------------------------------------

\88\ Proposed 12 CFR __.42(e).
---------------------------------------------------------------------------

Sec. __.42(f)--Small banks electing evaluation under the lending,
investment, and service tests. A bank that qualifies for evaluation
under the small bank performance standards but elects evaluation under
the lending, investment, and service test would be required to collect,
maintain, and report the data required for other banks pursuant to
proposed Sec. __.42(a)-(b).
Sec. Sec. __.41 and __42(g)--Assessment area delineation. Each
bank would be required to delineate one or more assessment areas within
which the appropriate Federal banking agency would evaluate its record
of helping to meet the credit needs of its community.\89\ A bank,
except a small bank or bank that was a small bank during the prior
calendar year, would also be required to collect and report to the
appropriate Federal banking agency by March 1 of each year a list for
each assessment area showing the geographies within the area.\90\
Assessment areas for wholesale or limited purpose banks would be
required to consist generally of one or more MSAs or metropolitan
divisions (using the MSA or metropolitan division boundaries that were
in effect as of January 1 of the calendar year in which the delineation
is made) or one or more contiguous political subdivisions, such as
counties, cities, or towns.\91\ Assessment areas for a bank other than
a wholesale or limited purpose bank would be required to consist
generally of one or more MSAs or metropolitan divisions (using the MSA
or metropolitan division boundaries that were in effect as of January 1
of the calendar year in which the delineation is made) or one or more
contiguous political subdivisions, such as counties, cities, or
towns.\92\ Assessment areas for a bank other than a wholesale or
limited purpose bank would also be required to include the geographies
in which a bank has its main office, branches, and deposit-taking
automated teller machines, as well as the surrounding geographies in
which the bank has originated or purchased a substantial portion of its
loans.\93\ Each bank's assessment area would be required to consist
only of whole geographies, not reflect illegal discrimination, not
arbitrarily exclude low- or moderate-income geographies, taking into
account the bank's size and financial condition, and not extend
substantially beyond an MSA boundary or beyond a state boundary unless
the assessment area is located in a multistate MSA.\94\
---------------------------------------------------------------------------

\89\ Proposed 12 CFR __.41(a).
\90\ Proposed 12 CFR __.42(g).
\91\ Proposed 12 CFR __.41(b).
\92\ Proposed 12 CFR __.41(c)(1).
\93\ Proposed 12 CFR __.41(c)(2).
\94\ Proposed 12 CFR __.41(e).
---------------------------------------------------------------------------

Recordkeeping Requirements
Sec. __.42(a)--Loan information required to be collected and
maintained. A bank, except a small bank, would be required to collect
and maintain, in machine-readable form (as prescribed by the
appropriate Federal banking agency), until the completion of its next
CRA examination, the following data for each small business or small
farm loan originated or purchased by the bank:
<bullet> a unique number or alphanumeric symbol used to identify
the relevant loan file;
<bullet> the loan amount at origination;
<bullet> the loan location; and
<bullet> an indicator whether the loan was to a business or a farm
with gross annual revenues of $1 million or less.\95\
---------------------------------------------------------------------------

\95\ Proposed 12 CFR __.42(a).
---------------------------------------------------------------------------

Sec. __.42(c)(1)--Optional data collection and maintenance--
Consumer loans. A bank could collect and maintain in machine-readable
form (as prescribed by the appropriate Federal banking agency) data for
consumer loans originated or purchased by the bank for consideration
under the lending test.\96\ A bank could maintain data for one or more
of the following categories of consumer loans: motor vehicle; credit
card; other secured; and other unsecured.\97\ If the bank maintains
data for loans in a certain category, it would be required to maintain
data for all loans originated or purchased within that category.\98\
The bank would be required to maintain data separately for each
category and must include for each loan:
---------------------------------------------------------------------------

\96\ Proposed 12 CFR __.42(c)(1).
\97\ Id.
\98\ Id.
---------------------------------------------------------------------------

<bullet> a unique number or alphanumeric symbol used to identify
the relevant loan file;
<bullet> the loan amount at origination or purchase;
<bullet> the loan location; and
<bullet> the gross annual income of the borrower that the bank
considered in making its credit decision.\99\
---------------------------------------------------------------------------

\99\ Id.
---------------------------------------------------------------------------

Sec. __.42(c)(2)--Optional data collection and maintenance--Other
loan data. At its option, a bank could also provide other information
concerning its lending performance, including additional loan
distribution data.\100\
---------------------------------------------------------------------------

\100\ Proposed 12 CFR __.42(c)(2).
---------------------------------------------------------------------------

Disclosure Requirements

Sec. __.43--Content and availability of public file. Banks would
be required to maintain and make available to the public a file
containing comments received from the public for the current year and
each of the prior two calendar years that specifically relate to the
bank's performance in helping to meet community credit needs, and any
response to the comments by the bank, if neither the comments nor the
responses contain statements that reflect adversely on the good name or
reputation of any persons other than the bank or publication of which
would violate specific provisions of law.\101\ The public file would
also be required to contain a copy of the public section of the bank's
most recent CRA performance evaluation prepared by the appropriate
Federal banking agency, which the bank would be required to place in
the public file within 30 days after its receipt from the agency.\102\
The public file would also be required to include: a list of the bank's
branches, street addresses, and geographies; a list of bank branches
opened or closed by the bank during the current year and each of the
prior two calendar years, their street addresses, and geographies; a
list of the services generally offered at the bank's branches,
descriptions of material differences in the availability or cost of
services at particular branches, and at the bank's option, information
regarding the availability of alternative systems for delivering retail
banking services; and a map of each assessment area showing the
boundaries of the area and identifying the geographies contained within
the area, either on the map or in a separate list.\103\ The bank could
include in the file any other information that it chooses.\104\
---------------------------------------------------------------------------

\101\ Proposed 12 CFR __.43(a)(1).
\102\ Proposed 12 CFR __.43(a)(2).
\103\ Proposed 12 CFR __.43(a)(3)-(6).
\104\ Proposed 12 CFR __.43(a)(7).
---------------------------------------------------------------------------

A bank, except a small bank or bank that was a small bank during
the prior

[[Page 34097]]

calendar year, would also be required to include in the public file the
following information pertaining to the bank and its affiliates, if
applicable for each of the prior two calendar years.\105\ If the bank
elects to have one or more categories of its consumer loans considered
under the lending test, for each of these categories, the number and
amount of loans: to low-, moderate-, middle-, and upper-income
individuals; located in low-, moderate-, middle-, and upper-income
census tracts; and located inside the bank's assessment area(s) and
outside the bank's assessment area(s).\106\ The bank would also be
required to place its CRA Disclosure Statement in the public file
within three business days of its receipt from the appropriate Federal
banking agency.\107\ Banks required to report data pursuant to
Regulation C would be required to include in the public file a written
notice that the institution's HMDA Disclosure Statement may be obtained
on the CFPB's website at <a href="http://www.consumerfinance.gov/hmda">www.consumerfinance.gov/hmda</a>.\108\ In
addition, a bank that elects to have the appropriate Federal banking
agency consider home mortgage lending of an affiliate would be required
to include in the public file the name of the affiliate and a written
notice that the affiliate's HMDA Disclosure Statement may be obtained
at the CFPB's website.\109\ The bank would also be required to place
the written notice(s) in the public file within three business days
after receiving notification from the Federal Financial Institutions
Examination Council of the disclosure statement(s) availability.\110\
---------------------------------------------------------------------------

\105\ Proposed 12 CFR __.43(b)(1).
\106\ Proposed 12 CFR __.43(b)(1)(i).
\107\ Proposed 12 CFR __.43(b)(1)(ii).
\108\ Proposed 12 CFR __.43(b)(2).
\109\ Id.
\110\ Id.
---------------------------------------------------------------------------

A small bank or a bank that was a small bank during the prior
calendar year would be required to include in its public file the
bank's loan-to-deposit ratio for each quarter of the prior calendar
year and, at its option, additional data on its loan-to-deposit
ratio.\111\ The bank would also be required to include in its public
file the information required for other banks by proposed Sec.
__.43(b)(1), if the bank has elected to be evaluated under the lending,
investment, and service tests.\112\ A bank that has been approved to be
assessed under a strategic plan would be required to include in its
public file a copy of that plan but would not be required to include
information submitted to the appropriate Federal banking agency on a
confidential basis in conjunction with the plan.\113\ A bank that
received a less than satisfactory rating during its most recent
examination would be required to include in its public file a
description of its current efforts to improve its performance in
helping to meet the credit needs of its entire community and would be
required to update the description quarterly.\114\
---------------------------------------------------------------------------

\111\ Proposed 12 CFR __.43(b)(3)(i).
\112\ Proposed 12 CFR __.43(b)(3)(ii).
\113\ Proposed 12 CFR __.43(b)(4).
\114\ Proposed 12 CFR __.43(b)(5).
---------------------------------------------------------------------------

A bank would be required to make available to the public for
inspection upon request and at no cost the information required in
proposed Sec. __.43 as follows.\115\ At the main office and, if an
interstate bank, at one branch office in each state, all information in
the public file.\116\ At each branch, a copy of the public section of
the bank's most recent CRA Performance Evaluation and a list of
services provided by the branch as well as, within five calendar days
of the request, all the information in the public file relating to the
assessment area in which the branch is located.\117\ Upon request, a
bank would be required to provide copies, either on paper or in another
form acceptable to the person making the request, of the information in
its public file and the bank may charge a reasonable fee not to exceed
the cost of copying and mailing (if applicable).\118\ Except as
otherwise provided in proposed Sec. __.43, a bank would be required to
ensure that the information required by this section is current as of
April 1 of each year.\119\
---------------------------------------------------------------------------

\115\ Proposed 12 CFR __.43(c).
\116\ Proposed 12 CFR __.43(c)(1).
\117\ Proposed 12 CFR __.43(c)(2).
\118\ Proposed 12 CFR __.43(d).
\119\ Proposed 12 CFR __.43(e).
---------------------------------------------------------------------------

Sec. __.44--Public notice by banks. A bank must provide in the
public lobby of its main office and in each of its branches the
appropriate notice set forth in appendix B (CRA Notice) of, as
applicable, 12 CFR part 25, 12 CFR part 228, or 12 CFR part 345.\120\
---------------------------------------------------------------------------

\120\ Proposed 12 CFR __.44.

