Full text of Federal Reserve Bank of New York Circulars : 10820. Community Reinvestment Act Examination Procedures

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FEDERAL RESERVE BANK
OF NEW YORK

AT 108 Z 0

D ecem b er 27, 1995

Community Reinvestment Act Examination Procedures

To the Chief Executive Officer of each State Member Bank
in the Second Federal Reserve District:

F o llo w in g is th e te x t o f a jo in t statem en t issued b y th e F ed eral F in an cial
In stitu tio n s E x am in atio n C ouncil:
The Board o f Governors o f the Federal Reserve System, the Comptroller
o f the Currency, the Federal Deposit Insurance Corporation, and the Office o f
Thrift Supervision recently approved examination procedures to implement the
revised Community Reinvestment Act (CRA) regulations that were published in
the Federal Register on May 4, 1995. [Ref. C ir. N o. 1 0 7 8 5 , d a te d M ay 31, 1 9 9 5 ]
There are four sets o f procedures -- procedures for small institutions, for large
retail institutions, for wholesale and limited purpose institutions, and for
institutions that have been approved for evaluation under a strategic plan. The
four different procedures correspond to the four alternative evaluation methods
provided in the revised CRA regulations and are designed to respond to basic
differences in institutions’ structures and operations. All o f the procedures
reflect the intent o f the regulation to establish performance-based CRA
examinations that are complete and accurate but, to the maximum extent possible,
mitigate the compliance burden for institutions.
In accordance with the regulations, examiners will begin using the small
institution procedures on January 1, 1996. The other procedures will not become
mandatory until July 1, 1997, but examiners will use them in those institutions
that elect to be evaluated under the new assessment methods, as described in the
regulations.

E n clo sed — fo r S tate m em b er banks in th is D istrict — is a co p y o f th e new
e x a m in a tio n p ro c ed u re s, co rresp o n d in g sam ple p ublic p erfo rm an ce ev alu atio n s, an d certain
in tro d u cto ry m ateria l fo r ex am iners. Q u estio n s reg ard in g th ese p ro ced u res m ay be
d irected to o u r C o m p lian c e E x am in atio n s D ep artm en t (T el. N o . 2 1 2 -7 2 0 -5 9 1 4 ).

C hester B . F eld berg ,
E x ecu tiv e V ice P resid en t.

CO M M UNITY REINVESTM ENT ACT
JOINT EXAM INATIO N PRO CEDURES

F act S heet - C R A E x am in atio n P rocedures
C o m m u n ity R ein v estm en t A ct E x am in atio n P ro ced u res for:
-S m all In stitu tio n s
-L arg e R etail Institu tio n s
-L im ited P urpose and W holesale In stitu tio n s
-In stitu tio n s w ith S trategic Plans

Board of Governors of the Federal Reserve System
Comptroller of the Currency
Federal Deposit Insurance Corporation
Office of Thrift Supervision

FACT SHEET
CRA EXAMINATION PROCEDURES

Leaders of the four federal bank and thrift regulatory agencies have adopted joint examination
procedures for monitoring compliance with new Community Reinvestment Act (CRA)
regulations. The procedures change old exam procedures in the following way: •

•

They provide for different evaluation methods to respond to basic differences in
institutions* size, structure and operations. The agencies have adopted separate
procedures for use in small institutions, large retail institutions, limited purpose or
wholesale institutions and institutions with strategic plans. The procedures will be •
published and distributed to all regulated institutions by the Federal Financial Institutions
Examination Council.
‘

The new procedures considerably reduce the burden on banks and thrifts by making CRA
evaluations more objective and performance-based, and by promoting consistency. The
procedures encourage examiners to be guided by common sense practices rather than
rigid and burdensome standards that focus on recordkeeping requirements.

•

Banks and thrifts will not be evaluated based on how they ascertain community credit
needs, how they advertise and market their products, or how actively their officers and
directors participate in local community organizations and civic groups.

•

Examiners will evaluate CRA performance based on review of objective information
about the institution, its community and its competitors, available demographic and
economic data, and any information the institution chooses to provide about lending,
service and investment opportunities in its assessment area. Examiners will not,
however, impose burden on an institution by requiring its staff to create or supply any
information not already developed as part of the bank or thrift’s normal business practice.

•

Interviews with local community, civic or government leaders will help examiners learn
about the community, its economic base and the bank or thrift’s local community
development initiatives.
# # #

The four federal bank and thrift regulatory agencies are the Federal Reserve System, the Office of die Comptroller
of the Currency, die Federal Deposit Insurance Corporation and the Office of Thrift Supervision. The Federal
Reserve supervises and examines bank holding companies and state member banks. The Federal Deposit Insurance
Corporation provides federal insurance on qualifying deposits at all of the nation's 12,000 banks and savings
associations. The Office of the Comptroller of the Currency and the Office of Thrift Supervision, both bureaus of
the Department of Treasury, respectively charter, regulate and examine national banks and federally chartered thrift
institutions. Each of the federal bank and thrift regulatory agencies engenders confidence in the nation's financial
structure by protecting the safety and soundness of the banking system.

C om m unity R einvestm ent Act Exam ination Procedures

"By making CRA evaluations more objective and performance based, I believe that we can
make the regulation more effective and also significantly reduce regulatory burden for the vast
majority o f banks and thrifts."
—

Eugene A. Ludwig
Comptroller o f the Currency
Office o f the Comptroller o f the Currency

"Examiners charged with the responsibility for developing rational, supportable, public CRA
performance evaluations and ratings must not be held to a rigid, unyielding, and unrealistic set
o f bureaucratic rules that frustrate their ability to go about their jobs."
—

Jonathan L. Fiechter
Acting Director
Office o f Thrift Supervision

"Some may argue that a sufficiently detailed set o f data and complex set o f formulas will
permit regulators to capture the variety o f local circumstances which exists.... Carried to its
logical conclusion, such a process would tend to replace examiner judgment and personal
evaluations o f character and creditworthiness with evaluations based solely on quantifiable
criteria. In my view, while such an approach may superficially seem fairer than the current
system, it might ultimately reduce economic opportunity and might prove counter-productive
in aiding traditionally under-served populations."
—

Lawrence B. Lindsey
Member
Board o f Governors o f the
Federal Reserve System

"I subscribe to efforts to focus attention on meaningful performance by banks and thrifts
instead o f building unproductive paper trails. While our examination standards need to be
consistently applied, we must have the flexibility to assess the performance o f an institution
based on its capabilities and the needs o f the community it serves. Each institution — like
each community — is unique."

