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l l★K

Federal Reserve Bank
of Dallas

DALLAS, TEXAS
75265-5906

February 2, 2001
Notice 01-12

TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

SUBJECT
Joint Final Rule on
Disclosure and Reporting of CRA-Related Agreements
DETAILS
The Board of Governors of the Federal Reserve System, the Office of the Comptroller
of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision
have published final rules to implement the Community Reinvestment Act sunshine provisions
of section 48 of the Federal Deposit Insurance Act. These provisions require nongovernmental
entities or persons, insured depository institutions, and affiliates that are parties to certain agreements in fulfillment of the CRA to make the agreements available to the public and the appropriate agency and file annual reports concerning the agreements with the appropriate agency. The
provisions were contained in section 711 of the Gramm-Leach-Bliley Act.
The joint rule, which becomes effective April 1, 2001, identifies the types of written
agreements that are covered by section 48 and defines many of the terms used in the statute. The
rule also describes how the parties to a covered agreement must make the agreement available to
the public and the appropriate agencies and explains the type of information that must be included in the annual report filed by a party to a covered agreement.
MORE INFORMATION
A copy of the Board’s notice as it appears on pages 2052–113, Vol. 66, No. 7 of the
Federal Register dated January 10, 2001, is attached. Additionally, you may obtain a hard copy
of the document by contacting the Public Affairs Department at (214) 922-5254.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

-2For more information, please contact Eugene Coy, Banking Supervision Department,
at (214) 922-6201. For additional copies of this Bank’s notice, contact the Public Affairs
Department at (214) 922-5254 or access District Notices on our web site at
http://www.dallasfed.org/banking/notices/index.html.

Wednesday,
January 10, 2001

Part II

Department of the
Treasury
Federal Reserve System
Federal Deposit
Insurance Corporation
Office of the Comptroller of the
Currency
Office of Thrift Supervision
12 CFR Parts 35, 207, 346, 533
Disclosure and Reporting of CRA-Related
Agreements; Final Rules

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
appropriate agencies and explains the
type of information that must be
included in the annual report filed by a
party to a covered agreement.

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency

EFFECTIVE DATE: This joint rule is
effective April 1, 2001.

12 CFR Part 35
[Docket No. 00–34]

FOR FURTHER INFORMATION CONTACT:

RIN 1557–AB85

FEDERAL RESERVE SYSTEM
12 CFR Part 207
[Regulation G; Docket No. R–1069]

FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 346
RIN 3064–AC33

DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 533
[Docket No. 2000–107]
RIN 1550–AB32

Disclosure and Reporting of CRARelated Agreements
AGENCIES: Office of the Comptroller of
the Currency (OCC); Board of Governors
of the Federal Reserve System (Board);
Federal Deposit Insurance Corporation
(FDIC); Office of Thrift Supervision
(OTS).
ACTION: Joint final rule.
SUMMARY: The OCC, Board, FDIC, and
OTS (collectively, the agencies) are
publishing final rules to implement the
CRA sunshine provisions of section 48
of the Federal Deposit Insurance Act.
These provisions require
nongovernmental entities or persons
(NGEPs), insured depository
institutions, and affiliates of insured
depository institutions that are parties
to certain agreements that are in
fulfillment of the Community
Reinvestment Act of 1977 to make the
agreements available to the public and
the appropriate agency and file annual
reports concerning the agreements with
the appropriate agency. These
provisions were contained in section
711 of the Gramm-Leach-Bliley Act.
The rule identifies the types of
written agreements that are covered by
section 48 (referred to as covered
agreements) and defines many of the
terms used in the statute. The rule also
describes how the parties to a covered
agreement must make the agreement
available to the public and the

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OCC: Michael S. Bylsma, Director,
Community and Consumer Law (202)
874–5750; or Karen O. Solomon,
Director, Legislative and Regulatory
Activities (202) 874–5090, Office of the
Comptroller of the Currency, 250 E
Street, SW, Washington, DC 20219.
BOARD: Scott G. Alvarez, Associate
General Counsel (202) 452–3583, Kieran
J. Fallon, Senior Counsel (202) 452–
5270, or Andrew Miller, Senior
Attorney (202) 452–3428, Legal
Division; Glenn E. Loney, Deputy
Director (202) 452–3585, James H.
Mann, Senior Attorney (202) 452–2412,
or Kathleen C. Ryan, Senior Attorney
(202) 452–3667, Division of Consumer
and Community Affairs; For users of
Telecommunications Device for the Deaf
(*TDD*) only, contact Janice Simms at
(202) 452–4984; Board of Governors of
the Federal Reserve System, 20th Street
and Constitution Avenue, NW,
Washington, DC 20551.
FDIC: Deanna Caldwell, Senior Policy
Analyst (202) 942–3366, or Robert
Mooney, Assistant Director (202) 942–
3378, Division of Compliance and
Consumer Affairs; or A. Ann Johnson,
Counsel, Regulation and Legislation
Section (202) 898–3573, Federal Deposit
Insurance Corporation, 550 17th Street,
NW, Washington, DC 20429.
OTS: Richard Bennett, Counsel
(Banking and Finance), (202) 906–7409;
or Karen Osterloh, Assistant Chief
Counsel, (202) 906–6639; Office of
Thrift Supervision, 1700 G Street, NW,
Washington, DC 20552.
The
contents of this preamble are listed in
the following outline:
SUPPLEMENTARY INFORMATION:

I. Background
II. Overview of Comments Received
III. Detailed Explanation of Final Rule
A. Definition of Covered Agreement
B. Disclosure of Covered Agreements
C. Annual Reports
D. Effective Dates of Disclosure and
Reporting Requirements
E. Compliance Provisions
F. Other Definitions and Rules of
Construction
IV. Regulatory Flexibility Act Analysis
V. Executive Order 12866 Determination
VI. Paperwork Reduction Act
VII. Comments Regarding the Use of ‘‘Plain
Language’’
VIII. Unfunded Mandates Act of 1995
IX. Compliance Chart

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I. Background
Section 711 of the GLB Act (Pub. L.
106–102, 113 Stat. 1338 (1999)) added a
new section 48 to the Federal Deposit
Insurance Act (12 U.S.C. 1831y) (FDI
Act) entitled ‘‘CRA Sunshine
Requirements.’’ Section 48 applies to
written agreements that (1) are made in
fulfillment of the Community
Reinvestment Act of 1977 (CRA),1
(2) involve funds or other resources of
an insured depository institution or
affiliate with an aggregate value of more
than $10,000 in a year, or loans with an
aggregate principal value of more than
$50,000 in a year, and (3) are entered
into by an insured depository institution
or affiliate of an insured depository
institution and a nongovernmental
entity or person. Section 48 does not,
however, cover any agreement with a
nongovernmental entity or person that
has not had a CRA contact with an
insured depository institution or
affiliate or a banking agency, such as
agreements entered into by entities or
persons that solicit charitable
contributions or other funds without
regard to the CRA. Under section 48, the
parties to a covered agreement must
make the agreement available to the
public and the appropriate agency. The
parties also must file a report annually
with the appropriate agency concerning
the disbursement, receipt and use of
funds or other resources under the
agreement.
On May 19, 2000, the agencies
published a joint notice of proposed
rulemaking in the Federal Register (65
FR 31962, May 19, 2000) to implement
section 48. The joint notice requested
comment on all aspects of the proposed
rule and on a wide variety of specific
topics identified in the SUPPLEMENTARY
INFORMATION accompanying the
proposal.
II. Overview of Comments Received
The agencies collectively received
more than 800 comments from the
public on the proposed rule, although
many commenters submitted copies of
the same comments to each of the
agencies. Comments were received from
a wide variety of sources including
members of Congress; state and local
government officials; banks, savings
associations and their holding
companies and other affiliates;
community-based and non-profit
organizations, including national and
regional associations whose
membership is composed of such
organizations; trade associations; other
businesses; and individuals.
1 12

U.S.C. 2901 et seq.

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These comments addressed to some
degree nearly all aspects of the proposed
rule. A number of these comments are
described in more detail in the
description of the final rule below. This
section provides a brief overview of the
comments and is not intended to
represent a detailed summary of all of
the comments. The agencies have
carefully reviewed and considered the
information and views provided by all
commenters.
Commenters generally requested
additional guidance on the types of
actions that would constitute a written
arrangement or understanding between
an insured depository institution or
affiliate and a NGEP. Many commenters
supported the proposed rule’s definition
of ‘‘fulfillment of the CRA,’’ while
others asserted that the proposed
definition was too broad.2 In this regard,
a number of commenters expressed
concern that the proposed rule could
require the disclosure of, and reporting
on, a wide range of agreements between
banking organizations and NGEPs that
are not directly related to or affected by
the CRA. They also expressed concern
that the proposed rule could discourage
banking organizations from entering
into agreements with NGEPs to provide
loans, investments or banking services
in their local communities.
Many commenters addressed the
exemption included in the statute and
the proposed rule for agreements that
are entered into by an insured
depository institution or affiliate with a
NGEP that has not ‘‘commented on,
testified about, or discussed with the
institution, or otherwise contacted the
institution, concerning the Community
Reinvestment Act.’’ 3 Most commenters
that addressed this issue requested that
the agencies clarify the types of actions
by a NGEP that would constitute a CRA
contact as described in the statutory
exemption. Some commenters
recommended that the agencies define a
CRA contact to include only CRArelated contacts by a NGEP with a
Federal banking agency or discussions
with an insured depository institution
or affiliate about such contacts.
Commenters also urged that the
agencies clarify that certain types of
discussions with an institution or
2 The proposed rule generally defined
‘‘fulfillment of the CRA’’ by reference to the full list
of factors that the agencies consider in evaluating
the CRA performance of an insured depository
institution or in acting on an application for a
deposit facility under the CRA, as described in the
lending, investment and service tests set forth in the
CRA regulations jointly adopted by the agencies
(‘‘CRA Regulations’’). See 12 CFR Part 25 (OCC); 12
CFR Part 228 (Board); 12 CFR Part 345 (FDIC); 12
CFR Part 563e (OTS).
3 See 12 U.S.C. 1831y(e)(1)(B)(iii).

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affiliate, such as a general discussion by
a NGEP with an institution concerning
the eligibility of products or services for
consideration under the CRA, were not
CRA contacts (and were therefore
exempt) within the meaning of the
statute. Other commenters asserted that
the statute did not allow the agencies to
limit CRA contacts only to those that
occur with a Federal banking agency
and that Congress intended a CRA
contact to encompass a broad range of
CRA-related contacts including
discussions by a NGEP with an insured
depository institution or affiliate
concerning the CRA.
A number of commenters also argued
that a CRA contact must be with an
appropriate official or representative of
the insured depository institution or
affiliate. A significant number of
commenters also urged that a CRA
contact be recognized only if the contact
occurred within a specified period of
time before the parties entered into the
agreement. Some commenters expressed
concern that, without these or other
limitations, the statute or proposed rule
would impose a substantial burden on
persons claiming the exemption and
make the exemption virtually
meaningless. Other commenters
asserted that the agencies lacked the
authority to require that a CRA contact
be temporally related to a CRA-related
agreement.
A number of commenters argued that
the statute or the proposed rule imposed
a substantial burden on persons who
engage in discussions with banking
organizations concerning the CRA or
petition the Federal banking agencies
for action related to the CRA. These
commenters argued that these burdens
could chill the public’s exercise of free
speech or right to petition the
government as protected by the
Constitution.
Commenters generally supported the
provisions of the proposed rule that
sought to streamline the disclosure and
annual reporting obligations of the
parties to a covered agreement to the
extent consistent with the statute. For
example, commenters widely supported
the proposed rule’s provisions giving
insured depository institutions,
affiliates and NGEPs flexibility in
making covered agreements available to
the public and allowing insured
depository institutions, affiliates and
NGEPs that are party to a number of
covered agreements the ability to file a
single, consolidated annual report
relating to all of the agreements.
Commenters also generally supported
the provisions of the proposed rule that
required a NGEP to make its covered
agreements available to an agency only

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upon request. Some commenters
requested that insured depository
institutions and affiliates also be
permitted to make covered agreements
available to the appropriate agency
upon request, or that the agencies
further streamline the agency disclosure
obligations applicable to institutions
and affiliates. Commenters requested
that the agencies streamline the process
for determining what information
contained in a covered agreement may
be withheld from public disclosure,
such as by identifying categories of
information that could be withheld from
public disclosure without prior agency
review.
Commenters overwhelmingly
supported the proposed rule’s
provisions allowing NGEPs to use
Federal tax forms and other reports to
fulfill the reporting requirements of the
rule. Comments were mixed concerning
the proposed rule’s provisions
governing the reporting of specific
purpose funds received by a NGEP, with
some commenters supporting this
reporting method and others asserting
that the method was burdensome or not
authorized by the statute.
Commenters also supported the
provisions of the rule that provided that
a NGEP is not required to file an annual
report for any year in which NGEP did
not receive funds under a covered
agreement. Several commenters
requested that the agencies provide a
similar exemption from the annual
reporting requirements to insured
depository institutions and affiliates.
III. Detailed Explanation of Final Rule
This section provides a more detailed
discussion of the comments received on
the proposal, the changes made by the
agencies in response to comments, and
the other provisions of the final rule. As
with the proposal, the final rule uses the
term ‘‘insured depository institution,’’
rather than ‘‘bank’’ or ‘‘savings
associations,’’ to facilitate compliance
and consistency among the agencies’
rules. As discussed below, the rule
identifies the specific agency or
agencies with whom a covered
agreement and its related annual reports
should be filed, and the agency or
agencies that would be considered a
relevant supervisory agency for a
covered agreement.
The final rule and the remaining
portions of this preamble also refer to a
‘‘nongovernmental’’ entity or person’’ as
a ‘‘NGEP.’’ The final rule uses this term,
rather than the term ‘‘person,’’ to avoid
confusion over the scope of the rule.
The term ‘‘nongovernmental entity or
person’’ or ‘‘NGEP’’ is defined in section
.11 of the rule generally to include

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any company or individual other than
the Federal government; a state, local or
tribal government; an insured
depository institution or affiliate; or a
representative of any of the foregoing.
The SUPPLEMENTARY INFORMATION
accompanying the proposed rule
included examples illustrating the scope
and application of the proposed rule.
Commenters generally favored having
examples that provide additional
guidance concerning the rule’s
provisions. Some commenters requested
that the agencies clarify or amend
certain examples, and commenters were
divided on whether the agencies should
incorporate all examples into the final
rule.
The final rule includes examples
illustrating some of the key provisions
of the rule, including the definition of
a ‘‘CRA communication,’’ the scope of
the exemptions for qualifying loan
agreements, and the information
required to be provided in the annual
report of an NGEP. The examples
included in the rule are part of the rule
and compliance with an example, to the
extent applicable, constitutes
compliance with the rule. (See section
.1(d).) The examples included in
the rule illustrate only the scope and
application of the particular topic
addressed by the example and do not
illustrate any other topic or issue that
may arise under the rule.
The agencies also have included in
this preamble examples that illustrate
other provisions of the rule. The
agencies have not included these other
examples in the final rule because fewer
questions appear to arise in connection
with these provisions and, thus,
including the examples in the rule
could make the rule longer without
providing a commensurate level of
benefit. The agencies, however, have
included these examples in the
preamble to illustrate the manner in
which the agencies expect to interpret
the rule in these areas. To further assist
members of the public in complying
with the rule, the agencies have
included in this preamble a chart that
summarizes the disclosure and
reporting requirements of the rule. This
chart, which is not part of the rule, is
located at Part IX of this preamble.
By operation of law, the regulations of
the agencies implementing section 48
shall take effect on the first day of the
calendar quarter which begins on or
after the date on which the regulations
are published in final form, which is
April 1, 2001.4
The agencies requested comment on
whether the rule should remain, as
4 12

U.S.C. 4802(b).

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proposed, in a separate part of each
agency’s regulations or be incorporated
into the agencies’ existing CRA
Regulations. Commenters generally
favored keeping the rule separate from
the CRA Regulations. In addition,
section 48 amended the FDI Act, and
not the CRA, and is independent of the
CRA and the CRA Regulations.
Accordingly, the final rule is
promulgated as a new part to each
agency’s regulations. Section
.1(c)
of the final rule provides that nothing in
the final rule affects in any way the
CRA, the agencies’ CRA Regulations, or
any agency’s interpretations or
administration of the CRA or the CRA
Regulations.
The following description applies to
the rule of each agency. Since each
agency’s rule will be codified at a
different part of the Code of Federal
Regulations, the following description
references the rule using only the
section numbers used in the rule.
A. Definition of Covered Agreement
Section
.2 of the rule defines
which agreements are covered by the
rule and includes the Act’s exemptions
from the definition of a covered
agreement for qualified loan agreements.
1. Covered Agreements
The proposed rule defined a covered
agreement as any contract, arrangement,
or understanding that meets all of the
following four criteria:
• The agreement is in writing;
• The agreement is made pursuant to,
or in connection with, the fulfillment of
the CRA, as defined by the rule (see
section .4);
• The parties to the agreement
include (1) one or more insured
depository institutions or affiliates of an
insured depository institution, and (2)
one or more NGEPs; and
• The agreement provides for the
insured depository institution or
affiliate to provide cash payments,
grants, or other consideration (except
loans) having an aggregate value of more
than $10,000 in any calendar year, or to
make loans in an aggregate principal
amount of more than $50,000 in any
calendar year.
The final rule retains these four
criteria for coverage. The final rule also
provides that, in order for an agreement
to be covered, one of the NGEPs that is
a party to the agreement must have had
a CRA communication (as defined in
section .3) prior to the time the parties
entered into the agreement. As noted
above, section 48 specifically exempts
from coverage any agreement entered
into by an institution or affiliate with a
NGEP who has not had a CRA

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communication. The agencies believe
that structuring this statutory exemption
as an affirmative requirement for
coverage makes the rule easier to
understand without affecting the scope
of the rule. The scope of the exemption
for agreements with a NGEP that has not
had a CRA communication is discussed
in detail below.
A covered agreement may be with an
insured depository institution or any
affiliate of an insured depository
institution, including a bank holding
company or a nonbank affiliate. Section
48 and the rule apply only to written
contracts, arrangements or
understandings, and do not apply to
oral contracts or agreements.
Some commenters requested that the
agencies provide additional guidance
concerning when written
communications between a NGEP and
an insured depository institution or
affiliate would constitute a ‘‘contract,
arrangement or understanding.’’ In
addition, some commenters asserted
that the rule should apply only to
legally enforceable contracts, while
comments were mixed on whether the
rule should apply to unilateral lending
or investment pledges made by an
insured depository institution or
affiliate in response to previous actions
by a NGEP.
As noted above, section 48 by its
terms applies not only to written
contracts, but also to written
arrangements and written
understandings that are entered into by
an insured depository institution or
affiliate with a NGEP and that otherwise
meet the statutory criteria to be a
covered agreement. For this reason, the
agencies have not limited the final rule
to legally binding written contracts.
Other written agreements that do not
constitute a legally binding contract, but
that reflect a mutual arrangement or
understanding between an insured
depository institution or affiliate and a
NGEP would be a covered agreement if
they meet the other criteria set forth in
the rule.5 A written arrangement or
understanding may be reflected by one
or more documents.
The agencies have included three
examples in the final rule that illustrate
when a written arrangement or
understanding would and would not
exist. (See section
.2(b).) Example 1
involves a NGEP that meets with an
insured depository institution and states
that the institution needs to make more
community development investments in
the NGEP’s community. The NGEP and
institution, however, do not reach an
agreement concerning the community
5 12

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
development investments the institution
should make in the community, and the
parties do not reach any mutual
arrangement or understanding. The
institution later unilaterally issues a
press release that announces the
institution has established a general goal
of making $100 million of community
grants in low- and moderate-income
neighborhoods in the institution’s
community over the next 5 years and
does not identify the NGEP. Since there
was no agreement or understanding
between the institution and NGEP, and
the institution acted unilaterally to
establish its investment goal, Example 1
states that the press release issued by
the institution is not a written
arrangement or understanding.
In Example 2, a NGEP meets with an
insured depository institution and states
that the institution needs to offer new
loan programs in the NGEP’s
community. The NGEP and the insured
depository institution reach a mutual
understanding that the institution will
provide $10 million in additional loans
in low- and moderate-income
neighborhoods in the NGEP’s
community. The insured depository
institution tells the NGEP that it will
issue a press release announcing the
program and subsequently issues a press
release that incorporates the key terms
of the mutual understanding between
the institution and NGEP. The press
release reflects the mutual arrangement
or understanding between the NGEP
and the insured depository institution
and is, therefore, a written arrangement
or understanding.
In Example 3, a NGEP sends a letter
to an insured depository institution
requesting that the institution provide a
$15,000 grant to the NGEP. The insured
depository institution responds in
writing and agrees to provide the grant
to the NGEP in connection with its
annual grant program. Since the
exchange of letters reflects an
understanding or arrangement between
the insured depository institution and
the NGEP, the agreement would be a
covered agreement if it meets the other
criteria set forth in the rule including,
in particular, the requirement that the
NGEP have had a CRA communication.
These examples are not exclusive and
other written exchanges may or may not
constitute a written arrangement or
understanding depending on the facts
and circumstances of the particular
situation.
2. Loan Agreements That Are Not
Covered Agreements
Section 48(e)(1)(B) specifically
exempts certain types of loan
agreements from coverage even if they

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otherwise meet the definition of a
covered agreement. Section
.2(c) of
the final rule implements these
exemptions.
a. Mortgage Loans. The first statutory
exemption is for any individual
mortgage loan. Under this exemption,
any mortgage loan made by an insured
depository institution or affiliate to any
individual or entity is exempt from the
requirements of section 48. This
exemption is available for any mortgage
loan, regardless of the identity of the
borrower or the rate charged on the
loan.
The agencies requested comment on
what types of loans would qualify as a
‘‘mortgage loan’’ for purposes of this
statutory exemption. A number of
commenters addressed this issue, with
the vast majority stating that the
exemption should be available for any
loan that is secured by real estate. A few
commenters asserted that the agencies
should define a mortgage loan to
include any loan the proceeds of which
are used for real estate-related purposes,
even if the loan was not secured by real
estate. Some commenters also
contended that investments in
mortgage-backed securities or other
types of real estate investments should
be exempt under this provision.
The final rule provides that this
statutory exemption is available to any
individual loan that is secured by real
estate. The real estate securing the loan
may be used for residential or
commercial purposes, and the loan does
not need to have been obtained for
purposes of purchasing or improving
the real estate. Since section 48
specifically provides that this
exemption is available only to mortgage
loans, an agreement to make a realestate related investment (including an
investment in mortgage-backed
securities) or to make a loan that is not
secured by real estate is not exempt
under this provision, although such
agreements may be exempt from
coverage under other provisions of the
rule.
Section
.2(d) of the final rule
provides examples illustrating the rule’s
exemptions for qualifying loan
agreements. The first example (Example
1) illustrates the exemption for any
individual mortgage loan. In this
example, an insured depository
institution provides an organization
with a $1 million loan pursuant to a
written agreement. The loan is secured
by real estate that is owned or to-beacquired by the organization.
Accordingly, Example 1 states that the
agreement is exempt from coverage
regardless of the interest rate on the loan

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or whether the loan was made for
purposes of re-lending.
b. Specific Contracts or Commitments
for Qualifying Loans. The statute also
exempts from coverage ‘‘any specific
contract or commitment for a loan or
extension of credit to individuals,
businesses, farms, or other entities, if
the funds are loaned at rates [that are]
not substantially below market rates and
if the purpose of the loan or extension
of credit does not include any relending of the borrowed funds to other
parties.‘‘ 6 Under the statute, this
exemption is available for any type of
loan to any individual or entity if the
loan meets the market rate and relending restrictions of the statute.
The agencies requested comment on
whether this exemption covers only a
specific commitment to make a
qualifying loan or extension of credit
(such as a loan commitment typically
made in the course of providing a line
of credit to a small business), or also
would provide an exemption for a
commitment to make multiple loans
that meet the Act’s restrictions. The
agencies also requested comment on
whether the agencies should define
when a loan is made at ‘‘substantially
below market rates’’ or for purposes of
re-lending. Most commenters that
addressed these issues requested that
the agencies provide additional
guidance concerning the phrases
‘‘substantially below market rates’’ and
‘‘for purposes of re-lending,’’ and some
of these commenters suggested
definitions for these phrases. Comments
were mixed on whether the exemption
was available only to a specific contract
or commitment for an individual loan or
if it also would cover a general
commitment by an insured depository
institution to make multiple loans over
a period of time.
After carefully reviewing the language
and purposes of section 48 and the
comments received, the agencies have
determined that the exemption in
section
.2(c)(2) is available only
with respect to a specific contract or
commitment by an insured depository
institution to make a single loan or
extension of credit that meets the Act’s
market-rate and re-lending restrictions,
and does not cover an agreement or
commitment by an institution or
affiliate to make multiple loans or
extensions of credit. The agencies also
have amended the rule to provide that
a loan is made for ‘‘purposes of relending’’ only if the loan application or
other loan documents indicate that the
borrower intends or is authorized to use
the borrowed funds to make a loan or
6 12

U.S.C. 1831y(e)(1)(B)(ii).

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extension of credit to one or more third
parties.
The final rule retains the statute’s
restriction that the loan or extension of
credit may not be made at a rate that is
substantially below market rates. In
determining whether a loan or extension
of credit is made at ‘‘substantially below
market rates,’’ an institution should
compare the rate charged on the loan or
extension of credit to the rate the
institution has or would charge a
comparable borrower (e.g., a NGEP with
similar financial resources and credit
history) on a comparable type of
transaction (e.g., a construction loan,
permanent financing, small business
loan, or unsecured consumer loan).
Since the rates charged on particular
types of loans vary over time and may
vary depending on the location of the
lender and borrower, the agencies have
not included in the rule a fixed formula
for determining whether a loan or
extension is made at ‘‘substantially
below market rates.’’
Examples 2, 3 and 4 in section
.2(c) of the rule illustrate the scope
and application of this exemption. In
Example 2, an insured depository
institution commits to provide a
$500,000 line of credit to a small
business pursuant to a written
agreement. The example provides that
the loan is made at a rate within the
range of rates offered by the institution
to other similarly situated small
businesses in the market and the loan
documentation does not indicate that
the borrower intends or is authorized to
re-lend the borrowed funds.
Accordingly, the example states that
this commitment for an individual loan
is exempt under section
.2(c)(2) of
the rule.
In Example 3, a small business
obtains a $75,000 small business loan,
documented in writing, from an insured
depository institution. The institution
offers its borrowers small business loans
that are guaranteed by the Small
Business Administration (SBA) and the
loan is made under this loan program.
The loan documentation does not
indicate that the borrower intends or is
authorized to re-lend the funds to any
third-party. Although the rate charged
by the institution on the loan is well
below that charged by the institution on
commercial loans, the rate is within the
range of rates that the institution would
charge a similarly situated small
business for a similar loan under the
institution’s SBA loan program.
Accordingly, the example states that the
loan is not made at substantially below
market rates and is exempt from
coverage under section
.2(c)(2) of
the rule.

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Example 4 involves a bank holding
company that enters into a written
agreement with a community
development organization. The
agreement provides for the insured
depository institutions owned by the
bank holding company to make $250
million in small business loans in their
communities over the next 5 years.
Since the agreement provides for the
institutions to make multiple loans, the
agreement is not a specific contract or
commitment for a loan or extension of
credit and, thus, is not exempt from
coverage under section
.2(c)(2) of
the rule. The example notes, however,
that each small business loan made
pursuant to this general commitment
would be exempt from coverage if the
loan separately meets market rate and
re-lending restrictions of the exemption.
To be entirely exempt from coverage
under section
.2(c)(1) or (2) of the
rule, an agreement must be exclusively
a loan, extension of credit or loan
commitment that meets the
requirements of the relevant exemption.
The rule provides, however, that if an
agreement includes a loan, extension of
credit or loan commitment that, if
documented separately, would meet the
rule’s requirements to be exempt and
also provides for the insured depository
institution or affiliate to provide other
funds or resources, the exempt loan,
extension of credit or loan commitment
may be excluded for purpose of
determining whether the agreement
meets the Act’s dollar thresholds or is
in fulfillment of the CRA. (See section
.2(e).)7
3. CRA Communication
Section 48(e)(1)(B)(iii) provides a
statutory exemption from the CRA
Sunshine provisions for ‘‘any agreement
entered into by an insured depository
institution or affiliate with a [NGEP]
who has not commented on, testified
about, or discussed with the institution,
or otherwise contacted the institution,
concerning the Community
Reinvestment Act of 1977.’’ This
exemption for agreements with persons
who have not had a CRA contact was
included in section
.2(b)(2) of the
proposed rule, which contained an
exemption that restated the statutory
language in section 48(e)(1)(B)(iii).
Section
.2(b)(2) also provided
examples of actions that would
constitute a CRA contact and other
7 The agencies note, however, that if the other
consideration would reduce the effective interest
rate paid on the loan or extension of credit to a rate
that is substantially below the market rate, the loan
or extension of credit would not itself be exempt
from coverage.

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examples of actions that would not be
considered a CRA contact.
The preamble invited comment on
this aspect of the proposal, including
comment on whether the agencies
should provide a more detailed
definition of the exemption and on
several alternative approaches to
defining CRA contact. Nearly all
commenters requested that the agencies
change the definition of CRA contact in
the proposed rule to explain the breadth
of the exemption, to provide additional
clarity regarding what constitutes a CRA
contact, or to exempt specifically certain
types of contacts. Many commenters
underscored the importance of a rule
that allowed persons to determine
before entering into an agreement
whether or not they have had a CRA
contact and qualify for the exemption.
While many commenters expressed
concern about various aspects of the
proposal on CRA contact, commenters
were divided on how to address these
concerns.
A significant number of commenters
argued that the agencies should define
a CRA contact to cover only providing
CRA-related comments or testimony to
an agency and discussions with an
insured depository institution or
affiliate about providing (or refraining
from providing) such comments or
testimony. There was also significant
support for an alternative that would
have excluded discussions with an
insured depository institution or
affiliate concerning whether particular
loans, services, investment or
community development activities are
generally eligible for consideration by
an agency under the CRA Regulations.
Others argued that only conversations
related specifically to the CRA
performance record of an institution
should be covered.
A significant number of commenters
advocated exempting contacts that are
incidental to ordinary business dealings,
which were perceived as outside the
intended scope of the statute. Others
advocated exempting certain types of
‘‘routine inquiries,’’ such as inquiries
about what an institution’s CRA rating
is or about the CRA statute or rule.
Some commenters, on the other hand,
supported a broad interpretation of CRA
contact that would cover general
discussions of the CRA. A small number
of commenters supported a broad
interpretation of CRA contact while also
advocating that the agencies narrow
other aspects of the definition of a
covered agreement, such as the
definition of fulfillment.
In addition to these issues regarding
the scope of the exemption, many
commenters urged the agencies to

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address other issues raised by the CRA
contact definition. In particular, a
number of commenters suggested that
the agencies indicate who at the
relevant institution or affiliate and who
at the NGEP must have a CRA contact
or have knowledge that a CRA contact
has occurred, or require a temporal or
other connection between the CRA
contact and negotiation of a CRA
agreement.
As explained more fully below, the
final rule incorporates changes in three
areas to address comments regarding the
definition of CRA contact. In summary,
in order to identify contacts that have a
relationship to an agreement and to
avoid imposing substantial burden on
parties entitled to claim the exemption,
the final rule adopts a definition of
‘‘CRA communication’’ that has three
parts. First, the rule adds clarity
regarding the type of communication
that is considered to concern the CRA;
second, the rule provides that the
institution and the NGEP must have
knowledge of the CRA communication
and specifies who must have that
knowledge; third, the rule recognizes a
temporal relationship between the
communication and the agreement.
In addition, the final rule relocates
and rewords the CRA communication
provision from an exemption for NGEPs
that have not had a CRA communication
to a requirement in the definition of a
covered agreement that the agreement
be with a NGEP that has had a CRA
communication. The final rule also
refers to a CRA contact as a ‘‘CRA
communication.’’ This relocation and
rewording makes the final rule easier to
read and understand and does not have
any substantive effect.
a. Definition of CRA Communication.
In considering the scope of the
exemption in section 48(e)(1)(B)(iii) for
NGEPs that have not had a contact
concerning the CRA, the agencies have
carefully considered the words of the
statute and the purpose of the
exemption as well as the comments
received by the agencies. The
Conference Report for the Act indicates
that this exemption was designed to
provide an exemption from the
requirements of the CRA Sunshine
provisions for a wide range of
organizations that solicit funds without
regard to the CRA. The Conference
Report lists as examples of the types of
groups that might qualify for this
exemption civil rights groups,
community groups providing housing or
other services in low-income
neighborhoods, veterans groups, and
community theater groups.8
8 See

H.R. Conf. Rep. No. 106–434 at 179 (1999).

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The final rule clarifies the definition
of a CRA communication by adding
specificity that was drawn from the
examples published in the original
proposal and in the preamble to the
original proposal. Under the final rule,
a CRA communication is defined to
include any of the following five types
of contacts:
• Any written or oral comment or
testimony provided to a Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution
or any CRA affiliate;9
• Any written comment submitted to
the insured depository institution that
discusses the adequacy of the
performance under the CRA of the
institution and that must be included in
the institution’s CRA public file;
• Any discussion or other contact
with an insured depository institution
or any affiliate about providing or
refraining from providing written or oral
comments or testimony to any Federal
banking agency concerning the
adequacy of the performance under the
CRA of the insured depository
institution, any affiliated insured
depository institution or any CRA
affiliate;
• Any discussion or other contact
with an insured depository institution
or any affiliate about providing or
refraining from providing written
comments that concern the adequacy of
the institution’s CRA performance and
that must be included in the
institution’s CRA public file; and
• Any discussion or other contact
with an insured depository institution
or affiliate about the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate.
The first four types of contacts
include contacts with a Federal banking
agency or with an institution or affiliate
about contacting a Federal banking
agency, as well as written
communications that, under existing
rules, must be retained by an institution
in its CRA public file. The final rule
includes a fifth type of contact that
relates to any discussion or other
contact with an institution or affiliate
about the adequacy of the institution’s
performance under the CRA.
In adopting this fifth type of contact,
the agencies have carefully considered
9 As discussed more fully below, a ‘‘CRA
affiliate’’ is an affiliate of an insured depository
institution whose activities are considered in
evaluating the CRA performance of the institution.
Accordingly, it is viewed as part of the insured
depository institution for these purposes.

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the suggestion of a number of
commenters that CRA communications
be limited to the first four types of
agency contacts or to discussions with
an institution regarding agency contacts.
The agencies note that the exemption in
section 48(e) for a NGEP that has not
had a CRA communication, by its terms,
is available only if the NGEP has not
‘‘discussed with the institution, or
otherwise contacted the institution,
concerning the CRA.’’ By its terms, the
exemption appears to contemplate that,
in order to qualify for the exemption,
the NGEP not have had discussions or
contacts ‘‘concerning the CRA.’’
Contacts ‘‘concerning the CRA’’ would
cover discussions that are not limited to
discussions regarding providing
testimony or comments to an agency.
In order to explain what type of
contact is covered by the words
‘‘concerning the CRA,’’ the final rule
includes the fifth category for
discussions or other contacts about the
‘‘adequacy’’ of the institution’s
performance under the CRA. This
reference was included to indicate that
a contact that is related to how well or
how poorly an institution is fulfilling its
obligation to help meet the credit needs
of the institution’s community as
evaluated under the CRA is one of the
types of contacts that would be most
likely to influence a CRA agreement,
and, consequently, would be a CRA
communication that disqualifies a NGEP
from claiming the exemption in section
48(e)(1)(B)(iii).
To help illustrate when a discussion
or contact relates to the adequacy of an
institution’s CRA performance, the final
rule contains several examples of
contacts that would be covered and
several examples of contacts that would
be exempt.10 These examples address
only the content of a CRA
communication and assume that all
other requirements regarding the
communication (and agreement) are
otherwise satisfied.
Three examples address contacts that
are CRA communications and,
consequently, would cause a written
agreement involving the NGEP to be a
covered agreement. In the first example,
a NGEP files a written comment with a
Federal banking agency in response to a
general agency request for comments on
an application to open a new branch.
10 Some commenters argued that the examples in
the proposed rule were helpful in illustrating the
scope of the CRA contact exemption and requested
additional examples. Other commenters argued that
the examples would broadly discourage certain
kinds of contacts and should be eliminated. Section
.1(d) of the final rule states that the examples
included in the rule are not exclusive, and the
agencies believe that, on this basis, the examples
are a useful illustration of the scope of the rule.

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The comment filed by the NGEP states
that the applicant insured depository
institution has successfully addressed
the credit needs of its community. In the
second example, a NGEP states to an
executive officer of an insured
depository institution that the
institution must improve its CRA
performance. Both of these examples
illustrate a contact in which the CRA
performance record of the institution is
specifically mentioned.
The statute does not require that a
specific reference to the Community
Reinvestment Act of 1977 be made in
order to represent a CRA
communication, and, in fact, a number
of commenters indicated that
discussions leading to agreements often
do not include a specific reference to
the CRA because the context of the
negotiation makes clear that the
agreement is intended to address CRA
performance. To illustrate this, an
example of a CRA communication has
been included that involves an oral
discussion in which the NGEP claims
that the institution needs to make more
mortgage loans in low- and moderateincome neighborhoods. The connection
with the CRA is indicated by the
reference to the action requested, which
involves activities that are often the
focus of CRA performance evaluations,
along with a statement indicating an
obligation that the institution take this
action, an obligation that is considered
to arise out of CRA evaluations.
The final rule also includes several
examples of contacts that are not
considered to be CRA communications.
One example involves a fund-raising
letter sent by a NGEP to an insured
depository institution and to other
businesses in the community
encouraging all businesses in the
community to meet their obligation to
make the community a better place to
live by supporting the fund-raising
efforts of the NGEP. This example
illustrates that a fund-raising letter that
is widely distributed in a way that does
not imply an obligation under the CRA
is not itself considered to be a CRA
communication. Similarly, a contact by
a NGEP with an insured depository
institution to simply determine what
rating the institution received at its most
recent CRA performance examination
would not, by itself, constitute a
discussion concerning the adequacy of
the institution’s performance.
A number of commenters advocated
clarifying that the definition of CRA
communication would not include
marketing efforts for products or
services that might relate to CRA
activities. The rule contains two
examples that illustrate that general

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marketing efforts and general
discussions regarding the eligibility of
products and services for CRA
consideration are not considered to be
CRA communications unless the
communication includes a discussion
concerning the adequacy of the
particular institution’s CRA
performance.
One example involves a discussion by
a NGEP with an insured depository
institution regarding whether particular
loans, services, investments, community
development activities or other
activities are generally eligible for
consideration by a Federal banking
agency under the CRA, without any
discussion of the adequacy of the CRA
performance of the insured depository
institution or affiliate.
Another example illustrates a
situation in which the NGEP combines
a general marketing discussion with a
discussion of the eligibility of particular
loans for consideration under the CRA,
but without any discussion of the
adequacy of the CRA performance
record of the institution or obligation of
the institution to take any action related
to the CRA. In this example, the NGEP
engages in the sale or purchase of loans
in the secondary market and sends a
general offering circular to financial
institutions offering to sell or purchase
a portfolio of loans. The NGEP then
meets with the institution and discusses
whether specific loans are generally
eligible for consideration under the
CRA, including which loans are made in
the institution’s community, without
discussing the CRA performance or
obligations of the institution. The
agencies believe that purchases and
sales of loans in the secondary market
are typically done in the manner
illustrated in the example and,
therefore, generally do not involve a
CRA communication.
The final rule also retains two
examples contained in the proposed
rule regarding other matters. One
illustrates that statements made at a
widely attended conference on a general
topic (but not a meeting or hearing
regarding a specific institution, affiliate
or transaction) are not considered to be
CRA communications. Statements made
at widely attended conferences on
general topics are not likely to be
effective in influencing CRA agreements
and cannot be effectively monitored.
The other example illustrates that
statements made in response to a direct
request to the specific NGEP from a
Federal banking agency (but not a
general request for comment in
connection with an application for
approval of a transaction or an
examination) are not considered to be

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CRA communications. Some
commenters suggested that this example
be deleted because it suggested a
preference for statements made by
NGEPs that have been directly contacted
by a banking agency over NGEPs that
provide information to the agency in the
course of a general solicitation of public
comment. The final rule retains the
example because the agencies believe
that it is important to the agencies’
ability to meet their statutory
obligations under the CRA that the
agencies obtain information regarding
the credit needs of the community from
sources that include NGEPs that may
enter into agreements with insured
depository institutions. In these
circumstances, the contact results due to
an action by the agency, not an attempt
by the NGEP to influence the agency or
obtain a CRA agreement. Imposing the
rule’s requirements on the NGEP in this
context might discourage cooperation
between NGEPs and the agencies and
impede the ability of the agencies to
obtain useful information regarding the
banking and credit needs of
communities.
b. Knowledge of CRA
Communications. To define when a
NGEP has had a CRA communication
with an insured depository institution
for purposes of the exemption provided
in section 48(e)(1)(B)(iii), it is essential
to know when a communication is
‘‘with the [insured depository]
institution’’ and when it is by a NGEP.
In other words, it is essential to know
who speaks for the institution and for
the NGEP. The statute is silent on this
point.
A number of commenters suggested
that the rule apply only to CRA
communications that occur with
designated officers of the insured
depository institution or affiliate, such
as the CRA compliance officer or
persons that negotiate covered
agreements. In circumstances where the
individuals involved in or responsible
for negotiating agreements do not know
that a CRA communication has
occurred, commenters claimed that it
would be difficult, if not impossible, for
institutions and NGEPs to know
whether they properly claimed the
exemption or were, in fact, in violation
of the CRA Sunshine provisions.
For example, casual conversations
between a bank teller and a customer
who is also an employee of a business
consulting firm might involve CRA
activities of the bank and meet a broad
reading of the proposed definition of
CRA contact. Commenters were
concerned that, if so, the contact could
cause a written agreement between the
institution and business consulting firm

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to be a covered agreement even though
the conversation had no influence over
the agreement because officials of the
institution and of the NGEP responsible
for negotiating the agreement were not
aware of the conversation.
To address this, a number of
commenters urged the agencies to
include a requirement that officers of
the institution and of the NGEP
responsible for negotiating agreements
have knowledge of the CRA
communication. Others suggested that
contacts include only communications
with executive officers and the CRA
compliance officer of insured
institutions and with senior officers of
NGEPs.
As noted above, the CRA Sunshine
provisions do not indicate who a NGEP
must contact at an insured depository
institution or affiliate in order to have
been considered to have made a CRA
contact for purposes of the exemption in
section 48(e). The statute is also silent
on who speaks for a NGEP that is an
organization or company, rather than an
individual.
The agencies believe that a CRA
communication can only have an effect
on an institution’s willingness to enter
into an agreement or on the terms of an
agreement if the communication is with
or is known to individuals at the
organization who are either involved in
negotiating the agreement or have
authority or responsibility for such
agreements. These are the individuals
that speak for the institution and
represent the institution in its decision
making. Moreover, these are the
individuals that are the most likely to
have communications regarding the
CRA that could lead to or affect the
types of agreements that the CRA
Sunshine provisions are intended to
cover.
There is no evidence in the terms of
the CRA Sunshine provisions or in the
legislative history for those provisions
that Congress intended to deny the
exemption based on CRA contacts that
are not known to the individuals that
are involved with or have the authority
to influence the negotiation of CRA
agreements. In fact, the example referred
to in the legislative history of the type
of organization the exemption was
designed to protect is a large youth
organization with national
membership.11 Given the size, scope
and nature of the organization, it is
impossible to believe that members of
that organization have not—at some
time and in some capacity—had
contacts with insured depository
11 See H.R. Conf. Rep. No. 106–434 at 179 (1999);
145 Cong. Rec. S13887 (daily ed. Nov. 4, 1999).