Burden Estimates
----------------------------------------------------------------------------------------------------------------
Estimated Average Total
Source and type of burden Description number of Frequency of estimated time estimated
respondents response per response annual burden
----------------------------------------------------------------------------------------------------------------
Reporting
----------------------------------------------------------------------------------------------------------------
Sec. Sec. __.41 and Assessment area
__.42(g). delineation.
OCC............ 173............ 1.............. 2.............. 346
Board.......... 152............ 1.............. 2.............. 304
FDIC........... 313............ 1.............. 2.............. 626
Sec. __.42(b)(1).......... Loan data:
Small business
and small farm.
OCC............ 154............ 1.............. 8.............. 1,232
Board.......... 148............ 1.............. 8.............. 1,184
FDIC........... 313............ 1.............. 8.............. 2,504
Sec. __.42(b)(2).......... Loan data:
Community
development.
OCC............ 173............ 1.............. 13............. 2,249
Board.......... 152............ 1.............. 13............. 1,976
FDIC........... 313............ 1.............. 13............. 4,069
Sec. __.42(b)(3).......... Loan data: Home
mortgage loans.
OCC............ 173............ 1.............. 253............ 43,769
Board.......... 140............ 1.............. 253............ 35,420
FDIC........... 349............ 1.............. 253............ 88,297
----------------------------------------------------------------------------------------------------------------

[[Page 34098]]

Optional Reporting
----------------------------------------------------------------------------------------------------------------
Sec. __.25(b)............. Request for
designation as
a wholesale
bank or a
limited
purpose bank.
OCC............ 19............. 1.............. 4.............. 76
Board.......... 1.............. 1.............. 4.............. 4
FDIC........... 1.............. 1.............. 4.............. 4
Sec. __.27................ Strategic plan.
OCC............ 14............. 1.............. 275............ 3,850
Board.......... 2.............. 1.............. 275............ 550
FDIC........... 10............. 1.............. 400............ 4,000
Sec. __.42(d)............. Data on
affiliate
lending data.
OCC............ 25............. 1.............. 38............. 950
Board.......... 5.............. 1.............. 38............. 190
FDIC........... 304............ 1.............. 38............. 11,552
Sec. __.42(e)............. Data on lending
by a
consortium or
a third party.
OCC............ 16............. 1.............. 17............. 272
Board.......... 12............. 1.............. 17............. 204
FDIC........... 115............ 1.............. 17............. 1,955
Sec. __.42(f)............. Small banks Covered by.. Burden in... Sec. Sec. ..............
electing 25.42(a) &
evaluation (b).
under the
lending,
investment,
and service
tests.
OCC............ ............... ............... ............... ..............
Board.......... ............... ............... ............... ..............
FDIC........... ............... ............... ............... ..............
----------------------------------------------------------------------------------------------------------------
Recordkeeping
----------------------------------------------------------------------------------------------------------------
Sec. __.42(a)............. Small business
and small farm
loan register.
OCC............ 173............ 1.............. 219............ 37,887
Board.......... 148............ 1.............. 219............ 32,412
FDIC........... 313............ 1.............. 219............ 68,547
----------------------------------------------------------------------------------------------------------------
Optional Recordkeeping
----------------------------------------------------------------------------------------------------------------
Sec. __.42(c)(1).......... Consumer loan
data.
OCC............ 5.............. 1.............. 326............ 1,630
Board.......... 36............. 1.............. 326............ 11,736
FDIC........... 10............. 1.............. 326............ 3,260
Sec. __.42(c)(2).......... Other loan data
OCC............ 25............. 1.............. 25............. 625
Board.......... 26............. 1.............. 25............. 650
FDIC........... 1.............. 1.............. 25............. 25
----------------------------------------------------------------------------------------------------------------
Disclosure
----------------------------------------------------------------------------------------------------------------
Sec. Sec. __.43 and __.44 Public file and
public notice.
OCC............ 990............ 1.............. 10............. 9,900
Board.......... 704............ 1.............. 10............. 7,040
FDIC........... 2,854.......... 1.............. 10............. 28,540
----------------------------------------------------------------------------------------------------------------
Total Estimated Annual Burden
----------------------------------------------------------------------------------------------------------------
OCC............ ............... ............... ............... 102,786
Board.......... ............... ............... ............... 91,670
FDIC........... ............... ............... ............... 213,379
----------------------------------------------------------------------------------------------------------------

Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the agencies, including whether
the information has practical utility; (b) The accuracy of the
agencies' estimate of the burden of the collection of information; (c)
Ways to enhance the quality, utility, and clarity of the information to
be collected; (d) Ways to minimize the burden of the collection on
respondents, including through the use of automated collection
techniques or other forms of information technology; and (e) Estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services to provide information.
Commenters may submit comments regarding the burden estimate, or
any

[[Page 34099]]

other aspect of this collection of information, including suggestions
for reducing the burden, to the addresses listed in the ADDRESSES
caption in the proposed rule. All comments will become a matter of
public record. A copy of the comments may also be submitted to the OMB
desk officer for the agencies: By mail to U.S. Office of Management and
Budget, 725 17th Street NW, #10235, Washington, DC 20503; or by email
to: <a href="/cdn-cgi/l/email-protection#4d22243f2c123e382f20243e3e2422230d22202f6328223d632a223b">[email&#160;protected]</a>, Attention, Federal Banking Agency Desk
Officer.
Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023, 12
U.S.C. 553(b)(4), requires that a notice of proposed rulemaking include
the internet address of a summary of not more than 100 words in length
of a proposed rule, in plain language, that shall be posted on the
internet website <a href="http://www.regulations.gov">www.regulations.gov</a>.
In summary, the agencies propose to amend their CRA regulations by
rescinding the final rule titled ``Community Reinvestment Act''
published in the Federal Register on February 1, 2024, and replacing it
with the agencies' CRA rule in effect on March 29, 2024, with certain
conforming and technical amendments. The agencies are also proposing
technical amendments to their regulations implementing the CRA sunshine
requirements of the Federal Deposit Insurance Act, and the OCC is
proposing technical amendments to its Public Welfare Investments
regulation.
The proposal and the required summary can be found for the OCC at
<a href="https://www.regulations.gov">https://www.regulations.gov</a> by searching for Docket ID OCC-2025-0005;
for the Board at <a href="https://www.federalreserve.gov/apps/proposals">https://www.federalreserve.gov/apps/proposals</a>, and for
the FDIC at <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/index.html">https://www.fdic.gov/resources/regulations/federal-register-publications/index.html</a>.

List of Subjects

12 CFR Part 24

Community development, Credit, Investments, Low and moderate income
housing, Manpower, National banks, Reporting and recordkeeping
requirements, Rural areas, Small businesses.

12 CFR Part 25

Community development, Credit, Investments, National banks,
Reporting and recordkeeping requirements, Savings associations.

12 CFR Part 35

Community development, Credit, Freedom of information, Investments,
National banks, Savings associations, Reporting and recordkeeping
requirements.

12 CFR Part 207

Banks, Banking, Community development, Holding companies, Reporting
and recordkeeping requirements.

12 CFR Part 228

Banks, banking, Community development, Credit, Investments,
Reporting and recordkeeping requirements.

12 CFR Part 345

Banks, banking, Community development, Credit, Investments,
Reporting and recordkeeping requirements.

12 CFR Part 346

Banks, banking, Savings associations.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

For the reasons set forth in the common preamble and under the
authority of 12 U.S.C. 93a and 2905, the Office of the Comptroller of
the Currency proposes to amend chapter I of title 12, Code of Federal
Regulations as follows:

PART 24--COMMUNITY AND ECONOMIC DEVELOPMENT ENTITIES, COMMUNITY
DEVELOPMENT PROJECTS, AND OTHER PUBLIC WELFARE INVESTMENTS

0
1. The authority citation for part 24 is revised to read as follows:

Authority: 12 U.S.C. 24 (Eleventh), 93a, 481, and 1818.

Sec. 24.2 [Amended]

0
2. Amend Sec. 24.2 by:
0
a. In the introductory text of paragraph (c), removing ``Sec. 25.23 of
appendix G to 12 CFR part 25'' and adding ``12 CFR 25.23'' in its
place.
0
b. In paragraph (f), removing ``Sec. 25.12(m) of appendix G to 12 CFR
part 25'' and adding ``12 CFR 25.12(m)'' in its place.

Sec. 24.3 [Amended]

0
3. Amend Sec. 24.3 by removing ``Sec. 25.23 of appendix G to 12 CFR
part 25'' and adding in its place ``12 CFR 25.23''.

Sec. 24.7 [Amended]

0
4. Amend Sec. 24.7 in paragraph (b) by removing ``Sec. 25.23 of
appendix G to 12 CFR part 25'' and adding in its place ``12 CFR
25.23''.
0
5. Part 25 is revised to read as follows:

PART 25--COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT
PRODUCTION REGULATIONS

Subpart A--General
Sec.
25.11 Authority, purposes, and scope.
25.12 Definitions.
Subpart B--Standards for Assessing Performance
Sec.
25.21 Performance tests, standards, and ratings, in general.
25.22 Lending test.
25.23 Investment test.
25.24 Service test.
25.25 Community development test for wholesale or limited purpose
banks and savings associations.
25.26 Small bank and savings association performance standards.
25.27 Strategic plan.
25.28 Assigned ratings.
25.29 Effect of CRA performance on applications.
Subpart C--Records, Reporting, and Disclosure Requirements
Sec.
25.41 Assessment area delineation.
25.42 Data collection, reporting, and disclosure.
25.43 Content and availability of public file.
25.44 Public notice by banks and savings associations.
25.45 Publication of planned examination schedule.
Subpart D--Transition Provisions
Sec.
25.51 Consideration of Bank Activities
25.52 Strategic Plan Retention
Subpart E--Prohibition Against Use of Interstate Branches Primarily for
Deposit Production
Sec.
25.61 Purpose and scope.
25.62 Definitions.
25.63 Loan-to-deposit ratio screen.
25.64 Credit needs determination.
25.65 Sanctions.

Appendix A to Part 25--Ratings

Appendix B to Part 25--CRA Notice

Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215,
215a, 481, 1462a, 1463, 1464, 1828(c), 1835a, 2901 through 2908, and
3101 through 3111, and 5412(b)(2)(B).

Subpart A--General

Sec. 25.11 Authority, purposes, and scope.