Ricki H eifer
Chairman
Federal Deposit Insurance Corporation

November 13, 1995

Community Reinvestment Act
Introduction to Examination Procedures
Background and Summary
The Community Reinvestment Act (CRA) of 1977 (12 U.S.C. 2901) as amended,
encourages each insured depository institution covered by the Act to help meet the credit needs
of the communities in which it operates. The CRA requires that each federal financial
supervisory agency assess the record of each covered depository institution in helping to meet the
credit needs of its entire community, including low- and moderate-income neighborhoods,
consistent with safe and sound operations, and take that record into account when deciding
whether to approve an application by the institution for a deposit facility.
Neither the CRA nor its implementing regulations inject hard and fast rules or ratios into
the examination or application processes. Rather, the law contemplates an evaluation of each
lender's record that can accommodate individual circumstances. Neither the CRA nor its
implementing regulations require financial institutions to make high risk loans that jeopardize
their safety. To the contrary, the law makes it clear that lending that meets an institution's CRA
responsibilities should be done within the bounds of safety and soundness. Rebuilding and
revitalizing communities through sound lending and good business judgment should benefit both
the communities and financial institutions.
An institution's capacity to help meet community credit needs is influenced by many
factors, including its financial condition and size, resource constraints, legal impediments and
local economic conditions that could affect the demand and supply of credit Examiners must
consider these factors when evaluating an institution's performance under CRA. This is
consistent with a fundamental underpinning of the CRA regulations —that the differences in
institutions and the communities in which they do business preclude rigid and inflexible rules.
Clear, flexible, and sensible performance criteria that accommodate differences in institutions
and their communities, that minimize burden, that promote consistency and objectivity, and that
allow examiners to be guided by common sense rather than adherence to mechanistic procedures,
are embodied in the CRA regulations and the examination procedures.
For example, the CRA regulations provide for different evaluation methods to respond to
basic differences in institutions' structures and operations. The regulations provide a streamlined
assessment method for small institutions that emphasizes lending performance; an assessment
method for large, retail institutions that focuses on lending, investment, and service performance;
and an assessment method for wholesale and limited-purpose institutions based on community
development activities. Further, the regulations also give any institution, regardless of size or
business strategy, the choice to be evaluated under a strategic plan. This type of flexibility and
customizing should permit institutions to be evaluated fairly and in conformance with their
business approach.

November 13,1995

Examination Burden Reduction
The complementary regulatory themes o f flexibility, responsiveness, and objectivity are
extended to the examination process as part o f an overarching effort, among other things, to
reduce the burden o f the regulations and the examination on institutions. Indeed, both the
regulations and the examination procedures reflect a conscientious effort to minimize burden on
financial institutions. For-example, examiners are encouraged to draw on the results o f previous
examinations o f an institution for information about major product lines, business strategy and
supervisory restrictions. This information is typically available from agency sources, and, often,
can be reviewed off-site. Further, examiners may already have knowledge o f an institution's
community and local demographics from their own past visits to the institution or to others in the
same area. In these cases, examiners should be able to develop a good understanding o f the
context in which an institution operates before the actual examination begins, and then just
supplement and update that understanding upon arrival at the institution.
The regulations focus on performance-based criteria, not process or documentation.
Institutions are not to be evaluated on how well they ascertain community credit needs, market
and advertise their products, or how actively members o f their boards o f directors participate in
local community organizations or civic groups. Consequently, the paperwork burden long
associated by institutions with these past evaluation factors has been eliminated, as has any
consideration o f these factors from the examination process.
This sets the stage for a more constructive, credible, efficient, and unobtrusive
examination process that concentrates on results. Both the regulations and the examination
procedures promote and establish evaluation methods based on reviewing objective data that
institutions can also use to measure their own performance. This should further minimize burden
since examination results w ill be more understandable, and, over time, more predictable.
Rather than a "one size fits all" examination, separate procedures have been developed for
small and large institutions, as w ell as for those that are wholesale or limited purpose, and those
that are operating under an approved strategic plan. Further, examiners are expected to use
common sense to tailor the examination to mitigate the burden on the institution, such as by
performing some procedures in advance o f the on-site examination. This tailoring allows
examiners to take reasonable steps to reduce burden while ensuring that the examination process
is more understandable for the institution.

Performance Context
An institution's performance under the regulatory assessment criteria is evaluated in the
context o f information about the institution, its community, and its competitors. The examiner
w ill review demographic and economic data about the institution's assessment area(s), and
information about local economic conditions, the institution's major business products and
strategies, and its financial condition, capacity, and ability to lend or invest in its community.

November 13,1995

Often, this review will be facilitated by gathering information from examinations o f other
institutions serving the same or similar assessment areas; reviewing information from other
recent community contacts; and reviewing information about the assessment area developed
cooperatively by the different agencies.
The examiner w ill also review information an institution chooses to provide about
lending, investment, and service opportunities in its assessment area(s). The examiner w ill not,
however, require the institution to create such information, nor will the examiner ask for any
information other than what the institution may already have developed as part o f its normal
business practice. An examiner should not evaluate an institution on its efforts to ascertain
c o m m u n ity credit needs, market its products, geocode its loans, or record CRA-related
discussions in its board minutes nor rate an institution on the quality o f any contextual
information that it may provide.
Role o f Com m unity Contacts
Interviews with local community, civic, or government leaders can help examiners learn
about the community, its economic base, and local community development initiatives. They
can also help examiners understand public perceptions o f how well local institutions are
responding to credit needs. These interviews help provide balance to the examiner’s
understanding o f the performance context. Community contact interviews normally take the
form o f personal meetings, but telephone conversations or larger group meetings may also be
appropriate.
Information from community contacts can provide valuable insights to examiners,
particularly to those who have relatively little experience or familiarity with an institution's
assessment area. Contacts may be made as part o f an examination, or prior to the start o f an
examination, and typically will be conducted by the examiners responsible for the CRA
examination. However, wherever possible, the agencies w ill draw on recent local interviews
conducted by other agency staff, or by other regulatory agencies with CRA responsibilities.
A ssessm ent Area Considerations
Institutions are required to identify one or more assessment areas within which the
agencies will evaluate the institution's performance. In most cases, an institution's assessment
area w ill be the town, municipality, county, some other political subdivision or the M SA in
which its branches are located and a substantial portion o f its loans are made. If an institution
chooses, however, its assessment area need not coincide with the boundaries o f one or more
political subdivisions (e.g., counties, cities, and towns or M SAs), so long as the adjustments to
those boundaries reflect the fact that the institution's assessment area(s) would otherwise be too
large for the institution to serve, have an unusual configuration, or would include significant
geographic barriers. When the assessment area coincides with recognized political subdivisions.