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institutions regarding the CRA. Without
a requirement in the rule that attributes
CRA communications only to members
of the organization that have authority
or responsibility for negotiating
agreements on behalf of that
organization, this organization
identified in the legislative history
would not be able to claim the
exemption.
Moreover, there would be significant
burden imposed on both banking
organizations and NGEPs if
organizations and NGEPs are not
entitled to rely on the exemption in
section 48(e)(1)(B)(iii) because of a CRA
communication between any employee
at the organization with any member of
a NGEP. To assure that no unauthorized
contacts occur and that agreements are
properly exempt under section
48(e)(1)(B)(iii), a banking organization
and NGEP would be required to monitor
all contacts by all employees and
members of the organization and NGEP.
Even in organizations of only moderate
size, this could entail tracking contacts
by thousands of employees at a single
banking organization. The burden from
this monitoring effort is likely to be
overwhelming with few benefits
because few if any CRA
communications that result in CRA
agreements are likely to occur among
individuals at the organization other
than those individuals with authority
and responsibility for these agreements.
For these reasons, the final rule
modifies the proposed rule to require
that, in order to be a CRA
communication that disqualifies a NGEP
from the exemption in section
48(e)(1)(B)(iii), specified individuals at
the institution or affiliate and at the
NGEP must have knowledge of the
communication.
Under the final rule, an insured
depository institution or affiliate is
considered to have knowledge of a CRA
communication with a NGEP if any of
the following representatives of the
institution or affiliate have knowledge
of the contact with the NGEP:
• An employee who approves,
directs, authorizes or negotiates the
agreement with the NGEP;
• An employee who is designated
with responsibility for compliance with
the CRA and who knows that the
institution or any affiliate of the
institution is negotiating, intends to
negotiate, or has been informed by the
NGEP that it expects to request that the
institution or affiliate negotiate an
agreement with the NGEP; or
• An executive officer of the
institution or affiliate and who knows
that the institution or any affiliate of the
institution is negotiating, intends to

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negotiate, or has been informed by the
NGEP that it expects to request that the
institution or affiliate negotiate an
agreement with the NGEP.
In addition to contacts between an
institution or affiliate and a NGEP, there
are several types of CRA contacts that
arise in the agency review process or the
CRA examination process or that
involve records that the institution is
responsible for maintaining. These
contacts are of such importance that the
institution is deemed by the final rule
to have knowledge of the
communication. In particular, an
institution or affiliate is deemed under
the final rule to have knowledge of any
testimony provided to a Federal banking
agency at a public meeting or hearing
and of any written comment submitted
to the insured depository institution
that must be and has been included in
the institution’s CRA public file. An
institution or affiliate is also considered
under the final rule to have knowledge
of any comment (written or oral) that
has been made by a NGEP to a Federal
banking agency if the comment is
conveyed in writing by the agency to the
insured depository institution or
affiliate.
The rule establishes a parallel
knowledge requirement for a NGEP. A
NGEP is considered to have knowledge
of a CRA communication if any of the
following have knowledge of the
contact:
• A director, employee or member of
the NGEP who approves, directs,
authorizes or negotiates the agreement
with the insured depository institution
of affiliate;
• A person who functions as an
executive officer of the NGEP and who
knows that the NGEP is negotiating or
intends to negotiate an agreement with
the insured depository institution or
affiliate; or
• Where the NGEP is an individual,
the individual.
For purposes of this requirement, an
executive officer of an institution,
affiliate or NGEP is defined as provided
in Regulation O to include any person
that participates or has authority to
participate in the major policymaking
functions of the institution, affiliate or
NGEP, regardless of the person’s title
(see 12 CFR 215.2(e)). In addition,
persons who serve as counsel to or agent
for an insured depository institution or
NGEP are considered to be acting for the
insured depository institution or NGEP
for purposes of receiving written
comments or testimony from an agency.
Under the final rule, the designated
individuals are not required personally
to have had the CRA communication.
Instead, a CRA communication is

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covered if the communication involved
or is known to one of the designated
individuals. The individuals identified
in the rule at the insured depository
institution or affiliate and at the NGEP
are the individuals who either are
involved in or are responsible for CRA
agreements. A CRA communication
with an employee of an insured
depository institution, affiliate or NGEP
that is not known to the individuals that
negotiate an agreement or to a person
with authority to intervene in the
negotiation of an agreement is unlikely
to influence the agreement in any way.
The knowledge requirement also
significantly reduces the burden on
insured depository institutions,
affiliates and NGEPs to monitor contacts
of employees or members that play no
role or have no influence in the
negotiations or decisions regarding
agreements.
c. Timing of CRA Communications. A
majority of commenters argued that the
final rules should require a temporal
relationship between the CRA
communication and the agreement.
These commenters contended that a
communication that occurs long before
or anytime after an agreement has been
entered into does not influence the
terms of an agreement or encourage an
institution to enter into an agreement.
Consequently, commenters argued that
taking account of CRA communications
that are distant in time from the date of
an agreement would be contrary to the
purpose of the exemption granted in
section 48(e)(1)(B)(iii), which they
argued was to exempt any agreement
with an NGEP that has not attempted to
use the CRA to negotiate the agreement.
These commenters argued that only
CRA communications that occur during
some period prior to the date of the
agreement be considered to be CRA
contacts. Commenters suggested periods
that varied from 30 days to 2 years prior
to the agreement, with some arguing
that only contacts that occur during the
public comment period for an agency’s
review of a transaction or a CRA
examination be considered.
Many commenters also contended
that failure to adopt a temporal
connection between a CRA
communication and a covered
agreement would forever disqualify a
NGEP for the exemption based on one
CRA communication, regardless of
when it occurred, its influence on a
written agreement or how circumstances
may have changed. They argued that
this would significantly chill free
speech and the right to provide
comments to a Federal agency.
On the other hand, several
commenters argued that section

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48(e)(1)(B)(iii) by its terms does not
provide any limitation on the timing of
a CRA communication, and that the
exemption is available only to a NGEP
that has not had a CRA communication
with an agency or insured depository
institution at any time. These
commenters believed that the agencies
have no authority to adopt a temporal
requirement.
The agencies have taken particular
care in considering the views presented
by commenters on this matter. A
purpose of the CRA Sunshine
provisions is to provide public
disclosure of agreements that are in
fulfillment of the CRA in order to allow
the public and Congress to monitor how
resources paid under these agreements
are used.12 The exemption in section
48(e)(1)(B)(iii) was included in order to
provide relief from the reporting and
disclosure provisions for agreements
with NGEPs that have not had a
discussion concerning the CRA. Thus,
the agencies believe that the purposes of
the exemption and of the CRA Sunshine
provisions generally assume a
connection between the CRA
communication and the covered
agreement.
As a practical matter, in the case of
agreements that are intended to be
covered by the CRA Sunshine
provisions, CRA communications
normally occur during the period in
which the agreement is discussed or
negotiated, which is a relatively short
period immediately before the
agreement is reached. Indeed, it is
during this negotiating period that
communications regarding the CRA
have the most effect on whether a CRA
agreement will be reached and on what
will be the purpose and the terms of the
agreement.
This view was supported by
commenters representing insured
depository institutions as well as
commenters representing NGEPs, most
of whom indicated that CRA
communications occurred regularly
during the negotiation period for CRA
agreements. This view is also consistent
with one of the purposes of the CRA
Sunshine provisions, which was to
allow monitoring of agreements that
result from contacts concerning the
CRA.
The exemption provided in section
48(e)(1)(B)(iii) would, over time, become
meaningless if the exemption is lost
because of statements concerning the
CRA that are made long before or after
an agreement has been reached. Without
a temporal relationship, all persons that
12 See, e.g., 145 Cong. Rec. S13877–78 (daily ed.
Nov. 4, 1999).

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potentially may have agreements with
insured depository institutions or their
affiliates regarding activities that receive
favorable consideration under the CRA
would likely feel compelled to maintain
records that allow them to determine
whether a CRA contact had ever been
made by any person in the organization
in order to ensure that the NGEP is in
compliance with the exemption and the
CRA Sunshine provisions. This would
represent a significant recordkeeping
burden on persons, including
businesses, community organizations
and individuals, that the exemption was
intended to benefit. For many of these
organizations, this would mean tracking
and reviewing contacts from numerous
employees or members on a continuous
and long-term basis.
This heavy burden is inconsistent
with the purpose of the exemption. It is
also inconsistent with the directive in
the CRA Sunshine provision that the
agencies prescribe regulations designed
to ensure and monitor compliance with
the CRA Sunshine provisions without
imposing an undue burden on the
parties.
The agencies believe that recognizing
a temporal relationship is an effective
and objective method for identifying
CRA communications that are most
likely to have influenced the shape or
the existence of an agreement.
Conversely, by not covering
communications made at a time that is
distant from or after the agreement, the
final rule substantially reduces the
potential that communications that are
unrelated to an agreement will be
covered without excluding
communications that have the most
direct effect on the agreement.
Moreover, a temporal relationship
focuses on the fact that in nearly all, if
not all, cases CRA communications are
made during the period in which the
potential for an agreement is discussed
and the agreement is negotiated. Thus,
a temporal relationship supports the
purpose of the CRA Sunshine
provisions, including the exemption in
section 48(e)(1)(B)(iii), of identifying
and exempting NGEPs that have not
made CRA communications in an effort
to obtain or negotiate a CRA agreement.
For these reasons, the final rule
provides a time frame designed to
recognize the connection between the
communication and the agreement. To
be deemed not to have had a CRA
communication under section
48(e)(1)(B)(iii), a NGEP must not have
had a CRA communication within 3
years prior to entering into the
agreement in the case of oral or written
communications with a Federal banking
agency. The NGEP also must not have

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had within the 3 years prior to the
agreement any written CRA
communication with the relevant
insured depository institution or any of
its affiliates. In addition, the NGEP must
not have had within the 3 years prior to
the agreement any oral communication
with the relevant insured depository
institution or any of its affiliates about
providing (or refraining from providing)
comments or testimony to a Federal
banking agency or comments to the
institution’s CRA public file where such
communications occur in connection
with a request to, or agreement by, the
institution or affiliate to take any action
that is in fulfillment of the CRA. Finally,
the NGEP must not have had any other
oral CRA communication with the
relevant insured depository institution
or any of its affiliates concerning the
adequacy of the institution’s CRA
performance within one year prior to
entering into the agreement.
The agencies selected the three year
period for communications with an
agency, certain types of discussions
with an institution or affiliate about
providing testimony or comments to an
agency, and other written contacts with
an institution or affiliate based on
several considerations. In this regard,
existing regulations generally require an
insured depository institution to
maintain written comments in its CRA
public file for a period of three years.13
The agencies’ examination schedules
also generally call for the agencies to
evaluate the CRA performance of large
insured depository institutions every 3
years. Regulations issued by the Office
of Management and Budget and
applicable to Federal agencies also
discourage any collection of information
that would require regulated entities to
retain records for more than three
years.14
The agencies selected the one year
period for oral communications with an
insured depository or affiliate (other
than those relating to agency comments
or testimony under the circumstances
described above) based on several other
considerations. One consideration was
that many commenters suggested a time
period in the one year range. Also, a
shorter time period for oral
communications with an insured
depository institution or affiliate
recognizes that, as a practical matter,
oral communications are harder to
monitor and remember than written
communications. The agencies believe,
however, that insured depository
13 See 12 CFR 25.43(a)(1) (OCC); 12 CFR
228.43(a)(1) (Board); 12 CFR 345.43(a)(1) (FDIC);
and 12 CFR 563e.43(a)(1)(OTS).
14 See 5 CFR 1320.5(d)(2)(iv).

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institutions and affiliates are more likely
to document and remember oral
communications with a NGEP that
concern providing comments or
testimony to a Federal banking agency
where such communications also
involve a request to, or agreement by,
the institution or affiliate to take
additional actions in fulfillment of the
CRA. Accordingly, the agencies have
included such oral communications in
the three year period described above.
The agencies believe these time
frames provide reasonable assurance
that the communication and the
agreement are not connected and would
not impose an undue burden on the
parties. Moreover, commenters
indicated that where a CRA
communication occurs it is most often
occurs immediately before the parties
enter into an agreement. This contact
period is well within the time periods
adopted by the rule.
d. Additional Exemptions. A number
of commenters requested that the Board
exercise the authority granted by the
CRA Sunshine provisions to provide
exemptions for certain types of
agreements that may involve a CRA
communication.15 In particular,
commenters requested exemptions for
law firms and consulting firms, trade
associations, owners of real estate that
enter into sale or lease agreements with
banks, community development
financial institutions (CDFIs), and
participants in the secondary loan
market such as government-sponsored
enterprises.
The agencies believe that many of the
concerns raised by these commenters
are addressed by modifications made to
the fulfillment, CRA communication
and other sections of the rule. In
addition, a wide range of agreements
between insured depository institutions
and affiliates and law firms will not be
covered under the final rule because the
definition of ‘‘nongovernmental entity
or person’’ in the final rule excludes any
person or entity that is acting as a
representative of an insured depository
institution or affiliate. (See section
.11.) Accordingly, many agreements
between law firms and insured
depository institutions and affiliates
would not be considered covered
agreements because the agreement
provides that the law firm will be acting
as a representative of the institution or
affiliate.
In order for agreements to be covered
agreements, the NGEP must have had a
CRA communication with an insured
depository institution or affiliate that is
a party to the agreement or an affiliate
15 See

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2061

of a party to the agreement and the
agreement must be made pursuant to, or
in connection with, the fulfillment of
the CRA, as described below. The
agencies believe that most traditional
consulting agreements that insured
depository institutions and affiliates
enter into will not meet both of these
requirements.
CDFIs that are insured depository
institutions or affiliates of insured
depository institutions are not covered
by the CRA Sunshine provisions to the
extent that they have agreements with
other insured depository institutions or
affiliates. CDFIs that are not insured
depository institutions or affiliates
thereof are considered NGEPs under the
rule (see section
.11.), and there
appears to be no reason to provide a
special exemption for this class of
NGEPs. In light of the other changes and
clarifications incorporated in the final
rule, the Board also has not adopted any
additional exceptions. The Board retains
the authority to grant exemptions from
the CRA communication provisions if
experience in administering these
provisions demonstrate that such action
is appropriate.
4. Fulfillment of the CRA for Purposes
of the CRA Sunshine Provisions
The CRA Sunshine requirements of
section 48 of the FDI Act apply only to
covered agreements. To be a covered
agreement, section 48(e)(1) requires that
the agreement be made pursuant to, or
in connection with, ‘‘the fulfillment of
the Community Reinvestment Act.’’
Section 48(e)(2) defines ‘‘fulfillment’’
for this purpose as ‘‘a list of factors that
the appropriate Federal banking agency
determines have a material impact on
the agency’s decision’’ to approve or
disapprove an application for a deposit
facility under section 803 of the CRA or
to assign a rating to an insured
depository institution under section 807
of the CRA.
In defining fulfillment for purposes of
the CRA Sunshine provisions, the
agencies proposed the lending,
investment, and service activities
enumerated in the agencies’ CRA
Regulations as the list of factors that
have a material impact on the relevant
agency decisions.16 This list of factors
is:
(1) Home purchase, home
improvement, small business, small
farm, community development, and
consumer lending as described in the
lending test portion of the CRA
16 12 CFR 25.21–25.29 (OCC); 12 CFR 228.21–
228.29 (Board); 12 CFR 345.21–345.29 (FDIC); 12
CFR 563e.21–563e.29 (OTS).

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Regulations, including loan purchases,
loan commitments and letters of credit;
(2) Making investments, deposits, or
grants, or acquiring membership shares
that have as their primary purpose
community development, as described
in the investment test portion of the
CRA regulations;
(3) Delivering retail banking services,
as described in the service test portion
of the CRA Regulations;
(4) Providing community
development services as described in
the service test portion of the CRA
Regulations;
(5) For a wholesale or limited-purpose
insured depository institution,
community development lending,
qualified investments, and community
development services, as described in
the community development test
portion of the CRA Regulations for
wholesale or limited-purpose insured
depository institutions;
(6) For a small insured depository
institution, the lending and other
activities described in the small insured
depository institution performance
standard of the CRA Regulations; and
(7) For an insured depository
institution whose CRA performance is
evaluated on the basis of a strategic
plan, any element of that plan as
described in the strategic plan portion of
the CRA Regulations.
The proposed rule also provided that
an agreement was in fulfillment of the
CRA if it called for any NGEP to provide
or refrain from providing written or oral
comments or testimony to any Federal
banking agency concerning the
performance under the CRA of an
insured depository institution or CRA
affiliate that is a party to the agreement
or an affiliate of a party to the
agreement, or written comments that are
required to be included in the CRA
public file of any such insured
depository institution.17
Some commenters suggested that this
list of factors was too broad and covered
normal business arrangements that were
not intended to be covered by the CRA
Sunshine provisions. In particular,
commenters suggested that, by referring
to a list of factors that includes all home
mortgage loans wherever and to
whomever made, the proposal could
cover activities for which no CRA
performance credit would ordinarily be
granted to the lending institution.
17 The CRA Regulations generally require the
agencies to consider public comments and
comments included in an institution’s CRA public
file when evaluating an institution’s CRA
performance. In addition, the CRA Regulations
require the agencies to consider written or oral
comments submitted to the agency when acting on
applications for a deposit facility.

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A number of commenters also argued
that the agencies should only consider
an activity to be in fulfillment of CRA
if the activity is itself ‘‘material’’ to the
CRA performance rating of an insured
depository institution or to an
evaluation of its CRA performance in an
application for a deposit facility. These
commenters suggested, among other
options, that an agreement be
considered to be in fulfillment of CRA
only if it involved loans in more than
one of the assessment areas served by
the insured depository institution, loans
of significant amounts based on the size
of the institution, or activities that
would change the CRA rating of the
institution.
The CRA Sunshine statute specifically
defines ‘‘fulfillment’’ to mean ‘‘a list of
factors that the appropriate Federal
banking agency determines have a
material impact on the agency’s
decision’’ to act on an application for a
deposit facility or assign a CRA rating.
Under the terms of the statute, the
agency must identify factors that have a
material impact. The statute determines
the threshold of amounts of resources
that are sufficient to trigger the CRA
Sunshine requirements. For this reason,
the agencies did not adopt the
suggestion of commenters that the
agencies modify the list of factors to
include a measure of the size of an
activity.
The agencies recognize, on the other
hand, that the list of factors in the
original proposal was very broad and
could be read to cover activities that do
not implicate the purposes of the CRA
Sunshine provisions. To address this,
the final rule has been amended to
provide that performance of a listed
activity, other than providing or
refraining from providing CRA-related
comments to an agency or providing
comments that must be included in the
institution’s CRA public file, is
considered to be in fulfillment of the
CRA for purposes of the CRA Sunshine
provisions only if the activity is of the
type that is likely to receive favorable
consideration by a Federal banking
agency in evaluating the performance
under the CRA of the insured depository
institution that is a party or an affiliate
of a party to the agreement.
This is intended as a general test that
does not turn on whether or not the
activity in fact receives credit at the next
CRA performance examination or is
considered as part of a review of CRA
performance in a future application for
a deposit facility. Instead, an insured
depository institution or NGEP can
make this judgment on the basis of
general experience with the CRA
performance review process for the

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particular type of insured depository
institution. An insured depository
institution is likely to receive favorable
consideration for an activity if the
activity (1) received favorable
consideration at the institution’s
previous CRA performance
examination, (2) would address a
deficiency that an agency cited in the
most recent public evaluation of the
CRA performance of the institution, or
(3) is of the type that is favorably
considered by the agencies in reviewing
the CRA performance of comparable
insured depository institutions. For
example, under item (3), an activity
conducted by a small, wholesale or
limited-purpose insured depository
institution (as defined in the CRA
Regulations) would likely receive
favorable consideration if the agencies
favorably consider such an activity
when reviewing the CRA performance
of other small, wholesale or limitedpurpose institutions, respectively.
Home mortgage lending in low- and
moderate-income neighborhoods in an
insured depository institution’s
assessment area typically is considered
favorably. On the other hand, home
mortgage lending in middle- and upperincome neighborhoods, while taken into
account in determining the size and
scope of an institution’s lending
activities under the CRA Regulations,
generally does not receive favorable
consideration. However, the context in
which the insured depository institution
operates may dictate otherwise. For
example, this would be the case if the
institution operates only in middle- and
upper-income areas or makes loans only
in high cost areas.
In focusing on activities that are likely
to receive favorable consideration, the
agencies recognize that there is a
difference between the purpose of the
CRA Regulations, which must broadly
take account of the context in which an
insured depository institution operates,
and the purpose of the CRA Sunshine
provisions. The agencies do not intend
the list of factors under the CRA
Sunshine provisions in any way to
indicate any change in the information
that the agencies review under the CRA
Regulations or to affect in any way the
manner in which examinations are
conducted or CRA performance ratings
given. Accordingly, section
.4
specifically provides that the term
‘‘fulfillment of the CRA’’ is only defined
for purposes of the CRA Sunshine
regulation. In addition, as discussed
above, section
.1(c) provides that
the final rule does not affect in any way
the CRA, the CRA Regulations or any
agency’s interpretations or

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administration of the CRA or CRA
Regulations.
As noted above, the final rule also
provides that the list of factors
representing fulfillment of the CRA for
purposes of the CRA Sunshine
provisions includes providing or
refraining from providing oral or written
comments or testimony to an agency
concerning the performance under the
CRA of an insured depository
institution that is a party to an
agreement or that is an affiliate of a
party to an agreement. Providing or
refraining from providing written
comments concerning the performance
under the CRA of an insured depository
institution that is a party to an
agreement or that is an affiliate of a
party to an agreement where the
comments must be included in the
institution’s CRA public file also is
always a factor that represents
fulfillment of the CRA. Providing oral or
written comments or testimony to an
agency concerning the adequacy of an
institution’s CRA performance or
providing written comments that must
be included in the institution’s CRA
public file are activities that are always
considered to be in fulfillment of the
CRA under the final rule, without regard
to whether the communication
comments favorably or unfavorably on
the CRA performance of the institution.
The terms of a written agreement
generally determine whether the
contract, arrangement or understanding
is in fulfillment of the CRA. However,
the parties to a written agreement may
not avoid coverage under the Act by
reaching an oral understanding, such as,
for example, an understanding that a
party will submit (or refrain from
submitting) oral or written CRA-related
comments or testimony to an agency or
written comments to an insured
depository institution that would have
to be included in the institution’s CRA
public file, and excluding this
understanding from the terms of the
written agreement.
Commenters generally supported the
original proposal to exclude from the
list of factors activities designed to
ensure compliance with the Federal
laws that prohibit discriminatory or
other illegal credit practices, such as the
Equal Credit Opportunity Act (15 U.S.C.
1691 et seq.) and the Fair Housing Act
(42 U.S.C. 3601 et seq.). Commenters
generally agreed that inclusion of these
activities in the list of factors could have
an unintended and detrimental impact
on compliance with and enforcement of
the fair lending laws by, for example,
discouraging agreements to hire
‘‘mystery shoppers’’ to test the
institution’s compliance with the fair

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lending laws or agreements to settle a
fair lending complaint and improve fair
lending performance. Accordingly, the
list of factors has not been changed to
include these or other activities.
5. Value
An agreement is subject to the CRA
Sunshine provisions only if it calls for
an insured depository institution or
affiliate to provide to one or more
persons cash payments, grants, or other
consideration of more than $10,000 in
any calendar year, or to make loans that
have an aggregate principal amount of
more than $50,000 in any calendar year.
The statutory threshold is based on the
total value of payments and loans
provided for under the agreement and
does not require that these payments or
loans actually be made to a party to the
agreement.18
The final rule follows the proposed
rule in providing that all cash payments,
grants, consideration or loans provided
by an insured depository institution or
affiliate under the agreement, including
amounts provided to individuals or
entities that are not parties to the
agreement, will be considered in
determining whether an agreement
meets the rule’s dollar thresholds.
However, the rule provides that if an
agreement includes a loan, extension of
credit or loan commitment that, if done
separately, would be exempt from
coverage and also provides for the
institution or affiliate to provide other
funds or resources, the parties may
exclude the exempt loan, extension of
credit or loan commitment when
determining if the agreement meets the
dollar thresholds of the rule. (See
section
.2(e)(2) of the rule and the
discussion under section III.A.2.b. above
concerning qualifying loans).
Under the final rule, an agreement
that provides for payments to be made
in any calendar year in excess of the
dollar thresholds established by the
statute is a covered agreement for its
entire term. The agencies believe that
using a calendar year period for these
calculations should facilitate
compliance with the rule by providing
all parties to a covered agreement a
uniform basis for determining whether
the agreement is covered by the rule and
because the terms of an agreement may
not coincide with the parties’ fiscal
years.
The final rule provides that the
annual value of an agreement that does
not have a fixed schedule of payments
is considered to be the entire value of
the agreement. (See section
.2(e)(1).)
Commenters were mixed in their view
18 See

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of how to determine the value of a
multi-year agreement that does not
specify when payments should be made.
Some commenters believed that the
annual value of these agreements should
be determined by amortizing the total
value over the life of the agreement, or
by reference to actual disbursements,
while others suggested that the entire
value be credited to the first year of the
agreement. The final rule credits the
entire value of this type of agreement to
the first year of the agreement. This
approach is the easiest to calculate and
is the least likely to cause an agreement
unexpectedly to become a covered
agreement.
The agencies requested comment on
how to value an agreement that does not
specify the amount of payments, grants,
loans or other consideration to be
provided under the agreement, such as
an agreement for an insured depository
institution to open a branch or to begin
offering a new loan product.
Commenters that addressed this issue
suggested allowing the parties to
estimate the value of the agreement in
these cases or to assume that the
agreement had no value.
In circumstances where an agreement
does not specify the amount of
payments, grants, loans or other
consideration to be provided under the
agreement, the agencies believe that the
parties must reasonably estimate the
value of the agreement. The final rule
allows insured depository institutions
that choose to report a list of covered
agreements to report the estimated value
of the agreement at that time (see
section III.B.3. below).
The following are examples of the
value provisions of the rule. These
examples, which are not included in the
rule, illustrate only the application of
the dollar thresholds of the rule, and
assume that the agreement otherwise
qualifies as a covered agreement.
Example 1: An insured depository
institution enters into a written agreement
with a small business investment company
pursuant to which the institution will invest
$25,000 in the company. Since the agreement
does not establish a schedule of payments,
the entire $25,000 is deemed to be provided
in the first year. Accordingly, the agreement
meets the dollar threshold criterion to be a
covered agreement.
Example 2: An insured depository
institution and a community organization
enter into a written agreement pursuant to
which the institution will invest $1 million
in a state-sponsored investment fund that
supports affordable housing initiatives for
low- and moderate-income individuals
during the next year. The community
organization will not receive any funds or
other resources from the insured depository
institution or its affiliates under the

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agreement. The agreement meets the value
threshold criterion for a covered agreement
under the proposed rule because the value of
the agreement for purposes of the CRA
Sunshine provisions does not depend on
who receives payments or resources under
the agreement.
Example 3: An affiliate of an insured
depository institution provides a $100,000
loan to an association of small businesses
pursuant to a written agreement. The loan is
on market terms and not for purposes of relending. The agreement also provides for the
affiliate to make a $5,000 grant to the local
chamber of commerce’s small business
incubator. Because the loan is made on
market terms and not for purposes of relending, the loan would be an exempt
agreement under the rule if it were a separate
agreement (see section
.2(c)(2)).
Accordingly, the value of the loan may be
excluded in determining the value of the
agreement. After excluding the loan, the
agreement would not meet the dollar
criterion of the rule.
Example 4: An insured depository
institution and a NGEP enter into a written
agreement that requires an affiliate of the
insured depository institution to provide the
organization with a grant of $5,000 in 2001,
$8,000 in 2002, and $11,000 in 2003. The
agreement exceeds the dollar threshold
criterion of the rule because the agreement
provides for payments in excess of $10,000
during 2003. Assuming the agreement meets
the other requirements of the rule and is not
otherwise exempt, the agreement is a covered
agreement for its entire term.

6. Related Agreements Considered a
Single Agreement
In two circumstances, section 48(e)
requires that separate agreements or
contracts be aggregated for purposes of
determining whether the agreements—
taken as a whole—meet the definition of
a covered agreement.19 The agencies
received very few comments concerning
the aggregation provisions of the
proposed rule. Some commenters stated
that the aggregation rules should be
deleted or should apply only when
necessary to prevent circumvention of
the CRA Sunshine provisions. The
agencies have retained the aggregation
rules included in the final rule because
the CRA Sunshine provisions require
the aggregation of agreements in certain
circumstances, and excluding the
aggregation principles from the final
rule would require institutions and
NGEPs to consult both the statute and
the rule to determine compliance with
those provisions.
Other commenters requested
clarification of certain aspects of the
aggregation rules. Those matters are
addressed below.
a. Agreements entered into by the
same parties. Under the final rule, all
written contracts, arrangements, or
19 See

12 U.S.C.1831y(e)(1) and (2).

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understandings that are entered into by
an insured depository institution or
affiliate of an insured depository
institution will be considered to be part
of a single agreement if the contracts,
arrangements, or understandings are
entered into with the same NGEP within
a 12-month period and each agreement
is in fulfillment of the CRA. This
aggregation rule applies to all written
agreements entered into during the 12month period by the same NGEP on the
one hand, and any part of the same
organization, including an insured
depository institution and any of its
affiliates, on the other hand. The
following examples illustrate this
aggregation principle and assume that a
CRA communication has occurred
before each agreement.
Example 1: In November, an insured
depository institution enters into a written
agreement with Community Development
Organization, Inc. pursuant to which the
institution makes an $8,000 investment in
the organization. In April of the next year, an
affiliate of the insured depository institution
and Community Development Organization,
Inc. enter into a written agreement under
which the affiliate makes an additional
$8,000 investment in the organization. For
purposes of this example, both investments
are assumed to be qualified investments
under the CRA Regulations. The separate
agreements must be aggregated under the rule
and the combined agreement meets the
$10,000 dollar threshold of the rule.
Accordingly, the agreements are jointly
considered a covered agreement.
Example 2: In September, an insured
depository institution orally agrees to donate
$15,000 of computer equipment to a local
housing organization. In January of the
following year, the institution and
organization enter into a written agreement
for the institution to make a $5,000 CRA
qualified investment in a local housing
project that is eligible for low-income
housing tax credits. The agreements do not
need to be aggregated under the rule because
the September agreement was not in writing.
Example 3: In February, an insured
depository institution enters into a written
agreement with Partnership A for the
institution to make a $9,000 grant to
Partnership A for the purpose of
rehabilitating affordable housing units. In
August of the same year, an affiliate of the
insured depository institution enters into a
written agreement with Partnership A under
which the affiliate makes a payment of
$9,000 so that its employees may have access
to the child care center operated by
Partnership A. The August agreement is not
in fulfillment of the CRA. Accordingly, the
two agreements would not be aggregated
under the rule.

b. Substantively Related Contracts.
Section 48(e)(1)(A)(ii) requires the
aggregation of separate but
‘‘substantively related contracts’’ even
where the contracts are entered into
with different NGEPs. Unlike the

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aggregation rule discussed above, the
rule aggregating ‘‘substantively related
contracts’’ applies only to separate,
written contracts and does not apply to
other types of written arrangements or
understandings.
The rule defines written contracts
entered into by an insured depository
institution or any of its affiliates as
‘‘substantively related’’ if the contracts
were negotiated in a coordinated
fashion. The rule does not require that
the separate contracts each be in
fulfillment of the CRA or that the parties
to the contracts (other than the banking
organization) be the same. Thus, the
rule prevents parties from avoiding the
disclosure and reporting obligations of
the statute by separating out from an
agreement payments or grants that may
not themselves be in fulfillment of the
CRA. The following examples illustrate
this aggregation principle and assume
that a CRA communication occurred
before each contract.
Example 1: Two housing organizations
jointly approach an insured depository
institution to obtain funding. A
representative of the insured depository
institution meets with both organizations at
the same time to discuss their funding needs.
The institution enters into a written contract
with one organization to provide it with
$9,000 for the purpose of rehabilitating
affordable housing units. The institution
enters into a separate written contract with
the other organization to provide the
organization with an unrestricted grant of
$9,000. Because the contracts were
negotiated in a coordinated fashion, the
contracts must be aggregated under the rule.
When aggregated, the contracts would meet
the statute’s $10,000 dollar threshold and
each contract would be a covered agreement.
Example 2: A bank holding company
announces its intention to acquire an insured
depository institution. A Florida-based group
and a California-based group independently
approach the bank holding company to seek
funding for specific projects and separately
negotiate written contracts with the bank
holding company. The contracts would not
be aggregated under the rule, and each
contract would be a covered agreement only
if that contract on its own met the
requirements of the rule.

7. Multiparty Agreements
The agencies requested comment on
how the rule should apply in
circumstances where a covered
agreement involves several parties and a
CRA communication has been made by
or concerning only one of the parties.
This issue arises where several NGEPs
enter into a covered agreement with an
insured depository institution and only
one of the entities or persons has made
a CRA communication or where a NGEP
has a CRA communication concerning
one insured depository institution and

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subsequently enters into a covered
agreement jointly with the institution
and several other unaffiliated insured
depository institutions. Several
commenters indicated that the
disclosure and reporting requirements
of the rule should only apply to parties
to a covered agreement that have
engaged in a CRA communication.
The final rule provides that a NGEP
that is a party to a covered agreement
that involves multiple NGEPs is not
required to comply with the
requirements of the rule if two
requirements are met. (See section
.3(d).) First, the NGEP must not
have had a CRA communication
concerning any insured depository
institution or affiliate that is a party to,
or an affiliate of a party to, the
agreement. Second, no officer, employee
or representative of the NGEP identified
in section
.3(b)(4) of the rule may
have knowledge at the time the
agreement is entered into that another
NGEP that is a party to the agreement
has had a CRA communication.
Similarly, an insured depository
institution or affiliate that is a party to
a covered agreement that involves
multiple insured depository institutions
or affiliates is not subject to the
disclosure and reporting requirements if
(1) no NGEP that is a party to the
agreement has had a CRA
communication with or concerning the
institution or affiliate, and (2) no officer
or employee of the institution or affiliate
identified in section ——.3(b)(3)(i) has
knowledge that the NGEP has had a
CRA communication with another
insured depository institution or
affiliate that is a party to the agreement.
In the context of multiparty agreements,
covering parties that have knowledge of
a CRA communication by other parties
to the agreement assures that parties do
not avoid the requirements of the CRA
Sunshine provisions by refraining from
making a CRA communication because
the party is aware that the
communication has already been made
by another party.
B. Disclosure of Covered Agreements
Section 48(a) requires that each party
to a covered agreement fully disclose
the agreement in its entirety and make
the full text of the agreement available
to the public and the appropriate agency
with supervisory responsibility over the
relevant insured depository
institution.21 The disclosure
requirements of section 48 apply only to
21 12

U.S.C. 1831y(a).

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covered agreements entered into after
November 12, 1999.22
1. Disclosure to the Public
Section
.6 of the final rule
requires that each party to a covered
agreement make a complete copy of the
agreement available to any member of
the public upon request. A covered
agreement must be made available
during the entire term of the agreement
and the 12 month period following
expiration of the agreement, without
regard to whether funds are paid or
received under the agreement during the
year in which a request for the
agreement is made. A party may charge
the requestor for the costs of copying
and sending an agreement, so long as
the fees are reasonable.
Commenters generally supported
having maximum flexibility to make
covered agreements available to the
public and to charge requestors
reasonable fees to cover the costs of
making covered agreements available.23
Accordingly, the final rule does not
prescribe any particular method a party
must employ in making a covered
agreement available to the public. The
agencies expect that parties to covered
agreements will employ methods of
making agreements available that will
not require requestors to go through
unreasonable efforts to obtain the
agreements. For example, a party may
make a covered agreement available to
any individual or entity by mailing it to
the requestor. A party also may make an
agreement available to an individual or
entity with access to the Internet by
posting the agreement on a publicly
accessible website or to members of the
public within a local geographic area by
making the agreement available at an
office within that area. In addition, a
party may choose to publish a list of its
covered agreements and provide the full
text of an agreement only to any
individual or entity that requests a
particular agreement identified in the
list.
Several commenters requested
clarification concerning how a party
should comply with the statute’s public
disclosure requirement when a covered
22 The rule includes special transition provisions
governing the disclosure of covered agreements
entered into after November 12, 1999, but before the
effective date of the rule. See section III.D below.
23 Some commenters questioned whether a party
to a covered agreement may also charge a requestor
for the cost of searching its records for covered
agreements. The final rule, like the provisions of the
CFA Regulations governing the public availability
of information in an insured depository institution’s
CRA public file, does not authorize the recovery of
search costs. See 12 CFR 25.43 (OCC); 12 CFR
228.43 (Board); 12 CFR 345.43 (FDIC); 12 CFR
563e.43 (OTS).

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agreement consists of or involves
multiple documents. For example,
commenters questioned whether all of
the supporting documentation relating
to a loan or grant must be disclosed. The
final rule follows the statute and
requires only that the written contract,
arrangement, or understanding be
disclosed and does not require the
disclosure or supporting
documentation. When the covered
agreement consists of a single
document, that document must be
disclosed. When the covered agreement
consists of or is reflected by multiple
documents, the party may disclose all of
the written documentation relating to
the agreement or only those documents
that set forth the primary terms of the
agreement, including (1) the names and
addresses of the parties to the
agreement; (2) the amount of any
payments, fees, loans, or other
consideration to be made or provided by
any party to the agreement; (3) any
description of how the funds or other
resources provided under the agreement
are to be used; and (4) the term of the
agreement (if the agreement establishes
a term).
Several commenters requested that
the rule establish a fixed period of time,
such as 30 days, within which a party
must respond to a request for a covered
agreement. The final rule follows the
text of section 48 and does not specify
a time period for responding to public
requests for an agreement. The agencies
expect that the parties will promptly
respond to requests from the public for
covered agreements.
As with the proposed rule, the final
rule gives discretion to an insured
depository institution to fulfill its public
disclosure obligation by placing a copy
of a covered agreement in its CRA
public file and making it available in
accordance with the procedures set
forth in the CRA Regulations relating to
public files. Several commenters
recommended that affiliates of insured
depository institutions that are parties
to covered agreement also be permitted
to disclose a covered agreement to the
public by placing it in the CRA public
file of an affiliated insured depository
institution. The final rule allows
affiliates to fulfill their disclosure
obligations in this manner so long as the
affiliated insured depository institution
then makes the agreement publicly
available in accordance with the rules
governing public disclosure of
information in the CRA public file.
When an affiliate relies on the CRA
public file of an insured depository
institution affiliate to fulfill the
disclosure obligations of the rule, it
must refer members of the public that

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request a copy of the affiliate’s covered
agreements to the affiliated insured
depository institution.
The proposed rule provided that the
parties’ obligation to make a covered
agreement publicly available terminated
12 months after the end of the term of
the agreement, and the agencies
requested comment on whether this
time period should be shorter or longer.
Several commenters stated that the time
period proposed was reasonable, while
others advocated a shorter time period
or no time period at all after the term
of an agreement. In order to fulfill the
purposes of section 48, the agencies
believe that the parties to a covered
agreement must make the agreement
available to the public for a reasonable
period of time. After reviewing the
comments received, the final rule
continues to require covered agreements
to be available to the public for a period
of 12 months after the term of the
agreement.
2. Treatment of Confidential and
Proprietary Information
Section 48(h)(2)(A) directs the
agencies to ensure that their
implementing regulations ‘‘do not
impose undue burden on the parties [to
a covered agreement] and that
proprietary and confidential
information is protected.’’24 This
provision must be read in harmony with
section 48(a), which requires that a
covered agreement ‘‘shall be in its
entirety fully disclosed, and the full text
thereof made available * * * to the
public.’’25 Other provisions of section
48 require the reporting of the terms and
value of covered agreements, the
identity of the parties to the agreement,
and the uses of funds and resources
provided under covered agreements.
The proposed rule provided that a
party could withhold information
contained in a covered agreement from
public disclosure only if the party
received a determination from the
relevant supervisory agency that such
information could be withheld by the
agency under the Freedom of
Information Act (5 U.S.C. 552) (FOIA).
The agencies noted, moreover, that the
Act’s directive that terms of covered
agreements be made available to the
public could require disclosure of some
types of information that an agency
might normally be able to withhold
from disclosure under the FOIA.
The agencies requested comment on a
number of issues associated with the
disclosure of potentially confidential
and proprietary information in covered
24 12

U.S.C. 1831y(h)(2)(A).
25 12 U.S.C. 1831y(a).

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agreements, including the likelihood
that covered agreements would contain
confidential and proprietary
information, whether FOIA standards
should be applied in determining
whether information can be withheld,
and whether alternative procedures
could be adopted.
Commenters indicated that covered
agreements may often contain
information they ordinarily consider to
be confidential or proprietary, such as
information about new and innovative
programs an insured depository
institution is offering, underwriting
standards for loans, competitive pricing
information, or personal data that would
otherwise be protected under applicable
privacy rules. Some commenters
expressed concern that the requirement
to disclose publicly covered agreements
could harm their competitive position
or dissuade insured depository
institutions and their affiliates from
entering into agreements with NGEPs
that are in fulfillment of the CRA.
Many commenters indicated that
requesting a determination of whether
information can be withheld from
disclosure from the relevant supervisory
agencies would be burdensome and
time consuming. They suggested the
agencies streamline the process for
obtaining such determinations or,
alternatively, provide a list of
information that a party could withhold
from disclosure without obtaining an
agency determination. Many
commenters expressed support for using
the FOIA as the standard for
determining whether information can be
withheld from public disclosure.
In light of the comments received, the
agencies have revised the procedures for
withholding information from public
disclosure to clarify the process for
determining whether information can be
withheld from public disclosure and
limit the circumstances in which the
relevant supervisory agency is involved
in making the determination. As
discussed above, section 48 directs that
certain information in covered
agreements be disclosed. Accordingly,
the final rule requires the disclosure of
the following information contained in
a covered agreement:
• The names and addresses of the
parties to the agreement;
• The amount of any payments, fees,
loans, or other consideration to be made
or provided by any party to the
agreement;
• Any description of how the funds
or other resources provided under the
agreement are to be used;
• The term of the agreement (if the
agreement establishes a term); and

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• Any other information that the
relevant supervisory agency determines
is not properly exempt from public
disclosure.
The agencies anticipate making a
determination that additional
information in a covered agreement
must be disclosed only in response to a
specific request for such a
determination. (See section
.6(b)(4).) Any such request must be
in writing and submitted to the relevant
supervisory agency in accordance with
its rules concerning the availability of
information.26
The final rule allows a party to a
covered agreement to withhold from
public disclosure any information not
described above if the party believes the
relevant supervisory agency could
withhold that information under The
FOIA. There is no requirement that the
party obtain a determination from the
relevant supervisory agency that such
information can be withheld. Standards
the agencies use to determine whether
they can withhold information in their
records from public disclosure records
are contained in subsection (b) of The
FOIA (5 U.S.C. 552(b)).
With regard to the disclosure of
information the agencies receive under
the final rule, including copies of
covered agreements and annual reports,
section
.8 provides that such
information will be made available in
accordance with The FOIA and the rules
regarding the availability of information
of the relevant supervisory agency.
3. Filing of Covered Agreement With
Agencies
Section 48(a) also requires each party
to a covered agreement to make the
agreement available to the appropriate
agency. The proposed rule required
each insured depository institution or
affiliate that is a party to a covered
agreement to file a complete copy of the
agreement with each relevant
supervisory agency within 30 days after
entering into the agreement. NGEPs
were obligated to file a covered
agreement with a relevant supervisory
agency within 30 days of receiving a
request from the agency.
Some commenters requested that the
agencies allow insured depository
institutions and affiliates, like NGEPs, to
make a covered agreement available to
the relevant supervisory agency only
upon an agency’s request. Others
suggested that the rule allow insured
depository institutions and affiliates the
option of filing with the agencies either
26 See, 12 CFR Part 4 (OCC); 12 CFR Part 261
(Board); 12 CFR Part 309 (FDIC); 12 CFR Part 505
and 31 CFR Part 1 (OTS).

