Full text of District Notices (Federal Reserve Bank of Dallas) : Public Access to Community Reinvestment Act Performance Evaluations, Notice 91-57

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Federal Reserve Bank
OF DALLAS
ROBERT
AND

D. M c T E E R , J R .

p re s id e n t
C H IE F E X E C U T IV E

O F F IC E R

J llly 12

1991

DALLAS TEXA S

75222

Notice 91-57
TO:

The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Public Access to Community Reinvestment Act
Performance Evaluations
DETAILS

The Board of Governors of the Federal Reserve System has announced
new procedures for state member banks regarding public access to Community
Reinvestment Act (CRA) performance evaluations and ratings. The Board is
implementing these new procedures by amending its Regulation BB (Community
Reinvestment).
The new procedures became effective July 11, 1991, and reflect only
minor modifications to the previous rules. State member banks are required to
place their CRA performance evaluation and rating in their public comment file
within 30 business days of receipt. The evaluation must be made available for
public inspection, copies must be provided for a fee not to exceed the cost of
reproduction and mailing, and the banks’ CRA notices must be amended to
indicate the availability of the evaluation and rating. In addition, the rule
makes it clear that a bank may, at its option, place its response to the
evaluation in the public file.
ATTACHMENT
A copy of the Board’s notice (Federal Reserve System Docket No.
R-0691) is attached.
MORE INFORMATION
For more information, please contact Dean Pankonien at (214)
651-6228. For additional copies of this Bank’s notice, please contact the
Public Affairs Department at (214) 651-6289.
Sincerely yours,

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 Intrastale (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

FEDERAL RESERVE SYSTEM
12 CFR PART 228
[DOCKET NO. R-0691]

Community Reinvestment Act

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Final Rule.

SUMMARY:

The Board is amending its regulation to implement

changes in the Community Reinvestment Act of 1977 (CRA) contained
in Title XII of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA).

This final rule establishes

procedures applicable to state member banks governing public
access to CRA Performance Evaluations and CRA ratings assigned by
the Federal Reserve during the examination process.
This final rule requires state member banks to place their
CRA Performance Evaluation and CRA rating in their public comment
file (which they are already required to maintain under existing
regulations) within 30 business days of receipt.

State member

banks must make the evaluation and rating available for public
inspection and provide copies of the evaluation, upon request, to
interested parties.

Banks may charge a reasonable fee for

reproduction of the evaluation and mailing costs, if applicable.
State member banks must also amend their CRA Public Notices to
reflect the public availability of the evaluation and rating.

EFFECTIVE DATE:

July 11, 1991.

FOR FURTHER INFORMATION CONTACT:

Janice Scandella, Review

Examiner, at (202) 452-3946; for the hearing impaired only,
contact Dorothea Thompson, Telecommunications Device for the
Deaf, at (202) 452-3544, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
SUPPLEMENTARY INFORMATION:
Background
Section 1212 of the FIRREA, Pub L. 101-73, 103 Stat. 183,
511 (1989) amended the CRA, Title VIII, Public Law No. 95-128, 91
Stat. 1147 (12 U.S.C. 2901 et sea.) to provide for written
evaluations of an institution's record of meeting the credit
needs of its entire community, including low- and moderate-income
neighborhoods.

It also requires the financial supervisory

agencies to use a four-tiered descriptive rating system in their
assessments of CRA performance of the institutions they supervise
in place of the five-tiered numerical rating system in use prior
to the amendment.

FIRREA requires the public disclosure of both

the written evaluation and CRA rating assigned for examinations
commenced on or after July 1, 1990.

In addition, it requires

that each written evaluation contain findings and conclusions
with respect to each of the assessment factors designed to
measure CRA performance.

Finally, the written evaluation must

2

contain the institution's rating and a statement describing the
basis for the rating.
Notwithstanding the public nature of the written
evaluations, FIRREA stipulates that the financial supervisory
agencies maintain as confidential information provided in
confidence to the examiners by members of the public, officers or
employees of the institution, or any other person or
organization, as well as information the agencies believe is too
sensitive or speculative for public disclosure.

FIRREA also

permits the agencies to provide information solely to the
examined institution when they determine that doing so will
promote the objectives of the CRA.
On December 22, 1989, the Federal Financial Institutions
Examination Council (FFIEC) published for public comment
proposals to implement all aspects of these amendments (54 FR
52914).

The FFIEC received 129 comments from financial

institutions, the public, research organizations, governmental
agencies, and members of the Congress.

Based on review of the

comments received, the FFIEC adopted the "Uniform Interagency
Community Reinvestment Act Final Guidelines for Disclosure of
Written Evaluations and Revised Assessment Rating System".

See

55 FR 18163 (May 1, 1990).
On June 28, 1990, the Board, the Office of the Comptroller
of the Currency, Federal Deposit Insurance Corporation, and
Office of Thrift Supervision, published for public comment a

joint temporary rule implementing all aspects of the FIRREA
amendments to CRA (55 FR 26624).

The agencies issued the

temporary rule to ensure that the changes became effective by the
effective date mandated by the Act.

Although the temporary rule

took effect July 1, 1990, the agencies requested public comment
prior to issuing a final rule.

The comment period ended on

August 27, 1990.
Purpose
This final rule adopts, with only minor modification, the
requirements in the temporary rule concerning the manner in which
state member banks must make their written CRA Performance
Evaluation and CRA rating public.

The Federal Reserve intends

this final rule to enhance the information available to the
public regarding the CRA activities and performance of state
member banks.