November 13,1995

or has not changed in any way since the previous examination, examiners may not have to
conduct a comprehensive reevaluation o f the assessment area.
When evaluating an institution's performance, the examiner will use the assessment area
designated by an institution provided that it meets regulatory criteria. Only i f the criteria have
not been satisfied w ill the examiner revise the assessment area so that it complies with the
regulations. The revisions will be discussed with institution management, and the revised
assessment area w ill be used to evaluate performance. However, unless the assessment area
reflects illegal discrimination, examiners will not consider problems with the designation o f the
assessment area when assigning a rating to the institution. Consequently, burden associated with
the delineation o f communities and inconsistencies resulting from examiners criticizing
community delineations as being too large at one examination and too small at the next should be
eliminated.

Small Institution Performance Criteria
The effect o f regulatory and examination burden can be more pronounced in small
institutions. Limited financial resources and staffing, and competitive factors often influence the
way that small institutions can meet their responsibilities under CRA. In recognition o f these
factors, the regulations established a streamlined assessment method for small institutions that
significantly reduces examination burden. The regulations contain only five performance
criteria:
1.

the institution's loan to deposit ratio adjusted for seasonal variation and, as appropriate,
other lending related activities such as secondary market participation, community
development loans or qualified investments;

the percentage o f loans and other lending-related activities located in the institution's
assessment area;

the distribution o f lending among borrowers o f different income levels and business and
farms o f different sizes;

the distribution o f lending among geographies o f different income levels; and,

the institution's record o f taking action, if warranted, in response to written complaints
about its CRA performance.

Small institutions are eligible for a rating o f Outstanding, as well as Satisfactory. An
examiner may conclude that an institution's performance so exceeds the standards for a
Satisfactory rating under the five core criteria that it merits a rating o f Outstanding. In addition,
at the institution's option, the examiner w ill consider the institution's performance in making

November 13,1995

qualified investments and in providing services that enhance credit availability in its assessment
area(s) in order to determine whether the institution merits an Outstanding rating.
In carrying out their examination responsibilities, examiners should exercise'common
sense in deciding how much material to review and what steps are necessary to reach an accurate
conclusion. For example, if an institution's assessment area is comprised o f only a few
geographies, a geographic analysis o f loans within the assessment area may be inappropriate or
unnecessary. Or, if an institution has done an analysis to determine where, and to whom, it is
making loans in its assessment area to assist itself in its business efforts, examiners may be able
to validate and then use the institution's analysis rather than conduct a detailed analysis o f their
own. In other words, when evaluating the performance criteria, examiners should always
consider and use available, reliable information.
Similarly, if an institution's loan-to-deposit ratio appears low, the examination procedures
ask the examiner to evaluate the institution's lending-related activities, such as loan sales and
community development lending and investments to determine if they materially supplement its
lending performance as reflected in its loan-to-deposit ratio. However, such an analysis may not
be necessary or a less extensive analysis may be sufficient if the loan-to-deposit ratio is high.

Large Institution Performance Criteria
The large institution performance criteria — the Lending, Investment, and Service Tests - cover all institutions with assets o f $250 million or more and institutions, regardless o f assetsize, owned by holding companies with total bank and thrift assets o f $1 billion or more unless
they requested designation and received approval as wholesale or limited-purpose institutions or
have been approved for evaluation under a strategic plan.
As under the streamlined small institution procedures, examiners are expected to exercise
judgment and common sense to minimize the burden imposed by the examination process,
consistent with a complete and accurate assessment o f performance. Therefore, for example,
examiners may be able to use economic and demographic data analyzed in an examination o f one
institution in examinations o f other institutions serving the same or similar assessment areas.
Community contacts may also be combined to cover more than one institution in a given market.
In cases where an institution has analyzed its CRA performance, examiners may use those
analyses, after verifying their accuracy and reliability, and should supplement those analyses
only where questions are raised. Examiners should consider any performance related
information offered by an institution but should not request information not called for by
examination procedures.
Large institutions do face burdens that small institutions do not, particularly related to
data collection and reporting. However, the existence o f those data in automated form will
permit examiners to conduct much o f the necessary analysis prior to the on-site examination and
thereby reduce any disruptions caused by the presence o f examiners at the institution. As in

November 13,1995

small institutions, examiners must be sensitive to the burden o f the examination process and use
judgment and common sense when conducting examinations, performing only those steps
necessary to arrive at an accurate assessment o f the institution’s performance.

Wholesale/Limited-Purpose Performance Criteria
In order to be evaluated under the community development test, an institution must be
designated as a wholesale or limited-purpose institution following submission o f a written
request to its primary regulator. Once an institution has received a designation, it will not
normally have to reapply for that designation. The designation will remain in effect until the
institution requests that it be revoked or until one year after the agency determines that the
institution no longer satisfies the criteria for designation and notifies the institution o f this
determination.
Wholesale or limited-purpose institutions are evaluated on the basis o f their:
1.

Community development lending, qualified investments, or community development
services;

Use o f innovative or complex qualified investments, community development loans, or
community development services and the extent to which investments are not routinely
provided by private investors; and

Responsiveness to community credit and development needs.