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copies of covered agreements or a list of
their covered agreements. Commenters
also suggested that the agencies allow
insured depository institutions and
affiliates to file covered agreements with
the agencies on a periodic basis, such as
once each quarter or once each year,
rather than 30 days after entering into
each agreement, or by placing
agreements in an institution’s CRA
public file.
The agencies believe that it is
important for the agencies to receive
notice when parties enter into a covered
agreement and to be able to gain prompt
access to the covered agreement. Such
notice and access allow the agencies to
monitor compliance by the parties with
the disclosure and reporting
requirements of section 48 and respond
to requests from interested members of
the public for copies of, or information
related to, covered agreements. The
agencies, however, have sought to
streamline the agency disclosure
obligations imposed on insured
depository institutions and affiliates in
a manner consistent with these
principles.
In particular, the final rule allows an
insured depository institution or
affiliate to fulfill its agency disclosure
obligation by filing, within 60 days after
the end of each calendar quarter, either
a complete copy of each covered
agreement entered into during the
calendar quarter, or a list of all covered
agreements entered into during the
calendar quarter. If the institution or
affiliate elects to file a list of agreements
with the agency, the list must provide
the following information concerning
each covered agreement entered into
during the relevant calendar quarter:
• The name and address of each party
to the agreement;
• The date the agreement was entered
into;
• The estimated total value of all
payments, fee, loans and other
considerations to be provided by the
institution or any affiliate under the
agreement; and
• The date the agreement terminates.
An institution or affiliate that files a
list of covered agreements with the
relevant supervisory agency must
provide any relevant supervisory agency
a complete copy of any covered
agreement referenced in the list within
7 calendar days of receiving a request
from the agency for the agreement. The
rule allows an agency to request a copy
of an agreement referenced in a list for
up to 36 months after the term of the
agreement. The final rule also continues
to allow insured depository institutions
and affiliates that are parties to the same
covered agreement to file jointly the

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appropriate documents with each
relevant supervisory agency.
NGEPs that are parties to covered
agreements must make a complete copy
of each agreement available to any
relevant supervisory agency on the
agency’s request. The NGEP must
provide the requesting agency with a
copy of the agreement within 30
calendar days of the agency’s request.
As with disclosure to the public, a
NGEP’s obligation to make an agreement
available to an agency terminates 12
months after the end of the agreement’s
term.
Whenever an insured depository
institution, affiliate or NGEP files a copy
of a covered agreement with an agencyeither at the agency’s request or, in the
case of an institution or affiliate, as part
of a quarterly filing-the institution,
affiliate or NGEP must provide the
agency with a complete copy of the
agreement. If the party proposes to
withhold information contained in the
agreement, the party must also file a
public version of the agreement that
excludes such information and provide
an explanation justifying the exclusions
under the FOIA. The agencies will not
keep information confidential under the
FOIA that a party would be required to
disclose to the public under section 48.
Accordingly, the parties may not
propose to withhold, and the agencies
will not withhold under the FOIA, the
types of information in a covered
agreement that a party must make
publicly available under section
.6(b)(3) of the rule.
4. Relevant Supervisory Agency
The final rule continues to use the
term ‘‘relevant supervisory agency’’ to
identify the appropriate agency for a
particular covered agreement. The
agencies have moved the definition of
this term from section
.6 of the rule
to the general definitions section
(section
.11) because the term is
used in multiple sections of the rule.
The agencies otherwise have made no
substantive changes to the definition.
Under the rule, the ‘‘relevant
supervisory agency’’ for a covered
agreement is:
• The OCC in the case where—
—The parties to the agreement include
a national bank or subsidiary of a
national bank; or
• A national bank or subsidiary or
CRA affiliate of a national bank provides
funds or resources under the agreement;
• The Board in the case where—
— The parties to the agreement include
a state member bank, subsidiary of a
state member bank, bank holding
company, or subsidiary of a bank

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holding company (other than an
insured depository institution or
subsidiary thereof); or
—A state member bank or subsidiary or
CRA affiliate of a state member bank
provides funds or resources under the
agreement;
• The FDIC in the case where—
— The parties to the agreement include
a state nonmember bank or subsidiary
of a state nonmember bank; or
—A state nonmember bank or
subsidiary or CRA affiliate of a state
nonmember bank provides funds or
resources under the agreement; or
• The OTS in the case where—
— The parties to the agreement include
a savings association, subsidiary of a
savings association, savings and loan
holding company or subsidiary of a
savings and loan holding company; or
—A savings association or subsidiary or
CRA affiliate of a savings association
provides funds or resources under the
agreement.
Under the definition, more than one
agency may be the relevant supervisory
agency with respect to a single covered
agreement. For example, if a national
bank, state nonmember bank, and a
savings association provide funds
pursuant to a covered agreement entered
into by their parent bank holding
company, the OCC, FDIC, OTS, and
Board would each be a relevant
supervisory agency for the agreement.
Several commenters expressed
concern that requiring filings with
multiple agencies under these
circumstances could increase the
burden of complying with the statute.
Some commenters asserted that the rule
should allow all filings to be made with
one regulatory body, such as the Federal
Financial Institutions Examinations
Council, and asserted that such a
procedure would reduce burden or help
ensure the consistent review of
confidential and proprietary
information that may be contained in a
covered agreement.
Section 48 directs that the
‘‘appropriate Federal banking agency’’
receive agreements and annual reports
under the statute. The agencies continue
to believe that the rule properly
identifies the appropriate Federal
banking agency for a covered agreement
by ensuring that a covered agreement
and its related annual reports are filed
with the agency or agencies that have
supervisory authority over the insured
depository institution or affiliate that is
involved with the agreement, either as
a party or as a source of funds or
resources paid under the agreement.

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C. Annual Reports
The Act requires each NGEP, insured
depository institution, or affiliate of an
insured depository institution that is a
party to a covered agreement to file a
report at least annually concerning
disbursement, receipt and use of funds
under the covered agreement. Section
.7 of the final rule implements these
annual reporting requirements. The
rule’s annual reporting obligations
apply only to covered agreements
entered into on or after May 12, 2000.27
The proposed rule required each party
to a covered agreement to file an annual
report for the fiscal year that the
agreement was entered into and each
subsequent fiscal year during the term
of the agreement. The proposal also
provided that a NGEP did not have to
file an annual report for any fiscal year
during the term of a covered agreement
if the NGEP did not receive any funds
under the covered agreement in that
year.
Commenters generally supported the
reporting exception provided to NGEPs.
Several commenters requested that the
agencies also provide insured
depository institutions and affiliates a
similar exception from the annual
reporting requirement for years in
which an institution or affiliate does not
make or receive payments, fees, or loans
under a covered agreement.
Section 48 requires a NGEP that is a
party to a covered agreement to file a
report at least once a year providing ‘‘an
accounting of the use of funds received
pursuant to’’ the covered agreement
during the preceding 12-month
period.28 The Act requires an insured
depository institution or affiliate that is
a party to a covered agreement to file an
annual report concerning funds or other
resources provided or received by the
institution or affiliate under the
agreement and any loans, investments,
or services provided by any party under
the agreement during the preceding 12month period.29
In light of these requirements and the
comments received, the final rule
provides that a NGEP must file an
annual report for each fiscal year in
which the NGEP receives or uses funds
or other resources under a covered
agreement. Because the statute focuses
on both the receipt and use of funds by
a NGEP under a covered agreement, the
agencies have modified the rule to
27 The rule includes special transition provisions
governing the filing of annual reports that relate to
the fiscal year of any party to a covered agreement
that ends prior to January 1, 2001. See section III.D
below.
28 See U.S.C. 1831y(c)(1).
29 See U.S.C. 1831y(b).

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require a NGEP to file an annual report
for any fiscal year in which the NGEP
uses funds received under a covered
agreement, even if the funds were not
received in that year. An insured
depository institution or affiliate must
file an annual report for a fiscal year if
the institution or affiliate made or
received any payments, fees, or loans
under a covered agreement during the
fiscal year, or has data that must be
reported on loans, investments, and
services provided by any party to the
agreement during the fiscal year.
These requirements ensure that a
party files an annual report for each year
that the party has information that must
be provided to the relevant supervisory
agency, and that an annual report is not
filed for any fiscal year where the
relevant party has no information that
must be reported. The agencies note that
a NGEP must file an annual report for
a fiscal year if it received or used any
funds or other resources under the
covered agreement during the fiscal
year, even if the amount of funds or
resources received or used are less than
the value thresholds discussed above for
defining a covered agreement. Any
annual report must be filed with each
relevant supervisory agency for the
covered agreement.
The following examples illustrate
these reporting requirements:
Example 1: A savings association and a
community development organization enter
into a 3-year covered agreement pursuant to
which the association will invest $100,000 in
the organization. The savings association in
fact provides $95,000 to the organization in
the first year of the agreement and the
remaining $5,000 to the organization in the
second year of the agreement, and the
organization uses the funds in the fiscal years
that they are received. The organization must
file an annual report with the OTS for each
of the first two fiscal years of the agreement
because the organization received and used
funds under the agreement in those years.
The savings association also must file an
annual report for each of the first fiscal two
years of the agreement since it made
payments in those years. Because the
organization does not receive or use funds
under the covered agreement during the third
year of the agreement, the organization and
savings association would not be required to
file an annual report with the OTS for that
year.
Example 2: A state nonmember bank enters
into a covered agreement with a community
organization to make $1 million in
community development grants in the
community over the next 5 years. The
community organization will not receive any
funds or other resources under the agreement
(including under the grants as they are
made), nor will it provide any services under
the agreement. Both parties must make the
covered agreement available to the public
and the FDIC. In addition, the state

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nonmember bank must file an annual report
for any year in which it makes payments
concerning grants made and actions taken
under the agreement. The community
organization is not required, however, to file
any annual reports concerning the agreement
because the organization receives and uses
no funds or resources under the agreement.

1. Annual Reports Filed by NGEPs
Section 48(c) requires each NGEP that
is a party to a covered agreement to file
a report at least annually with the
appropriate banking agency providing
an accounting of how the NGEP used
any funds received under the covered
agreement during the previous year. The
proposed rule required the annual
report filed by a NGEP to set forth (1)
the name and mailing address of the
NGEP, (2) information sufficient to
identify the covered agreement for
which the report is filed, such as by
providing the names of the parties to the
agreement and the date it was entered
into or by providing a copy of the
agreement, and (3) the amount of funds
received by the NGEP under the covered
agreement during the fiscal year. The
final rule retains these information
requirements.
a. Itemized List of Uses of Funds.
Section 48(c) requires that the annual
report of a NGEP provide a detailed,
itemized accounting of how the NGEP
used during the previous year any funds
or resources received under the covered
agreement. The proposed rule required
the accounting to be provided in one of
two ways—either a description of the
specific purpose or purposes for which
the funds were used, or an itemized list
of the amount of general purpose funds
used for pre-defined expense categories.
The proposed rule required a NGEP to
use the specific purpose reporting
method for any funds or other resources
that the NGEP received and allocated for
a specific purpose. Under the specific
purpose reporting method, the NGEP
would provide in its annual report a
description of each specific purpose for
which the funds or resources were used
during the fiscal year; and the amount
of funds or resources used for each
specific purpose during the fiscal year.
For funds or other resources that were
used for general or unspecified
purposes, the proposed rule required
the NGEP to report the amount of funds
used during the fiscal year for each
category of expenses included in the
detailed, itemized list set forth in
section 48(c)(3). These categories
required the NGEP to report the
aggregate amount of funds used during
the fiscal year for compensation of
officers, directors, and employees;
administrative expenses; travel
expenses; entertainment expenses;

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payment of consulting and professional
fees; and other expenses and uses.
Commenters generally supported the
itemized list and recommended that the
agencies not use their statutory
authority to expand the list of expense
categories included in section 48(c)(3).
The comments received concerning the
proposed specific purpose reporting
method were mixed. Some commenters
supported the streamlined reporting
procedures for specific purpose funds
because they believed it would require
the reporting of less information than
the itemized list of expenses. Some
commenters that supported this
reporting method requested that the
agencies provide NGEPs with the option
of using the specific purpose reporting
method or the detailed itemized list to
report the use of specific purpose funds.
Several commenters opposed the
specific purpose reporting method on
the basis that section 48(c) does not
provide for this type of reporting. In
addition, some commenters expressed
concern that the proposed rule’s
definition of specific purpose funds was
too broad or unclear or requested
additional guidance on when a NGEP
receives and uses funds or other
resources for a specific purpose.
Section 48(c)(1) requires a NGEP to
provide annually ‘‘an accounting of the
use of funds received pursuant to each
[covered] agreement during the
preceding 12-month period.’’ 30 Section
48(c)(3) provides that this annual
accounting ‘‘shall include a detailed,
itemized list of the uses to which such
funds have been made, including
compensation, administrative expenses,
travel, entertainment, consulting and
professional fees paid, and such other
categories, as determined by regulation
by the appropriate Federal banking
agency.’’ 31 The final rule implements
these requirements by providing that the
annual report of an NGEP must provide
a detailed, itemized list of how any
funds or other resources received by the
NGEP at any time under the covered
agreement were used during the fiscal
year using the categories of expenses
included in section 48. Unlike the
proposal, the list must disclose how the
NGEP during the fiscal year used any
funds or resources received under the
covered agreement, including funds or
resources that were received in a
previous fiscal year but that were not
used in that fiscal year. The agencies
have modified the rule in this way to
more closely track the provisions of
section 48.
30 12
31 12

U.S.C. 1831y(c)(1).
U.S.C. 1831y(c)(3).

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Under section 48 and the rule, the
itemized list of expenses must include,
at a minimum, the amount of funds
used during the fiscal year for—
• Compensation of officers, directors,
and employees;
• Administrative expenses;
• Travel expenses;
• Entertainment expenses;
• Payment of consulting and
professional fees; and
• Other expenses and uses (specify
expense or use).
The annual report may reflect the
total amount of funds from all sources
that the NGEP used during the fiscal
year for the types of expenses listed
above. The agencies may determine
from this and other information
included in the annual report the
proportion of funds that the NGEP
received under the covered agreement
that were used for each category of
expenses listed above. If a NGEP uses
funds under a covered agreement for
certain categories of expenses, such as
‘‘travel expenses,’’ the annual report
need only reflect the amount used for
that category.
The agencies also believe that it is
appropriate and consistent with the
statute to allow a NGEP, where possible,
to provide a more detailed accounting of
how it used funds received under a
covered agreement. A more detailed
accounting can be provided when a
NGEP allocates and uses funds received
under a covered agreement for a specific
purpose that is more limited than the
categories of expenses listed above, i.e.,
it is for a specific expense in one of the
categories listed above.
A specific purpose would not include
a general statement that funds were
received, for example, for services
rendered or to fund a general program
or to fund a project that involved
spending in multiple categories from the
more detailed list. Instead, as explained
below, the final rule clarifies that this
reporting option is available only if the
NGEP allocated and used the funds
received under the agreement for a
purpose that is at least as specific and
limited as a category of expenses in the
itemized list, such as to purchase a
computer or to fund a specific trip.
Accordingly, the final rule allows a
NGEP that allocates and uses funds
received under a covered agreement for
a specific purpose to report how it used
such funds by using the detailed,
itemized list, or stating the amount
received and used for the specific
purpose and providing a brief
description of the specific purpose. In
the event a NGEP chooses to use the
more specific reporting option, the
NGEP must use the detailed, itemized

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list to report the use of any funds that
were not allocated and used for a
specific purpose.
The final rule includes examples
illustrating these reporting provisions.
(See section
.7(d)(5).) The first
example involves a NGEP that receives
$15,000 under a covered agreement and
uses these funds to support its general
operations during the fiscal year. In
these circumstances, the NGEP’s annual
report must state that it received
$15,000 during the fiscal year under the
agreement and provide the total amount
of funds and resources that the NGEP
used during the fiscal year for each
category of expenses included in the
detailed, itemized list (i.e., for
compensation, administrative, travel
and entertainment expenses, consulting
and professional fees, and other
expenses and uses).
The second example involves an
organization that receives $15,000 under
a covered agreement and allocates and
uses these funds during the fiscal year
to purchase computer equipment to
support its activities. Because the
organization allocated and used the
funds for a purpose that is more narrow
and limited than the categories of
expenses in the itemized list, the
organization would have the option of
reporting either the total amount it used
during the year for each type of expense
in the itemized list of expenses
described above, or a statement that it
used the $15,000 to purchase computer
equipment.
The third example involves a group
that receives funds under a covered
agreement and uses some of these funds
during the fiscal year for a specific
purpose (to fund a particular business
trip) and some of the funds for other
purposes. Since the group did not use
all of the funds for a specific purpose,
the group’s annual report must provide
the amount that the group used during
the year for each category of expenses in
the itemized list. The group also could
report that it allocated and used a
specified portion of the funds for the
business trip and briefly describe the
trip.
b. Use of Other Reports. As noted
above, section 48(h)(2)(A) directs the
agencies to ensure that their regulations
implementing section 48 ‘‘do not
impose an undue burden on the
parties.’’ 32 The Conference Report for
the Act also indicates that the agencies
should allow reporting parties to use
reports prepared for other purposes to
fulfill the annual reporting
32 12

U.S.C. 1831y(h)(2)(A).

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requirements.33 Accordingly, the final
rule does not require that a NGEP’s
annual report be prepared on a special
form or in a particular format. Instead,
the final rule provides that a NGEP’s
annual report may consist of or
incorporate reports or documents that
the NGEP has prepared for public,
internal or other purposes so long as the
documents filed with the relevant
supervisory agency contain all of the
information required by the rule.
The preamble to the proposed rule
indicated that the agencies had
reviewed several tax forms commonly
filed by tax-exempt nonprofit
organizations and noted that Internal
Revenue Service Return of Organization
Exempt From Income Tax on Form 990
requires the filer to provide information
that is at least as detailed, and in some
cases more detailed, than the list of
expenses required under section 48(c).
Accordingly, the preamble to the
proposed rule specifically indicated that
NGEPs could use a completed Form 990
to provide the information required by
the rule.
Commenters expressed overwhelming
support for allowing NGEPs to use
documents prepared for other purposes
to fulfill the rule’s reporting
requirements. Commenters in particular
praised the agencies for allowing NGEPs
to use a Form 990 to fulfill their
reporting obligations and many
requested that the agencies incorporate
this guidance in the text of the final
rule. In response to these requests, the
rule expressly allows a NGEP to use a
Form 990 to provide the information
required by the rule and includes an
example illustrating how a NGEP could
use a Form 990 to provide the expense
information required by the rule. (See
section
.7(d)(3) and (d)(5)(i).)
Some commenters also requested that
the agencies clarify whether a NGEP
could use other tax forms, such as Short
Form Return of Organization Exempt
From Income Tax on Form 990EZ, to
fulfill its annual reporting obligation.
The final rule continues to provide that
the annual report of a NGEP may consist
of or incorporate any report or Federal
or state tax form so long as the
documents submitted, when taken as a
whole, contain all of the information
required by the rule. Accordingly, a
NGEP could incorporate a copy of an
IRS Form 990EZ in its annual report.
However, unless the form contains all
the information required by the rule, the
NGEP must supplement the form with
the additional information necessary to
fulfill the rule’s reporting requirements.
33 See

H.R. Conf. Rep. No. 106–434 at 179 (1999).

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c. Consolidated Annual Reports
Permitted. The proposed rule permitted
a NGEP that is a party to 5 or more
covered agreements to file a single
consolidated report covering all of the
NGEP’s covered agreements. The
agencies requested comment on whether
consolidated reports should be
permitted when a NGEP is party to 2 or
more covered agreements. Commenters
generally expressed support for
permitting a NGEP to file consolidated
reports when it is a party to 2 or more
agreements, and the final rule makes
that change.
A NGEP’s consolidated report must
identify the NGEP filing the report and
each agreement covered by the report. In
addition, in order to facilitate the
tracking of payments under covered
agreements, the final rule requires that
any consolidated annual report filed by
a NGEP indicate the amount the NGEP
received under each covered agreement
included in the report during the fiscal
year. All other information required by
the rule may be provided on an
aggregate basis for all agreements
covered by the annual report. Any
consolidated report must be filed with
all of the relevant supervisory agencies
for the covered agreements included in
the report. The rule includes an
example of the type of information that
must be included in a consolidated
annual report filed by a NGEP. (See
section
.7(d)(5)(iv).)
2. Annual Reports Filed by Insured
Depository Institutions and Affiliates
The annual reporting requirements for
insured depository institutions and
affiliates are largely specified in section
48(b) and the final rule, like the
proposal, includes these requirements.
The annual report for an insured
depository institution or affiliate must
identify the entity filing the report and
identify the covered agreement to which
the annual report relates. In addition,
the annual report must provide:
• The aggregate amount of payments,
fees and loans (listed separately)
provided by the insured depository
institution or affiliate under the
agreement to any other party during the
fiscal year;
• The aggregate amount of payments,
fees and loans (listed separately)
received by the insured depository
institution or affiliate under the
agreement from any other party during
the fiscal year;
• A description of the terms and
conditions of any payments, fees, or
loans provided to, or received from,
another party under the agreement; and
• The aggregate amount and number
of loans, amount and number of

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investments, and amount of services
provided under the covered agreement
to any NGEP that is not a party to the
agreement:
—By the insured depository institution
or affiliate; and
—By any other party to the agreement,
unless such information is not known
to the insured depository institution
or affiliate or will be contained in an
annual report filed by another party.
These informational requirements
track those established by the statute.
The rule allows an insured depository
institution and an affiliate that are
parties to the same covered agreement to
file a single, consolidated report for the
agreement. The proposed rule also
allowed an insured depository
institution or affiliate that is a party to
5 or more covered agreements to file a
single consolidated report relating to all
of the agreements. To reduce burden
and in response to comments, the final
rule allows insured depository
institutions or affiliates that are a party
to 2 or more covered agreements to file
a consolidated annual report.
The proposed rule would have
permitted the consolidated report of an
insured depository institution or
affiliate to provide aggregate data on the
amount of payments, fees and loans
provided and received by the institution
or affiliate under all agreements
included in the report, and on the loans,
investment and services provided by the
other parties to all of the agreements
included in the report. In order to
facilitate the tracking of payments made
by insured depository institutions and
affiliates under covered agreements, the
final rule requires that any consolidated
report filed by an institution or affiliate
state the amount of payments, fees, and
loans provided by the institution or
affiliate under each covered agreement
included in the report. The final rule
continues to allow a consolidated report
to provide aggregate information
concerning any payments, fees and
loans received by the institution or
affiliate under all of the agreements
included in the report, and concerning
any loans, investments and services
provided by other parties to the
agreements included in the report.
3. When and Where Must Annual
Reports Be Filed
The final rule adopts the approach for
filing annual reports taken in the
proposed rule and provides that each
party to a covered agreement generally
must prepare and file an annual report
with each relevant supervisory agency
for the fiscal year in which the party
enters into the agreement and each

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subsequent fiscal year during the term
of the covered agreement. In order to
provide maximum flexibility, the final
rule also permits a party to elect to use
the calendar year as its fiscal year for
purposes of the rule. Using a fiscal year
reporting period permits a party to
coordinate preparation of its annual
reports with other documents or reports
that typically are prepared on a fiscal
year basis. Commenters generally
supported this approach and the
agencies have made no changes to the
proposed rule.
As in the proposal, each party to a
covered agreement must file its annual
report for a fiscal year with each
relevant supervisory agency within 6
months of the end of the party’s fiscal
year. Some commenters requested
additional time to prepare and file
annual reports. The agencies believe
allowing 6 months for the filing of
annual reports gives the parties to a
covered agreement a reasonable amount
of time to gather the information
necessary from the previous fiscal year
and prepare the report. In addition, the
time period is similar to the time period
that parties have to prepare tax forms
and annual reports relating to the
previous fiscal year. For example, IRS
rules generally require an IRS Form 990
to be filed by the 15th day of the 5th
month after the end of an organization’s
fiscal year.
Consistent with section 48(c)(2), the
rule allows a NGEP to fulfill its filing
requirement by providing its annual
report to the insured depository
institution or affiliate that is a party to
the agreement. In response to
comments, the agencies have revised the
rule to allow a NGEP up to 6 months
(rather than 5) after the end of its fiscal
year to provide a copy of its annual
report to the appropriate insured
depository institution or affiliate. Any
NGEP that uses this filing option must
instruct the institution or affiliate to file
the report with all of the relevant
supervisory agencies on behalf of the
NGEP. An insured depository
institution or affiliate that receives an
annual report from a NGEP in this
manner must forward it to the relevant
supervisory agencies within 30 days.
This procedure reduces the likelihood
that annual reports will be filed with the
wrong agency because the insured
depository institution or affiliate will
know its relevant supervisory agency
while the NGEP may not.
D. Effective Dates of Disclosure and
Reporting Requirements
As discussed above, the disclosure
provisions of section 48 apply to all
covered agreements entered into after

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November 12, 1999, and the annual
reporting provisions apply to all
covered agreements entered into on or
after May 12, 2000.
1. Agreements That Are Amended or
Renewed After Statutory Dates
A written modification, amendment,
renewal, or extension of an agreement
creates a new agreement. Thus, if an
agreement entered into before November
12, 1999, is modified, amended,
renewed or extended after that date, the
parties must disclose the entire new
agreement in accordance with the rule’s
requirements if the agreement meets the
criteria to be a covered agreement.
Example: An insured depository
institution and a community organization
entered into a written agreement in January
1999 that calls for the institution to place an
ATM in the local community by January
2001. In September 2000, the parties entered
into a written modification of the agreement
that calls for the institution to establish a
full-service branch rather than an ATM. If the
modified agreement meets the criteria to be
a covered agreement, each party must
disclose the modified agreement in
accordance with the rule and the insured
depository institution must file any annual
reports required by the rule concerning the
agreement. (The organization would not be
required to file an annual report because it
does not receive any funds or resources
under the agreement.)

2. Transition Rules
Section
.10 of the final rule
contains special transition provisions
governing the disclosure and reporting
for covered agreements that were
entered into after the dates set forth
above, but before April 1, 2001, the
effective date of the final rule.
a. Disclosure to Public. The final rule
provides that a covered agreement that
was entered into after November 12,
1999, and that terminates before April 1,
2001, the effective date of the rule, must
be made publicly available in
accordance with the procedures in
section
.6 of the rule until April 1,
2002, one year after the effective date of
the rule. The agencies believe this
requirement provides the public with a
reasonable opportunity to obtain copies
of the agreements consistent with the
requirements of section 48. Parties to
such covered agreements are not
required to make the agreements
available to the public until the final
rule becomes effective.
b. Disclosure to Relevant Supervisory
Agency. The final rule requires a NGEP
to make any covered agreement that was
entered into after November 12, 1999,
and that terminates prior to April 1,
2001, available to the relevant
supervisory agency upon request until

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April 1, 2002. Insured depository
institutions and affiliates that are a party
to any such agreement must make the
agreement available to the relevant
supervisory agency by June 30, 2001, by
providing the agency either a copy of
the agreement or a list identifying the
agreement in accordance with section
.6(d) of the rule.
c. Annual Reporting. The final rule
also includes a special transition rule
for annual reports that relate to fiscal
years that end on or before December
31, 2000. Under this provision, if an
insured depository institution, affiliate
or NGEP is a party to a covered
agreement that was entered into
between May 12, 2000, and December
31, 2000, and has a fiscal year that ends
within that period, the institution,
affiliate or NGEP must file an annual
report concerning the covered
agreement with the relevant supervisory
agency by June 30, 2001, relating to that
fiscal year.34 The annual report must
provide the information described in
section
.7 of the rule. For any fiscal
year that ends after December 31, 2000,
the party would follow the reporting
procedures in section
.7 of the rule.
Example. On May 30, 2000, a NGEP and
insured depository institution entered into a
covered agreement for the institution to make
a grant of $30,000 in two $15,000
installments. The first installment was made
on June 15, 2000 and the second on
December 15, 2000. The fiscal year of the
NGEP ended on June 30, 2000. The NGEP is
required to file an annual report for its fiscal
year that ended June 30, 2000, no later than
June 30, 2001. This report would reflect the
June 15, 2000, payment received by the
NGEP. Under section
.7 of the rule, the
NGEP would then file a second annual report
by December 31, 2001, for its fiscal year
ending June 30, 2001. This second annual
report would reflect the December 15, 2000,
payment.

E. Compliance Provisions
The final rule makes no substantive
changes to the compliance provisions
that were proposed. Section 48(g)
specifically provides that nothing in
section 48 authorizes the agencies to
enforce the provisions of any covered
agreement. The proposed rule
incorporated this provision and the final
rule retains it. (See section
.9(e))
This is consistent with the longstanding policy of the agencies that
CRA-related agreements entered into
between insured depository institutions
(or their affiliates) and NGEPs are
private matters between the parties and
are not enforced by the agencies.
34 A NGEP may comply with this requirement by
providing a copy of the annual report by June 30,
2001, to an insured depository institution or
affiliate that is a party to the agreement in
accordance with section
.7(f)(2).

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Some commenters objected that the
compliance provisions in section
.9
(a) through (c) only apply to NGEPs and
do not apply to insured depository
institutions and affiliates. The agencies
may enforce compliance by insured
depository institutions and affiliates
with the disclosure and reporting
requirements of section 48 using the
cease and desist and other enforcement
powers granted in section 8 of the FDI
Act.35 Section 8 of the FDI Act,
however, applies only to insured
depository institutions, affiliates and
institution-affiliated parties, as defined
in the FDI Act. The provisions of section
8 of the FDI Act, therefore, generally do
not apply to NGEPs that are parties to
a covered agreement. Section 48(f)
instead includes special compliance
provisions applicable to NGEPs that are
party to a covered agreement.36
Under these provisions, the material
and willful failure of a NGEP to comply
with section 48 may cause the related
covered agreement to be unenforceable.
In particular, under the section 48(f)(1),
if the appropriate agency determines
that a NGEP has willfully failed to
comply with section 48 in a material
way, and the NGEP does not comply
with the law after receiving notice and
a reasonable period of time to correct
the area of noncompliance, the
agreement thereafter is unenforceable by
operation of section 48.
Consistent with section 48(f)(3), the
rule provides that inadvertent or de
minimis errors in reports or other
documents filed with an agency under
the rule will not subject the filing party
to any penalty. The rule requires the
agencies to provide a NGEP written
notice and an opportunity to respond
before determining the NGEP has not
complied with the rule, and allows the
NGEP at least 90 days to correct a
willful and material violation.
The rule also clarifies that, in these
circumstances, the agreement becomes
unenforceable only by the party that has
willfully and materially failed to
comply with the rule. Any other party
to the agreement may continue to
enforce the agreement against the
noncomplying party. The agencies
believe this construction is the
interpretation that is most consistent
with the language and purpose of the
Act. The agencies note that an
alternative construction could
35 See

12 U.S.C. 1818.
Federal statutes outside the banking laws
also may provide for penalties if an insured
depository institution, affiliate, or NGEP fails to
comply with the agency disclosure and reporting
requirements of section 48 or includes false
information in a filing made with an agency under
section 48. See, e.g. 18 U.S.C. 1001.
36 Other

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encourage NGEPs to violate the statute
in an attempt to avoid performance
under a legally binding contract, thereby
frustrating the purpose of the statute. If
the insured depository institution or
affiliate elects not to enforce the covered
agreement against the noncomplying
NGEP, the appropriate agency may
assist the institution or affiliate in
identifying a successor NGEP to assume
the responsibilities of the NGEP under
a covered agreement that has become
unenforceable.
Section 48(f)(1)(B) also provides that,
if an individual diverts funds or
resources received under a covered
agreement for his or her personal
financial gain and contrary to the
purposes of the agreement, the
appropriate agency may order the
individual to disgorge the funds and/or
prohibit the individual from being a
party to any covered agreement for up
to 10 years. As noted above, section 48
specifically provides that it does not
authorize the agencies to enforce any
provision of a covered agreement. If,
however, a court or other body of
competent jurisdiction determines that
an individual has diverted funds or
resources for personal financial gain and
contrary to the purposes of the
agreement, the agencies may take one of
the actions specified in the statute.
F. Other Definitions and Rules of
Construction
1. Nongovernmental Entity or Person
Section 48 applies only to agreements
entered into by a ‘‘nongovernmental
entity or person’’ with an insured
depository institution or affiliate. For
ease of reference, the rule uses the term
‘‘NGEP’’ instead of the phrase
‘‘nongovernmental entity or person.’’
Some commenters requested that the
agencies exclude certain types of
entities or organizations from the
definition of NGEP, including
government-sponsored enterprises,
credit unions, and quasi-public entities.
The final rule adopts the definition of
nongovernmental entity or person as
proposed. The agencies believe this
definition properly identifies those
entities and persons that are not
governmental entities and persons and,
therefore, are within the meaning of the
statutory term ‘‘nongovernmental entity
or person.’’ Under the rule, a NGEP
means any individual or entity other
than the U.S. government, a state
government, a unit of local government,
an Indian tribe, or any department,
agency, or instrumentality of such a
governmental entity. A NGEP does not
include a federally chartered public
corporation that receives federal funds

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appropriated specifically for that
corporation. A nongovernmental entity
that is affiliated with, or receives
funding from, such a federally chartered
public corporation, however, would not
be considered a NGEP under the rule,
unless the entity independently
qualified for an exclusion.
The final rule also does not treat
insured depository institutions and their
affiliates as NGEPs. Section 48 draws a
distinction between insured depository
institutions and their affiliates, on one
hand, and NGEPs on the other hand,
and imposes separate obligations on
these two groups.
2. Affiliate
The final rule adopts the term
‘‘affiliate’’ as proposed. The term is
defined in the FDI Act by reference to
the Bank Holding Company Act.37
Under the Bank Holding Company Act,
an affiliate is any company that
controls, is controlled by, or is under
common control with another company.
A company generally is considered to
control another entity if it owns or
controls 25 percent or more of any class
of the other entity’s voting securities.
The final rule retains the special rule
of construction that would apply in
situations where an insured depository
institution has filed an application with
an agency to become affiliated or merge
with another entity. In such
circumstances, a NGEP may have a CRA
communication and enter into an
agreement with the acquiring insured
depository institution (or holding
company thereof) concerning the
adequacy of the CRA performance of the
target institution. The agencies believe
these types of contacts constitute a CRA
communication under section 48 and
that any agreement resulting from such
communication is a covered agreement
if it otherwise meets the requirements of
section 48. Accordingly, the rule
provides that an insured depository
institution is deemed to be an affiliate
of any company that would be under
common control or merged with the
institution pursuant to a transaction that
is pending before an agency. This rule
of construction applies only where the
agency application is pending at both
the time an agreement is entered into
and the time when a triggering CRA
communication occurs. An example
illustrating this point is provided in
section
.3(c)(1)(iv) of the final rule.
3. CRA Affiliate Treated as Insured
Depository Institution
The CRA Regulations provide that an
insured depository institution, at its
37 12

U.S.C. 1813(w)(6); 12 U.S.C. 1841(k).

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
election, may request that an agency
consider certain activities conducted by
an affiliate in evaluating the CRA
performance of the insured depository
institution.38 In these circumstances, the
selected activities of the affiliate are
viewed as activities of the insured
depository institution. Accordingly, the
proposed rule provided that a contact
concerning this type of affiliate, referred
to as a ‘‘CRA affiliate,’’ to be the
equivalent of a contact concerning an
insured depository institution.
Similarly, the proposed rule provided
that an agreement would be considered
to be in fulfillment of the CRA if it
concerned the performance of any of the
activities in the list of factors performed
by a ‘‘CRA affiliate’’ of an insured
depository institution.
The agencies requested comment on
the treatment of CRA affiliates and how
agreements should be treated that relate
to affiliates that are not CRA affiliates at
the time an agreement is entered into,
but become CRA affiliates during the
term of an agreement. Commenters
generally did not object to the definition
of CRA affiliate or treating activities of
such an affiliate as the activities of the
insured depository institution for
purposes of the CRA Sunshine
provisions. However, several
commenters objected to an existing
agreement becoming a covered
agreement during the term of an
agreement as a result of the designation
of an affiliate as a CRA affiliate.
In light of the comments, section
.11(c) of the final rule defines a
‘‘CRA affiliate’’ as any company that is
an affiliate of an insured depository
institution and whose activities were
considered by an agency in assessing
the CRA performance of the institution
at the institution’s most recent CRA
examination prior to the agreement. In
addition, the rule provides that an
insured depository institution or
affiliate may designate a company as a
‘‘CRA affiliate’’ at any time prior to the
time a covered agreement is entered into
by informing the NGEP that is a party
to the agreement of such designation.
Section
.4(b) of the final rule
requires that an insured depository
institution or affiliate inform the other
parties to a covered agreement if the
agreement concerns the activities of a
CRA affiliate. The institution or affiliate
38 See CRA lending test (12 CFR 25.22(c),
228.22(c), 345.22(c) and 563e.22(c)); CRA
investment test (12 CFR 25.23(c), 228.23(c),
345.23(c) and 563e.23(c)); CRA service test (12 CFR
25.24(c), 228.24(c), 345.24(c) and 563e.24(c)); CRA
community development test for wholesale and
limited-purpose institutions (12 CFR 25.25(d),
228.25(d), 345.25(d) and 5632.25(d)); and CRA
strategic plans (12 CFR 25.27(c), 228.27(c),
245.27(c) and 563e.27(c)).

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2073

must provide this notification not later
than the time the agreement is entered
into. The agencies are of the view that
an agreement that relates to an affiliate
that is not a CRA affiliate at the time the
parties enter into an agreement cannot
become a covered agreement if the
affiliate becomes a CRA affiliate during
the term of the agreement.

shorter or longer period. The
appropriate agency could exercise this
discretion, for example, where a onetime grant is made to a NGEP late in a
year with the clear expectation that the
funds would be used in the next year.
In such circumstances, the agency could
require the NGEP to file an annual
report for the next year.

Example 1: The director of a NGEP submits
a written comment to a Federal banking
agency concerning the adequacy of the CRA
lending performance of a mortgage company
that is affiliated with an insured depository
institution. One year later, the director of the
NGEP negotiates an agreement with the
mortgage company for it to provide $100
million in mortgage loans in low- and
moderate-income neighborhoods in the next
year. The insured depository institution
elected, in accordance with the agencies’
CRA Regulations, to have the lending
activities of the mortgage company
considered in the institution’s most recent
CRA performance evaluation. The mortgage
affiliate, therefore, is considered a CRA
affiliate with respect to its lending activities.
The agreement is in fulfillment of the CRA
for purposes of section 48 and the NGEP has
engaged in a CRA communication under
section
.3(a)(1) because the selected
activities of a CRA affiliate and contacts with
an agency regarding a CRA affiliate are
considered activities of and contacts
concerning an insured depository institution.
Accordingly, the agreement is a covered
agreement.
Example 2: An affiliate of an insured
depository institution engages in mortgage
lending and provides credit counseling
services. The insured depository institution
elected to have only the mortgage lending
activities of the affiliate considered in its
most recent CRA performance evaluation.
The affiliate and a community group enter
into an agreement that provides for the
affiliate to provide credit counseling services
in the local community. The agreement is not
in fulfillment of the CRA because the affiliate
is not considered a CRA affiliate with respect
to its credit counseling activities.
Accordingly, the agreement is not a covered
agreement.

IV. Regulatory Flexibility Act Analysis

4. Term of Agreement
Under the final rule, the duration of
a party’s obligation to make a covered
agreement publicly available and to file
annual reports concerning the
agreement is based on the term of the
covered agreement. As a general matter,
the term of an agreement ends on the
agreement’s termination date
established by the parties. Agreements
that do not establish a termination date
are deemed for purposes of the
proposed rule to terminate on the last
date on which any party makes any
payments or provides any loan or other
resources under the agreement. The rule
gives the agencies discretion, in
appropriate circumstances, to determine
that the term of such an agreement is a

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Office of the Comptroller of the
Currency
The Regulatory Flexibility Act (5
U.S.C. 604) requires an agency to
publish a final regulatory flexibility
analysis when promulgating a final rule
that was subject to notice and comment,
unless the agency certifies that the rule
will not have a significant economic
impact on a substantial number of small
entities. The OCC believes that this rule
will not have a significant economic
impact on a substantial number of small
national banks, national bank
subsidiaries, or NGEPs that are party to
covered agreements with national banks
or their subsidiaries. This final rule
restates the statutory requirements and
includes provisions designed to reduce
the regulatory burden on entities and
persons of all sizes. The OCC has
prepared the following final regulatory
flexibility analysis because the GrammLeach-Bliley Act imposes requirements
that are new to the OCC and those
subject to the rule, and because the OCC
is unable at this time to estimate
definitively the economic impact of
compliance with the new requirements
of the rule.
Need for and Objectives of Rule
As discussed above, this rule
implements the CRA Sunshine
provisions of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y), which was enacted by section
711 of the Gramm-Leach-Bliley Act
(Pub. L. 106–102, 113 Stat. 1465 (1999)).
The rule’s objectives are to inform
insured depository institutions,
affiliates of insured depository
institutions, and NGEPs on how to
comply with section 48 by:
(1) Identifying those agreements that
are covered by section 48, including
describing the circumstances in which
an agreement is in fulfillment of the
CRA;
(2) Providing procedures for the
disclosure of covered agreements to the
public and the relevant supervisory
agency; and
(3) Providing procedures for preparing
and filing annual reports relating to
covered agreements with the relevant
supervisory agency.