(a) Authority and OMB control number--(1) Authority. The authority

[[Page 34100]]

for subparts A, B, C, D, and E is 12 U.S.C. 21, 22, 26, 27, 30, 36,
93a, 161, 215, 215a, 481, 1462a, 1463, 1464, 1828(c), 1835a, 2901
through 2908, 3101 through 3111, and 5412(b)(2)(B).
(2) OMB control number. The information collection requirements
contained in this part were approved by the Office of Management and
Budget under the provisions of 44 U.S.C. 3501 et seq. and have been
assigned OMB control number 1557-0160.
(b) Purposes. In enacting the Community Reinvestment Act (CRA), the
Congress required each appropriate Federal financial supervisory agency
to assess an institution's record of helping to meet the credit needs
of the local communities in which the institution is chartered,
consistent with the safe and sound operation of the institution, and to
take this record into account in the agency's evaluation of an
application for a deposit facility by the institution. This part is
intended to carry out the purposes of the CRA by:
(1) Establishing the framework and criteria by which the Office of
the Comptroller of the Currency (OCC) or the Federal Deposit Insurance
Corporation (FDIC), as appropriate, assesses a bank's or savings
association's record of helping to meet the credit needs of its entire
community, including low- and moderate-income neighborhoods, consistent
with the safe and sound operation of the bank or savings association;
and
(2) Providing that the OCC takes that record into account in
considering certain applications.
(c) Scope--(1) General. (i) Subparts A, B, C, and D, and Appendices
A and B, apply to all banks and savings associations except as provided
in paragraphs (c)(2) and (3) of this section. Subpart E only applies to
banks.
(ii) With respect to subparts A, B, C, and D, and Appendices A and
B--
(A) The OCC has the authority to prescribe these regulations for
national banks, Federal savings associations, and State savings
associations and has the authority to enforce these regulations for
national banks and Federal savings associations.
(B) The FDIC has the authority to enforce these regulations for
State savings associations.
(iii) With respect to subparts A, B, C, and D, and appendix A,
references to appropriate Federal banking agency will mean the OCC when
the institution is a national bank or Federal savings association and
the FDIC when the institution is a State savings association.
(2) Federal branches and agencies. (i) This part applies to all
insured Federal branches and to any Federal branch that is uninsured
that results from an acquisition described in section 5(a)(8) of the
International Banking Act of 1978 (12 U.S.C. 3103(a)(8)).
(ii) Except as provided in paragraph (c)(2)(i) of this section,
this part does not apply to Federal branches that are uninsured,
limited Federal branches, or Federal agencies, as those terms are
defined in part 28 of this chapter.
(3) Certain special purpose banks and savings associations. This
part does not apply to special purpose banks or special purpose savings
associations that do not perform commercial or retail banking services
by granting credit to the public in the ordinary course of business,
other than as incident to their specialized operations. These banks or
savings associations include banker's banks, as defined in 12 U.S.C. 24
(Seventh), and banks or savings associations that engage only in one or
more of the following activities: Providing cash management controlled
disbursement services or serving as correspondent banks or savings
associations, trust companies, or clearing agents.

Sec. 25.12 Definitions.

For purposes of subparts A, B, C, and D, and appendices A and B, of
this part, the following definitions apply:
(a) Affiliate means any company that controls, is controlled by, or
is under common control with another company. The term ``control'' has
the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company
is under common control with another company if both companies are
directly or indirectly controlled by the same company.
(b) Area median income means:
(1) The median family income for the MSA, if a person or geography
is located in an MSA, or for the metropolitan division, if a person or
geography is located in an MSA that has been subdivided into
metropolitan divisions; or
(2) The statewide nonmetropolitan median family income, if a person
or geography is located outside an MSA.
(c) Assessment area means a geographic area delineated in
accordance with Sec. 25.41.
(d) Automated teller machine (ATM) means an automated, unstaffed
banking facility owned or operated by, or operated exclusively for, the
bank or savings association at which deposits are received, cash
dispersed, or money lent.
(e) (1) Bank or savings association means, except as provided in
Sec. 25.11(c), a national bank (including a Federal branch as defined
in part 28 of this chapter) with Federally insured deposits or a
savings association;
(2) Bank and savings association means, except as provided in Sec.
25.11(c), a national bank (including a Federal branch as defined in
part 28 of this chapter) with Federally insured deposits and a savings
association.
(f) Branch means a staffed banking facility authorized as a branch,
whether shared or unshared, including, for example, a mini-branch in a
grocery store or a branch operated in conjunction with any other local
business or nonprofit organization.
(g) Community development means:
(1) Affordable housing (including multifamily rental housing) for
low- or moderate-income individuals;
(2) Community services targeted to low- or moderate-income
individuals;
(3) Activities that promote economic development by financing
businesses or farms that meet the size eligibility standards of the
Small Business Administration's Development Company or Small Business
Investment Company programs (13 CFR 121.301) or have gross annual
revenues of $1 million or less; or
(4) Activities that revitalize or stabilize--
(i) Low-or moderate-income geographies;
(ii) Designated disaster areas; or
(iii) Distressed or underserved nonmetropolitan middle-income
geographies designated by the Board of Governors of the Federal Reserve
System, FDIC, and the OCC, based on--
(A) Rates of poverty, unemployment, and population loss; or
(B) Population size, density, and dispersion. Activities revitalize
and stabilize geographies designated based on population size, density,
and dispersion if they help to meet essential community needs,
including needs of low- and moderate-income individuals.
(h) Community development loan means a loan that:
(1) Has as its primary purpose community development; and
(2) Except in the case of a wholesale or limited purpose bank or
savings association:
(i) Has not been reported or collected by the bank or savings
association or an affiliate for consideration in the bank's or savings
association's assessment as a home mortgage, small business, small
farm, or consumer loan, unless the loan is for a multifamily dwelling
(as defined in Sec. 1003.2(n) of this title); and
(ii) Benefits the bank's or savings association's assessment
area(s) or a broader statewide or regional area(s) that includes the
bank's or savings association's assessment area(s).

[[Page 34101]]

(i) Community development service means a service that:
(1) Has as its primary purpose community development;
(2) Is related to the provision of financial services; and
(3) Has not been considered in the evaluation of the bank's or
savings association's retail banking services under Sec. 25.24(d).
(j) Consumer loan means a loan to one or more individuals for
household, family, or other personal expenditures. A consumer loan does
not include a home mortgage, small business, or small farm loan.
Consumer loans include the following categories of loans:
(1) Motor vehicle loan, which is a consumer loan extended for the
purchase of and secured by a motor vehicle;
(2) Credit card loan, which is a line of credit for household,
family, or other personal expenditures that is accessed by a borrower's
use of a ``credit card,'' as this term is defined in Sec. 1026.2 of
this title;
(3) Other secured consumer loan, which is a secured consumer loan
that is not included in one of the other categories of consumer loans;
and
(4) Other unsecured consumer loan, which is an unsecured consumer
loan that is not included in one of the other categories of consumer
loans.
(k) Geography means a census tract delineated by the United States
Bureau of the Census in the most recent decennial census.
(l) Home mortgage loan means a closed-end mortgage loan or an open-
end line of credit as these terms are defined under Sec. 1003.2 of
this title, and that is not an excluded transaction under Sec.
1003.3(c)(1) through (10) and (13) of this title.
(m) Income level includes:
(1) Low-income, which means an individual income that is less than
50 percent of the area median income, or a median family income that is
less than 50 percent, in the case of a geography.
(2) Moderate-income, which means an individual income that is at
least 50 percent and less than 80 percent of the area median income, or
a median family income that is at least 50 and less than 80 percent, in
the case of a geography.
(3) Middle-income, which means an individual income that is at
least 80 percent and less than 120 percent of the area median income,
or a median family income that is at least 80 and less than 120
percent, in the case of a geography.
(4) Upper-income, which means an individual income that is 120
percent or more of the area median income, or a median family income
that is 120 percent or more, in the case of a geography.
(n) Limited purpose bank or savings association means a bank or
savings association that offers only a narrow product line (such as
credit card or motor vehicle loans) to a regional or broader market and
for which a designation as a limited purpose bank or savings
association is in effect, in accordance with Sec. 25.25(b).
(o) Loan location. A loan is located as follows:
(1) A consumer loan is located in the geography where the borrower
resides;
(2) A home mortgage loan is located in the geography where the
property to which the loan relates is located; and
(3) A small business or small farm loan is located in the geography
where the main business facility or farm is located or where the loan
proceeds otherwise will be applied, as indicated by the borrower.
(p) Loan production office means a staffed facility, other than a
branch, that is open to the public and that provides lending-related
services, such as loan information and applications.
(q) Metropolitan division means a metropolitan division as defined
by the Director of the Office of Management and Budget.
(r) MSA means a metropolitan statistical area as defined by the
Director of the Office of Management and Budget.
(s) Nonmetropolitan area means any area that is not located in an
MSA.
(t) Qualified investment means a lawful investment, deposit,
membership share, or grant that has as its primary purpose community
development.
(u) Small bank or savings association--(1) Definition. Small bank
or savings association means a bank or savings association that, as of
December 31 of either of the prior two calendar years, had assets of
less than $1.609 billion. Intermediate small bank or savings
association means a small bank or savings association with assets of at
least $402 million as of December 31 of both of the prior two calendar
years and less than $1.609 billion as of December 31 of either of the
prior two calendar years. The dollar figures in this paragraph are
applicable to banks and savings associations for calendar year 2025 and
are updated annually pursuant to paragraph (u)(2).
(2) Adjustment. The OCC adjusts and publishes the dollar figures in
paragraph (u)(1) of this section annually on its website, <a href="http://www.OCC.gov">www.OCC.gov</a>.
This adjustment is based on the year-to-year change in the average of
the Consumer Price Index for Urban Wage Earners and Clerical Workers,
not seasonally adjusted, for each twelve-month period ending in
November, with rounding to the nearest million.
(v) Small business loan means a loan included in ``loans to small
businesses'' as defined in the instructions for preparation of the
Consolidated Report of Condition and Income.
(w) Small farm loan means a loan included in ``loans to small
farms'' as defined in the instructions for preparation of the
Consolidated Report of Condition and Income.
(x) Wholesale bank or savings association means a bank or savings
association that is not in the business of extending home mortgage,
small business, small farm, or consumer loans to retail customers, and
for which a designation as a wholesale bank or savings association is
in effect, in accordance with Sec. 25.25(b).

Subpart B--Standards for Assessing Performance

Sec. 25.21 Performance tests, standards, and ratings, in general.