Examiners must be cognizant o f the context within which a wholesale or limited-purpose
institution operates. Examiners should recognize that these institutions may tailor their
community development activities based on their own circumstances and the community
development opportunities available to them in their assessment areas or the broader statewide or
regional areas that include the assessment areas.
Institutions need not engage in all three categories o f community development activities
to be considered satisfactory under the community development test Community development
loans, investments and services can be directed to a statewide or regional market that includes the
institution’s assessment area and still qualify for consideration under the community
development test as benefitting the assessment area. Moreover, if an institution has a satisfactory
community development record in its assessment area, all community development activities
regardless o f their locations should be considered.
As with other performance tests, in applying the community development test, examiners
should perform only those analyses that are necessary to reach an accurate conclusion about the
institution’s performance, use all available, reliable information, and avoid duplication o f effort
to reduce burden.

November 13,1995

Strategic Plans
The regulations permit any institution to develop, and submit for approval by its primary
supervisory agency, a strategic plan for addressing its responsibilities with respect fo CRA. The
regulations require, that the plan be developed in consultation with members of the public and
that it be published for public comment. The plan must contain measurable annual goals. A
single plan can contain goals designed to achieve only a "Satisfactory" rating or, at the
institution's option, can contain goals designed to achieve a "Satisfactory" rating, as well as goals
designed to achieve an "Outstanding" rating.
This approach to addressing an institution's CRA responsibilities presents an opportunity
for a very straightforward examination. The first question an examiner should investigate is
whether the goals were met. If they were, the appropriate rating should be assigned. The
appropriateness of the goals will have already been determined in the process of public comment
and agency review and approval. Consequently, further investigation relating to the context of
the institution should not be necessary. Obviously, if some or all of the plan's goals were not
met, the examiner will be required to evaluate such issues as whether they were substantially met
and in doing so will have to exercise some judgment regarding the degree to which they are
missed and the causes.
However, the examiner should approach an examination of an institution operating under
a plan understanding that part of the purpose for these regulatory provisions was to give the
institution significant latitude in designing a program that is appropriate to its own capabilities,
business strategies and organizational framework as well as to the communities that it serves.
Consequently, the institution may develop plans for a single assessment area that it serves, for
some, but not all, of the assessment areas that it serves, or for all of them. It may develop a plan
that incorporates and coordinates the activities of various affiliates. It will be the examiner’s
challenge to evaluate institutions operating under one plan or a number of plans in a way that
accurately reflects the results achieved and that sensibly wraps that evaluation into the overall
assessment of the institution.
As with other aspects of the CRA examination, the examiner should first make the
greatest use possible of information available from the agencies to evaluate performance under
the plan. However, it is likely that some elements of a plan under review will not be reflected in
public or other agency data. Consequently, the examiner may, of necessity, have to ask the
institution for the data necessaiy to determine whether it has met its goals. The examiner should
do so, to the greatest extent possible, by asking the institution to provide data for review prior to
going on-site for the examination. The examiner should also seek to mitigate burden by,
wherever possible, using data in the form maintained by the institution.

Small Institution CRA Examination Frocaduraa
FFIBC Hovambar 13, 1995

C O M M U N ITY REINVESTM ENT ACT
E XA M IN A TIO N PROCEDURES FOR
SM ALL INSTITUTIONS

Small Institution CRA Examination Procaduraa
FPIEC Hovambar 13, 1955

SM ALL IN S TITU TIO N E XA M IN A TIO N PROCEDURES

E X A M IN A TIO N SCOPE
1.

For institutions with more than one assessment area, select assessment areas for on-site
review. In making those selections, review prior CRA performance evaluations, available
community contact materials, and reported lending data and demographic data on each
assessment area. Consider factors such as:
a.
b.

the lending opportunities in the different assessment areas;
the level of the institution’s lending activity in the different assessment areas,
• particularly low-and moderate-income areas;

the number of other institutions in the different assessment areas and the
importance of the institution under examination in serving the different areas,
particularly any areas with relatively few other providers of financial services;

the existence of apparent anomalies in the reported HMDA data for any particular
assessment area(s);

the length of time since the assessment area(s) was last examined on-site;

the institution’s prior CRA performance in different assessment areas;

the experience of examiners in the same or similar assessment areas; and

comments from the public regarding the institution’s CRA performance.

For interstate institutions, a rating must be assigned for each state where the institution
has a branch and for each multi-state MSA where the institution has branches in two or
more states that comprise that MSA. Select one or more assessment areas in each state
for examination using these procedures.

Small Institution CXA examination Procedures
FFIBC November 13, 1995 __________________

PERFORMANCE CONTEXT
1.

Review standardized worksheets and other agency information sources to obtain
relevant demographic, economic, and loan data, to the extent available, on each
assessment area under review.

Obtain for review the Consolidated Reports of Condition (Call Reports)/Thrift
Financial Reports (TFRs), Uniform Bank/Thrift Performance Reports (UBPR/UTPR),
annual reports, supervisory reports, and prior CRA evaluations of the institution under
examination. Review financial information and the prior CRA evaluations of
institutions of similar size that serve the same or similar assessment area(s).

Consider any information the institution may provide on its local community and
economy, its business strategy, its lending capacity, or that otherwise assists in the
evaluation of the institution.

Review community contact forms prepared by the regulatory agencies to obtain
information that assists in the evaluation of the institution. Contact local community,
governmental, or economic development representatives to update or supplement this
information. Refer to the Community Contact Procedures for more detail.

Review the institution’s public file for any comments received by the institution or the
agency since the last CRA performance evaluation for information that assists in the
evaluation of the institution.

Document the performance context information gathered for use in evaluating the
institution’s performance.
ASSESSMENT AREA

Review the institution's stated assessment area(s) to ensure that it:
a.

consists of one or more MSAs or contiguous political subdivisions (e.g.,
counties, cities, or towns);

includes the geographies where the institution has its main office, branches, and
deposit-taking ATMs, as well as the surrounding geographies in which the
institution originated or purchased a substantial portion of its loans;

Small Institution CXA Examination Procaduraa
FFISC Novambar 1 3 , 19 9 5 _____________________

consists only of whole census tracts and block numbering areas;

consists of separate delineations for areas that extend substantially across CMSA
or state boundaries unless the assessment area is located in a multistate MSA;

does not reflect illegal discrimination; and

does not arbitrarily exclude any low- or moderate-income area(s)f taking into
account the institution’s size, branching structure, and financial condition.