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New Compliance Requirements
The final rule contains new
compliance requirements that require
insured depository institutions,
affiliates, and NGEPs that enter into a
covered agreement to make the
agreement available to members of the
public and to the appropriate agency,
and to file an annual report with the
appropriate agency concerning the
disbursement and use of funds under
the agreement. These reporting
provisions are required by section 48
and apply regardless of the size of the
insured depository institution, affiliate,
or NGEP. The agencies have sought to
reduce burden of complying with these
requirements wherever possible and
consistent with section 48.
Comments on the Initial Regulatory
Flexibility Analysis
Although few commenters addressed
the initial regulatory flexibility analysis
specifically, many commenters
addressed the regulatory burdens
associated with complying with the
final rule. Many commenters noted that
section 48 was broadly worded and
commended the agencies’ efforts to
clarify which agreements are subject to
section 48 and how a party to a covered
agreement may comply with the
statute’s disclosure and reporting
obligations. Many commenters,
however, expressed concern that the
scope of agreements that were covered
by the proposed rule would result in
coverage of a wide range of agreements
between banking organizations and
NGEPs that were not intended to be
subject to the disclosure and reporting
requirements of section 48. Many
commenters also expressed concern that
the statute and the rule would
discourage banking organizations from
entering into agreements with NGEPs to
provide loans, investments or banking
services in their local communities.
Commenters also provided specific
comments on the disclosure and annual
reporting procedures of the proposed
rule. These comments are discussed in
detail in part III. Commenters generally
supported granting the parties to
covered agreements maximum
flexibility in disclosing covered
agreements to the public and allowing
the parties to charge reasonable fees for
making covered agreements available.
Some commenters requested
clarification concerning how a party
should comply with the public
disclosure requirements when a covered
agreement consists of multiple
documents. Some commenters
supported requiring the public
disclosure period to terminate 12

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months after the term of the agreement,
as proposed, while others recommended
a shorter time period or no time period
at all after the term of the agreement.
Many commenters expressed concern
that the procedures in the proposed rule
for obtaining a determination from an
agency that information in covered
agreements may be withheld from
public disclosure was vague and overly
complicated. Commenters also
expressed concern with the requirement
that an insured depository institution
and affiliate file each covered agreement
with the relevant supervisory agency
within 30 days of entering into the
agreement.
Several commenters objected to the
proposed rule’s requirement that a
NGEP that receives and uses funds or
other resources for a specific purposes
must follow reporting procedures that
are different from the detailed, itemized
list that is described in section 48, while
others supported the proposal.
Commenters also requested additional
detail on the circumstances in which
funds or other resources are received for
a specific purpose. Commenters
overwhelmingly supported the
proposed rule’s provisions allowing
NGEPs to use Federal tax forms and
other reports to fulfill the reporting
requirements of the rule.
Several commenters requested that
insured depository institutions and
affiliates have an exception for filing
annual reports for fiscal years in which
they have no information to report.
Some commenters also requested that a
form be adopted for insured depository
institutions and affiliates to use in filing
annual reports. In addition, commenters
generally supported the option of filing
consolidated reports for NGEPs, insured
depository institutions, and affiliates
that are parties to two or more covered
agreements.
Minimizing Impact on Small
Institutions
Section 48 directs the OCC and the
other agencies to ensure that the rule
does not impose an undue burden on
the parties to covered agreements. The
final rule includes several provisions
that are designed to reduce the burden
and minimize the impact of the rule on
insured depository institutions,
affiliates and NGEPs, including small
institutions, affiliates and NGEPs. Many
of the provisions of the proposed rule
that were supported by commenters
were retained in the final rule and other
provisions were added in response to
comments received by the OCC and the
other agencies.
The final rule gives parties to covered
agreements flexibility in determining

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how to make a covered agreement
available to the public. The rule permits
an insured depository institution or
affiliate to use the institution’s CRA
public file to disclose covered
agreements to the public. Parties to
covered agreements also may charge a
requestor reasonable fees for the cost of
copying and mailing covered
agreements. In response to comments
received, the final rule provides a
streamlined method parties may follow
to determine whether information in a
covered agreement can be withheld
from public disclosure and additional
guidance on the types of information
that must be disclosed.
The rule requires a NGEP to file a
covered agreement with a relevant
supervisory agency only upon request of
the agency. In addition, in response to
comments, the final rule allows an
insured depository institution or
affiliate to make a covered agreement
available to the relevant supervisory
agency by either filing a copy of the
covered agreement with the agency or
filing with the agency a list that briefly
describes the covered agreements to
which the institution or affiliate is a
party. These filings must be made 60
days after the end of the relevant
calendar quarter. The final rule also
permits two or more insured depository
institutions and affiliates that are parties
to the same covered agreement to file
jointly the information that must be
disclosed to the relevant supervisory
agency.
The final rule provides exceptions to
the annual reporting requirements for
NGEPs and insured depository
institutions and affiliates under certain
circumstances. It also permits parties to
covered agreements to file their annual
reports on either a fiscal year or
calendar year basis. The rule also allows
an insured depository institution,
affiliate, or NGEP that is a party to 2 or
more covered agreements to prepare a
single, consolidated annual report
concerning all of the covered
agreements.
NGEPs are permitted to incorporate
into their annual reports other reports
that have been prepared for other
purposes, such as tax returns and
financial statements, to fulfill the
annual reporting requirement. The final
rule also permits NGEPs that receive
and use funds for a specific purpose
(that is, a purpose that is more specific
and limited than the reporting
categories listed in the regulation) either
to provide a detailed, itemized list of the
uses of funds by the NGEP or a brief
description of the use and the amount
of funds used for the specific purpose.
NGEPs are permitted to file an annual

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
report with the relevant supervisory
agency by filing it directly with the
agency or by filing it with the insured
depository institution or affiliate that is
a party to the covered agreement with
instructions to forward the annual
report to the relevant supervisory
agency.
Entities and Persons Covered
The OCC’s final rule applies to
national banks, subsidiaries of national
banks and NGEPs that enter into
covered agreements with a national
bank or a national bank subsidiary.
Section 48 does not authorize the OCC
to provide an exemption for covered
agreements based on the size of the
insured depository institution, affiliate
or NGEP that enters into the agreement.
The OCC and the other agencies
requested estimates of the burden the
proposed rule would impose on insured
depository institutions and affiliates and
NGEPs. One large bank estimated that it
was a party to over 500 agreements in
1999 that would have been considered
covered agreements under the proposed
rule. A national organization that
promotes the availability of credit and
capital in underserved communities
commented that it and its 720
community organization members have
negotiated 300 ‘‘CRA agreements’’ with
insured depository institutions and their
affiliates.
The agreements that trigger the
disclosure and reporting requirements
of the final rule are entered into by
private parties on a voluntary basis, are
not enforced by the agencies and, to
date, have not been required to be
disclosed to the agencies. The OCC
believes that larger national banks and
NGEPs are likely to be party to more
covered agreements than smaller
national banks and NGEPs. The OCC
and the other agencies have modified
the rule in several respects in order to
clarify the types of agreements that are
covered by section 48, and the types of
agreements that are exempt from
coverage. Although some commenters
submitted estimates of the number of
covered agreements they would be a
party to under the proposed rule, the
OCC does not believe the information
provided to date is sufficiently
comprehensive to enable it to estimate
definitively the total number of national
banks, subsidiaries, or NGEPs that are
parties to covered agreements.
Federal Reserve System
The Regulatory Flexibility Act (5
U.S.C. 604) requires an agency to
publish a final regulatory flexibility
analysis when promulgating a final rule
that was subject to notice and comment,

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unless the agency certifies that the rule
will not have a significant economic
impact on a substantial number of small
entities. The Board believes that this
rule will not have a significant
economic impact on a substantial
number of small state member banks,
bank holding companies, affiliates of
bank holding companies, and NGEPs
that are a party to a covered agreement
with any of the foregoing. This final rule
restates the statutory requirements and
includes provisions designed to reduce
the regulatory burden on entities and
persons of all sizes. The Board has
prepared the following final regulatory
flexibility analysis because the GrammLeach-Bliley Act imposes requirements
that are new to the Board and those
subject to the rule, and because the
Board is unable at this time to estimate
definitively the economic impact of
compliance with the new requirements
of the rule.
Need for and Objectives of Rule
As discussed above, this rule
implements the CRA Sunshine
provisions of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y), which was enacted by section
711 of the Gramm-Leach-Bliley Act
(Pub. L. 106–102, 113 Stat. 1465 (1999)).
The rule’s objectives are to inform
insured depository institutions,
affiliates of insured depository
institutions, and NGEPs on how to
comply with section 48 by:
(1) Identifying those agreements that
are covered by section 48, including
describing the circumstances in which
an agreement is in fulfillment of the
CRA;
(2) Providing procedures for the
disclosure of covered agreements to the
public and the relevant supervisory
agency; and
(3) Providing procedures for preparing
and filing annual reports relating to
covered agreements with the relevant
supervisory agency.
New Compliance Requirements
The final rule contains new
compliance requirements that require
insured depository institutions,
affiliates, and NGEPs that enter into a
covered agreement to make the
agreement available to members of the
public and to the appropriate agency,
and to file an annual report with the
appropriate agency concerning the
disbursement and use of funds under
the agreement. These reporting
provisions are required by section 48
and apply regardless of the size of the
insured depository institution, affiliate,
or NGEP. The agencies have sought to
reduce burden of complying with these

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2075

requirements wherever possible and
consistent with section 48.
Comments on the Initial Regulatory
Flexibility Analysis
Although few commenters addressed
the initial regulatory flexibility analysis
specifically, many commenters
addressed the regulatory burdens
associated with complying with the
final rule. Many commenters noted that
section 48 was broadly worded and
commended the agencies’ efforts to
clarify which agreements are subject to
section 48 and how a party to a covered
agreement may comply with the
statute’s disclosure and reporting
obligations. Many commenters,
however, expressed concern that the
scope of agreements that were covered
by the proposed rule would result in
coverage of a wide range of agreements
between banking organizations and
NGEPs that were not intended to be
subject to the disclosure and reporting
requirements of section 48. Many
commenters also expressed concern that
the statute and the rule would
discourage banking organizations from
entering into agreements with NGEPs to
provide loans, investments or banking
services in their local communities.
Commenters also provided specific
comments on the disclosure and annual
reporting procedures of the proposed
rule. These comments are discussed in
detail in part III. Commenters generally
supported granting the parties to
covered agreements maximum
flexibility in disclosing covered
agreements to the public and allowing
the parties to charge reasonable fees for
making covered agreements available.
Some commenters requested
clarification concerning how a party
should comply with the public
disclosure requirements when a covered
agreement consists of multiple
documents. Some commenters
supported requiring the public
disclosure period to terminate 12
months after the term of the agreement,
as proposed, while others recommended
a shorter time period or no time period
at all after the term of the agreement.
Many commenters expressed concern
that the procedures in the proposed rule
for obtaining a determination from an
agency that information in covered
agreements may be withheld from
public disclosure was vague and overly
complicated. Commenters also
expressed concern with the requirement
that an insured depository institution
and affiliate file each covered agreement
with the relevant supervisory agency
within 30 days of entering into the
agreement.

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Several commenters objected to the
proposed rule’s requirement that a
NGEP that receives and uses funds or
other resources for a specific purposes
must follow reporting procedures that
are different from the detailed, itemized
list that is described in section 48, while
others supported the proposal.
Commenters also requested additional
detail on the circumstances in which
funds or other resources are received for
a specific purpose. Commenters
overwhelmingly supported the
proposed rule’s provisions allowing
NGEPs to use Federal tax forms and
other reports to fulfill the reporting
requirements of the rule.
Several commenters requested that
insured depository institutions and
affiliates have an exception for filing
annual reports for fiscal years in which
they have no information to report.
Some commenters also requested that a
form be adopted for insured depository
institutions and affiliates to use in filing
annual reports. In addition, commenters
generally supported the option of filing
consolidated reports for NGEPs, insured
depository institutions, and affiliates
that are parties to two or more covered
agreements.
Minimizing Impact on Small
Institutions
Section 48 directs the Board and the
other agencies to ensure that the rule
does not impose an undue burden on
the parties to covered agreements. The
final rule includes several provisions
that are designed to reduce the burden
and minimize the impact of the rule on
insured depository institutions,
affiliates and NGEPs, including small
institutions, affiliates and NGEPs. Many
of the provisions of the proposed rule
that were supported by commenters
were retained in the final rule and other
provisions were added in response to
comments received by the Board and
the other agencies.
The final rule gives parties to covered
agreements flexibility in determining
how to make a covered agreement
available to the public. The rule permits
an insured depository institution or
affiliate to use the institution’s CRA
public file to disclose covered
agreements to the public. Parties to
covered agreements also may charge a
requestor reasonable fees for the cost of
copying and mailing covered
agreements. In response to comments
received, the final rule provides a
streamlined method parties may follow
to determine whether information in a
covered agreement can be withheld
from public disclosure and additional
guidance on the types of information
that must be disclosed.

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The rule requires a NGEP to file a
covered agreement with a relevant
supervisory agency only upon request of
the agency. In addition, in response to
comments, the final rule allows an
insured depository institution or
affiliate to make a covered agreement
available to the relevant supervisory
agency by either filing a copy of the
covered agreement with the agency or
filing with the agency a list that briefly
describes the covered agreements to
which the institution or affiliate is a
party. These filings must be made 60
days after the end of the relevant
calendar quarter. The final rule also
permits two or more insured depository
institutions and affiliates that are parties
to the same covered agreement to file
jointly the information that must be
disclosed to the relevant supervisory
agency.
The final rule provides exceptions to
the annual reporting requirements for
NGEPs and insured depository
institutions and affiliates under certain
circumstances. It also permits parties to
covered agreements to file their annual
reports on either a fiscal year or
calendar year basis. The rule also allows
an insured depository institution,
affiliate, or NGEP that is a party to 2 or
more covered agreements to prepare a
single, consolidated annual report
concerning all of the covered
agreements.
NGEPs are permitted to incorporate
into their annual reports other reports
that have been prepared for other
purposes, such as tax returns and
financial statements, to fulfill the
annual reporting requirement. The final
rule also permits NGEPs that receive
and use funds for a specific purpose
either to provide a detailed, itemized
list of the uses of funds by the NGEP or
a brief description of the use and the
amount of funds used for the specific
purpose. NGEPs are permitted to file an
annual report with the relevant
supervisory agency by filing it directly
with the agency or by filing it with the
insured depository institution or
affiliate that is a party to the covered
agreement with instructions to forward
the annual report to the relevant
supervisory agency.
Entities and Persons Covered
The Board’s final rule applies only to
the following parties to covered
agreements: (1) State member banks and
subsidiaries of state member banks, (2)
bank holding companies, (3) affiliates of
bank holding companies, other than
banks, savings associations and
subsidiaries of banks and savings
associations, and (4) NGEPs that enter
into covered agreements with any

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company listed in (1) through (3).
Section 48 does not authorize the Board
to provide an exemption for covered
agreements based on the size of the
insured depository institution, affiliate
or NGEP that enters into the agreement.
The Board requested estimates of the
burden the proposed rule would impose
on insured depository institutions and
affiliates and NGEPs. One large bank
estimated that it was a party to over 500
agreements in 1999 that would have
been considered covered agreements
under the proposed rule. A national
organization that promotes the
availability of credit and capital in
underserved communities commented
that it and its 720 community
organization members have negotiated
300 ‘‘CRA agreements’’ with insured
depository institutions and their
affiliates.
The agreements that trigger the
disclosure and reporting requirements
of the final rule are entered into by
private parties on a voluntary basis, are
not enforced by the agencies and, to
date, have not been required to be
disclosed to the agencies. The Board
believes that larger banking
organizations and NGEPs are likely to be
party to a higher proportion of covered
agreements than smaller banking
organizations and NGEPs. Although
some commenters submitted estimates
of the number of covered agreements
they would be a party to under the
proposed rule, the Board and the other
agencies have modified the rule in
several respects in order to clarify the
types of agreements that are covered by
section 48, and the types of agreements
that are exempt from coverage. The
Board does not believe it has received
enough information at this time to
estimate definitively the total number of
insured depository institutions,
affiliates or NGEPs that are parties to
covered agreements.
Federal Deposit Insurance Corporation
Subject to certain exceptions, the
Regulatory Flexibility Act (5 U.S.C.
601–612) (RFA) requires an agency to
prepare a final regulatory flexibility
analysis in conjunction with its
issuance of a final rule. If the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities, a
final regulatory flexibility analysis is not
required.39 At the time of issuance of
39 The RFA defines the term ‘‘small entity’’ in 5
U.S.C. 601 by reference to definitions published by
the Small Business Administration (SBA). The SBA
has defined a ‘‘small entity’’ for banking purposes
as a national or commercial bank, savings
institution or credit union with less than $100
million in assets. See 13 CFR 121.201.

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the proposed rule, the FDIC was unable
to certify that the rule would not have
a significant economic impact on a
substantial number of small entities.
Although the final rule contains
provisions designed to reduce the
burden of regulatory compliance by all
parties to covered agreements, the FDIC
lacks sufficient information to certify
that the final rule will not have a
significant economic impact on a
substantial number of small entities.
Therefore, pursuant to section 604 of the
RFA, the FDIC provides the following
final regulatory flexibility analysis.
Need for and Objectives of the Rule
The final rule implements § 48 of the
Federal Deposit Insurance Act (FDIA)
addressing disclosure and reporting
requirements for certain agreements
related to the CRA. Section 48(h)
requires the Federal banking agencies to
publish regulations applicable to
insured depository institutions, their
affiliates, and NGEPs relating to:
• The types of agreements covered by
the rule;
• The procedures for implementing
the disclosure requirements related to
agreements covered by the rule; and
• The procedures for implementing
the annual reporting requirements
related to agreements covered by the
rule.
Small Entities to Which the Final Rule
Will Apply
The final rule applies to all FDICinsured state nonmember banks (and
their affiliates), including those insured
state nonmember banks with assets of
under $100 million. As of September
2000, 3,331 (of 5,130 total) FDIC-insured
state nonmember banks had assets of
under $100 million. The final rule also
applies to NGEPs that enter into covered
agreements with insured depository
institutions or their affiliates.
Section 48 does not authorize the
FDIC to create exemptions for disclosure
or reporting requirements based on the
asset size of either an insured
depository institution (or its affiliate) or
a NGEP; therefore, the FDIC did not
establish alternative compliance
standards for small entities.
Because agreements like those that
will trigger the disclosure and reporting
requirements of the final rule have not
been previously disclosed or monitored
by the FDIC, the FDIC lacks sufficient
information to estimate the total number
of insured state nonmember banks (or
their affiliates) and NGEPs that may be
parties to covered agreements.

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Initial Regulatory Flexibility Analysis
and Related Burden Reduction
Measures
In its initial regulatory flexibility
analysis, the FDIC specifically requested
information on the likely significance of
the economic impact the proposed rule
would impose on state nonmember
banks, their affiliates, and NGEPs who
enter into covered agreements.
Following publication of the proposed
rule, the FDIC received approximately
200 comment letters. Although none of
the commenters specifically responded
to the questions raised in the initial
regulatory flexibility section of the
proposed rule, many commenters
addressed the regulatory burdens
associated with the disclosure and
reporting requirements described in the
proposed rule. They also requested
clarification regarding the types of
agreements that would be subject to the
rule and advocated implementation of a
more streamlined way to protect
confidential or proprietary information
from disclosure. (For a more complete
discussion of the comments received,
see the analysis contained in Part II of
the Supplementary Information section
of the preamble.)
Section 48 of the FDIA requires
insured depository institutions, their
affiliates, and NGEPs that are parties to
covered agreements: to make the
agreements available to the public and
to the relevant supervisory agency (as
defined in the rule), and to file an
annual report related to covered
agreements with the relevant
supervisory agency.
Section 48(h)(2)(A) of the FDIA
further requires the Federal banking
agencies to prescribe implementing
regulations that do not impose an undue
burden on parties to covered
agreements. In accordance with both
this statutory mandate and with the
comments received in response to the
proposed rule, in the final rule, the
FDIC sought to minimize the burden on
all parties to covered agreements—
including small entities.
A brief description of some of the
burden reduction measures related to
the final rule’s disclosure and reporting
requirements follows. (For a more
detailed discussion explanation of these
and other burden reduction measures
adopted in the final rule, see the
analysis contained in Part III of the
SUPPLEMENTARY INFORMATION section of
the preamble.)
The rule minimizes burden in its
disclosure requirements by offering
parties to covered agreements flexibility
in making these agreements available to
public. No one single method of

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disclosure is prescribed. NGEPs need
only disclose covered agreements when
a request for the agreement is made. One
way that insured depository institutions
(or affiliates) may meet their agency
disclosure obligations is by filing a
quarterly list of covered agreements
with the relevant supervisory agency,
with the actual agreement to be
provided upon the request of the
agency. If two or more insured
depository institutions or their affiliates
are parties to a covered agreement, they
are permitted to jointly disclose the
agreements to the relevant supervisory
agency. Further, an insured depository
institution and its affiliates may use the
institution’s CRA public file as a
disclosure mechanism. All parties to
covered agreements are permitted to
collect reasonable fees associated with
the disclosure of these agreements. For
clarity, the rule contains a list of items
contained in a covered agreement that
may not be withheld from disclosure,
but it allows parties to request an
agency determination concerning
whether other information properly may
be withheld.
The rule minimizes burden in its
reporting requirements by providing
certain exceptions to the annual
reporting requirement for both NGEPs
and for insured depository institutions
and their affiliates. Annual reports may
be filed to reflect either a calendar year
or fiscal year accounting system. A
NGEP may use certain tax forms and
other reports to satisfy its reporting
requirement and also may meet its
reporting obligations by filing the report
with the insured depository institution
(or affiliate) that is a party to the
agreement. The rule permits
consolidated annual reporting if insured
depository institutions, their affiliates,
or NGEPs are parties to at least two
covered agreements.
Reporting, Recordkeeping, and Other
Compliance Requirements
The final rule contains disclosure and
reporting requirements applicable to all
FDIC-insured state nonmember banks,
affiliates of state nonmember banks, and
non-governmental entities or persons
that are parties to covered agreements.
Parties to covered agreements are
required to make the agreements
available to the public and to the
relevant supervisory agency and to
report annually to the relevant
supervisory agency concerning the
covered agreements. (For a more
detailed explanation of the disclosure
requirements of the final rule, see the
explanation contained in Part III, B of
the SUPPLEMENTARY INFORMATION section
of the preamble. For a more detailed

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explanation of the reporting
requirements of the final rule, see the
explanation contained in Part III, C of
the SUPPLEMENTARY INFORMATION section
of the preamble.)
The final rule does not establish
specific recordkeeping procedures for
parties to covered agreements. The FDIC
anticipates that the parties will employ
recordkeeping policies and practices
sufficient to allow retrieval of covered
agreements as necessary for compliance
with the disclosure and annual
reporting requirements of the final rule.
Although the final rule contains
provisions to minimize the compliance
burden on parties to covered
agreements, it is possible that insured
state nonmember banks (and their
affiliates) and NGEPs may require
professional skills in recognizing the
existence of a covered agreement; and in
compiling materials responsive to
annual reporting requirements of the
final rule.
Office of Thrift Supervision
The Regulatory Flexibility Act (5
U.S.C. 601–612) requires federal
agencies to prepare a final regulatory
flexibility analysis (RFA) with a final
rule that was subject to notice and
comment, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. OTS believes
that this rule will not have a significant
economic impact on a substantial
number of small savings associations
and their subsidiaries, savings and loan
holding companies, affiliates of savings
associations and savings and loan
holding companies (other than bank
holding companies, banks, and
subsidiaries of bank holding companies
and banks), or NGEPs that enter into
covered agreements with any of the
foregoing because the burden imposed
on small entities stems in large part
from the GLB Act, rather than the final
rule. This final rule restates the
statutory requirements and includes
clarifications designed to reduce the
regulatory burden on savings
associations, affiliates, and NGEPs of all
sizes, as discussed below. OTS has
prepared the following RFA because the
GLB Act imposes requirements that are
new to OTS, the thrift industry, and
others, and because OTS is uncertain of
the economic impact of compliance
with the new requirements.
1. Statement of Need and Objectives
A description of the reasons why OTS
is adopting this final rule and a
statement of the objectives of, and legal
basis for, the final rule, are contained in
the SUPPLEMENTARY INFORMATION above.

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2. Small Entities to Which the Final
Rule Applies
OTS’s final rule applies to the
following types of entities if they are a
party to a covered agreement:
(1) Savings associations and their
subsidiaries;
(2) Savings and loan holding
companies
(3) Affiliates of savings associations
and savings and loan holding
companies, other than bank holding
companies; banks; and subsidiaries of
bank holding companies and banks; and
(4) NGEPs that enter into covered
agreements with any company listed in
(1), (2), or (3).
The final rule would apply regardless
of the size of the savings association,
affiliate, or NGEP.
Small savings associations are
generally defined, for Regulatory
Flexibility Act purposes, as those with
assets of $100 million or less. 13 CFR
121.201, Division H (2000). As of the
publication of the proposed rule, OTS
calculated that of the approximately
1,100 savings associations, a maximum
of 486 were small savings associations.
OTS also calculated that these 486
savings associations held approximately
100 subordinate organizations that
could possibly qualify as small entities.
OTS further calculated that a maximum
of 205 savings and loan holding
companies could possibly qualify as
small entities.40
The initial RFA (IRFA) published in
the proposed rule explained that to date,
parties to covered agreements have not
had to disclose or report agreements to
OTS. Generally, neither OTS nor any
other Federal agency is a party to
covered agreements. Finally, OTS does
not enforce such agreements. Thus, OTS
did not have information about these
agreements. OTS sought comments to
enable it to make an accurate burden
estimate including the number and size
of savings associations, affiliates, and
NGEPs that are parties to covered
agreements, and the number of covered
agreements that currently exist and
would likely be entered into each year
in the future.
40 It is likely that the number of small SLHCs is
significantly less than 205. In a recent notice of
proposed rulemaking, OTS applied a newly
promulgated Small Business Administration (SBA)
standard for determining whether holding
companies are small. OTS estimated there were 88
small SLHCs under the asset-based definition in the
SBA’s rule (i.e., holding company structures
holding assets of less than $100 million), or 150
small SLHCs using the revenue-based definition in
the SBA’s rule. See Savings and Loan Holding
Companies Notice of Significant Transactions or
Activities and OTS Review of Capital Adequacy, 65
Fed. Reg. 64,392, 64,397 (October 27, 2000)
(applying SBA rule 13 CFR 121.201).

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OTS received many comments on the
proposed rule addressing its potentially
broad application. A few NGEPs
specifically noted that three of the
largest community advocacy
organizations have 720, 1,200, and 3,600
members, respectively. Commenters
noted that each of these members is a
potential NGEP. Community advocacy
organizations are just one of many types
of NGEPs subject to the rule.
A substantial number of NGEPs
commented that there were hundreds, if
not thousands, of covered agreements.
Commenters estimated that one large
community advocacy organization alone
had 300 covered agreements, including
more than $1 trillion in loans and
investments for low- and moderateincome communities. Commenters
estimated another community advocacy
organization had a dozen agreements. A
very large financial institution estimated
that it had more than 500 covered
agreements in effect in 1999. A federal
savings association indicated that it
entered into 42 covered agreements with
38 community groups during the first
six months since the GLB Act was
enacted. A local government indicated
that it had $1.3 billion in loans or grants
in 60,000 separate transactions that
potentially were covered, including
15,000 transactions with one large
financial institution alone.
While this information provides
anecdotal evidence that a potentially
large number of savings associations,
affiliates, and NGEPs of all sizes are
parties to a potentially large number of
covered agreements, it does not enable
OTS to make a reliable estimate of the
burden of the final rule.
3. Reporting, Recordkeeping, and Other
Compliance Requirements of the Final
Rule
As described more fully elsewhere in
the SUPPLEMENTARY INFORMATION above,
the primary requirements of the final
rule involve the disclosure and
reporting of covered agreements. The
final rule requires each party to a
covered agreement to disclose the
agreement to the public by making a
complete copy available to any
individual or entity upon request. It also
requires each savings association or
affiliate that is a party to a covered
agreement to provide a copy to each
relevant supervisory agency (as defined
in the rule) and requires each NGEP that
is a party to provide a copy to each
relevant supervisory agency upon
request. The final rule also requires each
party to a covered agreement to file an
annual report with each relevant
supervisory agency concerning the
disbursement, receipt, and uses of funds

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or other resources under the covered
agreement. Most of these requirements
are mandated by section 48 of the FDI
Act.
Savings associations, affiliates, and
NGEPs may already have recordkeeping
and other policies and practices that
would already enable them to partly or
fully meet the requirements of this final
rule. To the extent that existing
practices and available resources are
insufficient, parties to covered
agreements would need professional
skills to comply with this final rule. To
disclose covered agreements, parties
may need clerical and computer
personnel. To prepare required reports
and disclosures, parties may need
personnel with these skills, as well as
personnel skilled in financial,
accounting, and legal matters. Some
degree of personnel training may be
necessary, such as to enable employees
to determine when parties enter into
covered agreements, and how to retain,
record, redact, and compile information
about agreements.
OTS cannot predict exactly how
savings associations, affiliates, and
NGEPs will comply with the final rule
since the requirements are new. For
example, OTS cannot assess the extent
to which savings associations, affiliates,
and NGEPs will avoid entering into
covered agreements as a result of the
final rule. A common concern expressed
by commenters was that the statute and
rule would have precisely this effect.
As discussed below, the final rule
contains many provisions designed to
minimize the compliance burden. These
provisions are consistent with the
directive in section 48(h)(2)(A) of the
FDI Act that the Federal banking
agencies ensure that the regulations
prescribed do not impose an undue
burden on the parties.
4. Significant Issues Raised in Response
to Initial Regulatory Flexibility Analysis
and Changes Made to Minimize Burden
The issues raised by the commenters
addressing burden in general are
described elsewhere in the
Supplementary Information. Many
NGEPs and insured depository
institutions commented that the
disclosure and reporting burdens would
be heavy. The issues that were raised by
commenters that specifically relate to
the rule’s impact on small businesses
were the following:
• Tracking and reporting on covered
agreements would require many NGEPs,
particularly small ones, to hire outside
CPAs for the first time. One NGEP
estimated that an additional 100,000 or
more nonprofits would find it necessary
to hire outside CPA firms, and that the

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paperwork, accounting, and
bookkeeping costs would amount to at
least $3,000 annually for each nonprofit
or $300 million annually for all.
• Disclosing and reporting covered
agreements would require additional
staff, both for NGEPs and insured
depository institutions. One estimate
was that a total of at least 5,000
additional bank employees would be
needed. One financial institution
indicated it would need at least one
additional full-time employee. Several
NGEPs indicated that nonprofits reliant
on volunteers could least afford
additional staff.
The proposed rule contained several
provisions designed to avoid undue
burdens. The final rule contains
additional provisions that should
minimize the need for new accounting
systems and additional staff.
With regard to the disclosure burden,
the final rule:
• Terminates the public disclosure
requirement and the requirement for a
NGEP to provide a copy to the relevant
supervisory agencies upon request 12
months after the end of the term of the
covered agreement.
• Does not mandate any particular
method for disclosing the agreement to
the public.
• Allows each party to charge
reasonable copying and mailing fees
when it discloses an agreement to the
public.
• Requires an NGEP to provide a copy
to the relevant supervisory agencies
only if the agency requests a copy.
• Allows a savings association or
affiliate to file with the relevant
supervisory agencies a copy of a covered
agreement 60 days after the end of each
calendar quarter. (The proposed rule
would have required filing 30 days after
entering into the agreement.)
• Allows a savings association or
affiliate to elect to file a list of its
covered agreements, rather than the
actual agreement with the relevant
supervisory agencies. It would be
required to submit a complete copy of
an agreement only upon a request from
the agency. (The proposed rule would
not have offered the option of a list.)
• Allows a savings association or
affiliate to publicly disclose by placing
a copy of the covered agreement in its
CRA public file and the savings
association making it available under
the public file procedures. (The
proposed rule would not have extended
this option to affiliates.)
• Allows two or more insured
depository institutions or affiliates that
are parties to a covered agreement to
jointly file with each relevant
supervisory agency.

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• Enhances the protections for
proprietary and confidential
information. (The final rule, unlike the
proposed rule, permits the parties to
redact information before making
agreements publicly available without
the need for prior agency review and
approval. It also lists the specific
information that parties may not redact
to provide clearer guidance. Finally, it
provides procedures for parties to
submit both redacted and unredacted
copies to the agencies to facilitate
release of information in accordance
with FOIA and related safeguards.)
• Contains transition provisions to
ease compliance with disclosure
requirements for agreements entered
into prior to the effective date of the
final rule. (The proposed rule had no
transition provisions.)
With regard to the reporting burden,
the final rule:
• Does not mandate any particular
form for the annual report.
• Allows each party to report on its
own fiscal year basis or on the calendar
year.
• Exempts a NGEP from filing a
report for a fiscal year if the NGEP does
not receive or use any funds or
resources during that year.
• Exempts an institution or affiliate
from filing a report for a fiscal year if the
institution or affiliate does not receive
or provide any payments, fees, or loans
during that year and has no data to
report on loans, investments, and
services provided by a party to the
agreement. An institution or affiliate has
no data to report on another party’s
activities if it does not know of the
information or the information is
contained in another party’s annual
report. (The proposed rule would not
have included this exemption.)
• Provides the option of special
purpose reporting procedures rather
than a detailed, itemized list for NGEPs
that allocate and use funds or other
resources under a covered agreement.
(The proposed rule contained similar
provisions but would have made special
purpose reporting mandatory where
applicable.)
• Allows a NGEP’s report to consist
of, or incorporate, reports prepared for
other purposes, such as IRS Form 990
and financial statements. (The proposed
rule contained similar provisions, but
would not have specifically referred to
IRS Form 990.)
• Permits a savings association,
affiliate, or NGEP that is a party to two
or more covered agreements to file a
single consolidated annual report
covering all its covered agreements,
aggregating certain information. (The
proposed rule only would have allowed

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consolidated reporting for entities that
are parties to five or more covered
agreements.)
• Allows a savings association and its
affiliates that are parties to the same
covered agreement to file a single
consolidated report.
• Allows a NGEP to file its report
with the insured depository institution
or affiliate that is a party to the
agreement, rather than with the relevant
supervisory agency, allotting six months
to do so. The institution must then
forward the report to the relevant
supervisory agency within 30 days.
• Contains transition provisions to
ease compliance with reporting
requirements for agreements entered
into prior to the effective date of the
final rule. (The proposed rule had no
transition provisions.)
The final rule also:
• Clarifies, through examples, that a
covered agreement (including a written
pledge) must reflect a mutual
arrangement or understanding.
• Excludes an agreement from the
definition of covered agreement if no
NGEP that is a party has a CRA
communication. (The final rule’s
definition of ‘‘CRA communication’’ is
narrower than the proposed rule’s
definition of ‘‘CRA contact’’ in three
ways: (1) The types of communications
that concern the CRA are somewhat
clarified and narrowed; (2) CRA
communications must be known about
by particular employees and officers of
the parties (in some instances, a
depository institution or affiliate may be
deemed to have knowledge); and (3)
CRA communications must occur no
earlier than one to three years prior to
entering into the agreement depending
on the type of CRA communication.)
• Does not subject a party to a
multiparty agreement to the
requirements of the rule if the party has
not had a CRA communication and does
not know about any CRA
communication among other parties to
the agreement. (The proposed rule
would have had no comparable
provision.)
• Clarifies that agreements that relate
to activities of affiliates that are not CRA
affiliates at the time a covered
agreement is entered into are not
covered.
• Implements the ‘‘fulfillment’’
provision to cover activities of the type
that are likely to receive favorable
consideration by a Federal banking
agency in evaluating the performance
under the CRA of the insured depository
institution that is a party to the
agreement or an affiliate of a party to the
agreement. (The proposed rule would

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not have had implemented the
provision in this manner.)
• Provides flexibility to the parties to
determine the value of an agreement
that does not specify the amount of
payments, grants, loans, or other
consideration.
• Excludes from the definition of
covered agreement any individual loan
secured by real estate.
• Excludes from the definition of
covered agreement, specific contracts or
commitments for a loan or extension of
credit if certain requirements are met,
provides flexibility to the parties to
determine if the loans are ‘‘substantially
below market rates,’’ and clarifies that
the terms of the loan application and
other loan documents establish whether
the restriction against relending is
satisfied.
• In determining whether an
agreement that combines an exempt
loan and other consideration is covered,
the exempt loan may be excluded from
consideration.
5. Significant Alternatives to the Final
Rule
The requirements in the final rule
parallel those in the GLB Act. The final
rule clarifies the statutory requirements
in some areas and restates the
requirements in a more understandable
manner in other areas. The final rule
does not impose any requirements that
differ substantially from the statute.
Since the requirements are set by
statute, OTS has only limited discretion
to consider alternatives. To the extent
that OTS does have discretion, it has
exercised that discretion to minimize
the burden as discussed above.
Congress has decided that ‘‘each’’
insured depository institution, affiliate,
or person that is a party to a covered
agreement must disclose and report the
agreement. The GLB Act does not
expressly authorize OTS to exempt
small savings associations, affiliates, or
NGEPs from these requirements. OTS
does not interpret the statute to permit
such an exemption.
6. Duplicative, Overlapping, or
Conflicting Federal Rules
This final rule does not appear to
duplicate or overlap with any other
Federal rules. To the extent that
required information is already
contained in reports prepared for other
purposes, the final rule allows a NGEP’s
report to consist of, or incorporate, these
existing reports. The final rule also
allows insured depository institutions
and affiliates to use the CRA public file
established under the CRA Regulations
as a mechanism for disclosing

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agreements. The rule is not intended to
otherwise affect the CRA.
OTS lacks sufficient information
about the contents of covered
agreements, however, to conclude
whether the final requirements conflict
with other Federal rules. One area of
potential conflict on which comment
was solicited was the rule’s requirement
to make a ‘‘complete copy’’ of a covered
agreement available to the public and to
the relevant supervisory agencies. OTS
solicited specific comment on whether
covered agreements contain information
that savings associations, affiliates, or
persons may be barred from disclosing
under other Federal rules (e.g., private
customer information), or may be
permitted to refrain from disclosing to
the public or a Federal banking agency
under other Federal rules (e.g.,
proprietary information). OTS also
generally sought comment on any
Federal rules that may duplicate,
overlap, or conflict with the proposal.
Several commenters indicated that
covered agreements are likely to contain
proprietary and confidential
information. Several commenters
requested that the final rule accord full
FOIA protections to information in
covered agreements. As discussed
above, the agencies have enhanced the
procedures for protecting proprietary
and confidential information in the final
rule.
V. Executive Order 12866
Determination
OCC: The Comptroller of the Currency
has determined that this final rule does
not constitute a ‘‘significant regulatory
action’’ for purposes of Executive Order
12866 because it does not satisfy any of
the elements of the definition of
‘‘significant regulatory action’’ provided
by the Executive Order.
OTS: OTS has determined that this
final rule does not constitute a
significant regulatory action for the
purpose of Executive Order 12866.
Reporting and disclosure are mandated
by section 48 of the FDI Act. Most of the
final rule’s provisions closely follow the
requirements of this section. OTS has
exercised its discretion, to the extent
possible, to minimize costs and
burdens. While OTS acknowledges that
the rule will impose costs on insured
depository institutions, affiliates, and
NGEPs by requiring these entities to
disclose and report on covered
agreements, OTS believes that the
impact of the rule does not meet the
thresholds of the Executive Order.
VI. Paperwork Reduction Act
The agencies may not conduct or
sponsor, and an organization is not

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
required to respond to, an information
collection unless it displays a currently
valid Office of Management and Budget
(OMB) control number. The OMB
control numbers are listed below:
OCC: 1557–0219
Board: 7100–0298
FDIC: 3064–0139
OTS: 1550–0105
The agencies sought comment on all
aspects of the burden estimates for the
information collections in the reporting
and disclosure provisions of the
proposed rule, including how
burdensome it would be for NGEPs,
insured depository institutions, and
affiliates of insured depository
institutions to comply with the burden
elements. Many commenters suggested,
in response to specific proposed
sections, that the disclosure and
reporting requirements of the rule
would impose significant burden on
them. Several asserted that the agencies
had underestimated the burden
associated with complying with the
rule.
Many commenters recommended
changes in the procedures of the
proposed rule for disclosing covered
agreements to the public and the
relevant supervisory agencies and for
submitting annual reports relating to
covered agreements. The agencies have
addressed several of these concerns by
amending the relevant provisions of the
rule as discussed above.
The final rule contains four disclosure
requirements and two reporting
requirements for insured depository
institutions and affiliates of insured
depository institutions, as well as three
disclosure requirements and one
reporting requirement for NGEPs. Below
is a brief summary of the paperwork
burdens implemented by this final rule.
The final rule requires each NGEP,
insured depository institution, and
affiliate of an insured depository
institution that is a party to a covered
agreement to make the agreement
available to the public upon request at
any time during the term of the
agreement and continuing until 12
months after the term of the agreement
(§§
.6(b)(1) and
.6(b)(5)).
A NGEP is required to disclose a
covered agreement to the relevant
supervisory agency within 30 days of a
request from the agency (§§
.6(c)(1)).
An insured depository institution or
affiliate that enters into a covered
agreement must, within 60 days after
the close of the relevant calendar
quarter, provide to each relevant
supervisory agency either (1) a complete
copy of each agreement entered into
during the calendar quarter

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(§§
.6(d)(1)(i)), or (2) a list of all
covered agreements entered into during
the calendar quarter (§§
.6(d)(1)(ii)).
Some commenters felt that allowing
insured depository institutions or
affiliates to submit a list of their covered
agreements would help to decrease
burden on the organization. If an
institution or affiliate submits a list of
its agreement, the institution or affiliate
must provide any relevant supervisory
agency with a complete copy of any
covered agreement referenced in the list
within 7 calendar days of receiving a
request from the agency
(§§
.6(d)(2)). The obligation of an
institution or affiliate to provide an
agency with a copy of a covered
agreement referenced in a list terminates
36 months after the term of the
agreement.
The final rule also requires each
NGEP that is a party to a covered
agreement to file an annual report that
relates to the agreement for each fiscal
year that the NGEP receives or uses
funds received under the agreement
(§§
.7(b)). Each insured depository
institution or affiliate that is a party to
a covered agreement must file an annual
report for each fiscal year that the
institution or affiliate makes or receives
payments under the agreement or has
data to report on loans, investments or
services provided under the agreement
(§§
.7(b)). Annual reports must be
filed with each relevant supervisory
agency for the covered agreement. The
content requirements for the annual
report for NGEPs, and insured
depository institutions and affiliates of
an insured depository institutions are
contained in (§§
.7(d)) and
(§§
.7(e)) respectively. The insured
depository institution or affiliate must
submit its annual report to the relevant
supervisory agency within 6 months of
the end of its fiscal year. A NGEP must,
within 6 months of the end of its fiscal
year, either file its annual report with
each relevant supervisory agency
directly or an insured depository
institution or affiliate that is a party to
the agreement with instructions for the
institution or affiliate to file it with the
relevant supervisory agency. The
insured depository institution or
affiliate must submit the annual report
of a NGEP to each relevant supervisory
agency within 30 days of receiving the
report (§§
.7(f)(2)(ii)).
Finally, an insured depository
institution or affiliate that is a party to
a covered agreement that concerns the
performance of any activity identified in
section
.4 (fulfillment) of a CRA
affiliate is required to notify each NGEP
that is a party to the agreement that the

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2081

agreement concerns a CRA affiliate
(§§
.4(b)).
The estimated total annual reporting
and disclosure burden of the final rule
will depend on the number of covered
agreements. The agencies specifically
requested comment on the total number
of NGEPs, insured depository
institutions, and affiliates that may be
parties to covered agreements, and the
total number of covered agreements that
may be subject to the disclosure and
reporting requirements of the rule. The
agencies received few estimates from
NGEPs, insured depository institutions
and affiliates concerning the number of
agreements to which they are parties
that would be covered under the rule.
One large bank estimated that it was a
party to over 500 agreements in 1999
that would have been considered
covered agreements under the proposed
rule. A national organization that
promotes the availability of credit and
capital in underserved communities
commented that it and its 720
community organization members have
negotiated 300 ‘‘CRA agreements’’ with
insured depository institutions and their
affiliates.
The agreements that trigger the
disclosure and reporting requirements
of the final rule are entered into by
private parties on a voluntary basis, are
not enforced by the agencies and, to
date, have not been required to be
disclosed to the agencies. The agencies
believe that larger banking organizations
and NGEPs are likely to be party to a
higher proportion of covered agreements
than smaller banking organizations and
NGEPs. Although some commenters
provided estimates on the number of
covered agreements that might exist
under the proposed rule, as noted
above, the final rule clarifies in several
important areas the types of agreements
that are covered by section 48, and the
types of agreements that are exempt
from coverage.
Accordingly, the agencies do not
believe they have received enough
information at this time to definitively
estimate the total number of insured
depository institutions, affiliates or
NGEPs that are parties to covered
agreements or the total number of
covered agreements that may be subject
to the disclosure and reporting
requirements of the rule. Nevertheless,
solely for purposes of complying with
the requirements of the Paperwork
Reduction Act, each agency has
computed the estimate of annual
paperwork burden assuming that each
insured depository institution it
regulates is involved, either as a party
or as a source of funds, with two
covered agreements. This would take

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

into account that large banking
organizations may be parties to
substantially more covered agreements
and many small banking organizations
may be party to no covered agreements.
In addition, the agencies have assumed
that one NGEP is a party to each of these
agreements. After the agencies have
gained some experience with collecting
information under the rule, they will reexamine the paperwork burden.
There are other requirements for
NGEPs, insured depository institutions,
and affiliates of an insured depository
institutions which are not considered to
be paperwork requirements. These
requirements are discussed in detail in
the regulation text and earlier in this
preamble.
OCC: OMB has reviewed and
approved the collections of information
contained in the rule under control
number 1557–0219, in accordance with
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.). OMB clearance
will expire on July 31, 2003.
The potential respondents include
national banks and subsidiaries of
national banks, and NGEPs that are a
party to a covered agreement with any
of the foregoing.
Estimated number of financial
institution respondents: 2,400.
Estimated number of NGEP
respondents: 4,800.
Estimated average annual burden
hours for financial institution
respondents per agreement: 9 hours.
Estimated burden hours for NGEPs
per agreement: 6 hours.
Estimated total annual reporting and
disclosure burden: 72,000 hours.
Board: In accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3506; 5 CFR 1320, appendix A.1),
the Board approved the rule under the
authority delegated to the Board by the
OMB. The OMB control number is
7100–0298. OMB clearance will expire
on January 31, 2004.
The potential respondents are state
member banks and subsidiaries of state
member banks; bank holding
companies; affiliates of bank holding
companies other than savings
associations, national banks, insured
nonmember banks, and subsidiaries of
such associations and banks, and NGEPs
that are a party to a covered agreement
with any of the foregoing.
Estimated number of financial
institution respondents: 994.
Estimated number of NGEP
respondents: 1,988.
Estimated average annual burden
hours for financial institution
respondents per agreement: 9 hours.
Estimated burden hours for NGEPs
per agreement: 6 hours.