(a) Performance tests and standards. The appropriate Federal
banking agency assesses the CRA performance of a bank or savings
association in an examination as follows:
(1) Lending, investment, and service tests. The appropriate Federal
banking agency applies the lending, investment, and service tests, as
provided in Sec. Sec. 25.22 through 25.24, in evaluating the
performance of a bank or savings association, except as provided in
paragraphs (a)(2), (3), and (4) of this section.
(2) Community development test for wholesale or limited purpose
banks and savings associations. The appropriate Federal banking agency
applies the community development test for a wholesale or limited
purpose bank or savings association, as provided in Sec. 25.25, except
as provided in paragraph (a)(4) of this section.
(3) Small bank and savings association performance standards. The
appropriate Federal banking agency applies the small bank or savings
association performance standards as provided in Sec. 25.26 in
evaluating the performance of a small bank or savings association or a
bank or savings association that was a small bank or savings
association during the prior calendar year, unless the bank or savings
association elects to be assessed as provided in paragraphs (a)(1),
(2), or (4) of this section. The bank or savings association may elect
to be assessed as provided in paragraph (a)(1) of this section only if
it collects and reports the

[[Page 34102]]

data required for other banks or savings associations under Sec.
25.42.
(4) Strategic plan. The appropriate Federal banking agency
evaluates the performance of a bank or savings association under a
strategic plan if the bank or savings association submits, and the
appropriate Federal banking agency approves, a strategic plan as
provided in Sec. 25.27.
(b) Performance context. The appropriate Federal banking agency
applies the tests and standards in paragraph (a) of this section and
also considers whether to approve a proposed strategic plan in the
context of:
(1) Demographic data on median income levels, distribution of
household income, nature of housing stock, housing costs, and other
relevant data pertaining to a bank's or savings association's
assessment area(s);
(2) Any information about lending, investment, and service
opportunities in the bank's or savings association's assessment area(s)
maintained by the bank or savings association or obtained from
community organizations, state, local, and tribal governments, economic
development agencies, or other sources;
(3) The bank's or savings association's product offerings and
business strategy as determined from data provided by the bank or
savings association;
(4) Institutional capacity and constraints, including the size and
financial condition of the bank or savings association, the economic
climate (national, regional, and local), safety and soundness
limitations, and any other factors that significantly affect the bank's
or savings association's ability to provide lending, investments, or
services in its assessment area(s);
(5) The bank's or savings association's past performance and the
performance of similarly situated lenders;
(6) The bank's or savings association's public file, as described
in Sec. 25.43, and any written comments about the bank's or savings
association's CRA performance submitted to the bank or savings
association or the appropriate Federal banking agency; and
(7) Any other information deemed relevant by the appropriate
Federal banking agency.
(c) Assigned ratings. The appropriate Federal banking agency
assigns to a bank or savings association one of the following four
ratings pursuant to Sec. 25.28 and appendix A of this part:
``outstanding''; ``satisfactory''; ``needs to improve''; or
``substantial noncompliance'' as provided in 12 U.S.C. 2906(b)(2). The
rating assigned by the appropriate Federal banking agency reflects the
bank's or savings association's record of helping to meet the credit
needs of its entire community, including low- and moderate-income
neighborhoods, consistent with the safe and sound operation of the bank
or savings association.
(d) Safe and sound operations. This part and the CRA do not require
a bank or savings association to make loans or investments or to
provide services that are inconsistent with safe and sound operations.
To the contrary, the appropriate Federal banking agency anticipates
banks and savings associations can meet the standards of this part with
safe and sound loans, investments, and services on which the banks and
savings associations expect to make a profit. Banks and savings
associations are permitted and encouraged to develop and apply flexible
underwriting standards for loans that benefit low- or moderate-income
geographies or individuals, only if consistent with safe and sound
operations.
(e) Low-cost education loans provided to low-income borrowers. In
assessing and taking into account the record of a bank or savings
association under this part, the appropriate Federal banking agency
considers, as a factor, low-cost education loans originated by the bank
or savings association to borrowers, particularly in its assessment
area(s), who have an individual income that is less than 50 percent of
the area median income. For purposes of this paragraph, ``low-cost
education loans'' means any education loan, as defined in section
140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7)) (including
a loan under a State or local education loan program), originated by
the bank or savings association for a student at an ``institution of
higher education,'' as that term is generally defined in sections 101
and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002)
and the implementing regulations published by the U.S. Department of
Education, with interest rates and fees no greater than those of
comparable education loans offered directly by the U.S. Department of
Education. Such rates and fees are specified in section 455 of the
Higher Education Act of 1965 (20 U.S.C. 1087e).
(f) Activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions. In assessing and
taking into account the record of a nonminority-owned and nonwomen-
owned bank or savings association under this part, the appropriate
Federal banking agency considers as a factor capital investment, loan
participation, and other ventures undertaken by the bank or savings
association in cooperation with minority- and women-owned financial
institutions and low-income credit unions. Such activities must help
meet the credit needs of local communities in which the minority- and
women-owned financial institutions and low-income credit unions are
chartered. To be considered, such activities need not also benefit the
bank's or savings association's assessment area(s) or the broader
statewide or regional area(s) that includes the bank's or savings
association's assessment area(s).

Sec. 25.22 Lending test.

(a) Scope of test. (1) The lending test evaluates a bank's or
savings association's record of helping to meet the credit needs of its
assessment area(s) through its lending activities by considering a
bank's or savings association's home mortgage, small business, small
farm, and community development lending. If consumer lending
constitutes a substantial majority of a bank's or savings association's
business, the appropriate Federal banking agency will evaluate the
bank's or savings association's consumer lending in one or more of the
following categories: motor vehicle, credit card, other secured, and
other unsecured loans. In addition, at a bank's or savings
association's option, the appropriate Federal banking agency will
evaluate one or more categories of consumer lending, if the bank or
savings association has collected and maintained, as required in Sec.
25.42(c)(1), the data for each category that the bank or savings
association elects to have the appropriate Federal banking agency
evaluate.
(2) The appropriate Federal banking agency considers originations
and purchases of loans. The appropriate Federal banking agency will
also consider any other loan data the bank or savings association may
choose to provide, including data on loans outstanding, commitments and
letters of credit.
(3) A bank or savings association may ask the appropriate Federal
banking agency to consider loans originated or purchased by consortia
in which the bank or savings association participates or by third
parties in which the bank or savings association has invested only if
the loans meet the definition of community development loans and only
in accordance with paragraph (d) of this section. The appropriate
Federal banking agency will not consider these loans under any
criterion of the lending test except the community development lending
criterion.

[[Page 34103]]

(b) Performance criteria. The appropriate Federal banking agency
evaluates a bank's or savings association's lending performance
pursuant to the following criteria:
(1) Lending activity. The number and amount of the bank's or
savings association's home mortgage, small business, small farm, and
consumer loans, if applicable, in the bank's or savings association's
assessment area(s);
(2) Geographic distribution. The geographic distribution of the
bank's or savings association's home mortgage, small business, small
farm, and consumer loans, if applicable, based on the loan location,
including:
(i) The proportion of the bank's or savings association's lending
in the bank's or savings association's assessment area(s);
(ii) The dispersion of lending in the bank's or savings
association's assessment area(s); and
(iii) The number and amount of loans in low-, moderate-, middle-,
and upper-income geographies in the bank's or savings association's
assessment area(s);
(3) Borrower characteristics. The distribution, particularly in the
bank's or savings association's assessment area(s), of the bank's or
savings association's home mortgage, small business, small farm, and
consumer loans, if applicable, based on borrower characteristics,
including the number and amount of:
(i) Home mortgage loans to low-, moderate-, middle-, and upper-
income individuals;
(ii) Small business and small farm loans to businesses and farms
with gross annual revenues of $1 million or less;
(iii) Small business and small farm loans by loan amount at
origination; and
(iv) Consumer loans, if applicable, to low-, moderate-, middle-,
and upper-income individuals;
(4) Community development lending. The bank's or savings
association's community development lending, including the number and
amount of community development loans, and their complexity and
innovativeness; and
(5) Innovative or flexible lending practices. The bank's or savings
association's use of innovative or flexible lending practices in a safe
and sound manner to address the credit needs of low- or moderate-income
individuals or geographies.
(c) Affiliate lending. (1) At a bank's or savings association's
option, the appropriate Federal banking agency will consider loans by
an affiliate of the bank or savings association, if the bank or savings
association provides data on the affiliate's loans pursuant to Sec.
25.42.
(2) The appropriate Federal banking agency considers affiliate
lending subject to the following constraints:
(i) No affiliate may claim a loan origination or loan purchase if
another institution claims the same loan origination or purchase; and
(ii) If a bank or savings association elects to have the
appropriate Federal banking agency consider loans within a particular
lending category made by one or more of the bank's or savings
association's affiliates in a particular assessment area, the bank or
savings association shall elect to have the appropriate Federal banking
agency consider, in accordance with paragraph (c)(1) of this section,
all the loans within that lending category in that particular
assessment area made by all of the bank's or savings association's
affiliates.
(3) The appropriate Federal banking agency does not consider
affiliate lending in assessing a bank's or savings association's
performance under paragraph (b)(2)(i) of this section.
(d) Lending by a consortium or a third party. Community development
loans originated or purchased by a consortium in which the bank or
savings association participates or by a third party in which the bank
or savings association has invested:
(1) Will be considered, at the bank's or savings association's
option, if the bank or savings association reports the data pertaining
to these loans under Sec. 25.42(b)(2); and
(2) May be allocated among participants or investors, as they
choose, for purposes of the lending test, except that no participant or
investor:
(i) May claim a loan origination or loan purchase if another
participant or investor claims the same loan origination or purchase;
or
(ii) May claim loans accounting for more than its percentage share
(based on the level of its participation or investment) of the total
loans originated by the consortium or third party.
(e) Lending performance rating. The appropriate Federal banking
agency rates a bank's or savings association's lending performance as
provided in appendix A of this part.

Sec. 25.23 Investment test.