If an institution's assessment area(s) does not coincide with the boundaries of an MSA
or political subdivisions), assess whether the adjustments to the boundaries were made
because the assessment area would otherwise be too large for the institution to
reasonably serve, have an unusual configuration, or include significant geographic
barriers.

If the assessment area(s) fails to comply with the applicable criteria described above,
develop, based on discussions with management, a revised assessment area(s) that
complies with the criteria. Use this assessment area(s) to evaluate the institution’s
performance, but do not otherwise consider the revision in determining the institution’s
rating.
PERFORMANCE C R ITER IA

Loan-to-Deposit Analysis
1.

From data contained in Call Reports, TFRs, or UBPR/UTPRs, calculate the average
loan-to-deposit ratio since the last examination by adding the quarterly loan-to-deposit
ratios and dividing by the number of quarters.

Evaluate whether the institution's average loan-to-deposit ratio is reasonable in light of
information from the performance context including, as applicable, the institution's
capacity to lend, the capacity of other similarly-situated institutions to lend in the
assessment area(s), demographic and economic factors present in the assessment
area(s), and the lending opportunities available in the institution's assessment area(s).

If the loan to deposit ratio does not appear reasonable in light of the performance
context, consider the number and the dollar volume of loans sold to the secondary
market, or the innovativeness or complexity of community development loans and

Small Institution CSA Examination Procaduraa
PFIKC Hovaabar 13, 1995 __________________

qualified investments to assess the extent to which these activities compensate for a low
loan-to-deposit ratio or supplement the institution's lending performance as reflected in
its loan-to-deposit ratio.
4.

Discuss the preliminary findings in this section with management.

Summarize in workpapers conclusions regarding the institution's loan-to-deposit ratio.

Comparison of Credit Extended Inside and Outside of the Assessment Area(s)
1.

If available, review HM DA data, automated loan reports, and any other reports that
may have been generated by the institution to analyze the extent of lending inside and
outside of the assessment area(s). I f a report generated by the institution is used, test
the accuracy of the output.

If loan reports or data analyzing lending inside and outside of the assessment area(s)
are not available or comprehensive, or if their accuracy cannot be verified, use
sampling guidelines to select a sample of loans originated, purchased or committed to
calculate the percentage (by number and dollar volume) located within the assessment
area(s).

If the percentage of loans or other lending related activities in the assessment area is
less than a majority, then the institution does not meet the standards for "Satisfactory"
under this performance criteria. In this case, consider information from the
performance context, such as information about economic conditions, loan demand, the
institution’s size, financial condition, branching network, and business strategies when
determining the effect of not meeting the standards for satisfactory for this criterion on
the overall rating for the institution.

Discuss the preliminary findings in this section with management.

Summarize in workpapers conclusions regarding the institution's level of lending or
other lending related activities inside and outside of its assessment area(s).

Distribution of Credit W ithin the Assessment Area(s)
1.

Determine whether the number and income distribution of geographies in the
assessment area(s) are sufficient for a meaningful analysis of the geographic
distribution of the institution’s loans in its assessment area(s).

Small Institution CRA Examination Procaduras
PFIXC Kovambar 13, 1995_____________________

If a geographic distribution analysis of the institution's loans would be meaningful and
the necessary geographic information (street address or CT/BNA numbers) is collected
by the institution in the ordinary course of its business, determine the distribution of
the institution's loans in its assessment area(s) among low-, moderate-, middle-, and
upper-income geographies. Where possible, use the same loan reports, loan data, or
sample used to compare credit extended inside and outside the assessment area(s).

If a geographic analysis of loans in the assessment area(s) is performed, identify groups
of geographies, by income categories, in which there is little or no loan penetration.
Absence of loans in any particular geography should not be a concern.

To the extent information about borrower income (individuals) or revenues (businesses)
is collected by the institution in the ordinary course of its business, determine the
distribution of loans in the assessment area(s) by borrower income and by business
revenues. Where possible, use the same loan reports, loan data, or sample used to
compare credit extended inside and outside the assessment area(s).

Identify categories of borrowers by income or business revenue for which there is little
or no loan penetration.

If an analysis of the distribution of loans among geographies of different income levels
would not be meaningful (e.g., very few geographies in the assessment area(s)) or an
analysis of lending to borrowers of different income or revenues could not be
performed (e.g., income data are not collected for certain loans), consider possible
proxies to use for analysis of the institution’s distribution of credit. Possibilities
include analyzing geographic distribution by street address rather than geography (if
data are available and the analysis would be meaningful) or analyzing the distribution
by loan size as a proxy for income or revenues of the borrower.

If there are categories of low penetration, form conclusions about the reasons for that
low penetration. Consider available information from the performance context,
including:
a.

information about the institution's size, branch network, financial condition,
supervisory restrictions (if any) and prior CRA record;

information from discussions with management, loan officers, and members of
the community;

Small Institution CRA Examination Procaduraa
FFXBC Kovambar 13, 1995____________________

information about economic conditions, particularly in the assessment area(s);

information about demographic or other characteristics of particular geographies
that could affect loan demand, such as the existence of a prison or college; and

information about other lenders serving the same or similar assessment area(s).

Discuss the preliminary findings in this section with management.

Summarize in workpapers conclusions concerning the geographic distribution of loans
and the distribution of loans by borrower characteristics in the institution's assessment
area(s).

Review of Complaints
1.

Review all complaints relating to the institution's CRA performance received by the
institution (these should all be contained in the institution's public file) and those that
were received by its supervisory agency.

If there were any complaints, evaluate the institution's record of taking action, if
warranted, in response to written complaints about its CRA performance.

If there were any complaints, discuss the preliminary findings in this section with
management.

If there were any complaints, summarize in workpapers conclusions regarding the
institution's record of taking action, if warranted, in response to written complaints
about its CRA performance. Include the total number of complaints and resolutions
with examples that illustrate the nature, responsiveness to, and resolution of, the
complaints.

Investments and Services (at the institution’s option to enhance a “Satisfactory” rating)
1.