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Estimated total annual reporting and
disclosure burden: 29,820 hours.
FDIC: OMB has reviewed and
approved the collections of information
contained in the rule under control
number 3064–0139, in accordance with
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.). OMB clearance
will expire on July 31, 2003.
The potential respondents are insured
nonmember banks, subsidiaries of
insured nonmember banks, and NGEPs
that are a party to a covered agreement
with any of the foregoing.
Estimated number of financial
institution respondents: 5,130.
Estimated number of NGEP
respondents: 10,260.
Estimated average annual burden
hours for financial institution
respondents per agreement: 9 hours.
Estimated burden hours for NGEPs
per agreement: 6 hours.
Estimated total annual reporting and
disclosure burden: 153,900 hours.
OTS: OMB has reviewed and
approved the collections of information
contained in the rule under control
number 1550–0105, in accordance with
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.). OMB clearance
will expire on July 31, 2003.
The potential respondents are savings
associations and their subsidiaries,
savings and loan holding companies,
affiliates of savings associations and
savings and loan holding companies
other than bank holding companies,
banks and subsidiaries of bank holding
companies, and NGEPs that are a party
to a covered agreement with any of the
foregoing.
Estimated number of financial
institution respondents: 1,075.
Estimated number of NGEP
respondents: 2,150.
Estimated average annual burden
hours for financial institution
respondents per agreement: 9 hours.
Estimated burden hours for NGEPs
respondents per agreement: 6 hours.
Estimated total annual reporting and
disclosure burden: 32,250 hours.
The agencies have a continuing
interest in the public’s opinion
regarding collections of information.
Members of the public may submit
comments, at any time, regarding any
aspect of these collections of
information. Comments may be sent to:
OCC: Jessie Dunaway, Clearance
Officer, Office of the Comptroller of the
Currency, 250 E Street, SW., Mailstop
8–4, Washington, DC 20219.
Board: Mary M. West, Federal Reserve
Board Clearance Officer, Mailstop 97,
Division of Research and Statistics,
Board of Governors of the Federal
Reserve System, Washington, DC 20551.

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FDIC: Steven F. Hanft, Assistant
Executive Secretary (Regulatory
Analysis), Federal Deposit Insurance
Corporation, Room F–4080, 550 17th
Street, NW., Washington, DC 20429.
OTS: Dissemination Branch (1550–
0106), Office of Thrift Supervision, 1700
G Street, NW., Washington, DC 20552.
A copy of all comments should also
be sent to the Office of Management and
Budget, Paperwork Reduction Project
(include OMB control number),
Washington, DC 20503.
VII. Comments Regarding the Use of
‘‘Plain Language’’
Section 722 of the Gramm-LeachBliley Act requires the agencies to use
‘‘plain language’’ in all final rules
published after January 1, 2000. The
agencies requested comments on
whether the proposed rule meets the
plain language standard, whether
changes should be made to the
organization or format of the rule and
whether terms used in the rule are clear.
Some commenters recommended that
agencies move the section that defines
terms used in the rule to the front of the
rule. The agencies believe that including
the substantive provisions of the rule,
including the key definitions of what
agreements are ‘‘covered agreements’’
and ‘‘in fulfillment of the CRA,’’ at the
front of the rule will assist users in
rapidly identifying whether a particular
agreement meets the requirements to be
a covered agreement. Accordingly, the
agencies have not moved the section
including other definitions to the front
of the rule. Some commenters requested
that the agencies clarify the scope of
certain terms used in the proposed rule
or examples included in the proposed
rule or accompanying SUPPLEMENTARY
INFORMATION. These comments are
addressed in Part III of this preamble.
VIII. Unfunded Mandates Act of 1995
OCC: Section 202 of the Unfunded
Mandates Act of 1995, 2 U.S.C. 1532
(Unfunded Mandates Act), requires that
an agency prepare a budgetary impact
statement before promulgating a rule
that includes a Federal mandate that
may result in expenditures by state,
local, and tribal governments, in the
aggregate, or by the private sector, of
$100 million or more in any one year.
If a budgetary impact statement is
required, section 205 of the Unfunded
Mandates Act also requires an agency to
identify and consider a reasonable
number of regulatory alternatives before
promulgating a rule.
This final rule does not apply to state,
local or tribal governments. The OCC is
not required to assess the effects of its
regulatory actions on the private sector

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
to the extent those regulations
incorporate requirements specifically
set forth in law. 2 U.S.C. 1531. The
provisions in the final rule incorporate
the requirements of Section 711 of the
GLBA. Moreover, as described
elsewhere in the Supplementary
Information, the final rule contains
provisions intended to minimize costs
and burdens on the private sector
entities to which it applies. Therefore,
the OCC has determined that this rule
will not result in expenditures by State,
local, and tribal governments, in the
aggregate, or by the private sector, of
$100 million or more in any one year
and, accordingly, has not prepared a
budgetary impact statement.
OTS: Section 202 of the Unfunded
Mandates Reform Act of 1995, 2 U.S.C.

1532 (Unfunded Mandates Act),
requires that an agency prepare a
budgetary impact statement before
promulgating a rule that includes a
Federal mandate that may result in
expenditures by state, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year. If a budgetary impact
statement is required, section 205 of the
Unfunded Mandates Act also requires
an agency to identify and consider a
reasonable number of regulatory
alternatives before promulgating a rule.
The final rule does not apply to state,
local or tribal governments. Although
the final rule applies to insured
depository institutions, affiliates, and
NGEPs, OTS is not required to assess
the effects of its regulatory actions on

2083

the private sector to the extent such
regulations incorporate requirements
specifically set forth in law. 2 U.S.C.
1531. Most of the final rule’s provisions
closely follow the requirements of
section 711 of the GLB Act. Moreover,
OTS has exercised its discretion, to the
extent possible, to minimize costs and
burdens. Therefore, OTS has
determined that this final rule will not
result in expenditures by State, local,
and tribal governments, in the aggregate,
or by the private sector, of $100 million
or more in any one year. Accordingly,
OTS has not prepared a budgetary
impact statement or specifically
addressed the regulatory alternatives
considered.
IX. Compliance Chart

DISCLOSURE OF COVERED AGREEMENTS TO THE PUBLIC
NGEP

Insured Depository Institution or affiliate

Which agreements must be
disclosed to the public?
When does my duty to disclose a covered agreement to the public begin?
What event triggers my obligation to disclose a covered agreement to a
member of the public?
How do I disclose a covered
agreement to the public?

Covered agreements entered into after 11/12/99 ...........

Covered agreements entered into after 11/12/99.

4/1/01 ..............................................................................

4/1/01.

An individual or entity must request you to make a covered agreement available.

An individual or entity must request you to make a covered agreement available.

You must promptly make a copy of the covered agreement available. You may withhold information that is
confidential and proprietary under FOIA standards.
However, you must disclose certain enumerated
items of information identified at § .6(b)(3).

When does my duty to disclose a covered agreement to the public end?

Twelve months after the end of the term of the agreement. However, if your agreement terminated before
4/1/01, your obligation to disclose terminates 4/1/02.

You must promptly make a copy of the covered agreement available. You may withhold information that is
confidential and proprietary under FOIA standards.
However, you must disclose certain enumerated
items of information identified at § .6(b)(3).
An IDI or affiliate may make an agreement available by
placing a copy of the covered agreement in the IDI’s
CRA public file. The IDI must make the agreement
available in accordance with the CRA rule on public
files.
Twelve months after the end of the term of the agreement. However if your agreement terminated before
4/1/01, your obligation to disclose terminates 4/1/02.

DISCLOSURE OF COVERED AGREEMENTS TO THE RELEVANT SUPERVISORY AGENCY (RSA)
NGEP
What agreements must be
disclosed to the RSA?.
When does my duty to disclose a covered agreement to the RSA begin?.
When must I disclose a covered agreement to the
RSA?.

VerDate 11<MAY>2000

Insured Depository Institution or affiliate

Covered agreements entered into after 11/12/99 ...........

Covered agreements entered into after 11/12/99.

4/1/01 ..............................................................................

4/1/01.

You must disclose your covered agreement to the RSA
within 30 days after the RSA requests a copy of the
agreement.

You must disclose your covered agreement to the RSA
within 60 days of the end of the calendar quarter in
which the agreement is entered into. However, if your
agreement terminated before 4/1/01, you must disclose your agreement to the RSA by 6/30/01.

18:11 Jan 09, 2001

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
DISCLOSURE OF COVERED AGREEMENTS TO THE RELEVANT SUPERVISORY AGENCY (RSA)—Continued
NGEP

Insured Depository Institution or affiliate

How do I disclose a covered
agreement to the RSA?.

You must provide the RSA with a complete copy of the
agreement. If you propose the withholding of any information that can be withheld from disclosure under
FOIA, you must also provide a public version of the
agreement that excludes such information and an explanation justifying the exclusion. The public version
must include the information identified at § .6(b)(3).

When does my duty to disclose a covered agreement to the RSA end?.

Twelve months after the end of the term of the agreement. However, if your agreement terminated before
4/1/01, you must make the agreement available to
the RSA until 4/l/02.

You must provide the RSA with a complete copy of the
agreement. If you propose the withholding of any information that can be withheld from disclosure under
FOIA, you must also provide a public version of the
agreement that excludes such information and an explanation justifying the exclusion. The public version
must include the information identified at § .6(b)(3).
Alternatively, you may provide a list of all covered
agreements that you entered into during the calendar
quarter, and include the information described at
§ .6(d)(1)(ii). If the RSA requests a copy of an agreement referenced in the list, you must provide a copy
of the agreement and a public version (if applicable)
within seven calendar days.
If you file a list, your obligation to provide a copy of an
agreement referenced in the list terminates thirty-six
months after the end of the term of the agreement.

ANNUAL REPORTS
NGEP
What agreements are subject to annual reporting requirements?
What periods require an annual report?

When must I file the annual
report?

May I file a consolidated annual report?

What must I include in the
annual report?

Insured Depository Institution or Affiliate

Covered agreements entered into on or after 5/12/00 ...

Covered agreements entered into on or after 5/12/00.

You must file a report for each fiscal year in which you
receive or use funds or other resources under the
covered agreement.
Alternatively, you may file your report on a calendar
year basis.
For fiscal years that end on or after 1/1/01, you must
file the report with each RSA within six months after
the end of the fiscal year covered by the report.
Alternatively, you may, within this six month period,
provide the report to an IDI or affiliate that is a party
to the agreement. You must include written instructions requiring the IDI or affiliate to promptly forward
the report to the RSA(s).
For fiscal years that end between 5/12/00 and 12/31/
00, you must file the report with each RSA (or with
an IDI or affiliate that is party to the agreement) no
later than 6/30/01.
If you are a party to two or more covered agreements,
you may file a single consolidated annual report concerning all the covered agreements.

You must file a report for each fiscal year in which you
have any reportable data concerning the covered
agreement described in § .7(e)(1)(iii), (e)(1)(iv) or
(e)(1)(vi). Alternatively, you may file your report on a
calendar year basis.
For fiscal years that end on or after 1/1/01, you must
file the report with each RSA within six months after
the end of the fiscal year covered by the report.
If a NGEP has provided its report to you, you must also
file that report with the RSA(s)on behalf of the NGEP
within 30 days of receipt.

You must include the information described at § .7(d).

List of Subjects

If you are a party to two or more covered agreements,
you may file a single consolidated annual report concerning all the covered agreements.
If you and your affiliates are parties to the same covered agreement, you may file a single consolidated
annual report relating to the agreement.
You must include the information described at § .7(e).

12 CFR Part 346

12 CFR Part 35

For fiscal years that end between 5/12/00 and 12/31/
00, you must file the report with each RSA no later
than 6/30/01.

Banks, Banking; Community
development; and Reporting and
recordkeeping.

Community development, Credit,
Freedom of information, Investments,
National banks, Reporting and
recordkeeping requirements.
12 CFR Part 207
Banks, Banking, Community
development, Federal Reserve System,
Holding companies, Reporting and
recordkeeping requirements.

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Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance

12 CFR Part 533
Administrative practice and
procedure, Business and industry,
Community development, Confidential
business information, Credit, Freedom
of information, Holding companies,
Investments, Mortgages, Nonprofit
organizations, Penalties, Reporting and
recordkeeping requirements, Savings
associations.

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For the reasons set out in the joint
preamble, Title 12, Chapter I, of the
Code of Federal Regulations is amended
by adding a new part 35 to read as
follows:

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PART 35—DISCLOSURE AND
REPORTING OF CRA-RELATED
AGREEMENTS
Sec.
35.1
35.2
35.3
35.4
35.5

Purpose and scope of this part.
Definition of covered agreement.
CRA communications.
Fulfillment of the CRA.
Related agreements considered a single
agreement.
35.6 Disclosure of covered agreements.
35.7 Annual reports.
35.8 Release of information under FOIA.
35.9 Compliance provisions.
35.10 Transition provisions.
35.11 Other definitions and rules of
construction used in this part.
Authority: 12 U.S.C. 1831y.
§ 35.1

Purpose and scope of this part.

(a) General. This part implements
section 711 of the Gramm-Leach-Bliley
Act (12 U.S.C. 1831y). That section
requires any nongovernmental entity or
person, insured depository institution,
or affiliate of an insured depository
institution that enters into a covered
agreement to—
(1) Make the covered agreement
available to the public and the
appropriate Federal banking agency;
and
(2) File an annual report with the
appropriate Federal banking agency
concerning the covered agreement.
(b) Scope of this part. The provisions
of this part apply to national banks,
subsidiaries of national banks, and
nongovernmental entities or persons
that enter into covered agreements with
a national bank or a subsidiary of a
national bank.
(c) Relation to Community
Reinvestment Act. This part does not
affect in any way the Community
Reinvestment Act of 1977 (12 U.S.C.
2901 et seq.), part 25 of this chapter
(Community Reinvestment Act and
Interstate Deposit Production
Regulations) or the OCC’s
interpretations or administration of that
Act or regulation.
(d) Examples.—(1) The examples in
this part are not exclusive. Compliance
with an example, to the extent
applicable, constitutes compliance with
this part.
(2) Examples in a paragraph illustrate
only the issue described in the
paragraph and do not illustrate any
other issues that may arise in this part.
§ 35.2

Definition of covered agreement.

(a) General definition of covered
agreement. A covered agreement is any
contract, arrangement, or understanding
that meets all of the following criteria—
(1) The agreement is in writing.
(2) The parties to the agreement
include—

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(i) One or more insured depository
institutions or affiliates of an insured
depository institution; and
(ii) One or more nongovernmental
entities or persons (referred to hereafter
as NGEPs).
(3) The agreement provides for the
insured depository institution or any
affiliate to—
(i) Provide to one or more individuals
or entities (whether or not parties to the
agreement) cash payments, grants, or
other consideration (except loans) that
have an aggregate value of more than
$10,000 in any calendar year; or
(ii) Make to one or more individuals
or entities (whether or not parties to the
agreement) loans that have an aggregate
principal amount of more than $50,000
in any calendar year.
(4) The agreement is made pursuant
to, or in connection with, the fulfillment
of the Community Reinvestment Act of
1977 (12 U.S.C. 2901 et seq.) (CRA), as
defined in § 35.4.
(5) The agreement is with a NGEP that
has had a CRA communication as
described in § 35.3 prior to entering into
the agreement.
(b) Examples concerning written
arrangements or understandings.—(1)
Example 1. A NGEP meets with an
insured depository institution and states
that the institution needs to make more
community development investments in
the NGEP’s community. The NGEP and
insured depository institution do not
reach an agreement concerning the
community development investments
the institution should make in the
community, and the parties do not reach
any mutual arrangement or
understanding. Two weeks later, the
institution unilaterally issues a press
release announcing that it has
established a general goal of making
$100 million of community
development grants in low- and
moderate-income neighborhoods served
by the insured depository institution
over the next 5 years. The NGEP is not
identified in the press release. The press
release is not a written arrangement or
understanding.
(2) Example 2. A NGEP meets with an
insured depository institution and states
that the institution needs to offer new
loan programs in the NGEP’s
community. The NGEP and the insured
depository institution reach a mutual
arrangement or understanding that the
institution will provide additional loans
in the NGEP’s community. The
institution tells the NGEP that it will
issue a press release announcing the
program. Later, the insured depository
institution issues a press release
announcing the loan program. The press
release incorporates the key terms of the

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understanding reached between the
NGEP and the insured depository
institution. The written press release
reflects the mutual arrangement or
understanding of the NGEP and the
insured depository institution and is,
therefore, a written arrangement or
understanding.
(3) Example 3. An NGEP sends a letter
to an insured depository institution
requesting that the institution provide a
$15,000 grant to the NGEP. The insured
depository institution responds in
writing and agrees to provide the grant
in connection with its annual grant
program. The exchange of letters
constitutes a written arrangement or
understanding.
(c) Loan agreements that are not
covered agreements. A covered
agreement does not include—
(1) Any individual loan that is
secured by real estate; or
(2) Any specific contract or
commitment for a loan or extension of
credit to an individual, business, farm,
or other entity, or group of such
individuals or entities, if—
(i) The funds are loaned at rates that
are not substantially below market rates;
and
(ii) The loan application or other loan
documentation does not indicate that
the borrower intends or is authorized to
use the borrowed funds to make a loan
or extension of credit to one or more
third parties.
(d) Examples concerning loan
agreements.—(1) Example 1. An insured
depository institution provides an
organization with a $1 million loan that
is documented in writing and is secured
by real estate owned or to-be-acquired
by the organization. The agreement is an
individual mortgage loan and is exempt
from coverage under paragraph (c)(1) of
this section, regardless of the interest
rate on the loan or whether the
organization intends or is authorized to
re-loan the funds to a third party.
(2) Example 2. An insured depository
institution commits to provide a
$500,000 line of credit to a small
business that is documented by a
written agreement. The loan is made at
rates that are within the range of rates
offered by the institution to similarly
situated small businesses in the market
and the loan documentation does not
indicate that the small business intends
or is authorized to re-lend the borrowed
funds. The agreement is exempt from
coverage under paragraph (c)(2) of this
section.
(3) Example 3. An insured depository
institution offers small business loans
that are guaranteed by the Small
Business Administration (SBA). A small
business obtains a $75,000 loan,

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documented in writing, from the
institution under the institution’s SBA
loan program. The loan documentation
does not indicate that the borrower
intends or is authorized to re-lend the
funds. Although the rate charged on the
loan is well below that charged by the
institution on commercial loans, the rate
is within the range of rates that the
institution would charge a similarly
situated small business for a similar
loan under the SBA loan program.
Accordingly, the loan is not made at
substantially below market rates and is
exempt from coverage under paragraph
(c)(2) of this section.
(4) Example 4. A bank holding
company enters into a written
agreement with a community
development organization that provides
that insured depository institutions
owned by the bank holding company
will make $250 million in small
business loans in the community over
the next 5 years. The written agreement
is not a specific contract or commitment
for a loan or an extension of credit and,
thus, is not exempt from coverage under
paragraph (c)(2) of this section. Each
small business loan made by the insured
depository institution pursuant to this
general commitment would, however,
be exempt from coverage if the loan is
made at rates that are not substantially
below market rates and the loan
documentation does not indicate that
the borrower intended or was
authorized to re-lend the funds.
(e) Agreements that include exempt
loan agreements. If an agreement
includes a loan, extension of credit or
loan commitment that, if documented
separately, would be exempt under
paragraph (c) of this section, the exempt
loan, extension of credit or loan
commitment may be excluded for
purposes of determining whether the
agreement is a covered agreement.
(f) Determining annual value of
agreements that lack schedule of
disbursements. For purposes of
paragraph (a)(3) of this section, a multiyear agreement that does not include a
schedule for the disbursement of
payments, grants, loans or other
consideration by the insured depository
institution or affiliate, is considered to
have a value in the first year of the
agreement equal to all payments, grants,
loans and other consideration to be
provided at any time under the
agreement.
§ 35.3

CRA communications.

(a) Definition of CRA communication.
A CRA communication is any of the
following—
(1) Any written or oral comment or
testimony provided to a Federal banking

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agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate.
(2) Any written comment submitted to
the insured depository institution that
discusses the adequacy of the
performance under the CRA of the
institution and must be included in the
institution’s CRA public file.
(3) Any discussion or other contact
with the insured depository institution
or any affiliate about—
(i) Providing (or refraining from
providing) written or oral comments or
testimony to any Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate;
(ii) Providing (or refraining from
providing) written comments to the
insured depository institution that
concern the adequacy of the
institution’s performance under the
CRA and must be included in the
institution’s CRA public file; or
(iii) The adequacy of the performance
under the CRA of the insured depository
institution, any affiliated insured
depository institution, or any CRA
affiliate.
(b) Discussions or contacts that are
not CRA communications—(1) Timing
of contacts with a Federal banking
agency. An oral or written
communication with a Federal banking
agency is not a CRA communication if
it occurred more than 3 years before the
parties entered into the agreement.
(2) Timing of contacts with insured
depository institutions and affiliates. A
communication with an insured
depository institution or affiliate is not
a CRA communication if the
communication occurred—
(i) More than 3 years before the
parties entered into the agreement, in
the case of any written communication;
(ii) More than 3 years before the
parties entered into the agreement, in
the case of any oral communication in
which the NGEP discusses providing (or
refraining from providing) comments or
testimony to a Federal banking agency
or written comments that must be
included in the institution’s CRA public
file in connection with a request to, or
agreement by, the institution or affiliate
to take (or refrain from taking) any
action that is in fulfillment of the CRA;
or
(iii) More than 1 year before the
parties entered into the agreement, in
the case of any other oral
communication not described in
paragraph (b)(2)(ii).

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(3) Knowledge of communication by
insured depository institution or
affiliate.—(i) A communication is only a
CRA communication under paragraph
(a) of this section if the insured
depository institution or its affiliate has
knowledge of the communication under
this paragraph (b)(3)(ii) or (b)(3)(iii) of
this section.
(ii) Communication with insured
depository institution or affiliate. An
insured depository institution or
affiliate has knowledge of a
communication by the NGEP to the
institution or its affiliate under this
paragraph only if one of the following
representatives of the insured
depository institution or any affiliate
has knowledge of the communication—
(A) An employee who approves,
directs, authorizes, or negotiates the
agreement with the NGEP; or
(B) An employee designated with
responsibility for compliance with the
CRA or executive officer if the employee
or executive officer knows that the
institution or affiliate is negotiating,
intends to negotiate, or has been
informed by the NGEP that it expects to
request that the institution or affiliate
negotiate an agreement with the NGEP.
(iii) Other communications. An
insured depository institution or
affiliate is deemed to have knowledge
of—
(A) Any testimony provided to a
Federal banking agency at a public
meeting or hearing;
(B) Any comment submitted to a
Federal banking agency that is conveyed
in writing by the agency to the insured
depository institution or affiliate; and
(C) Any written comment submitted
to the insured depository institution
that must be and is included in the
institution’s CRA public file.
(4) Communication where NGEP has
knowledge. A NGEP has a CRA
communication with an insured
depository institution or affiliate only if
any of the following individuals has
knowledge of the communication—
(i) A director, employee, or member of
the NGEP who approves, directs,
authorizes, or negotiates the agreement
with the insured depository institution
or affiliate;
(ii) A person who functions as an
executive officer of the NGEP and who
knows that the NGEP is negotiating or
intends to negotiate an agreement with
the insured depository institution or
affiliate; or
(iii) Where the NGEP is an individual,
the NGEP.
(c) Examples of CRA
communications.—(1) Examples of
actions that are CRA communications.
The following are examples of CRA

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communications. These examples are
not exclusive and assume that the
communication occurs within the
relevant time period as described in
paragraph (b)(1) or (b)(2) of this section
and the appropriate representatives
have knowledge of the communication
as specified in paragraphs (b)(3) and
(b)(4) of this section.
(i) Example 1. A NGEP files a written
comment with a Federal banking agency
that states than an insured depository
institution successfully addresses the
credit needs of its community. The
written comment is in response to a
general request from the agency for
comments on an application of the
insured depository institution to open a
new branch and a copy of the comment
is provided to the institution.
(ii) Example 2. A NGEP meets with an
executive officer of an insured
depository institution and states that the
institution must improve its CRA
performance.
(iii) Example 3. A NGEP meets with
an executive officer of an insured
depository institution and states that the
institution needs to make more
mortgage loans in low- and moderateincome neighborhoods in its
community.
(iv) Example 4. A bank holding
company files an application with a
Federal banking agency to acquire an
insured depository institution. Two
weeks later, the NGEP meets with an
executive officer of the bank holding
company to discuss the adequacy of the
performance under the CRA of the target
insured depository institution. The
insured depository institution was an
affiliate of the bank holding company at
the time the NGEP met with the target
institution. (See § 35.11(a).)
Accordingly, the NGEP had a CRA
communication with an affiliate of the
bank holding company.
(2) Examples of actions that are not
CRA communications. The following
are examples of actions that are not by
themselves CRA communications.
These examples are not exclusive.
(i) Example 1. A NGEP provides to a
Federal banking agency comments or
testimony concerning an insured
depository institution or affiliate in
response to a direct request by the
agency for comments or testimony from
that NGEP. Direct requests for
comments or testimony do not include
a general invitation by a Federal
banking agency for comments or
testimony from the public in connection
with a CRA performance evaluation of,
or application for a deposit facility (as
defined in section 803 of the CRA (12
U.S.C. 2902(3)) by, an insured
depository institution or an application

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by a company to acquire an insured
depository institution.
(ii) Example 2. A NGEP makes a
statement concerning an insured
depository institution or affiliate at a
widely attended conference or seminar
regarding a general topic. A public or
private meeting, public hearing, or other
meeting regarding one or more specific
institutions, affiliates or transactions
involving an application for a deposit
facility is not considered a widely
attended conference or seminar.
(iii) Example 3. A NGEP, such as a
civil rights group, community group
providing housing and other services in
low- and moderate-income
neighborhoods, veterans organization,
community theater group, or youth
organization, sends a fundraising letter
to insured depository institutions and to
other businesses in its community. The
letter encourages all businesses in the
community to meet their obligation to
assist in making the local community a
better place to live and work by
supporting the fundraising efforts of the
NGEP.
(iv) Example 4. A NGEP discusses
with an insured depository institution
or affiliate whether particular loans,
services, investments, community
development activities, or other
activities are generally eligible for
consideration by a Federal banking
agency under the CRA. The NGEP and
insured depository institution or
affiliate do not discuss the adequacy of
the CRA performance of the insured
depository institution or affiliate.
(v) Example 5. A NGEP engaged in the
sale or purchase of loans in the
secondary market sends a general
offering circular to financial institutions
offering to sell or purchase a portfolio of
loans. An insured depository institution
that receives the offering circular
discusses with the NGEP the types of
loans included in the loan pool,
whether such loans are generally
eligible for consideration under the
CRA, and which loans are made to
borrowers in the institution’s local
community. The NGEP and insured
depository institution do not discuss the
adequacy of the institution’s CRA
performance.
(d) Multiparty covered agreements.—
(1) A NGEP that is a party to a covered
agreement that involves multiple NGEPs
is not required to comply with the
requirements of this part if—
(i) The NGEP has not had a CRA
communication; and
(ii) No representative of the NGEP
identified in paragraph (b)(4) of this
section has knowledge at the time of the
agreement that another NGEP that is a

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party to the agreement has had a CRA
communication.
(2) An insured depository institution
or affiliate that is a party to a covered
agreement that involves multiple
insured depository institutions or
affiliates is not required to comply with
the disclosure and annual reporting
requirements in §§ 35.6 and 35.7 if—
(i) No NGEP that is a party to the
agreement has had a CRA
communication concerning the insured
depository institution or any affiliate;
and
(ii) No representative of the insured
depository institution or any affiliate
identified in paragraph (b)(3) of this
section has knowledge at the time of the
agreement that an NGEP that is a party
to the agreement has had a CRA
communication concerning any other
insured depository institution or
affiliate that is a party to the agreement.
§ 35.4

Fulfillment of the CRA.

(a) List of factors that are in
fulfillment of the CRA. Fulfillment of
the CRA, for purposes of this part,
means the following list of factors—
(1) Comments to a Federal banking
agency or included in CRA public file.
Providing or refraining from providing
written or oral comments or testimony
to any Federal banking agency
concerning the performance under the
CRA of an insured depository
institution or CRA affiliate that is a
party to the agreement or an affiliate of
a party to the agreement or written
comments that are required to be
included in the CRA public file of any
such insured depository institution; or
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the
insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Home-purchase, homeimprovement, small business, small
farm, community development, and
consumer lending, as described in
§ 25.22 (12 CFR 25.22), including loan
purchases, loan commitments, and
letters of credit;
(ii) Making investments, deposits, or
grants, or acquiring membership shares,
that have as their primary purpose
community development, as described
in § 25.23 (12 CFR 25.23);
(iii) Delivering retail banking services,
as described in § 25.24(d) (12 CFR
25.24(d));

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(iv) Providing community
development services, as described in
§ 25.24(e) (12 CFR 25.24(e));
(v) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making qualified investments, or
providing community development
services, as described in § 25.25(c) (12
CFR 25.25(c));
(vi) In the case of a small insured
depository institution, any lending or
other activity described in § 25.26(a) (12
CFR 25.26(a)); or
(vii) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in § 25.27(f) (12 CFR 25.27(f)).
(b) Agreements relating to activities of
CRA affiliates. An insured depository
institution or affiliate that is a party to
a covered agreement that concerns any
activity described in paragraph (a) of
this section of a CRA affiliate must,
prior to the time the agreement is
entered into, notify each NGEP that is a
party to the agreement that the
agreement concerns a CRA affiliate.
§ 35.5 Related agreements considered a
single agreement.

The following rules must be applied
in determining whether an agreement is
a covered agreement under § 35.2.
(a) Agreements entered into by same
parties. All written agreements to which
an insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement if the
agreements—
(1) Are entered into with the same
NGEP;
(2) Were entered into within the same
12-month period; and
(3) Are each in fulfillment of the CRA.
(b) Substantively related contracts.
All written contracts to which an
insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement, without regard
to whether the other parties to the
contracts are the same or whether each
such contract is in fulfillment of the
CRA, if the contracts were negotiated in
a coordinated fashion and a NGEP is a
party to each contract.
§ 35.6

Disclosure of covered agreements.

(a) Applicability date. This section
applies only to covered agreements
entered into after November 12, 1999.
(b) Disclosure of covered agreements
to the public—(1) Disclosure required.

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Each NGEP and each insured depository
institution or affiliate that enters into a
covered agreement must promptly make
a copy of the covered agreement
available to any individual or entity
upon request.
(2) Nondisclosure of confidential and
proprietary information permitted. In
responding to a request for a covered
agreement from any individual or entity
under paragraph (b)(1) of this section, a
NGEP, insured depository institution, or
affiliate may withhold from public
disclosure confidential or proprietary
information that the party believes the
relevant supervisory agency could
withhold from disclosure under the
Freedom of Information Act (5 U.S.C.
552 et seq.) (FOIA).
(3) Information that must be
disclosed. Notwithstanding paragraph
(b)(2) of this section, a party must
disclose any of the following
information that is contained in a
covered agreement—
(i) The names and addresses of the
parties to the agreement;
(ii) The amount of any payments, fees,
loans, or other consideration to be made
or provided by any party to the
agreement;
(iii) Any description of how the funds
or other resources provided under the
agreement are to be used;
(iv) The term of the agreement (if the
agreement establishes a term); and
(v) Any other information that the
relevant supervisory agency determines
is not properly exempt from public
disclosure.
(4) Request for review of withheld
information. Any individual or entity
may request that the relevant
supervisory agency review whether any
information in a covered agreement
withheld by a party must be disclosed.
Any requests for agency review of
withheld information must be filed, and
will be processed in accordance with,
the relevant supervisory agency’s rules
concerning the availability of
information (see subpart B of part 4 of
the OCC’s rules regarding the
availability of information under the
Freedom of Information Act (12 CFR
part 4, subpart B).
(5) Duration of obligation. The
obligation to disclose a covered
agreement to the public terminates 12
months after the end of the term of the
agreement.
(6) Reasonable copy and mailing fees.
Each NGEP and each insured depository
institution or affiliate may charge an
individual or entity that requests a copy
of a covered agreement a reasonable fee
not to exceed the cost of copying and
mailing the agreement.

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(7) Use of CRA public file by insured
depository institution or affiliate. An
insured depository institution and any
affiliate of an insured depository
institution may fulfill its obligation
under this paragraph (b) by placing a
copy of the covered agreement in the
insured depository institution’s CRA
public file if the institution makes the
agreement available in accordance with
the procedures set forth in § 25.43 (12
CFR 25.43);
(c) Disclosure by NGEPs of covered
agreements to the relevant supervisory
agency.—(1) Each NGEP that is a party
to a covered agreement must provide the
following within 30 days of receiving a
request from the relevant supervisory
agency—
(i) A complete copy of the agreement;
and
(ii) In the event the NGEP proposes
the withholding of any information
contained in the agreement in
accordance with paragraph (b)(2) of this
section, a public version of the
agreement that excludes such
information and an explanation
justifying the exclusions. Any public
version must include the information
described in paragraph (b)(3) of this
section.
(2) The obligation of a NGEP to
provide a covered agreement to the
relevant supervisory agency terminates
12 months after the end of the term of
the covered agreement.
(d) Disclosure by insured depository
institution or affiliate of covered
agreements to the relevant supervisory
agency.—(1) In general. Within 60 days
of the end of each calendar quarter, each
insured depository institution and
affiliate must provide each relevant
supervisory agency with—
(i)(A) A complete copy of each
covered agreement entered into by the
insured depository institution or
affiliate during the calendar quarter; and
(B) In the event the institution or
affiliate proposes the withholding of any
information contained in the agreement
in accordance with paragraph (b)(2) of
this section, a public version of the
agreement that excludes such
information (other than any information
described in paragraph (b)(3) of this
section) and an explanation justifying
the exclusions; or
(ii) A list of all covered agreements
entered into by the insured depository
institution or affiliate during the
calendar quarter that contains—
(A) The name and address of each
insured depository institution or
affiliate that is a party to the agreement;
(B) The name and address of each
NGEP that is a party to the agreement;

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(C) The date the agreement was
entered into;
(D) The estimated total value of all
payments, fees, loans and other
consideration to be provided by the
institution or any affiliate of the
institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered
agreements contained in list required.—
(i) If an insured depository institution or
affiliate files a list of the covered
agreements entered into by the
institution or affiliate pursuant to
paragraph (d)(1)(ii) of this section, the
institution or affiliate must provide any
relevant supervisory agency a complete
copy and public version of any covered
agreement referenced in the list within
7 calendar days of receiving a request
from the agency for a copy of the
agreement.
(ii) The obligation of an insured
depository institution or affiliate to
provide a covered agreement to the
relevant supervisory agency under this
paragraph (d)(2) terminates 36 months
after the end of the term of the
agreement.
(3) Joint filings. In the event that 2 or
more insured depository institutions or
affiliates are parties to a covered
agreement, the insured depository
institution(s) and affiliate(s) may jointly
file the documents required by this
paragraph (d). Any joint filing must
identify the insured depository
institution(s) and affiliate(s) for whom
the filings are being made.
§ 35.7

Annual reports.

(a) Applicability date. This section
applies only to covered agreements
entered into on or after May 12, 2000.
(b) Annual report required. Each
NGEP and each insured depository
institution or affiliate that is a party to
a covered agreement must file an annual
report with each relevant supervisory
agency concerning the disbursement,
receipt, and uses of funds or other
resources under the covered agreement.
(c) Duration of reporting
requirement—(1) NGEPs. A NGEP must
file an annual report for a covered
agreement for any fiscal year in which
the NGEP receives or uses funds or
other resources under the agreement.
(2) Insured depository institutions and
affiliates. An insured depository
institution or affiliate must file an
annual report for a covered agreement
for any fiscal year in which the
institution or affiliate—
(i) provides or receives any payments,
fees, or loans under the covered
agreement that must be reported under
paragraphs (e)(1)(iii) and (iv) of this
section; or

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(ii) has data to report on loans,
investments, and services provided by a
party to the covered agreement under
the covered agreement under paragraph
(e)(1)(vi) of this section.
(d) Annual reports filed by NGEP—(1)
Contents of report. The annual report
filed by a NGEP under this section must
include the following—
(i) The name and mailing address of
the NGEP filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The amount of funds or resources
received under the covered agreement
during the fiscal year; and
(iv) A detailed, itemized list of how
any funds or resources received by the
NGEP under the covered agreement
were used during the fiscal year,
including the total amount used for—
(A) Compensation of officers,
directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and
professional fees; and
(F) Other expenses and uses (specify
expense or use).
(2) More detailed reporting of uses of
funds or resources permitted—(i) In
general. If a NGEP allocated and used
funds received under a covered
agreement for a specific purpose, the
NGEP may fulfill the requirements of
paragraph (d)(1)(iv) of this section with
respect to such funds by providing—
(A) A brief description of each
specific purpose for which the funds or
other resources were used; and
(B) The amount of funds or resources
used during the fiscal year for each
specific purpose.
(ii) Specific purpose defined. A NGEP
allocates and uses funds for a specific
purpose if the NGEP receives and uses
the funds for a purpose that is more
specific and limited than the categories
listed in paragraph (d)(1)(iv) of this
section.
(3) Use of other reports. The annual
report filed by a NGEP may consist of
or incorporate a report prepared for any
other purpose, such as the Internal
Revenue Service Return of Organization
Exempt From Income Tax on Form 990,
or any other Internal Revenue Service
form, state tax form, report to members
or shareholders, audited or unaudited
financial statements, audit report, or
other report, so long as the annual
report filed by the NGEP contains all of
the information required by this
paragraph (d).

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(4) Consolidated reports permitted. A
NGEP that is a party to 2 or more
covered agreements may file with each
relevant supervisory agency a single
consolidated annual report covering all
the covered agreements. Any
consolidated report must contain all the
information required by this paragraph
(d). The information reported under
paragraphs (d)(1)(iv) and (d)(2) of this
section may be reported on an aggregate
basis for all covered agreements.
(5) Examples of annual report
requirements for NGEPs—(i) Example 1.
A NGEP receives an unrestricted grant
of $15,000 under a covered agreement,
includes the funds in its general
operating budget and uses the funds
during its fiscal year. The NGEP’s
annual report for the fiscal year must
provide the name and mailing address
of the NGEP, information sufficient to
identify the covered agreement, and
state that the NGEP received $15,000
during the fiscal year. The report must
also indicate the total expenditures
made by the NGEP during the fiscal year
for compensation, administrative
expenses, travel expenses,
entertainment expenses, consulting and
professional fees, and other expenses
and uses. The NGEP’s annual report
may provide this information by
submitting an Internal Revenue Service
Form 990 that includes the required
information. If the Internal Revenue
Service Form does not include
information for all of the required
categories listed in this part, the NGEP
must report the total expenditures in the
remaining categories either by providing
that information directly or by
providing another form or report that
includes the required information.
(ii) Example 2. An organization
receives $15,000 from an insured
depository institution under a covered
agreement and allocates and uses the
$15,000 during the fiscal year to
purchase computer equipment to
support its functions. The organization’s
annual report must include the name
and address of the organization,
information sufficient to identify the
agreement, and a statement that the
organization received $15,000 during
the year. In addition, since the
organization allocated and used the
funds for a specific purpose that is more
narrow and limited than the categories
of expenses included in the detailed,
itemized list of expenses, the
organization would have the option of
providing either the total amount it used
during the year for each category of
expenses included in paragraph
(d)(1)(iv) of this section, or a statement
that it used the $15,000 to purchase

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computer equipment and a brief
description of the equipment purchased.
(iii) Example 3. A community group
receives $50,000 from an insured
depository institution under a covered
agreement. During its fiscal year, the
community group specifically allocates
and uses $5,000 of the funds to pay for
a particular business trip and uses the
remaining $45,000 for general operating
expenses. The group’s annual report for
the fiscal year must include the name
and address of the group, information
sufficient to identify the agreement, and
a statement that the group received
$50,000. Because the group did not
allocate and use all of the funds for a
specific purpose, the group’s annual
report must provide the total amount of
funds it used during the year for each
category of expenses included in
paragraph (d)(1)(iv) of this section. The
group’s annual report also could state
that it used $5,000 for a particular
business trip and include a brief
description of the trip.
(iv) Example 4. A community
development organization is a party to
two separate covered agreements with
two unaffiliated insured depository
institutions. Under each agreement, the
organization receives $15,000 during its
fiscal year and uses the funds to support
its activities during that year. If the
organization elects to file a consolidated
annual report, the consolidated report
must identify the organization and the
two covered agreements, state that the
organization received $15,000 during
the fiscal year under each agreement,
and provide the total amount that the
organization used during the year for
each category of expenses included in
paragraph (d)(1)(iv) of this section.
(e) Annual report filed by insured
depository institution or affiliate—(1)
General. The annual report filed by an
insured depository institution or
affiliate must include the following—
(i) The name and principal place of
business of the insured depository
institution or affiliate filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans provided by
the insured depository institution or
affiliate under the covered agreement to
any other party to the agreement during
the fiscal year;
(iv) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans received by

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the insured depository institution or
affiliate under the covered agreement
from any other party to the agreement
during the fiscal year;
(v) A general description of the terms
and conditions of any payments, fees, or
loans reported under paragraphs
(e)(1)(iii) and (iv) of this section, or, in
the event such terms and conditions are
set forth—
(A) In the covered agreement, a
statement identifying the covered
agreement and the date the agreement
(or a list identifying the agreement) was
filed with the relevant supervisory
agency; or
(B) In a previous annual report filed
by the insured depository institution or
affiliate, a statement identifying the date
the report was filed with the relevant
supervisory agency; and
(vi) The aggregate amount and
number of loans, aggregate amount and
number of investments, and aggregate
amount of services provided under the
covered agreement to any individual or
entity not a party to the agreement—
(A) By the insured depository
institution or affiliate during its fiscal
year; and
(B) By any other party to the
agreement, unless such information is
not known to the insured depository
institution or affiliate filing the report or
such information is or will be contained
in the annual report filed by another
party under this section.
(2) Consolidated reports permitted.—
(i) Party to multiple agreements. An
insured depository institution or
affiliate that is a party to 2 or more
covered agreements may file a single
consolidated annual report with each
relevant supervisory agency concerning
all the covered agreements.
(ii) Affiliated entities party to the
same agreement. An insured depository
institution and its affiliates that are
parties to the same covered agreement
may file a single consolidated annual
report relating to the agreement with
each relevant supervisory agency for the
covered agreement.
(iii) Content of report. Any
consolidated annual report must contain
all the information required by this
paragraph (e). The amounts and data
required to be reported under
paragraphs (e)(1)(iv) and (vi) of this
section may be reported on an aggregate
basis for all covered agreements.
(f) Time and place of filing.—(1)
General. Each party must file its annual
report with each relevant supervisory
agency for the covered agreement no
later than six months following the end
of the fiscal year covered by the report.
(2) Alternative method of fulfilling
annual reporting requirement for a

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NGEP.—(i) A NGEP may fulfill the filing
requirements of this section by
providing the following materials to an
insured depository institution or
affiliate that is a party to the agreement
no later than six months following the
end of the NGEP’s fiscal year—
(A) A copy of the NGEP’s annual
report required under paragraph (d) of
this section for the fiscal year; and
(B) Written instructions that the
insured depository institution or
affiliate promptly forward the annual
report to the relevant supervisory
agency or agencies on behalf of the
NGEP.
(ii) An insured depository institution
or affiliate that receives an annual report
from a NGEP pursuant to paragraph
(f)(2)(i) of this section must file the
report with the relevant supervisory
agency or agencies on behalf of the
NGEP within 30 days.
§ 35.8

Release of information under FOIA.

