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Federal Reserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

July 29, 2004

Notice 04-47

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

SUBJECT
Withdrawal of Proposed Amendments to
Community Reinvestment Act Regulations
DETAILS
The Board of Governors is announcing its intention to withdraw proposed
amendments to its Community Reinvestment Act (CRA) regulations. In February 2004, the
Board, along with the Office of the Comptroller of the Currency, the Office of Thrift
Supervision, and the Federal Deposit Insurance Corporation, proposed revisions to the agencies’
CRA regulations. The key aspects of the proposal were:
1) to raise the small-bank asset threshold from $250 million to $500 million, thereby
allowing more banks to benefit from streamlined CRA evaluations; and
2) to allow examiners to reduce a depository institution’s CRA rating if the
institution engaged in a pattern or practice of abusive asset-based lending.
While community banks strongly favor raising the threshold, it is uncertain that the
cost savings to the average community bank of being “small” rather than “large” under the
proposal would be significant. On the other side, the proposal’s cost in the form of a potential
reduction in community development capital in a significant number of rural communities is also
uncertain, but potentially large in at least some communities. On balance, the Board does not
believe that the cost savings of the proposal clearly justify the potential adverse effects on certain
rural communities.

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.

-2The commenters were united in their opposition to the proposal to define a single
abusive lending practice in the CRA regulations (abusive asset-based lending) to the exclusion of
other abusive practices.
For these reasons, the Board is withdrawing the entire proposal.
MORE INFORMATION
For more information, please contact Eugene Coy at (214) 922-6201, or Diane van
Gelder at (214) 922-6282, Banking Supervision Department. Paper copies of this notice or
previous Federal Reserve Bank notices can be printed from our web site at www.dallasfed.org/
banking/notices/index.html.