(a) Scope of test. The investment test evaluates a bank's or
savings association's record of helping to meet the credit needs of its
assessment area(s) through qualified investments that benefit its
assessment area(s) or a broader statewide or regional area that
includes the bank's or savings association's assessment area(s).
(b) Exclusion. Activities considered under the lending or service
tests may not be considered under the investment test.
(c) Affiliate investment. At a bank's or savings association's
option, the appropriate Federal banking agency will consider, in its
assessment of a bank's or savings association's investment performance,
a qualified investment made by an affiliate of the bank or savings
association, if the qualified investment is not claimed by any other
institution.
(d) Disposition of branch premises. Donating, selling on favorable
terms, or making available on a rent-free basis a branch of the bank or
savings association that is located in a predominantly minority
neighborhood to a minority depository institution or women's depository
institution (as these terms are defined in 12 U.S.C. 2907(b)) will be
considered as a qualified investment.
(e) Performance criteria. The appropriate Federal banking agency
evaluates the investment performance of a bank or savings association
pursuant to the following criteria:
(1) The dollar amount of qualified investments;
(2) The innovativeness or complexity of qualified investments;
(3) The responsiveness of qualified investments to credit and
community development needs; and
(4) The degree to which the qualified investments are not routinely
provided by private investors.
(f) Investment performance rating. The appropriate Federal banking
agency rates a bank's or savings association's investment performance
as provided in appendix A of this part.

Sec. 25.24 Service test.

(a) Scope of test. The service test evaluates a bank's or savings
association's record of helping to meet the credit needs of its
assessment area(s) by analyzing both the availability and effectiveness
of a bank's or savings association's systems for delivering retail
banking services and the extent and innovativeness of its community
development services.
(b) Area(s) benefitted. Community development services must benefit
a bank's or savings association's assessment area(s) or a broader
statewide or regional area that includes the bank's or savings
association's assessment area(s).
(c) Affiliate service. At a bank's or savings association's option,
the appropriate Federal banking agency will consider, in its assessment
of a bank's or savings association's service performance, a community
development service provided by an affiliate of the

[[Page 34104]]

bank or savings association, if the community development service is
not claimed by any other institution.
(d) Performance criteria--retail banking services. The appropriate
Federal banking agency evaluates the availability and effectiveness of
a bank's or savings association's systems for delivering retail banking
services, pursuant to the following criteria:
(1) The current distribution of the bank's or savings association's
branches among low-, moderate-, middle-, and upper-income geographies;
(2) In the context of its current distribution of the bank's or
savings association's branches, the bank's or savings association's
record of opening and closing branches, particularly branches located
in low- or moderate-income geographies or primarily serving low- or
moderate-income individuals;
(3) The availability and effectiveness of alternative systems for
delivering retail banking services (e.g., ATMs, ATMs not owned or
operated by or exclusively for the bank or savings association, banking
by telephone or computer, loan production offices, and bank-at-work or
bank-by-mail programs) in low- and moderate-income geographies and to
low- and moderate-income individuals; and
(4) The range of services provided in low-, moderate-, middle-, and
upper-income geographies and the degree to which the services are
tailored to meet the needs of those geographies.
(e) Performance criteria--community development services. The
appropriate Federal banking agency evaluates community development
services pursuant to the following criteria:
(1) The extent to which the bank or savings association provides
community development services; and
(2) The innovativeness and responsiveness of community development
services.
(f) Service performance rating. The appropriate Federal banking
agency rates a bank's or savings association's service performance as
provided in appendix A of this part.

Sec. 25.25 Community development test for wholesale or limited
purpose banks and savings associations.

(a) Scope of test. The appropriate Federal banking agency assesses
a wholesale or limited purpose bank's or savings association's record
of helping to meet the credit needs of its assessment area(s) under the
community development test through its community development lending,
qualified investments, or community development services.
(b) Designation as a wholesale or limited purpose bank or savings
association. In order to receive a designation as a wholesale or
limited purpose bank or savings association, a bank or savings
association shall file a request, in writing, with the appropriate
Federal banking agency, at least three months prior to the proposed
effective date of the designation. If the appropriate Federal banking
agency approves the designation, it remains in effect until the bank or
savings association requests revocation of the designation or until one
year after the appropriate Federal banking agency notifies the bank or
savings association that it has revoked the designation on its own
initiative.
(c) Performance criteria. The appropriate Federal banking agency
evaluates the community development performance of a wholesale or
limited purpose bank or savings association pursuant to the following
criteria:
(1) The number and amount of community development loans (including
originations and purchases of loans and other community development
loan data provided by the bank or savings association, such as data on
loans outstanding, commitments, and letters of credit), qualified
investments, or community development services;
(2) The use of innovative or complex qualified investments,
community development loans, or community development services and the
extent to which the investments are not routinely provided by private
investors; and
(3) The bank's or savings association's responsiveness to credit
and community development needs.
(d) Indirect activities. At a bank's or savings association's
option, the appropriate Federal banking agency will consider in its
community development performance assessment:
(1) Qualified investments or community development services
provided by an affiliate of the bank or savings association, if the
investments or services are not claimed by any other institution; and
(2) Community development lending by affiliates, consortia and
third parties, subject to the requirements and limitations in Sec.
25.22(c) and (d).
(e) Benefit to assessment area(s)--(1) Benefit inside assessment
area(s). The appropriate Federal banking agency considers all qualified
investments, community development loans, and community development
services that benefit areas within the bank's or savings association's
assessment area(s) or a broader statewide or regional area that
includes the bank's or savings association's assessment area(s).
(2) Benefit outside assessment area(s). The appropriate Federal
banking agency considers the qualified investments, community
development loans, and community development services that benefit
areas outside the bank's or savings association's assessment area(s),
if the bank or savings association has adequately addressed the needs
of its assessment area(s).
(f) Community development performance rating. The appropriate
Federal banking agency rates a bank's or savings association's
community development performance as provided in appendix A of this
part.

Sec. 25.26 Small bank and savings association performance standards.

(a) Performance criteria--(1) Small banks and savings associations
that are not intermediate small banks or savings associations. The
appropriate Federal banking agency evaluates the record of a small bank
or savings association that is not, or that was not during the prior
calendar year, an intermediate small bank or savings association, of
helping to meet the credit needs of its assessment area(s) pursuant to
the criteria set forth in paragraph (b) of this section.
(2) Intermediate small banks and savings associations. The
appropriate Federal banking agency evaluates the record of a small bank
or savings association that is, or that was during the prior calendar
year, an intermediate small bank or savings association, of helping to
meet the credit needs of its assessment area(s) pursuant to the
criteria set forth in paragraphs (b) and (c) of this section.
(b) Lending test. A small bank's or savings association's lending
performance is evaluated pursuant to the following criteria:
(1) The bank's or savings association's loan-to-deposit ratio,
adjusted for seasonal variation, and, as appropriate, other lending-
related activities, such as loan originations for sale to the secondary
markets, community development loans, or qualified investments;
(2) The percentage of loans and, as appropriate, other lending-
related activities located in the bank's or savings association's
assessment area(s);
(3) The bank's or savings association's record of lending to and,
as appropriate, engaging in other lending-related activities for
borrowers of different income levels and businesses and farms of
different sizes;
(4) The geographic distribution of the bank's or savings
association's loans; and

[[Page 34105]]

(5) The bank's or savings association's record of taking action, if
warranted, in response to written complaints about its performance in
helping to meet credit needs in its assessment area(s).
(c) Community development test. An intermediate small bank's or
savings association's community development performance also is
evaluated pursuant to the following criteria:
(1) The number and amount of community development loans;
(2) The number and amount of qualified investments;
(3) The extent to which the bank or savings association provides
community development services; and
(4) The bank's or savings association's responsiveness through such
activities to community development lending, investment, and services
needs.
(d) Small bank or savings association performance rating. The
appropriate Federal banking agency rates the performance of a bank or
savings association evaluated under this section as provided in
appendix A of this part.

Sec. 25.27 Strategic plan.

(a) Alternative election. The appropriate Federal banking agency
will assess a bank's or savings association's record of helping to meet
the credit needs of its assessment area(s) under a strategic plan if:
(1) The bank or savings association has submitted the plan to the
appropriate Federal banking agency as provided for in this section;
(2) The appropriate Federal banking agency has approved the plan;
(3) The plan is in effect; and
(4) The bank or savings association has been operating under an
approved plan for at least one year.
(b) Data reporting. The appropriate Federal banking agency's
approval of a plan does not affect the bank's or savings association's
obligation, if any, to report data as required by Sec. 25.42.
(c) Plans in general--(1) Term. A plan may have a term of no more
than five years, and any multi-year plan must include annual interim
measurable goals under which the appropriate Federal banking agency
will evaluate the bank's or savings association's performance.
(2) Multiple assessment areas. A bank or savings association with
more than one assessment area may prepare a single plan for all of its
assessment areas or one or more plans for one or more of its assessment
areas.
(3) Treatment of affiliates. Affiliated institutions may prepare a
joint plan if the plan provides measurable goals for each institution.
Activities may be allocated among institutions at the institutions'
option, provided that the same activities are not considered for more
than one institution.
(d) Public participation in plan development. Before submitting a
plan to the appropriate Federal banking agency for approval, a bank or
savings association shall:
(1) Informally seek suggestions from members of the public in its
assessment area(s) covered by the plan while developing the plan;
(2) Once the bank or savings association has developed a plan,
formally solicit public comment on the plan for at least 30 days by
publishing notice in at least one newspaper of general circulation in
each assessment area covered by the plan; and
(3) During the period of formal public comment, make copies of the
plan available for review by the public at no cost at all offices of
the bank or savings association in any assessment area covered by the
plan and provide copies of the plan upon request for a reasonable fee
to cover copying and mailing, if applicable.
(e) Submission of plan. The bank or savings association shall
submit its plan to the appropriate Federal banking agency at least
three months prior to the proposed effective date of the plan. The bank
or savings association shall also submit with its plan a description of
its informal efforts to seek suggestions from members of the public,
any written public comment received, and, if the plan was revised in
light of the comment received, the initial plan as released for public
comment.
(f) Plan content--(1) Measurable goals. (i) A bank or savings
association shall specify in its plan measurable goals for helping to
meet the credit needs of each assessment area covered by the plan,
particularly the needs of low- and moderate-income geographies and low-
and moderate-income individuals, through lending, investment, and
services, as appropriate.
(ii) A bank or savings association shall address in its plan all
three performance categories and, unless the bank or savings
association has been designated as a wholesale or limited purpose bank
or savings association, shall emphasize lending and lending-related
activities. Nevertheless, a different emphasis, including a focus on
one or more performance categories, may be appropriate if responsive to
the characteristics and credit needs of its assessment area(s),
considering public comment and the bank's or savings association's
capacity and constraints, product offerings, and business strategy.
(2) Confidential information. A bank or savings association may
submit additional information to the appropriate Federal banking agency
on a confidential basis, but the goals stated in the plan must be
sufficiently specific to enable the public and the appropriate Federal
banking agency to judge the merits of the plan.
(3) Satisfactory and outstanding goals. A bank or savings
association shall specify in its plan measurable goals that constitute
``satisfactory'' performance. A plan may specify measurable goals that
constitute ``outstanding'' performance. If a bank or savings
association submits, and the appropriate Federal banking agency
approves, both ``satisfactory'' and ``outstanding'' performance goals,
the appropriate Federal banking agency will consider the bank or
savings association eligible for an ``outstanding'' performance rating.
(4) Election if satisfactory goals not substantially met. A bank or
savings association may elect in its plan that, if the bank or savings
association fails to meet substantially its plan goals for a
satisfactory rating, the appropriate Federal banking agency will
evaluate the bank's or savings association's performance under the
lending, investment, and service tests, the community development test,
or the small bank or savings association performance standards, as
appropriate.
(g) Plan approval--(1) Timing. The appropriate Federal banking
agency will act upon a plan within 60 calendar days after the
appropriate Federal banking agency receives the complete plan and other
material required under paragraph (e) of this section. If the
appropriate Federal banking agency fails to act within this time
period, the plan shall be deemed approved unless the appropriate
Federal banking agency extends the review period for good cause.
(2) Public participation. In evaluating the plan's goals, the
appropriate Federal banking agency considers the public's involvement
in formulating the plan, written public comment on the plan, and any
response by the bank or savings association to public comment on the
plan.
(3) Criteria for evaluating plan. The appropriate Federal banking
agency evaluates a plan's measurable goals using the following
criteria, as appropriate:
(i) The extent and breadth of lending or lending-related
activities, including, as appropriate, the distribution of loans among
different geographies, businesses and farms of different sizes, and
individuals of different income levels, the extent of community
development