The OCC will make covered
agreements and annual reports available
to the public in accordance with the
Freedom of Information Act (5 U.S.C.
552 et seq.) and the OCC’s rules
regarding the availability of information
under the Freedom of Information Act
(12 CFR part 4, subpart B). A party to
a covered agreement may request
confidential treatment of proprietary
and confidential information in a
covered agreement or an annual report
under those procedures.
§ 35.9

Compliance provisions.

(a) Willful failure to comply with
disclosure and reporting obligations.—
(1) If the OCC determines that a NGEP
has willfully failed to comply in a
material way with §§ 35.6 or 35.7, the
OCC will notify the NGEP in writing of
that determination and provide the
NGEP a period of 90 days (or such
longer period as the OCC finds to be
reasonable under the circumstances) to
comply.
(2) If the NGEP does not comply
within the time period established by
the OCC, the agreement shall thereafter
be unenforceable by that NGEP by
operation of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y).
(3) The OCC may assist any insured
depository institution or affiliate that is
a party to a covered agreement that is
unenforceable by a NGEP by operation
of section 48 of the Federal Deposit
Insurance Act (12 U.S.C. 1831y) in
identifying a successor to assume the
NGEP’s responsibilities under the
agreement.
(b) Diversion of funds. If a court or
other body of competent jurisdiction

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determines that funds or resources
received under a covered agreement
have been diverted contrary to the
purposes of the covered agreement for
an individual’s personal financial gain,
the OCC may take either or both of the
following actions—
(1) Order the individual to disgorge
the diverted funds or resources received
under the agreement;
(2) Prohibit the individual from being
a party to any covered agreement for a
period not to exceed 10 years.
(c) Notice and opportunity to respond.
Before making a determination under
paragraph (a)(1) of this section, or taking
any action under paragraph (b) of this
section, the OCC will provide written
notice and an opportunity to present
information to the OCC concerning any
relevant facts or circumstances relating
to the matter.
(d) Inadvertent or de minimis errors.
Inadvertent or de minimis errors in
annual reports or other documents filed
with the OCC under §§ 35.6 or 35.7 will
not subject the reporting party to any
penalty.
(e) Enforcement of provisions in
covered agreements. No provision of
this part shall be construed as
authorizing the OCC to enforce the
provisions of any covered agreement.
§ 35.10

Transition provisions.

(a) Disclosure of covered agreements
entered into before the effective date of
this part. The following disclosure
requirements apply to covered
agreements that were entered into after
November 12, 1999, and that terminated
before April 1, 2001.
(1) Disclosure to the public. Each
NGEP and each insured depository
institution or affiliate that was a party
to the agreement must make the
agreement available to the public under
§ 35.6 until at least April 1, 2002.
(2) Disclosure to the relevant
supervisory agency.—(i) Each NGEP that
was a party to the agreement must make
the agreement available to the relevant
supervisory agency under § 35.6 until at
least April 1, 2002.
(ii) Each insured depository
institution or affiliate that was a party
to the agreement must, by June 30, 2001,
provide each relevant supervisory
agency either—
(A) A copy of the agreement under
§ 35.6(d)(1)(i); or
(B) The information described in
§ 35.6(d)(1)(ii) for each agreement.
(b) Filing of annual reports that relate
to fiscal years ending on or before
December 31, 2000. In the event that a
NGEP, insured depository institution or
affiliate has any information to report
under § 35.7 for a fiscal year that ends

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on or before December 31, 2000, and
that concerns a covered agreement
entered into between May 12, 2000, and
December 31, 2000, the annual report
for that fiscal year must be provided no
later than June 30, 2001, to—
(1) Each relevant supervisory agency;
or
(2) In the case of a NGEP, to an
insured depository institution or
affiliate that is a party to the agreement
in accordance with § 35.7(f)(2).
§ 35.11 Other definitions and rules of
construction used in this part.

(a) Affiliate. ‘‘Affiliate’’ means—
(1) Any company that controls, is
controlled by, or is under common
control with another company; and
(2) For the purpose of determining
whether an agreement is a covered
agreement under § 35.2, an ‘‘affiliate’’
includes any company that would be
under common control or merged with
another company on consummation of
any transaction pending before a
Federal banking agency at the time—
(i) The parties enter into the
agreement; and
(ii) The NGEP that is a party to the
agreement makes a CRA
communication, as described in § 35.3.
(b) Control. ‘‘Control’’ is defined in
section 2(a) of the Bank Holding
Company Act (12 U.S.C. 1841(a)).
(c) CRA affiliate. A ‘‘CRA affiliate’’ of
an insured depository institution is any
company that is an affiliate of an
insured depository institution to the
extent, and only to the extent, that the
activities of the affiliate were considered
by the appropriate Federal banking
agency when evaluating the CRA
performance of the institution at its
most recent CRA examination prior to
the agreement. An insured depository
institution or affiliate also may
designate any company as a CRA
affiliate at any time prior to the time a
covered agreement is entered into by
informing the NGEP that is a party to
the agreement of such designation.
(d) CRA public file. ‘‘CRA public file’’
means the public file maintained by an
insured depository institution and
described in § 25.43 (12 CFR 25.43).
(e) Executive officer. The term
‘‘executive officer’’ has the same
meaning as in § 215.2(e)(1) of Regulation
O issued by the Board of Governors of
the Federal Reserve System (12 CFR
215.2(e)(1)).
(f) Federal banking agency;
appropriate Federal banking agency.
The terms ‘‘Federal banking agency’’
and ‘‘appropriate Federal banking
agency’’ have the same meanings as in
section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).

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(g) Fiscal year. (1) The fiscal year for
a NGEP that does not have a fiscal year
shall be the calendar year.
(2) Any NGEP, insured depository
institution, or affiliate that has a fiscal
year may elect to have the calendar year
be its fiscal year for purposes of this
part.
(h) Insured depository institution.
‘‘Insured depository institution’’ has the
same meaning as in section 3 of the
Federal Deposit Insurance Act (12
U.S.C. 1813).
(i) NGEP. ‘‘NGEP’’ means a
nongovernmental entity or person.
(j) Nongovernmental entity or
person—(1) General. A
‘‘nongovernmental entity or person’’ is
any partnership, association, trust, joint
venture, joint stock company,
corporation, limited liability
corporation, company, firm, society,
other organization, or individual.
(2) Exclusions. A nongovernmental
entity or person does not include—
(i) The United States government, a
state government, a unit of local
government (including a county, city,
town, township, parish, village, or other
general-purpose subdivision of a state)
or an Indian tribe or tribal organization
established under Federal, state or
Indian tribal law (including the
Department of Hawaiian Home Lands),
or a department, agency, or
instrumentality of any such entity;
(ii) A federally-chartered public
corporation that receives Federal funds
appropriated specifically for that
corporation;
(iii) An insured depository institution
or affiliate of an insured depository
institution; or
(iv) An officer, director, employee, or
representative (acting in his or her
capacity as an officer, director,
employee, or representative) of an entity
listed in paragraphs (i)(2)(i) through (iii)
of this section.
(k) Party. The term ‘‘party’’ with
respect to a covered agreement means
each NGEP and each insured depository
institution or affiliate that entered into
the agreement.
(l) Relevant supervisory agency. The
‘‘relevant supervisory agency’’ for a
covered agreement means the
appropriate Federal banking agency
for—
(1) Each insured depository
institution (or subsidiary thereof) that is
a party to the covered agreement;
(2) Each insured depository
institution (or subsidiary thereof) or
CRA affiliate that makes payments or
loans or provides services that are
subject to the covered agreement; and
(3) Any company (other than an
insured depository institution or

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subsidiary thereof) that is a party to the
covered agreement.
(m) Term of agreement. An agreement
that does not have a fixed termination
date is considered to terminate on the
last date on which any party to the
agreement makes any payment or
provides any loan or other resources
under the agreement, unless the relevant
supervisory agency for the agreement
otherwise notifies each party in writing.
Dated: December 21, 2000.
John D. Hawke, Jr.,
Comptroller of the Currency.

Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons set out in the joint
preamble, Title 12, Chapter II, of the
Code of Federal Regulations is amended
by adding a new part 207 to read as
follows:
PART 207—DISCLOSURE AND
REPORTING OF CRA-RELATED
AGREEMENTS (REGULATION G)
Sec.
207.1 Purpose and scope of this part.
207.2 Definition of covered agreement.
207.3 CRA communications.
207.4 Fulfillment of the CRA.
207.5 Related agreements considered a
single agreement.
207.6 Disclosure of covered agreements.
207.7 Annual reports.
207.8 Release of information under FOIA.
207.9 Compliance provisions.
207.10 Transition provisions.
207.11 Other definitions and rules of
construction used in this part.
Authority: 12 U.S.C. 1831y.
§ 207.1

Purpose and scope of this part.

(a) General. This part implements
section 711 of the Gramm-Leach-Bliley
Act (12 U.S.C. 1831y). That section
requires any nongovernmental entity or
person, insured depository institution,
or affiliate of an insured depository
institution that enters into a covered
agreement to—
(1) Make the covered agreement
available to the public and the
appropriate Federal banking agency;
and
(2) File an annual report with the
appropriate Federal banking agency
concerning the covered agreement.
(b) Scope of this part. The provisions
of this part apply to—
(1) State member banks and their
subsidiaries;
(2) Bank holding companies;
(3) Affiliates of bank holding
companies, other than banks, savings
associations and subsidiaries of banks
and savings associations; and

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(4) Nongovernmental entities or
persons that enter into covered
agreements with any company listed in
paragraph (b)(1) through (3) of this
section.
(c) Relation to Community
Reinvestment Act. This part does not
affect in any way the Community
Reinvestment Act of 1977 (12 U.S.C.
2901 et seq.), the Board’s Regulation BB
(12 CFR part 228), or the Board’s
interpretations or administration of that
Act or regulation.
(d) Examples.—(1) The examples in
this part are not exclusive. Compliance
with an example, to the extent
applicable, constitutes compliance with
this part.
(2) Examples in a paragraph illustrate
only the issue described in the
paragraph and do not illustrate any
other issues that may arise in this part.
§ 207.2

Definition of covered agreement.

(a) General definition of covered
agreement. A covered agreement is any
contract, arrangement, or understanding
that meets all of the following criteria—
(1) The agreement is in writing.
(2) The parties to the agreement
include—
(i) One or more insured depository
institutions or affiliates of an insured
depository institution; and
(ii) One or more nongovernmental
entities or persons (referred to hereafter
as NGEPs).
(3) The agreement provides for the
insured depository institution or any
affiliate to—
(i) Provide to one or more individuals
or entities (whether or not parties to the
agreement) cash payments, grants, or
other consideration (except loans) that
have an aggregate value of more than
$10,000 in any calendar year; or
(ii) Make to one or more individuals
or entities (whether or not parties to the
agreement) loans that have an aggregate
principal amount of more than $50,000
in any calendar year.
(4) The agreement is made pursuant
to, or in connection with, the fulfillment
of the Community Reinvestment Act of
1977 (12 U.S.C. 2901 et seq.) (CRA), as
defined in § 207.4.
(5) The agreement is with a NGEP that
has had a CRA communication as
described in § 207.3 prior to entering
into the agreement.
(b) Examples concerning written
arrangements or understandings.—(1)
Example 1. A NGEP meets with an
insured depository institution and states
that the institution needs to make more
community development investments in
the NGEP’s community. The NGEP and
insured depository institution do not
reach an agreement concerning the

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community development investments
the institution should make in the
community, and the parties do not reach
any mutual arrangement or
understanding. Two weeks later, the
institution unilaterally issues a press
release announcing that it has
established a general goal of making
$100 million of community
development grants in low- and
moderate-income neighborhoods served
by the insured depository institution
over the next 5 years. The NGEP is not
identified in the press release. The press
release is not a written arrangement or
understanding.
(2) Example 2. A NGEP meets with an
insured depository institution and states
that the institution needs to offer new
loan programs in the NGEP’s
community. The NGEP and the insured
depository institution reach a mutual
arrangement or understanding that the
institution will provide additional loans
in the NGEP’s community. The
institution tells the NGEP that it will
issue a press release announcing the
program. Later, the insured depository
institution issues a press release
announcing the loan program. The press
release incorporates the key terms of the
understanding reached between the
NGEP and the insured depository
institution. The written press release
reflects the mutual arrangement or
understanding of the NGEP and the
insured depository institution and is,
therefore, a written arrangement or
understanding.
(3) Example 3. An NGEP sends a letter
to an insured depository institution
requesting that the institution provide a
$15,000 grant to the NGEP. The insured
depository institution responds in
writing and agrees to provide the grant
in connection with its annual grant
program. The exchange of letters
constitutes a written arrangement or
understanding.
(c) Loan agreements that are not
covered agreements. A covered
agreement does not include—
(1) Any individual loan that is
secured by real estate; or
(2) Any specific contract or
commitment for a loan or extension of
credit to an individual, business, farm,
or other entity, or group of such
individuals or entities, if—
(i) The funds are loaned at rates that
are not substantially below market rates;
and
(ii) The loan application or other loan
documentation does not indicate that
the borrower intends or is authorized to
use the borrowed funds to make a loan
or extension of credit to one or more
third parties.

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(d) Examples concerning loan
agreements.—(1) Example 1. An insured
depository institution provides an
organization with a $1 million loan that
is documented in writing and is secured
by real estate owned or to-be-acquired
by the organization. The agreement is an
individual mortgage loan and is exempt
from coverage under paragraph (c)(1) of
this section, regardless of the interest
rate on the loan or whether the
organization intends or is authorized to
re-loan the funds to a third party.
(2) Example 2. An insured depository
institution commits to provide a
$500,000 line of credit to a small
business that is documented by a
written agreement. The loan is made at
rates that are within the range of rates
offered by the institution to similarly
situated small businesses in the market
and the loan documentation does not
indicate that the small business intends
or is authorized to re-lend the borrowed
funds. The agreement is exempt from
coverage under paragraph (c)(2) of this
section.
(3) Example 3. An insured depository
institution offers small business loans
that are guaranteed by the Small
Business Administration (SBA). A small
business obtains a $75,000 loan,
documented in writing, from the
institution under the institution’s SBA
loan program. The loan documentation
does not indicate that the borrower
intends or is authorized to re-lend the
funds. Although the rate charged on the
loan is well below that charged by the
institution on commercial loans, the rate
is within the range of rates that the
institution would charge a similarly
situated small business for a similar
loan under the SBA loan program.
Accordingly, the loan is not made at
substantially below market rates and is
exempt from coverage under paragraph
(c)(2) of this section.
(4) Example 4. A bank holding
company enters into a written
agreement with a community
development organization that provides
that insured depository institutions
owned by the bank holding company
will make $250 million in small
business loans in the community over
the next 5 years. The written agreement
is not a specific contract or commitment
for a loan or an extension of credit and,
thus, is not exempt from coverage under
paragraph (c)(2) of this section. Each
small business loan made by the insured
depository institution pursuant to this
general commitment would, however,
be exempt from coverage if the loan is
made at rates that are not substantially
below market rates and the loan
documentation does not indicate that

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the borrower intended or was
authorized to re-lend the funds.
(e) Agreements that include exempt
loan agreements. If an agreement
includes a loan, extension of credit or
loan commitment that, if documented
separately, would be exempt under
paragraph (c) of this section, the exempt
loan, extension of credit or loan
commitment may be excluded for
purposes of determining whether the
agreement is a covered agreement.
(f) Determining annual value of
agreements that lack schedule of
disbursements. For purposes of
paragraph (a)(3) of this section, a multiyear agreement that does not include a
schedule for the disbursement of
payments, grants, loans or other
consideration by the insured depository
institution or affiliate, is considered to
have a value in the first year of the
agreement equal to all payments, grants,
loans and other consideration to be
provided at any time under the
agreement.
§ 207.3

CRA communications.

(a) Definition of CRA communication.
A CRA communication is any of the
following—
(1) Any written or oral comment or
testimony provided to a Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate.
(2) Any written comment submitted to
the insured depository institution that
discusses the adequacy of the
performance under the CRA of the
institution and must be included in the
institution’s CRA public file.
(3) Any discussion or other contact
with the insured depository institution
or any affiliate about—
(i) Providing (or refraining from
providing) written or oral comments or
testimony to any Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate;
(ii) Providing (or refraining from
providing) written comments to the
insured depository institution that
concern the adequacy of the
institution’s performance under the
CRA and must be included in the
institution’s CRA public file; or
(iii) The adequacy of the performance
under the CRA of the insured depository
institution, any affiliated insured
depository institution, or any CRA
affiliate.
(b) Discussions or contacts that are
not CRA communications.—(1) Timing

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of contacts with a Federal banking
agency. An oral or written
communication with a Federal banking
agency is not a CRA communication if
it occurred more than 3 years before the
parties entered into the agreement.
(2) Timing of contacts with insured
depository institutions and affiliates. A
communication with an insured
depository institution or affiliate is not
a CRA communication if the
communication occurred—
(i) More than 3 years before the
parties entered into the agreement, in
the case of any written communication;
(ii) More than 3 years before the
parties entered into the agreement, in
the case of any oral communication in
which the NGEP discusses providing (or
refraining from providing) comments or
testimony to a Federal banking agency
or written comments that must be
included in the institution’s CRA public
file in connection with a request to, or
agreement by, the institution or affiliate
to take (or refrain from taking) any
action that is in fulfillment of the CRA;
or
(iii) More than 1 year before the
parties entered into the agreement, in
the case of any other oral
communication not described in
paragraph (b)(2)(ii) of this section.
(3) Knowledge of communication by
insured depository institution or
affiliate.—(i) A communication is only a
CRA communication under paragraph
(a) of this section if the insured
depository institution or its affiliate has
knowledge of the communication under
this paragraph (b)(3)(ii) or (b)(3)(iii) of
this section.
(ii) Communication with insured
depository institution or affiliate. An
insured depository institution or
affiliate has knowledge of a
communication by the NGEP to the
institution or its affiliate under this
paragraph only if one of the following
representatives of the insured
depository institution or any affiliate
has knowledge of the communication.
(A) An employee who approves,
directs, authorizes, or negotiates the
agreement with the NGEP; or
(B) An employee designated with
responsibility for compliance with the
CRA or executive officer if the employee
or executive officer knows that the
institution or affiliate is negotiating,
intends to negotiate, or has been
informed by the NGEP that it expects to
request that the institution or affiliate
negotiate an agreement with the NGEP.
(iii) Other communications. An
insured depository institution or
affiliate is deemed to have knowledge
of—

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(A) Any testimony provided to a
Federal banking agency at a public
meeting or hearing;
(B) Any comment submitted to a
Federal banking agency that is conveyed
in writing by the agency to the insured
depository institution or affiliate; and
(C) Any written comment submitted
to the insured depository institution
that must be and is included in the
institution’s CRA public file.
(4) Communication where NGEP has
knowledge. A NGEP has a CRA
communication with an insured
depository institution or affiliate only if
any of the following individuals has
knowledge of the communication—
(i) A director, employee, or member of
the NGEP who approves, directs,
authorizes, or negotiates the agreement
with the insured depository institution
or affiliate;
(ii) A person who functions as an
executive officer of the NGEP and who
knows that the NGEP is negotiating or
intends to negotiate an agreement with
the insured depository institution or
affiliate; or
(iii) Where the NGEP is an individual,
the NGEP.
(c) Examples of CRA
communications.—(1) Examples of
actions that are CRA communications.
The following are examples of CRA
communications. These examples are
not exclusive and assume that the
communication occurs within the
relevant time period as described in
paragraph (b)(1) or (b)(2) of this section
and the appropriate representatives
have knowledge of the communication
as specified in paragraphs (b)(3) and
(b)(4) of this section.
(i) Example 1. A NGEP files a written
comment with a Federal banking agency
that states than an insured depository
institution successfully addresses the
credit needs of its community. The
written comment is in response to a
general request from the agency for
comments on an application of the
insured depository institution to open a
new branch and a copy of the comment
is provided to the institution.
(ii) Example 2. A NGEP meets with an
executive officer of an insured
depository institution and states that the
institution must improve its CRA
performance.
(iii) Example 3. A NGEP meets with
an executive officer of an insured
depository institution and states that the
institution needs to make more
mortgage loans in low- and moderateincome neighborhoods in its
community.
(iv) Example 4. A bank holding
company files an application with a
Federal banking agency to acquire an

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insured depository institution. Two
weeks later, the NGEP meets with an
executive officer of the bank holding
company to discuss the adequacy of the
performance under the CRA of the target
insured depository institution. The
insured depository institution was an
affiliate of the bank holding company at
the time the NGEP met with the target
institution. (See § 207.11(a).)
Accordingly, the NGEP had a CRA
communication with an affiliate of the
bank holding company.
(2) Examples of actions that are not
CRA communications. The following
are examples of actions that are not by
themselves CRA communications.
These examples are not exclusive.
(i) Example 1. A NGEP provides to a
Federal banking agency comments or
testimony concerning an insured
depository institution or affiliate in
response to a direct request by the
agency for comments or testimony from
that NGEP. Direct requests for
comments or testimony do not include
a general invitation by a Federal
banking agency for comments or
testimony from the public in connection
with a CRA performance evaluation of,
or application for a deposit facility (as
defined in section 803 of the CRA (12
U.S.C. 2902(3)) by, an insured
depository institution or an application
by a company to acquire an insured
depository institution.
(ii) Example 2. A NGEP makes a
statement concerning an insured
depository institution or affiliate at a
widely attended conference or seminar
regarding a general topic. A public or
private meeting, public hearing, or other
meeting regarding one or more specific
institutions, affiliates or transactions
involving an application for a deposit
facility is not considered a widely
attended conference or seminar.
(iii) Example 3. A NGEP, such as a
civil rights group, community group
providing housing and other services in
low- and moderate-income
neighborhoods, veterans organization,
community theater group, or youth
organization, sends a fundraising letter
to insured depository institutions and to
other businesses in its community. The
letter encourages all businesses in the
community to meet their obligation to
assist in making the local community a
better place to live and work by
supporting the fundraising efforts of the
NGEP.
(iv) Example 4. A NGEP discusses
with an insured depository institution
or affiliate whether particular loans,
services, investments, community
development activities, or other
activities are generally eligible for
consideration by a Federal banking

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agency under the CRA. The NGEP and
insured depository institution or
affiliate do not discuss the adequacy of
the CRA performance of the insured
depository institution or affiliate.
(v) Example 5. A NGEP engaged in the
sale or purchase of loans in the
secondary market sends a general
offering circular to financial institutions
offering to sell or purchase a portfolio of
loans. An insured depository institution
that receives the offering circular
discusses with the NGEP the types of
loans included in the loan pool,
whether such loans are generally
eligible for consideration under the
CRA, and which loans are made to
borrowers in the institution’s local
community. The NGEP and insured
depository institution do not discuss the
adequacy of the institution’s CRA
performance.
(d) Multiparty covered agreements.—
(1) A NGEP that is a party to a covered
agreement that involves multiple NGEPs
is not required to comply with the
requirements of this part if—
(i) The NGEP has not had a CRA
communication; and
(ii) No representative of the NGEP
identified in paragraph (b)(4) of this
section has knowledge at the time of the
agreement that another NGEP that is a
party to the agreement has had a CRA
communication.
(2) An insured depository institution
or affiliate that is a party to a covered
agreement that involves multiple
insured depository institutions or
affiliates is not required to comply with
the disclosure and annual reporting
requirements in §§ 207.6 and 207.7 if—
(i) No NGEP that is a party to the
agreement has had a CRA
communication concerning the insured
depository institution or any affiliate;
and
(ii) No representative of the insured
depository institution or any affiliate
identified in paragraph (b)(3) of this
section has knowledge at the time of the
agreement that an NGEP that is a party
to the agreement has had a CRA
communication concerning any other
insured depository institution or
affiliate that is a party to the agreement.
§ 207.4

Fulfillment of the CRA.

(a) List of factors that are in
fulfillment of the CRA. Fulfillment of
the CRA, for purposes of this part,
means the following list of factors—
(1) Comments to a Federal banking
agency or included in CRA public file.
Providing or refraining from providing
written or oral comments or testimony
to any Federal banking agency
concerning the performance under the
CRA of an insured depository

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institution or CRA affiliate that is a
party to the agreement or an affiliate of
a party to the agreement or written
comments that are required to be
included in the CRA public file of any
such insured depository institution; or
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the
insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Home-purchase, homeimprovement, small business, small
farm, community development, and
consumer lending, as described in
§ 228.22 of Regulation BB (12 CFR
228.22), including loan purchases, loan
commitments, and letters of credit;
(ii) Making investments, deposits, or
grants, or acquiring membership shares,
that have as their primary purpose
community development, as described
in § 228.23 of Regulation BB (12 CFR
228.23);
(iii) Delivering retail banking services,
as described in § 228.24(d) of Regulation
BB (12 CFR 228.24(d));
(iv) Providing community
development services, as described in
§ 228.24(e) of Regulation BB (12 CFR
228.24(e));
(v) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making qualified investments, or
providing community development
services, as described in § 228.25(c) of
Regulation BB (12 CFR 228.25(c));
(vi) In the case of a small insured
depository institution, any lending or
other activity described in § 228.26(a) of
Regulation BB (12 CFR 228.26(a)); or
(vii) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in § 228.27(f) of Regulation
BB (12 CFR 228.27(f)).
(b) Agreements relating to activities of
CRA affiliates. An insured depository
institution or affiliate that is a party to
a covered agreement that concerns any
activity described in paragraph (a) of
this section of a CRA affiliate must,
prior to the time the agreement is
entered into, notify each NGEP that is a
party to the agreement that the
agreement concerns a CRA affiliate.

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§ 207.5 Related agreements considered a
single agreement.

The following rules must be applied
in determining whether an agreement is
a covered agreement under § 207.2.
(a) Agreements entered into by same
parties. All written agreements to which
an insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement if the
agreements—
(1) Are entered into with the same
NGEP;
(2) Were entered into within the same
12-month period; and
(3) Are each in fulfillment of the CRA.
(b) Substantively related contracts.
All written contracts to which an
insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement, without regard
to whether the other parties to the
contracts are the same or whether each
such contract is in fulfillment of the
CRA, if the contracts were negotiated in
a coordinated fashion and a NGEP is a
party to each contract.
§ 207.6

Disclosure of covered agreements.

(a) Applicability date. This section
applies only to covered agreements
entered into after November 12, 1999.
(b) Disclosure of covered agreements
to the public—(1) Disclosure required.
Each NGEP and each insured depository
institution or affiliate that enters into a
covered agreement must promptly make
a copy of the covered agreement
available to any individual or entity
upon request.
(2) Nondisclosure of confidential and
proprietary information permitted. In
responding to a request for a covered
agreement from any individual or entity
under paragraph (b)(1) of this section, a
NGEP, insured depository institution, or
affiliate may withhold from public
disclosure confidential or proprietary
information that the party believes the
relevant supervisory agency could
withhold from disclosure under the
Freedom of Information Act (5 U.S.C.
552 et seq.) (FOIA).
(3) Information that must be
disclosed. Notwithstanding paragraph
(b)(2) of this section, a party must
disclose any of the following
information that is contained in a
covered agreement—
(i) The names and addresses of the
parties to the agreement;
(ii) The amount of any payments, fees,
loans, or other consideration to be made
or provided by any party to the
agreement;
(iii) Any description of how the funds
or other resources provided under the
agreement are to be used;

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(iv) The term of the agreement (if the
agreement establishes a term); and
(v) Any other information that the
relevant supervisory agency determines
is not properly exempt from public
disclosure.
(4) Request for review of withheld
information. Any individual or entity
may request that the relevant
supervisory agency review whether any
information in a covered agreement
withheld by a party must be disclosed.
Any requests for agency review of
withheld information must be filed, and
will be processed in accordance with,
the relevant supervisory agency’s rules
concerning the availability of
information (see § 261.12 of the Board’s
Rules Regarding the Availability of
Information (12 CFR 261.12)).
(5) Duration of obligation. The
obligation to disclose a covered
agreement to the public terminates 12
months after the end of the term of the
agreement.
(6) Reasonable copy and mailing fees.
Each NGEP and each insured depository
institution or affiliate may charge an
individual or entity that requests a copy
of a covered agreement a reasonable fee
not to exceed the cost of copying and
mailing the agreement.
(7) Use of CRA public file by insured
depository institution or affiliate. An
insured depository institution and any
affiliate of an insured depository
institution may fulfill its obligation
under this paragraph (b) by placing a
copy of the covered agreement in the
insured depository institution’s CRA
public file if the institution makes the
agreement available in accordance with
the procedures set forth in § 228.43 of
Regulation BB (12 CFR 228.43).
(c) Disclosure by NGEPs of covered
agreements to the relevant supervisory
agency. (1) Each NGEP that is a party to
a covered agreement must provide the
following within 30 days of receiving a
request from the relevant supervisory
agency—
(i) A complete copy of the agreement;
and
(ii) In the event the NGEP proposes
the withholding of any information
contained in the agreement in
accordance with paragraph (b)(2) of this
section, a public version of the
agreement that excludes such
information and an explanation
justifying the exclusions. Any public
version must include the information
described in paragraph (b)(3) of this
section.
(2) The obligation of a NGEP to
provide a covered agreement to the
relevant supervisory agency terminates
12 months after the end of the term of
the covered agreement.

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(d) Disclosure by insured depository
institution or affiliate of covered
agreements to the relevant supervisory
agency—(1) In general. Within 60 days
of the end of each calendar quarter, each
insured depository institution and
affiliate must provide each relevant
supervisory agency with—
(i)(A) A complete copy of each
covered agreement entered into by the
insured depository institution or
affiliate during the calendar quarter; and
(B) In the event the institution or
affiliate proposes the withholding of any
information contained in the agreement
in accordance with paragraph (b)(2) of
this section, a public version of the
agreement that excludes such
information (other than any information
described in paragraph (b)(3) of this
section) and an explanation justifying
the exclusions; or
(ii) A list of all covered agreements
entered into by the insured depository
institution or affiliate during the
calendar quarter that contains—
(A) The name and address of each
insured depository institution or
affiliate that is a party to the agreement;
(B) The name and address of each
NGEP that is a party to the agreement;
(C) The date the agreement was
entered into;
(D) The estimated total value of all
payments, fees, loans and other
consideration to be provided by the
institution or any affiliate of the
institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered
agreements contained in list required. (i)
If an insured depository institution or
affiliate files a list of the covered
agreements entered into by the
institution or affiliate pursuant to
paragraph (d)(1)(ii) of this section, the
institution or affiliate must provide any
relevant supervisory agency a complete
copy and public version of any covered
agreement referenced in the list within
7 calendar days of receiving a request
from the agency for a copy of the
agreement.
(ii) The obligation of an insured
depository institution or affiliate to
provide a covered agreement to the
relevant supervisory agency under this
paragraph (d)(2) terminates 36 months
after the end of the term of the
agreement.
(3) Joint filings. In the event that 2 or
more insured depository institutions or
affiliates are parties to a covered
agreement, the insured depository
institution(s) and affiliate(s) may jointly
file the documents required by this
paragraph (d). Any joint filing must
identify the insured depository

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institution(s) and affiliate(s) for whom
the filings are being made.
§ 207.7

Annual reports.

(a) Applicability date. This section
applies only to covered agreements
entered into on or after May 12, 2000.
(b) Annual report required. Each
NGEP and each insured depository
institution or affiliate that is a party to
a covered agreement must file an annual
report with each relevant supervisory
agency concerning the disbursement,
receipt, and uses of funds or other
resources under the covered agreement.
(c) Duration of reporting
requirement—(1) NGEPs. A NGEP must
file an annual report for a covered
agreement for any fiscal year in which
the NGEP receives or uses funds or
other resources under the agreement.
(2) Insured depository institutions and
affiliates. An insured depository
institution or affiliate must file an
annual report for a covered agreement
for any fiscal year in which the
institution or affiliate—
(i) provides or receives any payments,
fees, or loans under the covered
agreement that must be reported under
paragraphs (e)(1)(iii) and (iv) of this
section; or
(ii) has data to report on loans,
investments, and services provided by a
party to the covered agreement under
the covered agreement under paragraph
(e)(1)(vi) of this section.
(d) Annual reports filed by NGEP.—
(1) Contents of report. The annual report
filed by a NGEP under this section must
include the following—
(i) The name and mailing address of
the NGEP filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The amount of funds or resources
received under the covered agreement
during the fiscal year; and
(iv) A detailed, itemized list of how
any funds or resources received by the
NGEP under the covered agreement
were used during the fiscal year,
including the total amount used for—
(A) Compensation of officers,
directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and
professional fees; and
(F) Other expenses and uses (specify
expense or use).
(2) More detailed reporting of uses of
funds or resources permitted—(i) In

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general. If a NGEP allocated and used
funds received under a covered
agreement for a specific purpose, the
NGEP may fulfill the requirements of
paragraph (d)(1)(iv) of this section with
respect to such funds by providing—
(A) A brief description of each
specific purpose for which the funds or
other resources were used; and
(B) The amount of funds or resources
used during the fiscal year for each
specific purpose.
(ii) Specific purpose defined. A NGEP
allocates and uses funds for a specific
purpose if the NGEP receives and uses
the funds for a purpose that is more
specific and limited than the categories
listed in paragraph (d)(1)(iv) of this
section.
(3) Use of other reports. The annual
report filed by a NGEP may consist of
or incorporate a report prepared for any
other purpose, such as the Internal
Revenue Service Return of Organization
Exempt From Income Tax on Form 990,
or any other Internal Revenue Service
form, state tax form, report to members
or shareholders, audited or unaudited
financial statements, audit report, or
other report, so long as the annual
report filed by the NGEP contains all of
the information required by this
paragraph (d).
(4) Consolidated reports permitted. A
NGEP that is a party to 2 or more
covered agreements may file with each
relevant supervisory agency a single
consolidated annual report covering all
the covered agreements. Any
consolidated report must contain all the
information required by this paragraph
(d). The information reported under
paragraphs (d)(1)(iv) and (d)(2) of this
section may be reported on an aggregate
basis for all covered agreements.
(5) Examples of annual report
requirements for NGEPs—(i) Example 1.
A NGEP receives an unrestricted grant
of $15,000 under a covered agreement,
includes the funds in its general
operating budget and uses the funds
during its fiscal year. The NGEP’s
annual report for the fiscal year must
provide the name and mailing address
of the NGEP, information sufficient to
identify the covered agreement, and
state that the NGEP received $15,000
during the fiscal year. The report must
also indicate the total expenditures
made by the NGEP during the fiscal year
for compensation, administrative
expenses, travel expenses,
entertainment expenses, consulting and
professional fees, and other expenses
and uses. The NGEP’s annual report
may provide this information by
submitting an Internal Revenue Service
Form 990 that includes the required
information. If the Internal Revenue

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Service Form does not include
information for all of the required
categories listed in this part, the NGEP
must report the total expenditures in the
remaining categories either by providing
that information directly or by
providing another form or report that
includes the required information.
(ii) Example 2. An organization
receives $15,000 from an insured
depository institution under a covered
agreement and allocates and uses the
$15,000 during the fiscal year to
purchase computer equipment to
support its functions. The organization’s
annual report must include the name
and address of the organization,
information sufficient to identify the
agreement, and a statement that the
organization received $15,000 during
the year. In addition, since the
organization allocated and used the
funds for a specific purpose that is more
narrow and limited than the categories
of expenses included in the detailed,
itemized list of expenses, the
organization would have the option of
providing either the total amount it used
during the year for each category of
expenses included in paragraph
(d)(1)(iv) of this section, or a statement
that it used the $15,000 to purchase
computer equipment and a brief
description of the equipment purchased.
(iii) Example 3. A community group
receives $50,000 from an insured
depository institution under a covered
agreement. During its fiscal year, the
community group specifically allocates
and uses $5,000 of the funds to pay for
a particular business trip and uses the
remaining $45,000 for general operating
expenses. The group’s annual report for
the fiscal year must include the name
and address of the group, information
sufficient to identify the agreement, and
a statement that the group received
$50,000. Because the group did not
allocate and use all of the funds for a
specific purpose, the group’s annual
report must provide the total amount of
funds it used during the year for each
category of expenses included in
paragraph (d)(1)(iv) of this section. The
group’s annual report also could state
that it used $5,000 for a particular
business trip and include a brief
description of the trip.
(iv) Example 4. A community
development organization is a party to
two separate covered agreements with
two unaffiliated insured depository
institutions. Under each agreement, the
organization receives $15,000 during its
fiscal year and uses the funds to support
its activities during that year. If the
organization elects to file a consolidated
annual report, the consolidated report
must identify the organization and the

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two covered agreements, state that the
organization received $15,000 during
the fiscal year under each agreement,
and provide the total amount that the
organization used during the year for
each category of expenses included in
paragraph (d)(1)(iv) of this section.
(e) Annual report filed by insured
depository institution or affiliate—(1)
General. The annual report filed by an
insured depository institution or
affiliate must include the following—
(i) The name and principal place of
business of the insured depository
institution or affiliate filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans provided by
the insured depository institution or
affiliate under the covered agreement to
any other party to the agreement during
the fiscal year;
(iv) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans received by
the insured depository institution or
affiliate under the covered agreement
from any other party to the agreement
during the fiscal year;
(v) A general description of the terms
and conditions of any payments, fees, or
loans reported under paragraphs
(e)(1)(iii) and (iv) of this section, or, in
the event such terms and conditions are
set forth—
(A) In the covered agreement, a
statement identifying the covered
agreement and the date the agreement
(or a list identifying the agreement) was
filed with the relevant supervisory
agency; or
(B) In a previous annual report filed
by the insured depository institution or
affiliate, a statement identifying the date
the report was filed with the relevant
supervisory agency; and
(vi) The aggregate amount and
number of loans, aggregate amount and
number of investments, and aggregate
amount of services provided under the
covered agreement to any individual or
entity not a party to the agreement—
(A) By the insured depository
institution or affiliate during its fiscal
year; and
(B) By any other party to the
agreement, unless such information is
not known to the insured depository
institution or affiliate filing the report or
such information is or will be contained
in the annual report filed by another
party under this section.

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(2) Consolidated reports permitted—
(i) Party to multiple agreements. An
insured depository institution or
affiliate that is a party to 2 or more
covered agreements may file a single
consolidated annual report with each
relevant supervisory agency concerning
all the covered agreements.
(ii) Affiliated entities party to the
same agreement. An insured depository
institution and its affiliates that are
parties to the same covered agreement
may file a single consolidated annual
report relating to the agreement with
each relevant supervisory agency for the
covered agreement.
(iii) Content of report. Any
consolidated annual report must contain
all the information required by this
paragraph (e). The amounts and data
required to be reported under
paragraphs (e)(1)(iv) and (vi) of this
section may be reported on an aggregate
basis for all covered agreements.
(f) Time and place of filing.—(1)
General. Each party must file its annual
report with each relevant supervisory
agency for the covered agreement no
later than six months following the end
of the fiscal year covered by the report.
(2) Alternative method of fulfilling
annual reporting requirement for a
NGEP—(i) A NGEP may fulfill the filing
requirements of this section by
providing the following materials to an
insured depository institution or
affiliate that is a party to the agreement
no later than six months following the
end of the NGEP’s fiscal year—
(A) A copy of the NGEP’s annual
report required under paragraph (d) of
this section for the fiscal year; and
(B) Written instructions that the
insured depository institution or
affiliate promptly forward the annual
report to the relevant supervisory
agency or agencies on behalf of the
NGEP.
(ii) An insured depository institution
or affiliate that receives an annual report
from a NGEP pursuant to paragraph
(f)(2)(i) of this section must file the
report with the relevant supervisory
agency or agencies on behalf of the
NGEP within 30 days.
§ 207.8

Release of information under FOIA.

The Board will make covered
agreements and annual reports available
to the public in accordance with the
Freedom of Information Act (5 U.S.C.
552 et seq.) and the Board’s Rules
Regarding the Availability of
Information (12 CFR part 261). A party
to a covered agreement may request
confidential treatment of proprietary
and confidential information in a
covered agreement or an annual report
under those procedures.

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§ 207.9

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
Compliance provisions.