If the institution chooses, review its performance in making qualified investments and
providing branches and other services and delivery systems that enhance credit
availability in its assessment area(s). Performance with respect to qualified
investments and services may be used to enhance an institution’s overall rating of
“Satisfactory,” but cannot be used to lower a rating that otherwise would have been
assigned.

Small Institution CRA Examination Procaduraa
__________________
FFXBC Kovambar 13, 1995

To evaluate the institution's performance in making qualified investments that enhance
credit availability in its assessment area(s)( consider:
a.

the dollar volume of qualified investments, by type and location;

the impact of those investments on the institution's assessment area(s); and

the innovativeness or complexity of the investments.

To evaluate the institution's record of providing branches and other services and
delivery systems that enhance credit availability in its assessment area(s), consider:
a.

the number of branches and ATMs located in the institution's assessment
area(s);

the number of branches and ATMs located within, or that are readily accessible
to, low- and moderate-income geographies compared to those located in, or
readily accessible to middle- and upper-income geographies;

the type and level of service(s) offered at branches and ATMs and alternative
delivery systems; and

the institution's record of opening and closing branches.

RATINGS
1.

Group the analyses of the assessment areas examined by MSA and non-MSA areas
within each state where the institution has branches. If an institution has branches in
two or more states of a multi-state MSA, group the assessment areas that are in that
MSA.

Summarize conclusions about the institution's performance in each MSA and the nonMSA portion of each state in which an assessment area was examined using these
procedures. If two or more assessment areas in an MSA or in the non-MSA portion of
a state were examined using these procedures, weigh the different assessment areas
considering such factors as:

the significance of the institution’s activities in each compared to the

Small Institution CRA examination Procaduras
FFIEC Novaabar 13, 1995
_____________ _

institution's overall activities;
b.

the lending opportunities in each;

the importance of the institution in providing loans to eacht particularly in light
of the number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For assessment areas in MS As and non-MSA areas that were not examined using these
procedures, consider facts and data related to the institution's lending to ensure that
performance in those assessment areas is not inconsistent with the conclusions based on
the assessment areas examined on-site.

For institutions operating in only one multi-state MSA or one state, assign one of the
four preliminary ratings - “Satisfactory”, “Outstanding”, “Needs to Improve”, and
“Substantial Noncompliance” - in accordance with step 6 below. To determine the
relative significance of each MSA and non-MSA area to the institution's prelimary
rating, consider:

the significance of the institution’s activities in each compared to the
institution’s overall activities;

the lending opportunities in each;

the importance of the institution in providing loans to each, particularly in light
of the number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For other institutions, assign one of the four preliminary ratings - “Satisfactory,”
“Outstanding,” “Needs to Improve,” and “Substantial Noncompliance” - for each
state in which the institution has at least one branch and for each multi-state MSA in
which the insitution has branches in two or more states in accordance with step #6
below. To determine the relative significance of each MSA and the non-MSA area on
the institution's preliminary state rating, consider:
a.

the significance of the institution’s activities in each compared to the
institution’s overall activities;

Small Institution CRA Examination Procadurra
r n s c Kovambar 13, 1995____________________

the lending opportunities in each;

the importance of the institution in providing loans to each, particularly in light
of the number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

Consult the Small Institution Ratings Matrix and information in workpapers to assign a
preliminary rating of:
a.

“Satisfactory” if the institution's performance meets each of the standards for a
satisfactory rating or if exceptionally strong performance with respect to some
of the standards compensates for weak performance in others;

"Needs to Improve" or "Substantial Noncompliance" if the institution’s
performance fails to meet the standards for "Satisfactory" performance.
Whether a rating is "Needs to Improve" or "Substantial Noncompliance" will
depend upon the degree to which the institution's performance has failed to
meet the standards for a "Satisfactory" rating; or

"Outstanding" if the institution meets the rating descriptions and standards for
“Satisfactory” for each of the five core criteria, and materiaUy exceeds the
standards for Satisfactory” in some or all of the criteria to the extent that an
outstanding rating is warranted, or if the institution's performance with respect
to the five core criteria generally exceeds “Satisfactory” and its performance in
making qualified investments and providing branches and other services and
delivery systems in the assessment area(s) supplement its performance under the
five core criteria sufficiently to warrant an overall rating of “Outstanding.”

For an institution with branches in more than one state or multi-state MSA, assign a
preliminary rating to the institution as a whole taking into account the institution's
record in different states or multi-state MSAs by considering:

the significance of the institution's activities in each compared to the
institution’s overall activities;

the lending opportunities in each;

Small Institution CRA Ixamlnation Procadursa
FFXSC Nov«ab«r 13, 1995_______________ '

the importance of the institution in providing loans to each, particularly in light
of the number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

Review the'results of the fair lending component of the most recent compliance
examination and determine whether the findings should lower the institution’s overall
CRA rating or, if applicable, its CRA rating in any state or multi-state MSA. If
evidence of discrimination was uncovered, consider:
a.

the the nature and extent of the evidence;

the policies and procedures that the institution has in place to prevent
discriminatory or other illegal credit practices;

any corrective action the institution took or committed to take, particularly
voluntary corrective action resulting from a self-assessment conducted prior to
the examination; and

other relevant information, such as the institution's past fair lending
performance.

Assign a final rating for the institution as a whole and, if applicable, each state in
which the institution has at least one branch and each multi-state MSA in which it has
branches in two or more states, considering:
a.

the institution’s preliminary rating; and

the results of the fair lending component of its compliance examination.

10.

Discuss conclusions with management.

11.

Write an evaluation of the institution’s performance for the examination report and the
public evaluation.

12.

Prepare recommendations for a supervisory strategy and for matters that require
attention or follow-up activities.

Small In* ti tut ion CRA Examination Procadura*
FFZEC Novambar 13, 1995_____________________

PUBLIC F IL E CHECKLIST
1.

There is no need to review each branch or each complete public file during every
examination. In determining the extent to which the institution’s public files should be
reviewed, consider the institution’s record of compliance with the public file
requirements in previous examinations, its branching structure and changes to it since its
last examination, complaints about the institution’s compliance with the public file
requirements, and any other relevant information.