[[Page 34106]]

lending, and the use of innovative or flexible lending practices to
address credit needs;
(ii) The amount and innovativeness, complexity, and responsiveness
of the bank's or savings association's qualified investments; and
(iii) The availability and effectiveness of the bank's or savings
association's systems for delivering retail banking services and the
extent and innovativeness of the bank's or savings association's
community development services.
(h) Plan amendment. During the term of a plan, a bank or savings
association may request the appropriate Federal banking agency to
approve an amendment to the plan on grounds that there has been a
material change in circumstances. The bank or savings association shall
develop an amendment to a previously approved plan in accordance with
the public participation requirements of paragraph (d) of this section.
(i) Plan assessment. The appropriate Federal banking agency
approves the goals and assesses performance under a plan as provided
for in appendix A of this part.

Sec. 25.28 Assigned ratings.

(a) Ratings in general. Subject to paragraphs (b) and (c) of this
section, the appropriate Federal banking agency assigns to a bank or
savings association a rating of ``outstanding,'' ``satisfactory,''
``needs to improve,'' or ``substantial noncompliance'' based on the
bank's or savings association's performance under the lending,
investment and service tests, the community development test, the small
bank or savings association performance standards, or an approved
strategic plan, as applicable.
(b) Lending, investment, and service tests. The appropriate Federal
banking agency assigns a rating for a bank or savings association
assessed under the lending, investment, and service tests in accordance
with the following principles:
(1) A bank or savings association that receives an ``outstanding''
rating on the lending test receives an assigned rating of at least
``satisfactory'';
(2) A bank or savings association that receives an ``outstanding''
rating on both the service test and the investment test and a rating of
at least ``high satisfactory'' on the lending test receives an assigned
rating of ``outstanding''; and
(3) No bank or savings association may receive an assigned rating
of ``satisfactory'' or higher unless it receives a rating of at least
``low satisfactory'' on the lending test.
(c) Effect of evidence of discriminatory or other illegal credit
practices. (1) The appropriate Federal banking agency's evaluation of a
bank's or savings association's CRA performance is adversely affected
by evidence of discriminatory or other illegal credit practices in any
geography by the bank or savings association or in any assessment area
by any affiliate whose loans have been considered as part of the bank's
or savings association's lending performance. In connection with any
type of lending activity described in Sec. 25.22(a), evidence of
discriminatory or other credit practices that violate an applicable
law, rule, or regulation includes, but is not limited to:
(i) Discrimination against applicants on a prohibited basis in
violation, for example, of the Equal Credit Opportunity Act or the Fair
Housing Act;
(ii) Violations of the Home Ownership and Equity Protection Act;
(iii) Violations of section 5 of the Federal Trade Commission Act;
(iv) Violations of section 8 of the Real Estate Settlement
Procedures Act; and
(v) Violations of the Truth in Lending Act provisions regarding a
consumer's right of rescission.
(2) In determining the effect of evidence of practices described in
paragraph (c)(1) of this section on the bank's or savings association's
assigned rating, the appropriate Federal banking agency considers the
nature, extent, and strength of the evidence of the practices; the
policies and procedures that the bank or savings association (or
affiliate, as applicable) has in place to prevent the practices; any
corrective action that the bank or savings association (or affiliate,
as applicable) has taken or has committed to take, including voluntary
corrective action resulting from self-assessment; and any other
relevant information.

Sec. 25.29 Effect of CRA performance on applications.

(a) CRA performance. Among other factors, the appropriate Federal
banking agency takes into account the record of performance under the
CRA of each applicant bank or savings association, and for applications
under 10(e) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)), of each
proposed subsidiary savings association, in considering an application
for:
(1) The establishment of:
(i) A domestic branch for insured national banks; or
(ii) A domestic branch or other facility that would be authorized
to take deposits for savings associations;
(2) The relocation of the main office or a branch;
(3) The merger or consolidation with or the acquisition of assets
or assumption of liabilities of an insured depository institution
requiring approval under the Bank Merger Act (12 U.S.C. 1828(c)); and
(4) The conversion of an insured depository institution to a
national bank or Federal savings association charter; and
(5) Acquisitions subject to section 10(e) of the Home Owners' Loan
Act (12 U.S.C. 1467a(e)).
(b) Charter application. (1) An applicant (other than an insured
depository institution) for a national bank charter shall submit with
its application a description of how it will meet its CRA objectives.
The OCC takes the description into account in considering the
application and may deny or condition approval on that basis.
(2) An applicant for a Federal savings association charter shall
submit with its application a description of how it will meet its CRA
objectives. The appropriate Federal banking agency takes the
description into account in considering the application and may deny or
condition approval on that basis.
(c) Interested parties. The appropriate Federal banking agency
takes into account any views expressed by interested parties that are
submitted in accordance with the applicable comment procedures in
considering CRA performance in an application listed in paragraphs (a)
and (b) of this section.
(d) Denial or conditional approval of application. A bank's or
savings association's record of performance may be the basis for
denying or conditioning approval of an application listed in paragraph
(a) of this section.
(e) Insured depository institution. For purposes of this section,
the term ``insured depository institution'' has the meaning given to
that term in 12 U.S.C. 1813.

Subpart C--Records, Reporting, and Disclosure Requirements

Sec. 25.41 Assessment area delineation.

(a) In general. A bank or savings association shall delineate one
or more assessment areas within which the appropriate Federal banking
agency evaluates the bank's or savings association's record of helping
to meet the credit needs of its community. The appropriate Federal
banking agency does not evaluate the bank's or savings association's
delineation of its

[[Page 34107]]

assessment area(s) as a separate performance criterion, but the
appropriate Federal banking agency reviews the delineation for
compliance with the requirements of this section.
(b) Geographic area(s) for wholesale or limited purpose banks or
savings associations. The assessment area(s) for a wholesale or limited
purpose bank or savings association must consist generally of one or
more MSAs or metropolitan divisions (using the MSA or metropolitan
division boundaries that were in effect as of January 1 of the calendar
year in which the delineation is made) or one or more contiguous
political subdivisions, such as counties, cities, or towns, in which
the bank or savings association has its main office, branches, and
deposit-taking ATMs.
(c) Geographic area(s) for other banks and savings association. The
assessment area(s) for a bank or savings association other than a
wholesale or limited purpose bank or savings association must:
(1) Consist generally of one or more MSAs or metropolitan divisions
(using the MSA or metropolitan division boundaries that were in effect
as of January 1 of the calendar year in which the delineation is made)
or one or more contiguous political subdivisions, such as counties,
cities, or towns; and
(2) Include the geographies in which the bank or savings
association has its main office, its branches, and its deposit-taking
ATMs, as well as the surrounding geographies in which the bank or
savings association has originated or purchased a substantial portion
of its loans (including home mortgage loans, small business and small
farm loans, and any other loans the bank or savings association
chooses, such as those consumer loans on which the bank or savings
association elects to have its performance assessed).
(d) Adjustments to geographic area(s). A bank or savings
association may adjust the boundaries of its assessment area(s) to
include only the portion of a political subdivision that it reasonably
can be expected to serve. An adjustment is particularly appropriate in
the case of an assessment area that otherwise would be extremely large,
of unusual configuration, or divided by significant geographic
barriers.
(e) Limitations on the delineation of an assessment area. Each
bank's or savings associations assessment area(s):
(1) Must consist only of whole geographies;
(2) May not reflect illegal discrimination;
(3) May not arbitrarily exclude low- or moderate-income
geographies, taking into account the bank's or savings association's
size and financial condition; and
(4) May not extend substantially beyond an MSA boundary or beyond a
state boundary unless the assessment area is located in a multistate
MSA. If a bank or savings association serves a geographic area that
extends substantially beyond a state boundary, the bank or savings
association shall delineate separate assessment areas for the areas in
each state. If a bank or savings association serves a geographic area
that extends substantially beyond an MSA boundary, the bank or savings
association shall delineate separate assessment areas for the areas
inside and outside the MSA.
(f) Banks and savings association serving military personnel.
Notwithstanding the requirements of this section, a bank or savings
association whose business predominantly consists of serving the needs
of military personnel or their dependents who are not located within a
defined geographic area may delineate its entire deposit customer base
as its assessment area.
(g) Use of assessment area(s). The appropriate Federal banking
agency uses the assessment area(s) delineated by a bank or savings
association in its evaluation of the bank's or savings association's
CRA performance unless the appropriate Federal banking agency
determines that the assessment area(s) do not comply with the
requirements of this section.

Sec. 25.42 Data collection, reporting, and disclosure.