Each state member bank must place its most recent

CRA Performance Evaluation containing its rating in its CRA
public comment file, already required by existing regulation,
within 30 business days of receipt.

Each state member bank must

also make the CRA Performance Evaluation available, at a minimum,
in the public comment file at the bank's head office and, if
applicable, at a designated office located in each additional
delineated community.

Each state member bank must revise the CRA

Notice it is already required to maintain in the public lobby of
each of its offices, other than off-premises electronic deposit
facilities, to inform the public of the availability of the
4

evaluation and where it can be obtained.

Each' state member bank

must make copies of the evaluation available upon request, and
may charge a fee not exceeding the cost of reproduction and
mailing (if applicable).
Discussion Of Comment Letters
The Board received eight comments in response to the
temporary rule.

Among the issues raised by the commenters was a

concern that the language contained in the temporary rule
authorizing banks to charge a "reasonable fee not to exceed the
cost of reproduction and mailing (if applicable)" would result in
inadvertent violations of the regulation since the term
"reasonable" is subject to interpretation.

One commenter sought

to impose a "safe harbor" provision authorizing a $.10 per page
copying charge and $2.00 mailing fee.

After evaluating this

alternative, the Board determined that establishing a set fee
schedule is .unnecessary at this time and that the "reasonable
fee" language provides sufficient guidance.

The Board's intent

is to ensure that no state member bank charges unreasonable or
exorbitant fees for providing copies of the evaluations to the
public.

This provision is similar to the current provision

regarding the CRA statement.

Since the regulation was adopted in

1978, 12 CFR 228.4(f) has required that state member banks
provide a copy of the CRA statement to the public upon request,
and allowed banks to charge a fee "not to exceed the cost of
reproduction."

To the Board's knowledge this has not caused any
5

problems of interpretation.
A commenter advocated wider availability of the evaluations
throughout the various communities an institution might serve.
In the temporary rule the Board required that each state member
bank, at a minimum, place the evaluation in the CRA public file
at the head office and at one designated office in each local
community.

The Board believes that this approach provides

adequate availability.

Each state member bank must keep a

complete CRA public file at its head office.

Additionally, if

the bank has more than one local community, it must keep those
materials relating to each local community at a designated office
in that community.

This ensures that, at a minimum, a state

member bank's written CRA evaluation and CRA rating are available
to the public at one location in each designated local community
served by the bank and at the head office.

The bank's head

office file must contain materials relating to all local
communities served by the bank.
Another commenter expressed concern that the regulation
required the bank to place any prepared response to the CRA
evaluation in the public file.
temporary rule.

This was not the intent of the

The final rule has been modified to make clear

that it does not require, but merely permits, the bank to respond
to the CRA evaluation and place its response in the public file
should it so desire.

Paragraphs 228.5(a)(3) and 228.3(c)(3) of

the rule have been revised to eliminate any possible ambiguity in

the regulatory language.

In responding to a request by the

public for a copy of the CRA evaluation, the final rule also
allows a bank to include its written response to the evaluation.
A commenter suggested that requiring the CRA Performance
Evaluation to be placed in the public file within 30 business
days of receipt failed to provide banks with sufficient time to
formulate a response.

The commenter advocated extending the

filing period to 90 days.

The Board believes that the 30

business day period provides banks with sufficient opportunity to
respond to the issues addressed in the evaluation.
Finally, a commenter advocated exempting banks with less
than $150 million in total assets from making the evaluation
available in a designated office in each local community as well
as the head office.

The CRA applies to state member banks

regardless of their size.

Therefore, the Board believes it is

inappropriate to tailor the regulation along such lines.
Regulatory Flexibility Act
Pursuant to the requirements of the Regulatory Flexibility
Act, 5 U.S.C. 605(b), the Board certifies that this final rule
will have an insignificant economic impact on small entities.
This final rule imposes only minimal costs on state member banks,
regardless of size.

7

List of Subjects in 12 CFR Part 228
Community development: Consumer protection; Credit; Federal
,-v .

•

r

« *

.

-*.* ' ■

f

-

..

■

.

Reserve System; Investments; Reporting and recordkeeping
requirements.

v".-

AUTHORITY AND ISSUANCE:
For the reasons set forth in the preamble, Part
Chapter

Iof Title12 of

228 of

the code of Federal Regulations is

amended as set forth below:
PART 228— (AMENDED)
Accordingly, the interim rule amending 12 CFR Part 228 which
was published at 55 FR 26624-26628 on June 28, 1990, is adopted
as a final rule with the following changes:
'• -'r

1.

1 ■

-

The authority citation for Part 228 continues to read as

follows:
AUTHORITY:

Community Reinvestment Act of 1977
[title VIII, Pub. L. 95-128,

91 Stat.

1147 (12 U.S.C. 2901 et seq.)];

12

U.S.C. 321, 325, 1814, 1816, 1828, 1842.

* * * * *

2.

In § 228.5, paragraphs (a)(3) and (c)(3) are revised to

read as follows:

§ 228.5

Files of public comments and recent CRA

statements.
(a) * * *
(3)

Any response to the comments under paragraph
(a)(1) of this section that the bank wishes to
make; and

* * * * *

(C ) * * *

(3)

The most recent CRA Performance Evaluation shall,
at a minimum, be available at the head office and
at an office in each local community so designated
under paragraph (c)(2) of this section.

The bank

may respond to the CRA Performance Evaluation and
may make the response available in the same manner
as the CRA Performance Evaluation.

June 4, 1991

Date

(signed) William W. Wiles

William W. Wiles
Secretary of the Board

9