(a) Willful failure to comply with
disclosure and reporting obligations—
(1) If the Board determines that a NGEP
has willfully failed to comply in a
material way with §§ 207.6 or 207.7, the
Board will notify the NGEP in writing
of that determination and provide the
NGEP a period of 90 days (or such
longer period as the Board finds to be
reasonable under the circumstances) to
comply.
(2) If the NGEP does not comply
within the time period established by
the Board, the agreement shall thereafter
be unenforceable by that NGEP by
operation of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y).
(3) The Board may assist any insured
depository institution or affiliate that is
a party to a covered agreement that is
unenforceable by a NGEP by operation
of section 48 of the Federal Deposit
Insurance Act (12 U.S.C. 1831y) in
identifying a successor to assume the
NGEP’s responsibilities under the
agreement.
(b) Diversion of funds. If a court or
other body of competent jurisdiction
determines that funds or resources
received under a covered agreement
have been diverted contrary to the
purposes of the covered agreement for
an individual’s personal financial gain,
the Board may take either or both of the
following actions—
(1) Order the individual to disgorge
the diverted funds or resources received
under the agreement;
(2) Prohibit the individual from being
a party to any covered agreement for a
period not to exceed 10 years.
(c) Notice and opportunity to respond.
Before making a determination under
paragraph (a)(1) of this section, or taking
any action under paragraph (b) of this
section, the Board will provide written
notice and an opportunity to present
information to the Board concerning any
relevant facts or circumstances relating
to the matter.
(d) Inadvertent or de minimis errors.
Inadvertent or de minimis errors in
annual reports or other documents filed
with the Board under §§ 207.6 or 207.7
will not subject the reporting party to
any penalty.
(e) Enforcement of provisions in
covered agreements. No provision of
this part shall be construed as
authorizing the Board to enforce the
provisions of any covered agreement.
§ 207.10

Transition provisions.

(a) Disclosure of covered agreements
entered into before the effective date of
this part. The following disclosure
requirements apply to covered

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agreements that were entered into after
November 12, 1999, and that terminated
before April 1, 2001.
(1) Disclosure to the public. Each
NGEP and each insured depository
institution or affiliate that was a party
to the agreement must make the
agreement available to the public under
§ 207.6 until at least April 1, 2002.
(2) Disclosure to the relevant
supervisory agency—(i) Each NGEP that
was a party to the agreement must make
the agreement available to the relevant
supervisory agency under § 207.6 until
at least April 1, 2002.
(ii) Each insured depository
institution or affiliate that was a party
to the agreement must, by June 30, 2001,
provide each relevant supervisory
agency either—
(A) A copy of the agreement under
§ 207.6(d)(1)(i); or
(B) The information described in
§ 207.6(d)(1)(ii) for each agreement.
(b) Filing of annual reports that relate
to fiscal years ending on or before
December 31, 2000. In the event that a
NGEP, insured depository institution or
affiliate has any information to report
under § 207.7 for a fiscal year that ends
on or before December 31, 2000, and
that concerns a covered agreement
entered into between May 12, 2000, and
December 31, 2000, the annual report
for that fiscal year must be provided no
later than June 30, 2001, to—
(1) Each relevant supervisory agency;
or
(2) In the case of a NGEP, to an
insured depository institution or
affiliate that is a party to the agreement
in accordance with § 207.7(f)(2).
§ 207.11 Other definitions and rules of
construction used in this part.

(a) Affiliate. ‘‘Affiliate’’ means—
(1) Any company that controls, is
controlled by, or is under common
control with another company; and
(2) For the purpose of determining
whether an agreement is a covered
agreement under § 207.2, an ‘‘affiliate’’
includes any company that would be
under common control or merged with
another company on consummation of
any transaction pending before a
Federal banking agency at the time—
(i) The parties enter into the
agreement; and
(ii) The NGEP that is a party to the
agreement makes a CRA
communication, as described in § 207.3.
(b) Control. ‘‘Control’’ is defined in
section 2(a) of the Bank Holding
Company Act (12 U.S.C. 1841(a)).
(c) CRA affiliate. A ‘‘CRA affiliate’’ of
an insured depository institution is any
company that is an affiliate of an
insured depository institution to the

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extent, and only to the extent, that the
activities of the affiliate were considered
by the appropriate Federal banking
agency when evaluating the CRA
performance of the institution at its
most recent CRA examination prior to
the agreement. An insured depository
institution or affiliate also may
designate any company as a CRA
affiliate at any time prior to the time a
covered agreement is entered into by
informing the NGEP that is a party to
the agreement of such designation.
(d) CRA public file. ‘‘CRA public file’’
means the public file maintained by an
insured depository institution and
described in § 228.43 of Regulation BB
(12 CFR 228.43).
(e) Executive officer. The term
‘‘executive officer’’ has the same
meaning as in § 215.2(e)(1) of the
Board’s Regulation O (12 CFR
215.2(e)(1)).
(f) Federal banking agency;
appropriate Federal banking agency.
The terms ‘‘Federal banking agency’’
and ‘‘appropriate Federal banking
agency’’ have the same meanings as in
section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(g) Fiscal year. (1) The fiscal year for
a NGEP that does not have a fiscal year
shall be the calendar year.
(2) Any NGEP, insured depository
institution, or affiliate that has a fiscal
year may elect to have the calendar year
be its fiscal year for purposes of this
part.
(h) Insured depository institution.
‘‘Insured depository institution’’ has the
same meaning as in section 3 of the
Federal Deposit Insurance Act (12
U.S.C. 1813).
(i) NGEP. ‘‘NGEP’’ means a
nongovernmental entity or person.
(j) Nongovernmental entity or
person—(1) General. A
‘‘nongovernmental entity or person’’ is
any partnership, association, trust, joint
venture, joint stock company,
corporation, limited liability
corporation, company, firm, society,
other organization, or individual.
(2) Exclusions. A nongovernmental
entity or person does not include—
(i) The United States government, a
state government, a unit of local
government (including a county, city,
town, township, parish, village, or other
general-purpose subdivision of a state)
or an Indian tribe or tribal organization
established under Federal, state or
Indian tribal law (including the
Department of Hawaiian Home Lands),
or a department, agency, or
instrumentality of any such entity;
(ii) A federally-chartered public
corporation that receives Federal funds

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appropriated specifically for that
corporation;
(iii) An insured depository institution
or affiliate of an insured depository
institution; or
(iv) An officer, director, employee, or
representative (acting in his or her
capacity as an officer, director,
employee, or representative) of an entity
listed in paragraphs (i)(2)(i) through (iii)
of this section.
(k) Party. The term ‘‘party’’ with
respect to a covered agreement means
each NGEP and each insured depository
institution or affiliate that entered into
the agreement.
(l) Relevant supervisory agency. The
‘‘relevant supervisory agency’’ for a
covered agreement means the
appropriate Federal banking agency
for—
(1) Each insured depository
institution (or subsidiary thereof) that is
a party to the covered agreement;
(2) Each insured depository
institution (or subsidiary thereof) or
CRA affiliate that makes payments or
loans or provides services that are
subject to the covered agreement; and
(3) Any company (other than an
insured depository institution or
subsidiary thereof) that is a party to the
covered agreement.
(m) Term of agreement. An agreement
that does not have a fixed termination
date is considered to terminate on the
last date on which any party to the
agreement makes any payment or
provides any loan or other resources
under the agreement, unless the relevant
supervisory agency for the agreement
otherwise notifies each party in writing.

346.8 Release of information under FOIA.
346.9 Compliance provisions.
346.10 Transition provisions.
346.11 Other definitions and rules of
construction used in this part.
Authority: 12 U.S.C. 1831y.
§ 346.1

Purpose and scope of this part.

Federal Deposit Insurance Corporation
12 CFR Chapter III

(a) General. This part implements
section 711 of the Gramm-Leach-Bliley
Act (12 U.S.C. 1831y). That section
requires any nongovernmental entity or
person, insured depository institution,
or affiliate of an insured depository
institution that enters into a covered
agreement to—
(1) Make the covered agreement
available to the public and the
appropriate Federal banking agency;
and
(2) File an annual report with the
appropriate Federal banking agency
concerning the covered agreement.
(b) Scope of this part. The provisions
of this part apply to—
(1) State nonmember insured banks;
(2) Subsidiaries of state nonmember
insured banks;
(3) Nongovernmental entities or
persons that enter into covered
agreements with any company listed in
paragraph (b)(1) and (2) of this section.
(c) Relation to Community
Reinvestment Act. This part does not
affect in any way the Community
Reinvestment Act of 1977 (12 U.S.C.
2901 et seq.) or the FDIC’s Community
Reinvestment regulation found at 12
CFR part 345, or the FDIC’s
interpretations or administration of that
Act or regulation.
(d) Examples.—(1) The examples in
this part are not exclusive. Compliance
with an example, to the extent
applicable, constitutes compliance with
this part.
(2) Examples in a paragraph illustrate
only the issue described in the
paragraph and do not illustrate any
other issues that may arise in this part.

Authority and Issuance

§ 346.2

By order of the Board of Governors of the
Federal Reserve System, December 21, 2000.
Jennifer J. Johnson,
Secretary of the Board.

For the reasons set out in the joint
preamble, Title 12, Chapter III, of the
Code of Federal Regulations is amended
by adding a new part 346 to read as
follows:
PART 346—DISCLOSURE AND
REPORTING OF CRA-RELATED
AGREEMENTS
Sec.
346.1 Purpose and scope of this part.
346.2 Definition of covered agreement.
346.3 CRA communications.
346.4 Fulfillment of the CRA.
346.5 Related agreements considered a
single agreement.
346.6 Disclosure of covered agreements.
346.7 Annual reports.

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Definition of covered agreement.

(a) General definition of covered
agreement. A covered agreement is any
contract, arrangement, or understanding
that meets all of the following criteria—
(1) The agreement is in writing.
(2) The parties to the agreement
include—
(i) One or more insured depository
institutions or affiliates of an insured
depository institution; and
(ii) One or more nongovernmental
entities or persons (referred to hereafter
as NGEPs).
(3) The agreement provides for the
insured depository institution or any
affiliate to—
(i) Provide to one or more individuals
or entities (whether or not parties to the

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agreement) cash payments, grants, or
other consideration (except loans) that
have an aggregate value of more than
$10,000 in any calendar year; or
(ii) Make to one or more individuals
or entities (whether or not parties to the
agreement) loans that have an aggregate
principal amount of more than $50,000
in any calendar year.
(4) The agreement is made pursuant
to, or in connection with, the fulfillment
of the Community Reinvestment Act of
1977 (12 U.S.C. 2901 et seq.) (CRA), as
defined in § 346.4.
(5) The agreement is with a NGEP that
has had a CRA communication as
described in § 346.3 prior to entering
into the agreement.
(b) Examples concerning written
arrangements or understandings—(1)
Example 1. A NGEP meets with an
insured depository institution and states
that the institution needs to make more
community development investments in
the NGEP’s community. The NGEP and
insured depository institution do not
reach an agreement concerning the
community development investments
the institution should make in the
community, and the parties do not reach
any mutual arrangement or
understanding. Two weeks later, the
institution unilaterally issues a press
release announcing that it has
established a general goal of making
$100 million of community
development grants in low- and
moderate-income neighborhoods served
by the insured depository institution
over the next 5 years. The NGEP is not
identified in the press release. The press
release is not a written arrangement or
understanding.
(2) Example 2. A NGEP meets with an
insured depository institution and states
that the institution needs to offer new
loan programs in the NGEP’s
community. The NGEP and the insured
depository institution reach a mutual
arrangement or understanding that the
institution will provide additional loans
in the NGEP’s community. The
institution tells the NGEP that it will
issue a press release announcing the
program. Later, the insured depository
institution issues a press release
announcing the loan program. The press
release incorporates the key terms of the
understanding reached between the
NGEP and the insured depository
institution. The written press release
reflects the mutual arrangement or
understanding of the NGEP and the
insured depository institution and is,
therefore, a written arrangement or
understanding.
(3) Example 3. An NGEP sends a letter
to an insured depository institution
requesting that the institution provide a

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$15,000 grant to the NGEP. The insured
depository institution responds in
writing and agrees to provide the grant
in connection with its annual grant
program. The exchange of letters
constitutes a written arrangement or
understanding.
(c) Loan agreements that are not
covered agreements. A covered
agreement does not include—
(1) Any individual loan that is
secured by real estate; or
(2) Any specific contract or
commitment for a loan or extension of
credit to an individual, business, farm,
or other entity, or group of such
individuals or entities if—
(i) The funds are loaned at rates that
are not substantially below market rates;
and
(ii) The loan application or other loan
documentation does not indicate that
the borrower intends or is authorized to
use the borrowed funds to make a loan
or extension of credit to one or more
third parties.
(d) Examples concerning loan
agreements.—(1) Example 1. An insured
depository institution provides an
organization with a $1 million loan that
is documented in writing and is secured
by real estate owned or to-be-acquired
by the organization. The agreement is an
individual mortgage loan and is exempt
from coverage under paragraph (c)(1) of
this section, regardless of the interest
rate on the loan or whether the
organization intends or is authorized to
re-loan the funds to a third party.
(2) Example 2. An insured depository
institution commits to provide a
$500,000 line of credit to a small
business that is documented by a
written agreement. The loan is made at
rates that are within the range of rates
offered by the institution to similarly
situated small businesses in the market
and the loan documentation does not
indicate that the small business intends
or is authorized to re-lend the borrowed
funds. The agreement is exempt from
coverage under paragraph (c)(2) of this
section.
(3) Example 3. An insured depository
institution offers small business loans
that are guaranteed by the Small
Business Administration (SBA). A small
business obtains a $75,000 loan,
documented in writing, from the
institution under the institution’s SBA
loan program. The loan documentation
does not indicate that the borrower
intends or is authorized to re-lend the
funds. Although the rate charged on the
loan is well below that charged by the
institution on commercial loans, the rate
is within the range of rates that the
institution would charge a similarly
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loan under the SBA loan program.
Accordingly, the loan is not made at
substantially below market rates and is
exempt from coverage under paragraph
(c)(2) of this section.
(4) Example 4. A bank holding
company enters into a written
agreement with a community
development organization that provides
that insured depository institutions
owned by the bank holding company
will make $250 million in small
business loans in the community over
the next 5 years. The written agreement
is not a specific contract or commitment
for a loan or an extension of credit and,
thus, is not exempt from coverage under
paragraph (c)(2) of this section. Each
small business loan made by the insured
depository institution pursuant to this
general commitment would, however,
be exempt from coverage if the loan is
made at rates that are not substantially
below market rates and the loan
documentation does not indicate that
the borrower intended or was
authorized to re-lend the funds.
(e) Agreements that include exempt
loan agreements. If an agreement
includes a loan, extension of credit or
loan commitment that, if documented
separately, would be exempt under
paragraph (c) of this section, the exempt
loan, extension of credit or loan
commitment may be excluded for
purposes of determining whether the
agreement is a covered agreement.
(f) Determining annual value of
agreements that lack schedule of
disbursements. For purposes of
paragraph (a)(3) of this section, a multiyear agreement that does not include a
schedule for the disbursement of
payments, grants, loans or other
consideration by the insured depository
institution or affiliate, is considered to
have a value in the first year of the
agreement equal to all payments, grants,
loans and other consideration to be
provided at any time under the
agreement.
§ 346.3

CRA communications.

(a) Definition of CRA communication.
A CRA communication is any of the
following—
(1) Any written or oral comment or
testimony provided to a Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate.
(2) Any written comment submitted to
the insured depository institution that
discusses the adequacy of the
performance under the CRA of the
institution and must be included in the
institution’s CRA public file.

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(3) Any discussion or other contact
with the insured depository institution
or any affiliate about—
(i) Providing (or refraining from
providing) written or oral comments or
testimony to any Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate;
(ii) Providing (or refraining from
providing) written comments to the
insured depository institution that
concern the adequacy of the
institution’s performance under the
CRA and must be included in the
institution’s CRA public file; or
(iii) The adequacy of the performance
under the CRA of the insured depository
institution, any affiliated insured
depository institution, or any CRA
affiliate.
(b) Discussions or contacts that are
not CRA communications—(1) Timing
of contacts with a Federal banking
agency. An oral or written
communication with a Federal banking
agency is not a CRA communication if
it occurred more than 3 years before the
parties entered into the agreement.
(2) Timing of contacts with insured
depository institutions and affiliates. A
communication with an insured
depository institution or affiliate is not
a CRA communication if the
communication occurred—
(i) More than 3 years before the
parties entered into the agreement, in
the case of any written communication;
(ii) More than 3 years before the
parties entered into the agreement, in
the case of any oral communication in
which the NGEP discusses providing (or
refraining from providing) comments or
testimony to a Federal banking agency
or written comments that must be
included in the institution’s CRA public
file in connection with a request to, or
agreement by, the institution or affiliate
to take (or refrain from taking) any
action that is in fulfillment of the CRA;
or
(iii) More than 1 year before the
parties entered into the agreement, in
the case of any other oral
communication not described in
paragraph (b)(2)(ii) of this section.
(3) Knowledge of communication by
insured depository institution or
affiliate.—(i) A communication is only a
CRA communication under paragraph
(a) of this section if the insured
depository institution or its affiliate has
knowledge of the communication under
this paragraph (b)(3)(ii) or (b)(3)(iii) of
this section.
(ii) Communication with insured
depository institution or affiliate. An

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insured depository institution or
affiliate has knowledge of a
communication by the NGEP to the
institution or its affiliate under this
paragraph only if one of the following
representatives of the insured
depository institution or any affiliate
has knowledge of the communication—
(A) An employee who approves,
directs, authorizes, or negotiates the
agreement with the NGEP; or
(B) An employee designated with
responsibility for compliance with the
CRA or executive officer if the employee
or executive officer knows that the
institution or affiliate is negotiating,
intends to negotiate, or has been
informed by the NGEP that it expects to
request that the institution or affiliate
negotiate an agreement with the NGEP.
(iii) Other communications. An
insured depository institution or
affiliate is deemed to have knowledge
of—
(A) Any testimony provided to a
Federal banking agency at a public
meeting or hearing;
(B) Any comment submitted to a
Federal banking agency that is conveyed
in writing by the agency to the insured
depository institution or affiliate; and
(C) Any written comment submitted
to the insured depository institution
that must be and is included in the
institution’s CRA public file.
(4) Communication where NGEP has
knowledge. A NGEP has a CRA
communication with an insured
depository institution or affiliate only if
any of the following individuals has
knowledge of the communication—
(i) A director, employee, or member of
the NGEP who approves, directs,
authorizes, or negotiates the agreement
with the insured depository institution
or affiliate;
(ii) A person who functions as an
executive officer of the NGEP and who
knows that the NGEP is negotiating or
intends to negotiate an agreement with
the insured depository institution or
affiliate; or
(iii) Where the NGEP is an individual,
the NGEP.
(c) Examples of CRA
communications—(1) Examples of
actions that are CRA communications.
The following are examples of CRA
communications. These examples are
not exclusive and assume that the
communication occurs within the
relevant time period as described in
paragraph (b)(1) or (b)(2) of this section
and the appropriate representatives
have knowledge of the communication
as specified in paragraphs (b)(3) and
(b)(4) of this section.

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(i) Example 1. A NGEP files a written
comment with a Federal banking agency
that states than an insured depository
institution successfully addresses the
credit needs of its community. The
written comment is in response to a
general request from the agency for
comments on an application of the
insured depository institution to open a
new branch and a copy of the comment
is provided to the institution.
(ii) Example 2. A NGEP meets with an
executive officer of an insured
depository institution and states that the
institution must improve its CRA
performance.
(iii) Example 3. A NGEP meets with
an executive officer of an insured
depository institution and states that the
institution needs to make more
mortgage loans in low- and moderateincome neighborhoods in its
community.
(iv) Example 4. A bank holding
company files an application with a
Federal banking agency to acquire an
insured depository institution. Two
weeks later, the NGEP meets with an
executive officer of the bank holding
company to discuss the adequacy of the
performance under the CRA of the target
insured depository institution. The
insured depository institution was an
affiliate of the bank holding company at
the time the NGEP met with the target
institution. (See § 346.11(a).)
Accordingly, the NGEP had a CRA
communication with an affiliate of the
bank holding company.
(2) Examples of actions that are not
CRA communications. The following
are examples of actions that are not by
themselves CRA communications.
These examples are not exclusive.
(i) Example 1. A NGEP provides to a
Federal banking agency comments or
testimony concerning an insured
depository institution or affiliate in
response to a direct request by the
agency for comments or testimony from
that NGEP. Direct requests for
comments or testimony do not include
a general invitation by a Federal
banking agency for comments or
testimony from the public in connection
with a CRA performance evaluation of,
or application for a deposit facility (as
defined in section 803 of the CRA (12
U.S.C. 2902(3)) by, an insured
depository institution or an application
by a company to acquire an insured
depository institution.
(ii) Example 2. A NGEP makes a
statement concerning an insured
depository institution or affiliate at a
widely attended conference or seminar
regarding a general topic. A public or
private meeting, public hearing, or other
meeting regarding one or more specific

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institutions, affiliates or transactions
involving an application for a deposit
facility is not considered a widely
attended conference or seminar.
(iii) Example 3. A NGEP, such as a
civil rights group, community group
providing housing and other services in
low- and moderate-income
neighborhoods, veterans organization,
community theater group, or youth
organization, sends a fundraising letter
to insured depository institutions and to
other businesses in its community. The
letter encourages all businesses in the
community to meet their obligation to
assist in making the local community a
better place to live and work by
supporting the fundraising efforts of the
NGEP.
(iv) Example 4. A NGEP discusses
with an insured depository institution
or affiliate whether particular loans,
services, investments, community
development activities, or other
activities are generally eligible for
consideration by a Federal banking
agency under the CRA. The NGEP and
insured depository institution or
affiliate do not discuss the adequacy of
the CRA performance of the insured
depository institution or affiliate.
(v) Example 5. A NGEP engaged in the
sale or purchase of loans in the
secondary market sends a general
offering circular to financial institutions
offering to sell or purchase a portfolio of
loans. An insured depository institution
that receives the offering circular
discusses with the NGEP the types of
loans included in the loan pool,
whether such loans are generally
eligible for consideration under the
CRA, and which loans are made to
borrowers in the institution’s local
community. The NGEP and insured
depository institution do not discuss the
adequacy of the institution’s CRA
performance.
(d) Multiparty covered agreements.—
(1) A NGEP that is a party to a covered
agreement that involves multiple NGEPs
is not required to comply with the
requirements of this part if—
(i) The NGEP has not had a CRA
communication; and
(ii) No representative of the NGEP
identified in paragraph (b)(4) of this
section has knowledge at the time of the
agreement that another NGEP that is a
party to the agreement has had a CRA
communication.
(2) An insured depository institution
or affiliate that is a party to a covered
agreement that involves multiple
insured depository institutions or
affiliates is not required to comply with
the disclosure and annual reporting
requirements in §§ 346.6 and 346.7 if—

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(i) No NGEP that is a party to the
agreement has had a CRA
communication concerning the insured
depository institution or any affiliate;
and
(ii) No representative of the insured
depository institution or any affiliate
identified in paragraph (b)(3) of this
section has knowledge at the time of the
agreement that an NGEP that is a party
to the agreement has had a CRA
communication concerning any other
insured depository institution or
affiliate that is a party to the agreement.
§ 346.4

Fulfillment of the CRA.

(a) List of factors that are in
fulfillment of the CRA. Fulfillment of
the CRA, for purposes of this part,
means the following list of factors—
(1) Comments to a Federal banking
agency or included in CRA public file.
Providing or refraining from providing
written or oral comments or testimony
to any Federal banking agency
concerning the performance under the
CRA of an insured depository
institution or CRA affiliate that is a
party to the agreement or an affiliate of
a party to the agreement or written
comments that are required to be
included in the CRA public file of any
such insured depository institution; or
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the
insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Home-purchase, homeimprovement, small business, small
farm, community development, and
consumer lending, as described in 12
CFR 345.22, including loan purchases,
loan commitments, and letters of credit;
(ii) Making investments, deposits, or
grants, or acquiring membership shares,
that have as their primary purpose
community development, as described
in 12 CFR 345.23;
(iii) Delivering retail banking services,
as described in 12 CFR 345.24(d);
(iv) Providing community
development services, as described in
12 CFR 345.24(e);
(v) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making qualified investments, or
providing community development
services, as described in 12 CFR
345.25(c);

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(vi) In the case of a small insured
depository institution, any lending or
other activity described in 12 CFR
345.26(a); or
(vii) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in 12 CFR 345.27(f).
(b) Agreements relating to activities of
CRA affiliates. An insured depository
institution or affiliate that is a party to
a covered agreement that concerns any
activity described in paragraph (a) of
this section of a CRA affiliate must,
prior to the time the agreement is
entered into, notify each NGEP that is a
party to the agreement that the
agreement concerns a CRA affiliate.
§ 346.5 Related agreements considered a
single agreement.

The following rules must be applied
in determining whether an agreement is
a covered agreement under § 346.2.
(a) Agreements entered into by same
parties. All written agreements to which
an insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement if the
agreements—
(1) Are entered into with the same
NGEP;
(2) Were entered into within the same
12-month period; and
(3) Are each in fulfillment of the CRA.
(b) Substantively related contracts.
All written contracts to which an
insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement, without regard
to whether the other parties to the
contracts are the same or whether each
such contract is in fulfillment of the
CRA, if the contracts were negotiated in
a coordinated fashion and a NGEP is a
party to each contract.
§ 346.6

Disclosure of covered agreements.

(a) Applicability date. This section
applies only to covered agreements
entered into after November 12, 1999.
(b) Disclosure of covered agreements
to the public—(1) Disclosure required.
Each NGEP and each insured depository
institution or affiliate that enters into a
covered agreement must promptly make
a copy of the covered agreement
available to any individual or entity
upon request.
(2) Nondisclosure of confidential and
proprietary information permitted. In
responding to a request for a covered
agreement from any individual or entity
under paragraph (b)(1) of this section, a
NGEP, insured depository institution, or
affiliate may withhold from public

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disclosure confidential or proprietary
information that the party believes the
relevant supervisory agency could
withhold from disclosure under the
Freedom of Information Act (5 U.S.C.
552 et seq.) (FOIA).
(3) Information that must be
disclosed. Notwithstanding paragraph
(b)(2) of this section, a party must
disclose any of the following
information that is contained in a
covered agreement—
(i) The names and addresses of the
parties to the agreement;
(ii) The amount of any payments, fees,
loans, or other consideration to be made
or provided by any party to the
agreement;
(iii) Any description of how the funds
or other resources provided under the
agreement are to be used;
(iv) The term of the agreement (if the
agreement establishes a term); and
(v) Any other information that the
relevant supervisory agency determines
is not properly exempt from public
disclosure.
(4) Request for review of withheld
information. Any individual or entity
may request that the relevant
supervisory agency review whether any
information in a covered agreement
withheld by a party must be disclosed.
Any requests for agency review of
withheld information must be filed, and
will be processed in accordance with,
the relevant supervisory agency’s rules
concerning the availability of
information (see the FDIC’s rules
regarding Disclosure of Information (12
CFR part 309)).
(5) Duration of obligation. The
obligation to disclose a covered
agreement to the public terminates 12
months after the end of the term of the
agreement.
(6) Reasonable copy and mailing fees.
Each NGEP and each insured depository
institution or affiliate may charge an
individual or entity that requests a copy
of a covered agreement a reasonable fee
not to exceed the cost of copying and
mailing the agreement.
(7) Use of CRA public file by insured
depository institution or affiliate. An
insured depository institution and any
affiliate of an insured depository
institution may fulfill its obligation
under this paragraph (b) by placing a
copy of the covered agreement in the
insured depository institution’s CRA
public file if the institution makes the
agreement available in accordance with
the procedures set forth in 12 CFR
345.43.
(c) Disclosure by NGEPs of covered
agreements to the relevant supervisory
agency—(1) Each NGEP that is a party
to a covered agreement must provide the

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following within 30 days of receiving a
request from the relevant supervisory
agency—
(i) A complete copy of the agreement;
and
(ii) In the event the NGEP proposes
the withholding of any information
contained in the agreement in
accordance with paragraph (b)(2) of this
section, a public version of the
agreement that excludes such
information and an explanation
justifying the exclusions. Any public
version must include the information
described in paragraph (b)(3) of this
section.
(2) The obligation of a NGEP to
provide a covered agreement to the
relevant supervisory agency terminates
12 months after the end of the term of
the covered agreement.
(d) Disclosure by insured depository
institution or affiliate of covered
agreements to the relevant supervisory
agency—(1) In general. Within 60 days
of the end of each calendar quarter, each
insured depository institution and
affiliate must provide each relevant
supervisory agency with—
(i)(A) A complete copy of each
covered agreement entered into by the
insured depository institution or
affiliate during the calendar quarter; and
(B) In the event the institution or
affiliate proposes the withholding of any
information contained in the agreement
in accordance with paragraph (b)(2) of
this section, a public version of the
agreement that excludes such
information (other than any information
described in paragraph (b)(3) of this
section) and an explanation justifying
the exclusions; or
(ii) A list of all covered agreements
entered into by the insured depository
institution or affiliate during the
calendar quarter that contains—
(A) The name and address of each
insured depository institution or
affiliate that is a party to the agreement;
(B) The name and address of each
NGEP that is a party to the agreement;
(C) The date the agreement was
entered into;
(D) The estimated total value of all
payments, fees, loans and other
consideration to be provided by the
institution or any affiliate of the
institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered
agreements contained in list required.—
(i) If an insured depository institution or
affiliate files a list of the covered
agreements entered into by the
institution or affiliate pursuant to
paragraph (d)(1)(ii) of this section, the
institution or affiliate must provide any
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copy and public version of any covered
agreement referenced in the list within
7 calendar days of receiving a request
from the agency for a copy of the
agreement.
(ii) The obligation of an insured
depository institution or affiliate to
provide a covered agreement to the
relevant supervisory agency under this
paragraph (d)(2) terminates 36 months
after the end of the term of the
agreement.
(3) Joint filings. In the event that 2 or
more insured depository institutions or
affiliates are parties to a covered
agreement, the insured depository
institution(s) and affiliate(s) may jointly
file the documents required by this
paragraph (d). Any joint filing must
identify the insured depository
institution(s) and affiliate(s) for whom
the filings are being made.
§ 346.7

Annual reports.

(a) Applicability date. This section
applies only to covered agreements
entered into on or after May 12, 2000.
(b) Annual report required. Each
NGEP and each insured depository
institution or affiliate that is a party to
a covered agreement must file an annual
report with each relevant supervisory
agency concerning the disbursement,
receipt, and uses of funds or other
resources under the covered agreement.
(c) Duration of reporting
requirement—(1) NGEPs. A NGEP must
file an annual report for a covered
agreement for any fiscal year in which
the NGEP receives or uses funds or
other resources under the agreement.
(2) Insured depository institutions and
affiliates. An insured depository
institution or affiliate must file an
annual report for a covered agreement
for any fiscal year in which the
institution or affiliate—
(i) provides or receives any payments,
fees, or loans under the covered
agreement that must be reported under
paragraphs (e)(1)(iii) and (iv) of this
section; or
(ii) has data to report on loans,
investments, and services provided by a
party to the covered agreement under
the covered agreement under paragraph
(e)(1)(vi) of this section.
(d) Annual reports filed by NGEP—(1)
Contents of report. The annual report
filed by a NGEP under this section must
include the following—
(i) The name and mailing address of
the NGEP filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement

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was entered into or by providing a copy
of the agreement;
(iii) The amount of funds or resources
received under the covered agreement
during the fiscal year; and
(iv) A detailed, itemized list of how
any funds or resources received by the
NGEP under the covered agreement
were used during the fiscal year,
including the total amount used for—
(A) Compensation of officers,
directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and
professional fees; and
(F) Other expenses and uses (specify
expense or use).
(2) More detailed reporting of uses of
funds or resources permitted—(i) In
general. If a NGEP allocated and used
funds received under a covered
agreement for a specific purpose, the
NGEP may fulfill the requirements of
paragraph (d)(1)(iv) of this section with
respect to such funds by providing—
(A) A brief description of each
specific purpose for which the funds or
other resources were used; and
(B) The amount of funds or resources
used during the fiscal year for each
specific purpose.
(ii) Specific purpose defined. A NGEP
allocates and uses funds for a specific
purpose if the NGEP receives and uses
the funds for a purpose that is more
specific and limited than the categories
listed in paragraph (d)(1)(iv) of this
section.
(3) Use of other reports. The annual
report filed by a NGEP may consist of
or incorporate a report prepared for any
other purpose, such as the Internal
Revenue Service Return of Organization
Exempt From Income Tax on Form 990,
or any other Internal Revenue Service
form, state tax form, report to members
or shareholders, audited or unaudited
financial statements, audit report, or
other report, so long as the annual
report filed by the NGEP contains all of
the information required by this
paragraph (d).
(4) Consolidated reports permitted. A
NGEP that is a party to 2 or more
covered agreements may file with each
relevant supervisory agency a single
consolidated annual report covering all
the covered agreements. Any
consolidated report must contain all the
information required by this paragraph
(d). The information reported under
paragraphs (d)(1)(iv) and (d)(2) of this
section may be reported on an aggregate
basis for all covered agreements.
(5) Examples of annual report
requirements for NGEPs.—(i) Example
1. A NGEP receives an unrestricted

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grant of $15,000 under a covered
agreement, includes the funds in its
general operating budget, and uses the
funds during its fiscal year. The NGEP’s
annual report for the fiscal year must
provide the name and mailing address
of the NGEP, information sufficient to
identify the covered agreement, and
state that the NGEP received $15,000
during the fiscal year. The report must
also indicate the total expenditures
made by the NGEP during the fiscal year
for compensation, administrative
expenses, travel expenses,
entertainment expenses, consulting and
professional fees, and other expenses
and uses. The NGEP’s annual report
may provide this information by
submitting an Internal Revenue Service
Form 990 that includes the required
information. If the Internal Revenue
Service Form does not include
information for all of the required
categories listed in this part, the NGEP
must report the total expenditures in the
remaining categories either by providing
that information directly or by
providing another form or report that
includes the required information.
(ii) Example 2. An organization
receives $15,000 from an insured
depository institution under a covered
agreement and allocates and uses the
$15,000 during the fiscal year to
purchase computer equipment to
support its functions. The organization’s
annual report must include the name
and address of the organization,
information sufficient to identify the
agreement, and a statement that the
organization received $15,000 during
the year. In addition, since the
organization allocated and used the
funds for a specific purpose that is more
narrow and limited than the categories
of expenses included in the detailed,
itemized list of expenses, the
organization would have the option of
providing either the total amount it used
during the year for each category of
expenses included in paragraph
(d)(1)(iv) of this section, or a statement
that it used the $15,000 to purchase
computer equipment and a brief
description of the equipment purchased.
(iii) Example 3. A community group
receives $50,000 from an insured
depository institution under a covered
agreement. During its fiscal year, the
community group specifically allocates
and uses $5,000 of the funds to pay for
a particular business trip and uses the
remaining $45,000 for general operating
expenses. The group’s annual report for
the fiscal year must include the name
and address of the group, information
sufficient to identify the agreement, and
a statement that the group received
$50,000. Because the group did not

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allocate and use all of the funds for a
specific purpose, the group’s annual
report must provide the total amount of
funds it used during the year for each
category of expenses included in
paragraph (d)(1)(iv) of this section. The
group’s annual report also could state
that it used $5,000 for a particular
business trip and include a brief
description of the trip.
(iv) Example 4. A community
development organization is a party to
two separate covered agreements with
two unaffiliated insured depository
institutions. Under each agreement, the
organization receives $15,000 during its
fiscal year and uses the funds to support
its activities during that year. If the
organization elects to file a consolidated
annual report, the consolidated report
must identify the organization and the
two covered agreements, state that the
organization received $15,000 during
the fiscal year under each agreement,
and provide the total amount that the
organization used during the year for
each category of expenses included in
paragraph (d)(1)(iv) of this section.
(e) Annual report filed by insured
depository institution or affiliate.—(1)
General. The annual report filed by an
insured depository institution or
affiliate must include the following—
(i) The name and principal place of
business of the insured depository
institution or affiliate filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans provided by
the insured depository institution or
affiliate under the covered agreement to
any other party to the agreement during
the fiscal year;
(iv) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans received by
the insured depository institution or
affiliate under the covered agreement
from any other party to the agreement
during the fiscal year;
(v) A general description of the terms
and conditions of any payments, fees, or
loans reported under paragraphs
(e)(1)(iii) and (iv) of this section, or, in
the event such terms and conditions are
set forth—
(A) In the covered agreement, a
statement identifying the covered
agreement and the date the agreement
(or a list identifying the agreement) was
filed with the relevant supervisory
agency; or

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(B) In a previous annual report filed
by the insured depository institution or
affiliate, a statement identifying the date
the report was filed with the relevant
supervisory agency; and
(vi) The aggregate amount and
number of loans, aggregate amount and
number of investments, and aggregate
amount of services provided under the
covered agreement to any individual or
entity not a party to the agreement—
(A) By the insured depository
institution or affiliate during its fiscal
year; and
(B) By any other party to the
agreement, unless such information is
not known to the insured depository
institution or affiliate filing the report or
such information is or will be contained
in the annual report filed by another
party under this section.
(2) Consolidated reports permitted—
(i) Party to multiple agreements. An
insured depository institution or
affiliate that is a party to 2 or more
covered agreements may file a single
consolidated annual report with each
relevant supervisory agency concerning
all the covered agreements.
(ii) Affiliated entities party to the
same agreement. An insured depository
institution and its affiliates that are
parties to the same covered agreement
may file a single consolidated annual
report relating to the agreement with
each relevant supervisory agency for the
covered agreement.
(iii) Content of report. Any
consolidated annual report must contain
all the information required by this
paragraph (e). The amounts and data
required to be reported under
paragraphs (e)(1)(iv) and (vi) of this
section may be reported on an aggregate
basis for all covered agreements.
(f) Time and place of filing—(1)
General. Each party must file its annual
report with each relevant supervisory
agency for the covered agreement no
later than six months following the end
of the fiscal year covered by the report.
(2) Alternative method of fulfilling
annual reporting requirement for a
NGEP.—(i) A NGEP may fulfill the filing
requirements of this section by
providing the following materials to an
insured depository institution or
affiliate that is a party to the agreement
no later than six months following the
end of the NGEP’s fiscal year—
(A) A copy of the NGEP’s annual
report required under paragraph (d) of
this section for the fiscal year; and
(B) Written instructions that the
insured depository institution or
affiliate promptly forward the annual
report to the relevant supervisory
agency or agencies on behalf of the
NGEP.

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(ii) An insured depository institution
or affiliate that receives an annual report
from a NGEP pursuant to paragraph
(f)(2)(i) of this section must file the
report with the relevant supervisory
agency or agencies on behalf of the
NGEP within 30 days.
§ 346.8

Release of information under FOIA.

The FDIC will make covered
agreements and annual reports available
to the public in accordance with the
Freedom of Information Act (5 U.S.C.
552 et seq.) and the FDIC’s rules
regarding Disclosure of Information (12
CFR part 309). A party to a covered
agreement may request confidential
treatment of proprietary and
confidential information in a covered
agreement or an annual report under
those procedures.
§ 346.9

Compliance provisions.

(a) Willful failure to comply with
disclosure and reporting obligations.—
(1) If the FDIC determines that a NGEP
has willfully failed to comply in a
material way with §§ 346.4 or 346.5, the
FDIC will notify the NGEP in writing of
that determination and provide the
NGEP a period of 90 days (or such
longer period as the FDIC finds to be
reasonable under the circumstances) to
comply.
(2) If the NGEP does not comply
within the time period established by
the FDIC, the agreement shall thereafter
be unenforceable by that NGEP by
operation of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y).
(3) The FDIC may assist any insured
depository institution or affiliate that is
a party to a covered agreement that is
unenforceable by a NGEP by operation
of section 48 of the Federal Deposit
Insurance Act (12 U.S.C. 1831y) in
identifying a successor to assume the
NGEP’s responsibilities under the
agreement.
(b) Diversion of funds. If a court or
other body of competent jurisdiction
determines that funds or resources
received under a covered agreement
have been diverted contrary to the
purposes of the covered agreement for
an individual’s personal financial gain,
the FDIC may take either or both of the
following actions—
(1) Order the individual to disgorge
the diverted funds or resources received
under the agreement;
(2) Prohibit the individual from being
a party to any covered agreement for a
period not to exceed 10 years.
(c) Notice and opportunity to respond.
Before making a determination under
paragraph (a)(1) of this section, or taking
any action under paragraph (b) of this

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section, the FDIC will provide written
notice and an opportunity to present
information to the FDIC concerning any
relevant facts or circumstances relating
to the matter.
(d) Inadvertent or de minimis errors.
Inadvertent or de minimis errors in
annual reports or other documents filed
with the FDIC under §§ 346.6 or 346.7
will not subject the reporting party to
any penalty.
(e) Enforcement of provisions in
covered agreements. No provision of
this part shall be construed as
authorizing the FDIC to enforce the
provisions of any covered agreement.
§ 346.10

Transition provisions.

(a) Disclosure of covered agreements
entered into before the effective date of
this part. The following disclosure
requirements apply to covered
agreements that were entered into after
November 12, 1999, and that terminated
before April 1, 2001.
(1) Disclosure to the public. Each
NGEP and each insured depository
institution or affiliate that was a party
to the agreement must make the
agreement available to the public under
§ 346.6 until at least April 1, 2002.
(2) Disclosure to the relevant
supervisory agency.—(i) Each NGEP that
was a party to the agreement must make
the agreement available to the relevant
supervisory agency under § 346.6 until
at least April 1, 2002.
(ii) Each insured depository
institution or affiliate that was a party
to the agreement must, by June 30, 2001,
provide each relevant supervisory
agency either—
(A) A copy of the agreement under
§ 346.6(d)(1)(i); or
(B) The information described in
§ 346.6(d)(1)(ii) for each agreement.
(b) Filing of annual reports that relate
to fiscal years ending on or before
December 31, 2000. In the event that a
NGEP, insured depository institution or
affiliate has any information to report
under § 346.7 for a fiscal year that ends
on or before December 31, 2000, and
that concerns a covered agreement
entered into between May 12, 2000, and
December 31, 2000, the annual report
for that fiscal year must be provided no
later than June 30, 2001, to—
(1) Each relevant supervisory agency;
or
(2) In the case of a NGEP, to an
insured depository institution or
affiliate that is a party to the agreement
in accordance with § 346.7(f)(2).
§ 346.11 Other definitions and rules of
construction used in this part.

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(1) Any company that controls, is
controlled by, or is under common
control with another company; and
(2) For the purpose of determining
whether an agreement is a covered
agreement under § 346.2, an ‘‘affiliate’’
includes any company that would be
under common control or merged with
another company on consummation of
any transaction pending before a
Federal banking agency at the time—
(i) The parties enter into the
agreement; and
(ii) The NGEP that is a party to the
agreement makes a CRA
communication, as described in § 346.3.
(b) Control. ‘‘Control’’ is defined in
section 2(a) of the Bank Holding
Company Act (12 U.S.C. 1841(a)).
(c) CRA affiliate. A ‘‘CRA affiliate’’ of
an insured depository institution is any
company that is an affiliate of an
insured depository institution to the
extent, and only to the extent, that the
activities of the affiliate were considered
by the appropriate Federal banking
agency when evaluating the CRA
performance of the institution at its
most recent CRA examination prior to
the agreement. An insured depository
institution or affiliate also may
designate any company as a CRA
affiliate at any time prior to the time a
covered agreement is entered into by
informing the NGEP that is a party to
the agreement of such designation.
(d) CRA public file. ‘‘CRA public file’’
means the public file maintained by an
insured depository institution and
described in 12 CFR 345.43.
(e) Executive officer. The term
‘‘executive officer’’ has the same
meaning as in § 215.2(e)(1) of the Board
of Governors of the Federal Reserve
System’s Regulation O (12 CFR
215.2(e)(1)).
(f) Federal banking agency;
appropriate Federal banking agency.
The terms ‘‘Federal banking agency’’
and ‘‘appropriate Federal banking
agency’’ have the same meanings as in
section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(g) Fiscal year. (1) The fiscal year for
a NGEP that does not have a fiscal year
shall be the calendar year.
(2) Any NGEP, insured depository
institution, or affiliate that has a fiscal
year may elect to have the calendar year
be its fiscal year for purposes of this
part.
(h) Insured depository institution.
‘‘Insured depository institution’’ has the
same meaning as in section 3 of the
Federal Deposit Insurance Act (12
U.S.C. 1813).
(i) NGEP. ‘‘NGEP’’ means a
nongovernmental entity or person.