In any review of the public file undertaken, determine, as needed, whether branches
display an accurate public notice in their lobbies, a complete public file is available in the
institution's main office and at least one branch in each state, and the public file available
in the main office and in a branch in each state contains:
a.

all written comments from the public relating to the institution's CRA
performance and responses to them for the current and preceding two calendar
years (except those that reflect adversely on the good name or reputation of any
persons other than the institution);

the institution's most recent CRA Public Performance Evaluation;

a map of each assessment area showing its boundaries and, on the map or in a
separate list, the geographies contained within the assessment area;

a list of the institution's branches, branches opened and closed during the
current and each of the prior two calendar years, and their street addresses and
geographies;

the HM DA Disclosure Statement for the prior two calendar years, if applicable;

the institution's loan-to-deposit ratio for each quarter of the prior calendar year;

a quarterly report of the institution's efforts to improve its record if it received a
less than satisfactory rating during its most recent CRA examination; and

a list of services Goan and deposit products and transaction fees generally
offered, and hours of operation at the institution's branches), including a
description of any material differences in the availability or cost of services
among locations.

Small institution CKA Examination Procaduraa
FFXEC Hovambar 13, 1995
________________

In any branch review undertaken, determine whether the branch provides the most
recent public evaluation and a list of services available at the branch or a description of
material differences from the services generally available at the institution's other
branches.

CRA RATIN G S M A TR IX - SM A LL IN STITU TIO N S

C H A R A C T E R IS T IC

O U T S T A N D IN G

S A T IS F A C T O R Y

N E E D S TO IM P R O V E

S U B S T A N T IA L N O N C O M P L IA N C E

L oan-to-deposit ratio

The loan-to-deposit ratio is m ore than
reasonable (considering seasonal
variations an d taking into account
len din g related activities) given the
in stitu tion ’s size, fin an cial condition,
a n d assessm ent area credit needs.

The loan-to-deposit ratio is
reasonable (considering season al
variations an d taking into
accou n t lending related
activities) given the institu tion’s
size, fin a n cia l condition, an d
assessm ent area credit needs.

The loan-to-deposit ratio is less
than reasonable (considering
season al variations a n d takin g into
accou nt lending rela ted activities)
given the institu tion’s size,
fin a n c ia l condition, a n d assessm ent
area credit needs.

The loan-to-deposit ratio is reason able (considering
season al variations an d takin g into account lending
related activities) given the institu tion’s size,
fin a n cia l condition, a n d assessm ent area credit
needs. ,

A ssessm en t area(s)
concentration

A substantial m ajority o f loans and
o th er lending related activities are in
the in stitu tion ’s assessm ent area(s).

A m ajority o f loans an d oth er
lending related activities are in
the in stitu tion ’s assessm ent
area(s).

A m ajority o f loans a n d oth er
lending related activities are outside
the institu tion’s assessm en t area(s).

A substantial m ajority o f loans a n d oth er lending
related activities are outside th e institution’s
assessm en t area(s).

G eograph ic distribution o f
loans

The geographic distribution o f loans
reflects excellent dispersion throughout
the assessm en t area(s).

The geographic distribution o f
loans reflects reasonable
dispersion throughout the
assessm en t area(s).

The geographic distribution o f
loans reflects p o o r dispersion
throughout the assessm en t area(s).

The geograph ic distribution o f loans reflects very
p o o r dispersion throughout th e assessm ent area(s).

B o rro w er’s p ro file

The distribution o f borrowers reflects,
given the dem ographics o f the
assessm en t area(s), excellent
pen etration am ong individuals o f
d ifferen t incom e levels (including lowa n d m oderate-incom e) an d businesses
o f d ifferen t sizes.

The distribution o f borrow ers
reflects, given the dem ographics
o f the assessm ent area(s),
reason able penetration am ong
individuals o f differen t incom e
levels (including low - an d
m oderate-incom e) an d businesses
o f differen t sizes.

The distribution o f borrow ers
reflects, given the dem ographics o f
the assessm ent area(s), p o o r
penetration am ong individuals o f
differen t incom e levels (including
low - a n d m oderate-incom e) a n d
businesses o f d ifferen t sizes.

The distribution o f borrow ers reflects, given the
dem ographics o f the assessm en t area(s), very p o o r
penetration am ong individuals o f differen t incom e
levels (including low - a n d m oderate-incom e) and
businesses o f d ifferen t sizes.

R esponse to su bstantiated
com plaints

The institution has taken noteworthy,
creative action in response to
su bstantiated com plaints about its
p erform an ce in m eeting assessm ent
a rea credit needs.

The institution has taken
appropriate action in respon se to
su bstantiated com plaints abou t
its perform an ce in m eeting
assessm en t area credit needs.

The institution h a s taken
inadequate action in response to
su bstantiated com plaints abou t its
perform an ce in m eetin g assessm en t
area credit needs.

The institution is unresponsive to substantiated
com plaints a b o u t its perfo rm a n ce in m eeting
assessm ent area credit needs.

Investm ents

The in stitu tion ’s investm ent record
enhan ces credit availability in its
assessm en t area.

N /A

C H A R A C T E R IS T IC

O U T S T A N D IN G

S A T IS F A C T O R Y

N E E D S T O IM P R O V E

S U B S T A N T IA L N O N C O M P L IA N C E

Services

The in stitu tion ’s record o f providin g
branches, A T M s, loan production
offices, a n d /o r o th er services and
delivery system s enhances credit
availability in its assessm ent area(s).

N/A

N /A

S m a ll Institution Performance Evaluation
FFIEC November 13, 1995

SAMPLE SMALL INSTITUTION EVALUATIO N*

PUBLIC DISCLOSURE
(Date o f Evaluation)

COMMUNITY REINVESTMENT ACT
PERFORMANCE EVALUATION

Name of Depository Institution
Institution’s Identification Number
Address of Institution

Name of Supervisory Agency
Address of Supervisory Agency

NOTE:

This evaluation is not, nor should it be construed as, an assessment of the
financial condition of this institution. The rating assigned to this institution
does not represent an analysis, conclusion or opinion of the federal financial
supervisory agency concerning the safety and soundness of this financial
institution.

*This is a sample created for an institution operating in one assessment area and in one state.
It should be adjusted, as appropriate, to reflect the institution’s operations. Refer to the
Instructions for Writing Public Evaluations for further guidance.