(a) Loan information required to be collected and maintained. A
bank or savings association, except a small bank or savings
association, shall collect, and maintain in machine readable form (as
prescribed by the appropriate Federal banking agency) until the
completion of its next CRA examination, the following data for each
small business or small farm loan originated or purchased by the bank
or savings association:
(1) A unique number or alpha-numeric symbol that can be used to
identify the relevant loan file;
(2) The loan amount at origination;
(3) The loan location; and
(4) An indicator whether the loan was to a business or farm with
gross annual revenues of $1 million or less.
(b) Loan information required to be reported. A bank or savings
association, except a small bank or savings association or a bank or
savings association that was a small bank or savings association during
the prior calendar year, shall report annually by March 1 to the
appropriate Federal banking agency in machine readable form (as
prescribed by the appropriate Federal banking agency) the following
data for the prior calendar year:
(1) Small business and small farm loan data. For each geography in
which the bank or savings association originated or purchased a small
business or small farm loan, the aggregate number and amount of loans:
(i) With an amount at origination of $100,000 or less;
(ii) With amount at origination of more than $100,000 but less than
or equal to $250,000;
(iii) With an amount at origination of more than $250,000; and
(iv) To businesses and farms with gross annual revenues of $1
million or less (using the revenues that the bank or savings
association considered in making its credit decision);
(2) Community development loan data. The aggregate number and
aggregate amount of community development loans originated or
purchased; and
(3) Home mortgage loans. If the bank or savings association is
subject to reporting under part 1003 of this title, the location of
each home mortgage loan application, origination, or purchase outside
the MSAs in which the bank or savings association has a home or branch
office (or outside any MSA) in accordance with the requirements of part
1003 of this title.
(c) Optional data collection and maintenance--(1) Consumer loans. A
bank or savings association may collect and maintain in machine
readable form (as prescribed by the appropriate Federal banking agency)
data for consumer loans originated or purchased by the bank or savings
association for consideration under the lending test. A bank or savings
association may maintain data for one or more of the following
categories of consumer loans: Motor vehicle, credit card, other
secured, and other unsecured. If the bank or savings association
maintains data for loans in a certain category, it shall maintain data
for all loans originated or purchased within that category. The bank or
savings association shall maintain data separately for each category,
including for each loan:
(i) A unique number or alpha-numeric symbol that can be used to
identify the relevant loan file;
(ii) The loan amount at origination or purchase;
(iii) The loan location; and
(iv) The gross annual income of the borrower that the bank or
savings association considered in making its credit decision.

[[Page 34108]]

(2) Other loan data. At its option, a bank or savings association
may provide other information concerning its lending performance,
including additional loan distribution data.
(d) Data on affiliate lending. A bank or savings association that
elects to have the appropriate Federal banking agency consider loans by
an affiliate, for purposes of the lending or community development test
or an approved strategic plan, shall collect, maintain, and report for
those loans the data that the bank or savings association would have
collected, maintained, and reported pursuant to paragraphs (a), (b),
and (c) of this section had the loans been originated or purchased by
the bank or savings association. For home mortgage loans, the bank or
savings association shall also be prepared to identify the home
mortgage loans reported under part 1003 of this title by the affiliate.
(e) Data on lending by a consortium or a third party. A bank or
savings association that elects to have the appropriate Federal banking
agency consider community development loans by a consortium or third
party, for purposes of the lending or community development tests or an
approved strategic plan, shall report for those loans the data that the
bank or savings association would have reported under paragraph (b)(2)
of this section had the loans been originated or purchased by the bank
or savings association.
(f) Small banks and savings associations electing evaluation under
the lending, investment, and service tests. A bank or savings
association that qualifies for evaluation under the small bank or
savings association performance standards but elects evaluation under
the lending, investment, and service tests shall collect, maintain, and
report the data required for other banks or savings association
pursuant to paragraphs (a) and (b) of this section.
(g) Assessment area data. A bank or savings association, except a
small bank or savings association or a bank or savings association that
was a small bank or savings association during the prior calendar year,
shall collect and report to the appropriate Federal banking agency by
March 1 of each year a list for each assessment area showing the
geographies within the area.
(h) CRA Disclosure Statement. The appropriate Federal banking
agency prepares annually for each bank or savings association that
reports data pursuant to this section a CRA Disclosure Statement that
contains, on a state-by-state basis:
(1) For each county (and for each assessment area smaller than a
county) with a population of 500,000 persons or fewer in which the bank
or savings association reported a small business or small farm loan:
(i) The number and amount of small business and small farm loans
reported as originated or purchased located in low-, moderate-, middle-
, and upper-income geographies;
(ii) A list grouping each geography according to whether the
geography is low-, moderate-, middle-, or upper-income;
(iii) A list showing each geography in which the bank or savings
association reported a small business or small farm loan; and
(iv) The number and amount of small business and small farm loans
to businesses and farms with gross annual revenues of $1 million or
less;
(2) For each county (and for each assessment area smaller than a
county) with a population in excess of 500,000 persons in which the
bank or savings association reported a small business or small farm
loan:
(i) The number and amount of small business and small farm loans
reported as originated or purchased located in geographies with median
income relative to the area median income of less than 10 percent, 10
or more but less than 20 percent, 20 or more but less than 30 percent,
30 or more but less than 40 percent, 40 or more but less than 50
percent, 50 or more but less than 60 percent, 60 or more but less than
70 percent, 70 or more but less than 80 percent, 80 or more but less
than 90 percent, 90 or more but less than 100 percent, 100 or more but
less than 110 percent, 110 or more but less than 120 percent, and 120
percent or more;
(ii) A list grouping each geography in the county or assessment
area according to whether the median income in the geography relative
to the area median income is less than 10 percent, 10 or more but less
than 20 percent, 20 or more but less than 30 percent, 30 or more but
less than 40 percent, 40 or more but less than 50 percent, 50 or more
but less than 60 percent, 60 or more but less than 70 percent, 70 or
more but less than 80 percent, 80 or more but less than 90 percent, 90
or more but less than 100 percent, 100 or more but less than 110
percent, 110 or more but less than 120 percent, and 120 percent or
more;
(iii) A list showing each geography in which the bank or savings
association reported a small business or small farm loan; and
(iv) The number and amount of small business and small farm loans
to businesses and farms with gross annual revenues of $1 million or
less;
(3) The number and amount of small business and small farm loans
located inside each assessment area reported by the bank or savings
association and the number and amount of small business and small farm
loans located outside the assessment area(s) reported by the bank or
savings association; and
(4) The number and amount of community development loans reported
as originated or purchased.
(i) Aggregate disclosure statements. The OCC, in conjunction with
the Board of Governors of the Federal Reserve System and the FDIC,
prepares annually, for each MSA or metropolitan division (including an
MSA or metropolitan division that crosses a state boundary) and the
nonmetropolitan portion of each state, an aggregate disclosure
statement of small business and small farm lending by all institutions
subject to reporting under this part or parts 228 or 345 of this title.
These disclosure statements indicate, for each geography, the number
and amount of all small business and small farm loans originated or
purchased by reporting institutions, except that the appropriate
Federal banking agency may adjust the form of the disclosure if
necessary, because of special circumstances, to protect the privacy of
a borrower or the competitive position of an institution.
(j) Central data depositories. The appropriate Federal banking
agency makes the aggregate disclosure statements, described in
paragraph (i) of this section, and the individual bank or savings
association CRA Disclosure Statements, described in paragraph (h) of
this section, available to the public at central data depositories. The
appropriate Federal banking agency publishes a list of the depositories
at which the statements are available.

Sec. 25.43 Content and availability of public file.

(a) Information available to the public. A bank or savings
association shall maintain a public file that includes the following
information:
(1) All written comments received from the public for the current
year and each of the prior two calendar years that specifically relate
to the bank's or savings association's performance in helping to meet
community credit needs, and any response to the comments by the bank or
savings association, if neither the comments nor the responses contain
statements that reflect adversely on the good name or reputation of any
persons other than the bank or savings association or

[[Page 34109]]

publication of which would violate specific provisions of law;
(2) A copy of the public section of the bank's or savings
association's most recent CRA Performance Evaluation prepared by the
appropriate Federal banking agency. The bank or savings association
shall place this copy in the public file within 30 business days after
its receipt from the appropriate Federal banking agency;
(3) A list of the bank's or savings association's branches, their
street addresses, and geographies;
(4) A list of branches opened or closed by the bank or savings
association during the current year and each of the prior two calendar
years, their street addresses, and geographies;
(5) A list of services (including hours of operation, available
loan and deposit products, and transaction fees) generally offered at
the bank's or savings association's branches and descriptions of
material differences in the availability or cost of services at
particular branches, if any. At its option, a bank or savings
association may include information regarding the availability of
alternative systems for delivering retail banking services (e.g., ATMs,
ATMs not owned or operated by or exclusively for the bank or savings
association, banking by telephone or computer, loan production offices,
and bank-at-work or bank-by-mail programs);
(6) A map of each assessment area showing the boundaries of the
area and identifying the geographies contained within the area, either
on the map or in a separate list; and
(7) Any other information the bank or savings association chooses.
(b) Additional information available to the public--(1) Banks and
savings associations other than small banks or savings associations. A
bank or savings association, except a small bank or savings association
or a bank or savings association that was a small bank or savings
association during the prior calendar year, shall include in its public
file the following information pertaining to the bank or savings
association and its affiliates, if applicable, for each of the prior
two calendar years:
(i) If the bank or savings association has elected to have one or
more categories of its consumer loans considered under the lending
test, for each of these categories, the number and amount of loans:
(A) To low-, moderate-, middle-, and upper-income individuals;
(B) Located in low-, moderate-, middle-, and upper-income census
tracts; and
(C) Located inside the bank's or savings association's assessment
area(s) and outside the bank's or savings association's assessment
area(s); and
(ii) The bank's or savings association's CRA Disclosure Statement.
The bank or savings association shall place the statement in the public
file within three business days of its receipt from the appropriate
Federal banking agency.
(2) Banks and savings associations required to report Home Mortgage
Disclosure Act (HMDA) data. A bank or savings association required to
report home mortgage loan data pursuant part 1003 of this title shall
include in its public file a written notice that the institution's HMDA
Disclosure Statement may be obtained on the Consumer Financial
Protection Bureau's (Bureau's) website at <a href="http://www.consumerfinance.gov/hmda">www.consumerfinance.gov/hmda</a>.
In addition, a bank or savings association that elected to have the
appropriate Federal banking agency consider the mortgage lending of an
affiliate shall include in its public file the name of the affiliate
and a written notice that the affiliate's HMDA Disclosure Statement may
be obtained at the Bureau's website. The bank or savings association
shall place the written notice(s) in the public file within three
business days after receiving notification from the Federal Financial
Institutions Examination Council of the availability of the disclosure
statement(s).
(3) Small banks and savings associations. A small bank or savings
association or a bank or savings association that was a small bank or
savings association during the prior calendar year shall include in its
public file:
(i) The bank's or savings association's loan-to-deposit ratio for
each quarter of the prior calendar year and, at its option, additional
data on its loan-to-deposit ratio; and
(ii) The information required for other banks or savings
associations by paragraph (b)(1) of this section, if the bank or
savings association has elected to be evaluated under the lending,
investment, and service tests.
(4) Banks and savings associations with strategic plans. A bank or
savings association that has been approved to be assessed under a
strategic plan shall include in its public file a copy of that plan. A
bank or savings association need not include information submitted to
the appropriate Federal banking agency on a confidential basis in
conjunction with the plan.
(5) Banks and savings associations with less than satisfactory
ratings. A bank or savings association that received a less than
satisfactory rating during its most recent examination shall include in
its public file a description of its current efforts to improve its
performance in helping to meet the credit needs of its entire
community. The bank or savings association shall update the description
quarterly.
(c) Location of public information. A bank or savings association
shall make available to the public for inspection upon request and at
no cost the information required in this section as follows:
(1) At the main office and, if an interstate bank or savings
association, at one branch office in each state, all information in the
public file; and
(2) At each branch:
(i) A copy of the public section of the bank's or savings
association's most recent CRA Performance Evaluation and a list of
services provided by the branch; and
(ii) Within five calendar days of the request, all the information
in the public file relating to the assessment area in which the branch
is located.
(d) Copies. Upon request, a bank or savings association shall
provide copies, either on paper or in another form acceptable to the
person making the request, of the information in its public file. The
bank or savings association may charge a reasonable fee not to exceed
the cost of copying and mailing (if applicable).
(e) Updating. Except as otherwise provided in this section, a bank
or savings association shall ensure that the information required by
this section is current as of April 1 of each year.