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(j) Nongovernmental entity or
person—(1) General. A
‘‘nongovernmental entity or person’’ is
any partnership, association, trust, joint
venture, joint stock company,
corporation, limited liability
corporation, company, firm, society,
other organization, or individual.
(2) Exclusions. A nongovernmental
entity or person does not include—
(i) The United States government, a
state government, a unit of local
government (including a county, city,
town, township, parish, village, or other
general-purpose subdivision of a state)
or an Indian tribe or tribal organization
established under Federal, state or
Indian tribal law (including the
Department of Hawaiian Home Lands),
or a department, agency, or
instrumentality of any such entity;
(ii) A federally-chartered public
corporation that receives Federal funds
appropriated specifically for that
corporation;
(iii) An insured depository institution
or affiliate of an insured depository
institution; or
(iv) An officer, director, employee, or
representative (acting in his or her
capacity as an officer, director,
employee, or representative) of an entity
listed in paragraphs (h)(2)(i) through
(iii) of this section.
(k) Party. The term ‘‘party’’. The
authority citation for part 405 continues
to read as follows: with respect to a
covered agreement means each NGEP
and each insured depository institution
or affiliate that entered into the
agreement.
(l) Relevant supervisory agency. The
‘‘relevant supervisory agency’’ for a
covered agreement means the
appropriate Federal banking agency
for—
(1) Each insured depository
institution (or subsidiary thereof) that is
a party to the covered agreement;
(2) Each insured depository
institution (or subsidiary thereof) or
CRA affiliate that makes payments or
loans or provides services that are
subject to the covered agreement; and
(3) Any company (other than an
insured depository institution or
subsidiary thereof) that is a party to the
covered agreement.
(m) Term of agreement. An agreement
that does not have a fixed termination
date is considered to terminate on the
last date on which any party to the
agreement makes any payment or
provides any loan or other resources
under the agreement, unless the relevant
supervisory agency for the agreement
otherwise notifies each party in writing.
By order of the Board of Directors, Federal
Deposit Insurance Corporation.

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Dated at Washington, DC, this 21st day of
December, 2000.
Robert E. Feldman,
Executive Secretary.

Department of Treasury
Office of Thrift Supervision
12 CFR Chapter V
Authority and Issuance
For the reasons set out in the joint
preamble, Title 12, Chapter V, of the
Code of Federal Regulations is amended
by adding a new part 533 to read as
follows:

§ 533.2

PART 533—DISCLOSURE AND
REPORTING OF CRA-RELATED
AGREEMENTS
Sec.
533.1 Purpose and scope of this part.
533.2 Definition of covered agreement.
533.3 CRA communications.
533.4 Fulfillment of the CRA.
533.5 Related agreements considered a
single agreement.
533.6 Disclosure of covered agreements.
533.7 Annual reports.
533.8 Release of information under FOIA.
533.9 Compliance provisions.
533.10 Transition provisions.
533.11 Other definitions and rules of
construction used in this part.
Authority: 12 U.S.C. 1462a, 1463, 1464,
1467a, and 1831y.
§ 533.1

Purpose and scope of this part.

(a) General. This part implements
section 711 of the Gramm-Leach-Bliley
Act (12 U.S.C. 1831y). That section
requires any nongovernmental entity or
person (NGEP), insured depository
institution, or affiliate of an insured
depository institution that enters into a
covered agreement to—
(1) Make the covered agreement
available to the public and the
appropriate Federal banking agency;
and
(2) File an annual report with the
appropriate Federal banking agency
concerning the covered agreement.
(b) Scope of this part. The provisions
of this part apply to—
(1) Savings associations and their
subsidiaries;
(2) Savings and loan holding
companies;
(3) Affiliates of savings associations
and savings and loan holding
companies, other than bank holding
companies, banks, and subsidiaries of
bank holding companies and banks; and
(4) NGEPs that enter into covered
agreements with any company listed in
paragraphs (b)(1) through (b)(3) of this
section.
(c) Relation to Community
Reinvestment Act. This part does not

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affect in any way the Community
Reinvestment Act of 1977 (CRA) (12
U.S.C. 2901 et seq.), OTS’s Community
Reinvestment rule (12 CFR Part 563e),
or OTS’s interpretations or
administration of the CRA or
Community Reinvestment rule.
(d) Examples. (1) The examples in this
part are not exclusive. Compliance with
an example, to the extent applicable,
constitutes compliance with this part.
(2) Examples in a paragraph illustrate
only the issue described in the
paragraph and do not illustrate any
other issues that may arise in this part.
Definition of covered agreement.

(a) General definition of covered
agreement. A covered agreement is any
contract, arrangement, or understanding
that meets all of the following criteria—
(1) The agreement is in writing.
(2) The parties to the agreement
include—
(i) One or more insured depository
institutions or affiliates of an insured
depository institution; and
(ii) One or more NGEPs.
(3) The agreement provides for the
insured depository institution or any
affiliate to—
(i) Provide to one or more individuals
or entities (whether or not parties to the
agreement) cash payments, grants, or
other consideration (except loans) that
have an aggregate value of more than
$10,000 in any calendar year; or
(ii) Make to one or more individuals
or entities (whether or not parties to the
agreement) loans that have an aggregate
principal amount of more than $50,000
in any calendar year.
(4) The agreement is made pursuant
to, or in connection with, the fulfillment
of the CRA, as defined in § 533.4 of this
part.
(5) The agreement is with a NGEP that
has had a CRA communication as
described in § 533.3 of this part prior to
entering into the agreement.
(b) Examples concerning written
arrangements or understandings. (1)
Example 1. A NGEP meets with an
insured depository institution and states
that the institution needs to make more
community development investments in
the NGEP’s community. The NGEP and
insured depository institution do not
reach an agreement concerning the
community development investments
the institution should make in the
community, and the parties do not reach
any mutual arrangement or
understanding. Two weeks later, the
institution unilaterally issues a press
release announcing that it has
established a general goal of making
$100 million of community
development grants in low- and

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moderate-income neighborhoods served
by the insured depository institution
over the next 5 years. The NGEP is not
identified in the press release. The press
release is not a written arrangement or
understanding.
(2) Example 2. A NGEP meets with an
insured depository institution and states
that the institution needs to offer new
loan programs in the NGEP’s
community. The NGEP and the insured
depository institution reach a mutual
arrangement or understanding that the
institution will provide additional loans
in the NGEP’s community. The
institution tells the NGEP that it will
issue a press release announcing the
program. Later, the insured depository
institution issues a press release
announcing the loan program. The press
release incorporates the key terms of the
understanding reached between the
NGEP and the insured depository
institution. The written press release
reflects the mutual arrangement or
understanding of the NGEP and the
insured depository institution and is,
therefore, a written arrangement or
understanding.
(3) Example 3. An NGEP sends a letter
to an insured depository institution
requesting that the institution provide a
$15,000 grant to the NGEP. The insured
depository institution responds in
writing and agrees to provide the grant
in connection with its annual grant
program. The exchange of letters
constitutes a written arrangement or
understanding.
(c) Loan agreements that are not
covered agreements. A covered
agreement does not include—
(1) Any individual loan that is
secured by real estate; or
(2) Any specific contract or
commitment for a loan or extension of
credit to an individual, business, farm,
or other entity, or group of such
individuals or entities, if—
(i) The funds are loaned at rates that
are not substantially below market rates;
and
(ii) The loan application or other loan
documentation does not indicate that
the borrower intends or is authorized to
use the borrowed funds to make a loan
or extension of credit to one or more
third parties.
(d) Examples concerning loan
agreements. (1) Example 1. An insured
depository institution provides an
organization with a $1 million loan that
is documented in writing and is secured
by real estate owned or to-be-acquired
by the organization. The agreement is an
individual mortgage loan and is exempt
from coverage under paragraph (c)(1) of
this section, regardless of the interest
rate on the loan or whether the

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organization intends or is authorized to
re-loan the funds to a third party.
(2) Example 2. An insured depository
institution commits to provide a
$500,000 line of credit to a small
business that is documented by a
written agreement. The loan is made at
rates that are within the range of rates
offered by the institution to similarly
situated small businesses in the market
and the loan documentation does not
indicate that the small business intends
or is authorized to re-lend the borrowed
funds. The agreement is exempt from
coverage under paragraph (c)(2) of this
section.
(3) Example 3. An insured depository
institution offers small business loans
that are guaranteed by the Small
Business Administration (SBA). A small
business obtains a $75,000 loan,
documented in writing, from the
institution under the institution’s SBA
loan program. The loan documentation
does not indicate that the borrower
intends or is authorized to re-lend the
funds. Although the rate charged on the
loan is well below that charged by the
institution on commercial loans, the rate
is within the range of rates that the
institution would charge a similarly
situated small business for a similar
loan under the SBA loan program.
Accordingly, the loan is not made at
substantially below market rates and is
exempt from coverage under paragraph
(c)(2) of this section.
(4) Example 4. A bank holding
company enters into a written
agreement with a community
development organization that provides
that insured depository institutions
owned by the bank holding company
will make $250 million in small
business loans in the community over
the next 5 years. The written agreement
is not a specific contract or commitment
for a loan or an extension of credit and,
thus, is not exempt from coverage under
paragraph (c)(2) of this section. Each
small business loan made by the insured
depository institution pursuant to this
general commitment would, however,
be exempt from coverage if the loan is
made at rates that are not substantially
below market rates and the loan
documentation does not indicate that
the borrower intended or was
authorized to re-lend the funds.
(e) Agreements that include exempt
loan agreements. If an agreement
includes a loan, extension of credit or
loan commitment that, if documented
separately, would be exempt under
paragraph (c) of this section, the exempt
loan, extension of credit or loan
commitment may be excluded for
purposes of determining whether the
agreement is a covered agreement.

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(f) Determining annual value of
agreements that lack schedule of
disbursements. For purposes of
paragraph (a)(3) of this section, a multiyear agreement that does not include a
schedule for the disbursement of
payments, grants, loans or other
consideration by the insured depository
institution or affiliate, is considered to
have a value in the first year of the
agreement equal to all payments, grants,
loans and other consideration to be
provided at any time under the
agreement.
§ 533.3

CRA communications.

(a) Definition of CRA communication.
A CRA communication is any of the
following—
(1) Any written or oral comment or
testimony provided to a Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate.
(2) Any written comment submitted to
the insured depository institution that
discusses the adequacy of the
performance under the CRA of the
institution and must be included in the
institution’s CRA public file.
(3) Any discussion or other contact
with the insured depository institution
or any affiliate about—
(i) Providing (or refraining from
providing) written or oral comments or
testimony to any Federal banking
agency concerning the adequacy of the
performance under the CRA of the
insured depository institution, any
affiliated insured depository institution,
or any CRA affiliate;
(ii) Providing (or refraining from
providing) written comments to the
insured depository institution that
concern the adequacy of the
institution’s performance under the
CRA and must be included in the
institution’s CRA public file; or
(iii) The adequacy of the performance
under the CRA of the insured depository
institution, any affiliated insured
depository institution, or any CRA
affiliate.
(b) Discussions or contacts that are
not CRA communications. (1) Timing of
contacts with a Federal banking agency.
An oral or written communication with
a Federal banking agency is not a CRA
communication if it occurred more than
3 years before the parties entered into
the agreement.
(2) Timing of contacts with insured
depository institutions and affiliates. A
communication with an insured
depository institution or affiliate is not
a CRA communication if the
communication occurred—

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(i) More than 3 years before the
parties entered into the agreement, in
the case of any written communication;
(ii) More than 3 years before the
parties entered into the agreement, in
the case of any oral communication in
which the NGEP discusses providing (or
refraining from providing) comments or
testimony to a Federal banking agency
or written comments that must be
included in the institution’s CRA public
file in connection with a request to, or
agreement by, the institution or affiliate
to take (or refrain from taking) any
action that is in fulfillment of the CRA;
or
(iii) More than 1 year before the
parties entered into the agreement, in
the case of any other oral
communication not described in
paragraph (b)(2)(ii).
(3) Knowledge of communication by
insured depository institution or
affiliate. (i) A communication is only a
CRA communication under paragraph
(a) of this section if the insured
depository institution or its affiliate has
knowledge of the communication under
paragraph (b)(3)(ii) or (b)(3)(iii) of this
section.
(ii) Communication with insured
depository institution or affiliate. An
insured depository institution or
affiliate has knowledge of a
communication by the NGEP to the
institution or its affiliate under this
paragraph only if one of the following
representatives of the insured
depository institution or any affiliate
has knowledge of the communication—
(A) An employee who approves,
directs, authorizes, or negotiates the
agreement with the NGEP; or
(B) An employee designated with
responsibility for compliance with the
CRA or executive officer if the employee
or executive officer knows that the
institution or affiliate is negotiating,
intends to negotiate, or has been
informed by the NGEP that it expects to
request that the institution or affiliate
negotiate an agreement with the NGEP.
(iii) Other communications. An
insured depository institution or
affiliate is deemed to have knowledge
of—
(A) Any testimony provided to a
Federal banking agency at a public
meeting or hearing;
(B) Any comment submitted to a
Federal banking agency that is conveyed
in writing by the agency to the insured
depository institution or affiliate; and
(C) Any written comment submitted
to the insured depository institution
that must be and is included in the
institution’s CRA public file.
(4) Communication where NGEP has
knowledge. A NGEP has a CRA

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communication with an insured
depository institution or affiliate only if
any of the following individuals has
knowledge of the communication—
(i) A director, employee, or member of
the NGEP who approves, directs,
authorizes, or negotiates the agreement
with the insured depository institution
or affiliate;
(ii) A person who functions as an
executive officer of the NGEP and who
knows that the NGEP is negotiating or
intends to negotiate an agreement with
the insured depository institution or
affiliate; or
(iii) Where the NGEP is an individual,
the NGEP.
(c) Examples of CRA
communications—(1) Examples of
actions that are CRA communications.
The following are examples of CRA
communications. These examples are
not exclusive and assume that the
communication occurs within the
relevant time period as described in
paragraph (b)(1) or (b)(2) of this section
and the appropriate representatives
have knowledge of the communication
as specified in paragraphs (b)(3) and
(b)(4) of this section.
(i) Example 1. A NGEP files a written
comment with a Federal banking agency
that states than an insured depository
institution successfully addresses the
credit needs of its community. The
written comment is in response to a
general request from the agency for
comments on an application of the
insured depository institution to open a
new branch and a copy of the comment
is provided to the institution.
(ii) Example 2. A NGEP meets with an
executive officer of an insured
depository institution and states that the
institution must improve its CRA
performance.
(iii) Example 3. A NGEP meets with
an executive officer of an insured
depository institution and states that the
institution needs to make more
mortgage loans in low- and moderateincome neighborhoods in its
community.
(iv) Example 4. A bank holding
company files an application with a
Federal banking agency to acquire an
insured depository institution. Two
weeks later, the NGEP meets with an
executive officer of the bank holding
company to discuss the adequacy of the
performance under the CRA of the target
insured depository institution. The
insured depository institution was an
affiliate of the bank holding company at
the time the NGEP met with the target
institution. (See § 533.11(a) of this part.)
Accordingly, the NGEP had a CRA
communication with an affiliate of the
bank holding company.

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(2) Examples of actions that are not
CRA communications. The following
are examples of actions that are not by
themselves CRA communications.
These examples are not exclusive.
(i) Example 1. A NGEP provides to a
Federal banking agency comments or
testimony concerning an insured
depository institution or affiliate in
response to a direct request by the
agency for comments or testimony from
that NGEP. Direct requests for
comments or testimony do not include
a general invitation by a Federal
banking agency for comments or
testimony from the public in connection
with a CRA performance evaluation of,
or application for a deposit facility (as
defined in section 803 of the CRA (12
U.S.C. 2902(3)) by, an insured
depository institution or an application
by a company to acquire an insured
depository institution.
(ii) Example 2. A NGEP makes a
statement concerning an insured
depository institution or affiliate at a
widely attended conference or seminar
regarding a general topic. A public or
private meeting, public hearing, or other
meeting regarding one or more specific
institutions, affiliates or transactions
involving an application for a deposit
facility is not considered a widely
attended conference or seminar.
(iii) Example 3. A NGEP, such as a
civil rights group, community group
providing housing and other services in
low- and moderate-income
neighborhoods, veterans organization,
community theater group, or youth
organization, sends a fundraising letter
to insured depository institutions and to
other businesses in its community. The
letter encourages all businesses in the
community to meet their obligation to
assist in making the local community a
better place to live and work by
supporting the fundraising efforts of the
NGEP.
(iv) Example 4. A NGEP discusses
with an insured depository institution
or affiliate whether particular loans,
services, investments, community
development activities, or other
activities are generally eligible for
consideration by a Federal banking
agency under the CRA. The NGEP and
insured depository institution or
affiliate do not discuss the adequacy of
the CRA performance of the insured
depository institution or affiliate.
(v) Example 5. A NGEP engaged in the
sale or purchase of loans in the
secondary market sends a general
offering circular to financial institutions
offering to sell or purchase a portfolio of
loans. An insured depository institution
that receives the offering circular
discusses with the NGEP the types of

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loans included in the loan pool,
whether such loans are generally
eligible for consideration under the
CRA, and which loans are made to
borrowers in the institution’s local
community. The NGEP and insured
depository institution do not discuss the
adequacy of the institution’s CRA
performance.
(d) Multiparty covered agreements. (1)
A NGEP that is a party to a covered
agreement that involves multiple NGEPs
is not required to comply with the
requirements of this part if—
(i) The NGEP has not had a CRA
communication; and
(ii) No representative of the NGEP
identified in paragraph (b)(4) of this
section has knowledge at the time of the
agreement that another NGEP that is a
party to the agreement has had a CRA
communication.
(2) An insured depository institution
or affiliate that is a party to a covered
agreement that involves multiple
insured depository institutions or
affiliates is not required to comply with
the requirements in §§ 533.6 and 533.7
if—
(i) No NGEP that is a party to the
agreement has had a CRA
communication concerning the insured
depository institution or any affiliate;
and
(ii) No representative of the insured
depository institution or any affiliate
identified in paragraph (b)(3) of this
section has knowledge at the time of the
agreement that an NGEP that is a party
to the agreement has had a CRA
communication concerning any other
insured depository institution or
affiliate that is a party to the agreement.
§ 533.4

Fulfillment of the CRA

(a) List of factors that are in
fulfillment of the CRA. Fulfillment of
the CRA, for purposes of this part,
means the following list of factors—
(1) Comments to a Federal banking
agency or included in CRA public file.
Providing or refraining from providing
written or oral comments or testimony
to any Federal banking agency
concerning the performance under the
CRA of an insured depository
institution or CRA affiliate that is a
party to the agreement or an affiliate of
a party to the agreement or written
comments that are required to be
included in the CRA public file of any
such insured depository institution; or
(2) Activities given favorable CRA
consideration. Performing any of the
following activities if the activity is of
the type that is likely to receive
favorable consideration by a Federal
banking agency in evaluating the
performance under the CRA of the

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insured depository institution that is a
party to the agreement or an affiliate of
a party to the agreement—
(i) Home-purchase, homeimprovement, small business, small
farm, community development, and
consumer lending, as described in
§ 563e.22 of this chapter, including loan
purchases, loan commitments, and
letters of credit;
(ii) Making investments, deposits, or
grants, or acquiring membership shares,
that have as their primary purpose
community development, as described
in § 563e.23 of this chapter;
(iii) Delivering retail banking services,
as described in § 563.24(d) of this
chapter;
(iv) Providing community
development services, as described in
§ 563e.24(e) of this chapter;
(v) In the case of a wholesale or
limited-purpose insured depository
institution, community development
lending, including originating and
purchasing loans and making loan
commitments and letters of credit,
making qualified investments, or
providing community development
services, as described in § 563e.25(c) of
this chapter;
(vi) In the case of a small insured
depository institution, any lending or
other activity described in § 563e.26(a)
of this chapter; or
(vii) In the case of an insured
depository institution that is evaluated
on the basis of a strategic plan, any
element of the strategic plan, as
described in § 563e.27(f) of this chapter.
(b) Agreements relating to activities of
CRA affiliates. An insured depository
institution or affiliate that is a party to
a covered agreement that concerns any
activity described in paragraph (a) of
this section of a CRA affiliate must,
prior to the time the agreement is
entered into, notify each NGEP that is a
party to the agreement that the
agreement concerns a CRA affiliate.
§ 533.5 Related agreements considered a
single agreement.

The following rules must be applied
in determining whether an agreement is
a covered agreement under § 533.2 of
this part.
(a) Agreements entered into by same
parties. All written agreements to which
an insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement if the
agreements—
(1) Are entered into with the same
NGEP;
(2) Were entered into within the same
12-month period; and
(3) Are each in fulfillment of the CRA.

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2109

(b) Substantively related contracts.
All written contracts to which an
insured depository institution or an
affiliate of the insured depository
institution is a party shall be considered
to be a single agreement, without regard
to whether the other parties to the
contracts are the same or whether each
such contract is in fulfillment of the
CRA, if the contracts were negotiated in
a coordinated fashion and a NGEP is a
party to each contract.
§ 533.6

Disclosure of covered agreements.

(a) Applicability date. This section
applies only to covered agreements
entered into after November 12, 1999.
(b) Disclosure of covered agreements
to the public. (1) Disclosure required.
Each NGEP and each insured depository
institution or affiliate that enters into a
covered agreement must make a copy of
the covered agreement available to any
individual or entity upon request.
(2) Nondisclosure of confidential and
proprietary information permitted. In
responding to a request for a covered
agreement from any individual or entity
under paragraph (b)(1) of this section, a
NGEP, insured depository institution, or
affiliate may withhold from public
disclosure confidential or proprietary
information that the party believes the
relevant supervisory agency could
withhold from disclosure under the
Freedom of Information Act (5 U.S.C.
552 et seq.) (FOIA).
(3) Information that must be
disclosed. Notwithstanding paragraph
(b)(2) of this section, a party must
disclose any of the following
information that is contained in a
covered agreement—
(i) The names and addresses of the
parties to the agreement;
(ii) The amount of any payments, fees,
loans, or other consideration to be made
or provided by any party to the
agreement;
(iii) Any description of how the funds
or other resources provided under the
agreement are to be used;
(iv) The term of the agreement (if the
agreement establishes a term); and
(v) Any other information that the
relevant supervisory agency determines
is not properly exempt from public
disclosure.
(4) Request for review of withheld
information. Any individual or entity
may request that the relevant
supervisory agency review whether any
information in a covered agreement
withheld by a party must be disclosed.
Any requests for agency review of
withheld information must be filed, and
will be processed in accordance with,
the relevant supervisory agency’s rules
concerning the availability of

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information (see part 505 of this chapter
and the Department of Treasury’s rules
(31 CFR part 1)).
(5) Duration of obligation. The
obligation to disclose a covered
agreement to the public terminates 12
months after the end of the term of the
agreement.
(6) Reasonable copy and mailing fees.
Each NGEP and each insured depository
institution or affiliate may charge an
individual or entity that requests a copy
of a covered agreement a reasonable fee
not to exceed the cost of copying and
mailing the agreement.
(7) Use of CRA public file by insured
depository institution or affiliate. An
insured depository institution and any
affiliate of an insured depository
institution may fulfill its obligation
under this paragraph (b) by placing a
copy of the covered agreement in the
insured depository institution’s CRA
public file if the institution makes the
agreement available in accordance with
the procedures set forth in § 563e.43 of
this chapter.
(c) Disclosure by NGEPs of covered
agreements to the relevant supervisory
agency. (1) Each NGEP that is a party to
a covered agreement must provide the
following within 30 days of receiving a
request from the relevant supervisory
agency—
(i) A complete copy of the agreement;
and
(ii) In the event the NGEP proposes
the withholding of any information
contained in the agreement in
accordance with paragraph (b)(2) of this
section, a public version of the
agreement that excludes such
information and an explanation
justifying the exclusions. Any public
version must include the information
described in paragraph (b)(3) of this
section.
(2) The obligation to provide a
covered agreement to the relevant
supervisory agency terminates 12
months after the end of the term of the
covered agreement.
(d) Disclosure by insured depository
institution or affiliate of covered
agreements to the relevant supervisory
agency. (1) In general. Within 60 days
of the end of each calendar quarter, each
insured depository institution and
affiliate must provide each relevant
supervisory agency with—
(i)(A) A complete copy of each
covered agreement entered into by the
insured depository institution or
affiliate during the calendar quarter; and
(B) In the event the institution or
affiliate proposes the withholding of any
information contained in the agreement
in accordance with paragraph (b)(2) of
this section, a public version of the

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agreement that excludes such
information (other than any information
described in paragraph (b)(3) of this
section) and an explanation justifying
the exclusions; or
(ii) A list of all covered agreements
entered into by the insured depository
institution or affiliate during the
calendar quarter that contains—
(A) The name and address of each
insured depository institution or
affiliate that is a party to the agreement;
(B) The name and address of each
NGEP that is a party to the agreement;
(C) The date the agreement was
entered into;
(D) The estimated total value of all
payments, fees, loans and other
consideration to be provided by the
institution or any affiliate of the
institution under the agreement; and
(E) The date the agreement terminates.
(2) Prompt filing of covered
agreements contained in list required. (i)
If an insured depository institution or
affiliate files a list of the covered
agreements entered into by the
institution or affiliate pursuant to
paragraph (d)(1)(ii) of this section, the
institution or affiliate must provide any
relevant supervisory agency a complete
copy and public version of any covered
agreement referenced in the list within
7 calendar days of receiving a request
from the agency for a copy of the
agreement.
(ii) The obligation of an insured
depository institution or affiliate to
provide a covered agreement to the
relevant supervisory agency under this
paragraph (d)(2) terminates 36 months
after the end of the term of the covered
agreement.
(3) Joint filings. In the event that 2 or
more insured depository institutions or
affiliates are parties to a covered
agreement, the insured depository
institution(s) and affiliate(s) may jointly
file the documents required by this
paragraph (d) of this section. Any joint
filing must identify the insured
depository institution(s) and affiliate(s)
for whom the filings are being made.
§ 533.7

Annual reports.

(a) Applicability date. This section
applies only to covered agreements
entered into on or after May 12, 2000.
(b) Annual report required. Each
NGEP and each insured depository
institution or affiliate that is a party to
a covered agreement must file an annual
report with each relevant supervisory
agency concerning the disbursement,
receipt, and uses of funds or other
resources under the covered agreement.
(c) Duration of reporting requirement.
(1) NGEPs. A NGEP must file an annual
report for a covered agreement for any

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fiscal year in which the NGEP receives
or uses funds or other resources under
the agreement.
(2) Insured depository institutions and
affiliates. An insured depository
institution or affiliate must file an
annual report for a covered agreement
for any fiscal year in which the
institution or affiliate—
(i) Provides or receives any payments,
fees, or loans under the covered
agreement that must be reported under
paragraphs (e)(1)(iii) and (e)(1)(iv) of
this section; or
(ii) Has data to report on loans,
investments, and services provided by a
party to the covered agreement under
the covered agreement under paragraph
(e)(1)(vi) of this section.
(d) Annual reports filed by NGEP. (1)
Contents of report. The annual report
filed by a NGEP under this section must
include the following—
(i) The name and mailing address of
the NGEP filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The amount of funds or resources
received under the covered agreement
during the fiscal year; and
(iv) A detailed, itemized list of how
the funds or resources received by the
NGEP under the covered agreement
were used during the fiscal year,
including the total amount used for—
(A) Compensation of officers,
directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and
professional fees; and
(F) Other expenses and uses (specify
expense or use).
(2) More detailed reporting of uses of
funds or resources permitted. (i) In
general. If a NGEP allocated and used
funds received under a covered
agreement for a specific purpose, the
NGEP may fulfill the requirements of
paragraph (d)(1)(iv) of this section with
respect to such funds by providing—
(A) A brief description of each
specific purpose for which the funds or
other resources were used; and
(B) The amount of funds or resources
used during the fiscal year for each
specific purpose.
(ii) Specific purpose defined. A NGEP
allocates and uses funds for a specific
purpose if the NGEP receives and uses
the funds for a purpose that is more
specific and limited than the categories
listed in paragraph (d)(1)(iv) of this
section.

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(3) Use of other reports. The annual
report filed by a NGEP may consist of
or incorporate a report prepared for any
other purpose, such as the Internal
Revenue Service Return of Organization
Exempt From Income Tax on Form 990,
or any other Internal Revenue Service
form, state tax form, report to members
or shareholders, audited or unaudited
financial statements, audit report, or
other report, so long as the annual
report filed by the NGEP contains all of
the information required by this
paragraph (d).
(4) Consolidated reports permitted. A
NGEP that is a party to 2 or more
covered agreements may file with each
relevant supervisory agency a single
consolidated annual report covering all
the covered agreements. Any
consolidated report must contain all the
information required by this paragraph
(d). The information reported under
paragraphs (d)(1)(iv) and (d)(2) of this
section may be reported on an aggregate
basis for all covered agreements.
(5) Examples of annual report
requirements for NGEPs
(i) Example 1. A NGEP receives an
unrestricted grant of $15,000 under a covered
agreement, includes the funds in its general
operating budget and uses the funds during
its fiscal year. The NGEP’s annual report for
the fiscal year must provide the name and
mailing address of the NGEP, information
sufficient to identify the covered agreement,
and state that the NGEP received $15,000
during the fiscal year. The report must also
indicate the total expenditures made by the
NGEP during the fiscal year for
compensation, administrative expenses,
travel expenses, entertainment expenses,
consulting and professional fees, and other
expenses and uses. The NGEP’s annual report
may provide this information by submitting
an Internal Revenue Service Form 990 that
includes the required information. If the
Internal Revenue Service Form does not
include information for all of the required
categories listed in this part, the NGEP must
report the total expenditures in the remaining
categories either by providing that
information directly or by providing another
form or report that includes the required
information.
(ii) Example 2. An organization receives
$15,000 from an insured depository
institution under a covered agreement and
allocates and uses the $15,000 during the
fiscal year to purchase computer equipment
to support its functions. The organization’s
annual report must include the name and
address of the organization, information
sufficient to identify the agreement, and a
statement that the organization received
$15,000 during the year. In addition, since
the organization allocated and used the funds
for a specific purpose that is more narrow
and limited than the categories of expenses
included in the detailed, itemized list of
expenses, the organization would have the
option of providing either the total amount
it used during the year for each category of

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expenses included in paragraph (d)(1)(iv) of
this section, or a statement that it used the
$15,000 to purchase computer equipment
and a brief description of the equipment
purchased.
(iii) Example 3. A community group
receives $50,000 from an insured depository
institution under a covered agreement.
During its fiscal year, the community group
specifically allocates and uses $5,000 of the
funds to pay for a particular business trip and
uses the remaining $45,000 for general
operating expenses. The group’s annual
report for the fiscal year must include the
name and address of the group, information
sufficient to identify the agreement, and a
statement that the group received $50,000.
Because the group did not allocate and use
all of the funds for a specific purpose, the
group’s annual report must provide the total
amount of funds it used during the year for
each category of expenses included in
paragraph (d)(1)(iv) of this section. The
group’s annual report also could state that it
used $5,000 for a particular business trip and
include a brief description of the trip.
(iv) Example 4. A community development
organization is a party to two separate
covered agreements with two unaffiliated
insured depository institutions. Under each
agreement, the organization receives $15,000
during its fiscal year and uses the funds to
support its activities during that year. If the
organization elects to file a consolidated
annual report, the consolidated report must
identify the organization and the two covered
agreements, state that the organization
received $15,000 during the fiscal year under
each agreement, and provide the total
amount that the organization used during the
year for each category of expenses included
in paragraph (d)(1)(iv) of this section.

(e) Annual report filed by insured
depository institution or affiliate—(1)
General. The annual report filed by an
insured depository institution or
affiliate must include the following—
(i) The name and principal place of
business of the insured depository
institution or affiliate filing the report;
(ii) Information sufficient to identify
the covered agreement for which the
annual report is being filed, such as by
providing the names of the parties to the
agreement and the date the agreement
was entered into or by providing a copy
of the agreement;
(iii) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans provided by
the insured depository institution or
affiliate under the covered agreement to
any other party to the agreement during
the fiscal year;
(iv) The aggregate amount of
payments, aggregate amount of fees, and
aggregate amount of loans received by
the insured depository institution or
affiliate under the covered agreement
from any other party to the agreement
during the fiscal year;
(v) A general description of the terms
and conditions of any payments, fees, or

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loans reported under paragraphs
(e)(1)(iii) and (e)(1)(iv) of this section,
or, in the event such terms and
conditions are set forth—
(A) In the covered agreement, a
statement identifying the covered
agreement and the date the agreement
(or a list identifying the agreement) was
filed with the relevant supervisory
agency; or
(B) In a previous annual report filed
by the insured depository institution or
affiliate, a statement identifying the date
the report was filed with the relevant
supervisory agency; and
(vi) The aggregate amount and
number of loans, aggregate amount and
number of investments, and aggregate
amount of services provided under the
covered agreement to any individual or
entity not a party to the agreement—
(A) By the insured depository
institution or affiliate during its fiscal
year; and
(B) By any other party to the
agreement, unless such information is
not known to the insured depository
institution or affiliate filing the report or
such information is or will be contained
in the annual report filed by another
party under this section.
(2) Consolidated reports permitted. (i)
Party to multiple agreements. An
insured depository institution or
affiliate that is a party to 2 or more
covered agreements may file a single
consolidated annual report with each
relevant supervisory agency concerning
all the covered agreements.
(ii) Affiliated entities party to the
same agreement. An insured depository
institution and its affiliates that are
parties to the same covered agreement
may file a single consolidated annual
report relating to the agreement with
each relevant supervisory agency for the
covered agreement.
(iii) Content of report. Any
consolidated annual report must contain
all the information required by this
paragraph (e). The amounts and data
required to be reported under
paragraphs (e)(1)(iv) and (e)(1)(vi) of this
section may be reported on an aggregate
basis for all covered agreements.
(f) Time and place of filing. (1)
General. Each party must file its annual
report with each relevant supervisory
agency for the covered agreement no
later than six months following the end
of the fiscal year covered by the report.
(2) Alternative method of fulfilling
annual reporting requirement for a
NGEP. (i) A NGEP may fulfill the filing
requirements of this section by
providing the following materials to an
insured depository institution or
affiliate that is a party to the agreement

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no later than six months following the
end of the NGEP’s fiscal year—
(A) A copy of the NGEP’s annual
report required under paragraph (d) of
this section for the fiscal year; and
(B) Written instructions that the
insured depository institution or
affiliate promptly forward the annual
report to the relevant supervisory
agency or agencies on behalf of the
NGEP.
(ii) An insured depository institution
or affiliate that receives an annual report
from a NGEP pursuant to paragraph
(f)(2)(i) of this section must file the
report with the relevant supervisory
agency or agencies on behalf of the
NGEP within 30 days.
§ 533.8

Release of information under FOIA.

OTS will make covered agreements
and annual reports available to the
public in accordance with the Freedom
of Information Act (5 U.S.C. 552 et seq.),
OTS’s rules (part 505 of this chapter),
and the Department of Treasury’s rules
(31 CFR part 1). A party to a covered
agreement may request confidential
treatment of proprietary and
confidential information in a covered
agreement or an annual report under
those procedures.
§ 533.9

Compliance provisions.

(a) Willful failure to comply with
disclosure and reporting obligations. (1)
If OTS determines that a NGEP has
willfully failed to comply in a material
way with §§ 533.6 or 533.7 of this part,
OTS will notify the NGEP in writing of
that determination and provide the
NGEP a period of 90 days (or such
longer period as OTS finds to be
reasonable under the circumstances) to
comply.
(2) If the NGEP does not comply
within the time period established by
OTS, the agreement shall thereafter be
unenforceable by that NGEP by
operation of section 48 of the Federal
Deposit Insurance Act (12 U.S.C.
1831y).
(3) OTS may assist any insured
depository institution or affiliate that is
a party to a covered agreement that is
unenforceable by a NGEP by operation
of section 48 of the Federal Deposit
Insurance Act (12 U.S.C. 1831y) in
identifying a successor to assume the
NGEP’s responsibilities under the
agreement.
(b) Diversion of funds. If a court or
other body of competent jurisdiction
determines that funds or resources
received under a covered agreement
have been diverted contrary to the
purposes of the covered agreement for
an individual’s personal financial gain,

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OTS may take either or both of the
following actions—
(1) Order the individual to disgorge
the diverted funds or resources received
under the agreement;
(2) Prohibit the individual from being
a party to any covered agreement for a
period not to exceed 10 years.
(c) Notice and opportunity to respond.
Before making a determination under
paragraph (a)(1) of this section, or taking
any action under paragraph (b) of this
section, OTS will provide written notice
and an opportunity to present
information to OTS concerning any
relevant facts or circumstances relating
to the matter.
(d) Inadvertent or de minimis errors.
Inadvertent or de minimis errors in
annual reports or other documents filed
with OTS under §§ 533.6 or 533.7 of this
part will not subject the reporting party
to any penalty.
(e) Enforcement of provisions in
covered agreements. No provision of
this part shall be construed as
authorizing OTS to enforce the
provisions of any covered agreement.
§ 533.10

Transition provisions.

(a) Disclosure of covered agreements
entered into before the effective date of
this part. The following disclosure
requirements apply to covered
agreements that were entered into after
November 12, 1999, and that terminated
before April 1, 2001.
(1) Disclosure to the public. Each
NGEP and each insured depository
institution or affiliate that was a party
to the agreement must make the
agreement available to the public under
§ 533.6 of this part until at least April
1, 2002.
(2) Disclosure to the relevant
supervisory agency. (i) Each NGEP that
was a party to the agreement must make
the agreement available to the relevant
supervisory agency under § 533.6 of this
part until at least April 1, 2002.
(ii) Each insured depository
institution or affiliate that was a party
to the agreement must, by June 30, 2001,
provide each relevant supervisory
agency either—
(A) A copy of the agreement under
§ 533.6(d)(1)(i) of this part; or
(B) The information described in
§ 533.6(d)(1)(ii) of this part for each
agreement.
(b) Filing of annual reports that relate
to fiscal years ending on or before
December 31, 2000. In the event that a
NGEP, insured depository institution or
affiliate has any information to report
under § 533.7 of this part for a fiscal that
ends on or before December 31, 2000,
and that concerns a covered agreement
entered into between May 12, 2000, and

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December 31, 2000, the annual report
for that fiscal year must be provided, no
later than June 30, 2001, to—
(1) Each relevant supervisory agency;
or
(2) In the case of a NGEP, to an
insured depository institution or
affiliate that is a party to the agreement
in accordance with § 533.7(f)(2) of this
part.
§ 533.11 Other definitions and rules of
construction used in this part.

(a) Affiliate. Affiliate means—
(1) Any company that controls, is
controlled by, or is under common
control with another company; and
(2) For the purpose of determining
whether an agreement is a covered
agreement under § 533.2, an affiliate
includes any company that would be
under common control or merged with
another company on consummation of
any transaction pending before a
Federal banking agency at the time—
(i) The parties enter into the
agreement; and
(ii) The NGEP that is a party to the
agreement makes a CRA
communication, as described in § 533.3
of this part.
(b) Control. Control is defined in
section 2(a) of the Bank Holding
Company Act (12 U.S.C. 1841(a)).
(c) CRA affiliate. A CRA affiliate of an
insured depository institution is any
company that is an affiliate of an
insured depository institution to the
extent, and only to the extent, that the
activities of the affiliate were considered
by the appropriate Federal banking
agency when evaluating the CRA
performance of the institution at its
most recent CRA examination prior to
the agreement. An insured depository
institution or affiliate also may
designate any company as a CRA
affiliate at any time prior to the time a
covered agreement is entered into by
informing the NGEP that is a party to
the agreement of such designation.
(d) CRA public file. CRA public file
means the public file maintained by an
insured depository institution and
described in § 563.43 of this chapter.
(e) Executive officer. The term
executive officer has the same meaning
as in § 215.2(e)(1) of the Board of
Governors of the Federal Reserve’s
Regulation O (12 CFR 215.2(e)(1)). In
applying this definition under this part,
the term savings association shall be
used in place of the term bank.
(f) Federal banking agency;
appropriate Federal banking agency.
The terms Federal banking agency and
appropriate Federal banking agency
have the same meanings as in section 3
of the Federal Deposit Insurance Act (12
U.S.C. 1813).

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Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations
(g) Fiscal year. (1) The fiscal year for
a NGEP that does not have a fiscal year
shall be the calendar year.
(2) Any NGEP, insured depository
institution, or affiliate that has a fiscal
year may elect to have the calendar year
be its fiscal year for purposes of this
part.
(h) Insured depository institution.
Insured depository institution has the
same meaning as in section 3 of the
Federal Deposit Insurance Act (12
U.S.C. 1813).
(i) Nongovernmental entity or person
or NGEP—(1) General. A
nongovernmental entity or person or
NGEP is any partnership, association,
trust, joint venture, joint stock company,
corporation, limited liability
corporation, company, firm, society,
other organization, or individual.
(2) Exclusions. A nongovernmental
entity or person does not include—
(i) The United States government, a
state government, a unit of local
government (including a county, city,
town, township, parish, village, or other
general-purpose subdivision of a state)
or an Indian tribe or tribal organization

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established under Federal, state or
Indian tribal law (including the
Department of Hawaiian Home Lands),
or a department, agency, or
instrumentality of any such entity;
(ii) A federally-chartered public
corporation that receives Federal funds
appropriated specifically for that
corporation;
(iii) An insured depository institution
or affiliate of an insured depository
institution; or
(iv) An officer, director, employee, or
representative (acting in his or her
capacity as an officer, director,
employee, or representative) of an entity
listed in paragraphs (i)(2)(i), (i)(2)(ii), or
(i)(2)(iii) of this section.
(j) Party. The term party with respect
to a covered agreement means each
NGEP and each insured depository
institution or affiliate that entered into
the agreement.
(k) Relevant supervisory agency. The
relevant supervisory agency for a
covered agreement means the
appropriate Federal banking agency
for—

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(1) Each insured depository
institution (or subsidiary thereof) that is
a party to the covered agreement;
(2) Each insured depository
institution (or subsidiary thereof) or
CRA affiliate that makes payments or
loans or provides services that are
subject to the covered agreement; and
(3) Any company (other than an
insured depository institution or
subsidiary thereof) that is a party to the
covered agreement.
(l) Term of agreement. An agreement
that does not have a fixed termination
date is considered to terminate on the
last date on which any party to the
agreement makes any payment or
provides any loan or other resources
under the agreement, unless the relevant
supervisory agency for the agreement
otherwise notifies each party in writing.
Dated: December 20, 2000.
By the Office of Thrift Supervision.
Ellen Seidman,
Director.
[FR Doc. 01–3 Filed 1–9–01; 8:45 am]
BILLING CODE 4810–33–U; 6210–01–U; 6714–01–U;
6720–01–U

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102