Sec. 25.44 Public notice by banks and savings associations.

A bank or savings association shall provide in the public lobby of
its main office and each of its branches the appropriate public notice
set forth in appendix B of this part. Only a branch of a bank or
savings association having more than one assessment area shall include
the bracketed material in the notice for branch offices. Only an
insured national bank that is an affiliate of a holding company shall
include the next to the last sentence of the notices. An insured
national bank shall include the last sentence of the notices only if it
is an affiliate of a holding company that is not prevented by statute
from acquiring additional banks. Only a savings association that is an
affiliate of a holding company shall include the last two sentences of
the notices.

Sec. 25.45 Publication of planned examination schedule.

The appropriate Federal banking agency publishes at least 30 days
in advance of the beginning of each calendar quarter a list of banks
and

[[Page 34110]]

savings associations scheduled for CRA examinations in that quarter.

Subpart D--Transition Provisions

Sec. 25.51 Consideration of Bank or Savings Association Activities.

(a) In assessing a bank's or savings association's CRA performance,
the appropriate Federal banking agency will consider any loan,
investment, or service that was eligible for CRA consideration at the
time the bank or savings association conducted the activity.
(b) Notwithstanding paragraph (a), in assessing a bank's or savings
association's CRA performance, the appropriate Federal banking agency
will consider any loan or investment that was eligible for CRA
consideration at the time the bank or savings association entered into
a legally binding commitment to make the loan or investment.

Sec. 25.52 Strategic Plan Retention.

A bank or savings association strategic plan approved by the
appropriate Federal banking agency and in effect as of December 31,
2021, remains in effect, except that provisions of the plan that are
not consistent with this part in effect as of January 1, 2022, are
void, unless amended pursuant to Sec. 25.27.

Subpart E--Prohibition Against Use of Interstate Branches Primarily
for Deposit Production

Sec. 25.61 Purpose and scope.

(a) Purpose. The purpose of this subpart is to implement section
109 (12 U.S.C. 1835a) of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (Interstate Act).
(b) Scope. (1) This subpart applies to any national bank that has
operated a covered interstate branch for a period of at least one year,
and any foreign bank that has operated a covered interstate branch that
is a Federal branch for a period of at least one year.
(2) This subpart describes the requirements imposed under 12 U.S.C.
1835a, which requires the appropriate Federal banking agencies (the
OCC, the Board of Governors of the Federal Reserve System, and the
FDIC) to prescribe uniform rules that prohibit a bank from using any
authority to engage in interstate branching pursuant to the Interstate
Act, or any amendment made by the Interstate Act to any other provision
of law, primarily for the purpose of deposit production.

Sec. 25.62 Definitions.

For purposes of this subpart, the following definitions apply:
(a) Bank means, unless the context indicates otherwise:
(1) A national bank; and
(2) A foreign bank as that term is defined in 12 U.S.C. 3101(7) and
12 CFR 28.11(i).
(b) Covered interstate branch means:
(1) Any branch of a national bank, and any Federal branch of a
foreign bank, that:
(i) Is established or acquired outside the bank's home State
pursuant to the interstate branching authority granted by the
Interstate Act or by any amendment made by the Interstate Act to any
other provision of law; or
(ii) Could not have been established or acquired outside of the
bank's home State but for the establishment or acquisition of a branch
described in paragraph (b)(1)(i) of this section; and
(2) Any bank or branch of a bank controlled by an out-of-State bank
holding company.
(c) Federal branch means Federal branch as that term is defined in
12 U.S.C. 3101(6) and 12 CFR 28.11(h).
(d) Home State means:
(1) With respect to a State bank, the State that chartered the
bank;
(2) With respect to a national bank, the State in which the main
office of the bank is located;
(3) With respect to a bank holding company, the State in which the
total deposits of all banking subsidiaries of such company are the
largest on the later of:
(i) July 1, 1966; or
(ii) The date on which the company becomes a bank holding company
under the Bank Holding Company Act;
(4) With respect to a foreign bank:
(i) For purposes of determining whether a U.S. branch of a foreign
bank is a covered interstate branch, the home State of the foreign bank
as determined in accordance with 12 U.S.C. 3103(c) and 12 CFR 28.11(n);
and
(ii) For purposes of determining whether a branch of a U.S. bank
controlled by a foreign bank is a covered interstate branch, the State
in which the total deposits of all banking subsidiaries of such foreign
bank are the largest on the later of:
(A) July 1, 1966; or
(B) The date on which the foreign bank becomes a bank holding
company under the Bank Holding Company Act.
(e) Host State means a State in which a covered interstate branch
is established or acquired.
(f) Host state loan-to-deposit ratio generally means, with respect
to a particular host state, the ratio of total loans in the host state
relative to total deposits from the host state for all banks (including
institutions covered under the definition of ``bank'' in 12 U.S.C.
1813(a)(1)) that have that state as their home state, as determined and
updated periodically by the appropriate Federal banking agencies and
made available to the public.
(g) Out-of-State bank holding company means, with respect to any
State, a bank holding company whose home State is another State.
(h) State means state as that term is defined in 12 U.S.C.
1813(a)(3).
(i) Statewide loan-to-deposit ratio means, with respect to a bank,
the ratio of the bank's loans to its deposits in a state in which the
bank has one or more covered interstate branches, as determined by the
OCC.

Sec. 25.63 Loan-to-deposit ratio screen.

(a) Application of screen. Beginning no earlier than one year after
a covered interstate branch is acquired or established, the OCC will
consider whether the bank's statewide loan-to-deposit ratio is less
than 50 percent of the relevant host State loan-to-deposit ratio.
(b) Results of screen. (1) If the OCC determines that the bank's
statewide loan-to-deposit ratio is 50 percent or more of the host state
loan-to-deposit ratio, no further consideration under this subpart is
required.
(2) If the OCC determines that the bank's statewide loan-to-deposit
ratio is less than 50 percent of the host state loan-to-deposit ratio,
or if reasonably available data are insufficient to calculate the
bank's statewide loan-to-deposit ratio, the OCC will make a credit
needs determination for the bank as provided in Sec. 25.64.

Sec. 25.64 Credit needs determination.

(a) In general. The OCC will review the loan portfolio of the bank
and determine whether the bank is reasonably helping to meet the credit
needs of the communities in the host state that are served by the bank.
(b) Guidelines. The OCC will use the following considerations as
guidelines when making the determination pursuant to paragraph (a) of
this section:
(1) Whether covered interstate branches were formerly part of a
failed or failing depository institution;
(2) Whether covered interstate branches were acquired under
circumstances where there was a low loan-to-deposit ratio because of
the nature of the acquired institution's business or loan portfolio;
(3) Whether covered interstate branches have a high concentration
of commercial or credit card lending, trust services, or other
specialized activities, including the extent to which the

[[Page 34111]]

covered interstate branches accept deposits in the host state;
(4) The CRA ratings received by the bank, if any;
(5) Economic conditions, including the level of loan demand, within
the communities served by the covered interstate branches;
(6) The safe and sound operation and condition of the bank; and
(7) The OCC's CRA regulations (subparts A through D of this part)
and interpretations of those regulations.

Sec. 25.65 Sanctions.

(a) In general. If the OCC determines that a bank is not reasonably
helping to meet the credit needs of the communities served by the bank
in the host state, and that the bank's statewide loan-to-deposit ratio
is less than 50 percent of the host state loan-to-deposit ratio, the
OCC:
(1) May order that a bank's covered interstate branch or branches
be closed unless the bank provides reasonable assurances to the
satisfaction of the OCC, after an opportunity for public comment, that
the bank has an acceptable plan under which the bank will reasonably
help to meet the credit needs of the communities served by the bank in
the host state; and
(2) Will not permit the bank to open a new branch in the host state
that would be considered to be a covered interstate branch unless the
bank provides reasonable assurances to the satisfaction of the OCC,
after an opportunity for public comment, that the bank will reasonably
help to meet the credit needs of the community that the new branch will
serve.
(b) Notice prior to closure of a covered interstate branch. Before
exercising the OCC's authority to order the bank to close a covered
interstate branch, the OCC will issue to the bank a notice of the OCC's
intent to order the closure and will schedule a hearing within 60 days
of issuing the notice.
(c) Hearing. The OCC will conduct a hearing scheduled under
paragraph (b) of this section in accordance with the provisions of 12
U.S.C. 1818(h) and 12 CFR part 19.

Appendix A to Part 25--Ratings

(a) Ratings in general. (1) In assigning a rating, the
appropriate Federal banking agency evaluates a bank's or savings
association's

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.