Small Institution Performance Evaluation'
FFIEC November 13, 1995

IN S TIT U TIO N ’S CRA RATING : This institution is rated________________ .
Write a one or two sentence summary explaining the major factors supporting the institution’s
rating. When illegal discrimination or discouragement has been identified, the conclusion should
include a statement that the rating was influenced by violations of the substantive provisions of
the antidiscrimination laws. The conclusion should not mention any technical violations of the
antidiscrimination laws.

Small Institution Performance Evaluation
FFIEC November 13, 1995

The follow ing table indicates the perform ance level o f name o f financial institution with respect
to each o f the fiv e perform ance criteria. [Indicate the performance level under each criteria by

marking an "X" in the appropriate column. If the institution received no complaints since the
prior examination, do not "X" a column, instead type over all three boxes "No complaints were
received since the prior examination."]

SM ALL
INSTITUTION
ASSESSM ENT
CRITERIA

(NAM E OF FINAN CIAL INSTITUTIONS
PERFORM ANCE LEVELS

Exceeds
Standards
for
Satisfactory
Perform ance

M eets
Standards
for
Satisfactory
Perform ance

Loan to D eposit
Ratio

Lending in
Assessm ent
Area

Lending to
Borrowers o f
Different
Incomes and to
businesses o f
Different sizes

Geographic
Distribution o f
Loans

Response to
Complaints

D oes not
m eet
Standards
for
Satisfactory
Perform ance

Small Institution Performance Evaluation
FFIEC November 13, 1995

DESCRIPTION OF IN S TITU TIO N
In one or two paragraphs describe the institution’s ability to meet various credit needs based on
its financial condition and size, product offerings, prior performance, legal impediments and
other factors. Information that may be important includes relationships with a holding company
and its affiliates, tbtal assets, asset/loan portfolio mix, primary business focus, branching
network, and any merger or acquisition activity.
DESCRIPTION OF (Name o f A S S E S S M E N T A R E A )
In one or two paragraphs describe the assessment area(s) under review by including appropriate
information (and any trends) on the population, median income, employment including major
employers, and community credit needs and business opportunities identified through outreach
activities. Include, as appropriate, a discussion of the number and kinds of CRA-related
community contacts that were consulted and relevant information obtained and used, if any, in
the CRA evaluation.
CONCLUSIONS W IT H RESPECT TO PERFORMANCE C R ITER IA :
Discuss the institution’s CRA performance. The facts, data and analysis that were used to form
a conclusion about the rating should be reflected in the narrative, including institution strengths
and areas for improvement. The narrative should clearly demonstrate how the performance
criteria were analyzed in order to rate the institution. In addition to the information provided
on the core criteria, the performance evaluation should include information on qualified
investments and the provision of services when they are considered in the examination process.
Write a paragraph about the institution’s record of complying with the antidiscrimination laws
(ECOA, FHA, or HMDA) using the following guidelines.

When substantive violations involving illegal discrimination or discouragement have been
found, state that substantive violations were found, whether they caused the CRA rating
to be adjusted downward, and why the rating was or was not adjusted. Identify the
law(s) and regulations^) violated, the extent of the violation(s) (e.g., widespread, or
limited to a particular office, division, or subsidiary) and characterize management’s
responsiveness in acting upon the issue(s). Mention whether the institution has policies,
procedures, training programs, internal assessment efforts, or other practices in place to
prevent discriminatory or other illegal credit practices. State whether management has
taken, or commited to take, corrective action particularly with respect to voluntary
corrective action resulting from self-assessment(s).
If no substantive violations were found, state that no violations of the substantive
provisions of the antidiscrimination laws and regulations were identified. Even if
3

Small Institution Performance Evaluation
FFIEC November 13, 1995

discrimination has not been found, comments related to the institution’s fair lending
policies, procedures, training programs and internal assessment efforts may still be
appropriate. If applicable, technical violations cited in the report of examination should
be presented in general terms.

L arge Institution E lim in ation Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

C O M M U N ITY REINVESTM ENT ACT
E XA M IN A TIO N PROCEDURES
FOR

LARGE R E TA IL INSTITUTIO NS

Large Institution Examination Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

E X A M IN A TIO N PROCEDURES FOR LARGE R E TA IL IN STITU TIO N S

E X A M IN A TIO N SCOPE
1.

For institutions with more than one assessment area, select assessment areas for on-site
examination. To select one or more assessment areas for an on-site examination,
review prior performance evaluations, available community contact materials, reported
lending data and demographic data on each assessment area and consider factors such
as:
a.

the lending, investment, and service opportunities in the different assessment
areas, both urban and rural;

the lending, investment, and service activity in the different assessment areas;

the length of time since the assessment area(s) was most recently reviewed on
site;

' d.

the existence of apparent anomalies in the reported HM DA or CRA data for any
particular assessment area;

the institution’s prior CRA performance in different assessment areas;

the number of other institutions in the assessment areas and the importance of
the institution under examination in addressing credit needs in the different
assessment areas, particularly in areas with a limited number of financial service
providers;

the experience of examiners in the same or similar assessment areas; and

comments from the public regarding the institution’s CRA performance.

For interstate institutions, a rating must be assigned for each state where the institution
has a branch and for each multi-state MSA where the institution has branches in two or
more of the states that comprise the multi-state MSA. Select one or more assessment
areas in each state for examination using these procedures.

L arge Institution Examination Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

PERFORMANCE CONTEXT
1.

Review standardized worksheets and other agency information sources to obtain
relevant demographic, economic, and loan data, to the extent available, on each
assessment area under review. Compare the data to similar data for the MSA, county,
or state to determine how any similarities or differences will help in evaluating lending,
investment, and service opportunities and community and economic conditions in the
assessment area. Also consider whether the area has housing costs that are particularly
high given area median income.

Obtain for review the Consolidated Reports of Condition (Call Reports)/Thrift
Financial Reports (TFRs), annual reports, supervisory reports, and prior CRA
evaluations of the institution under examination to help understand the institution's
ability and capacity, including any limitations imposed by size, financial condition, or
statutory, regulatory, economic or other constraints, to respond to safe and sound
opportunities in the assessment area(s) for lending, investing, or providing services.

Consider any information the institution may provide on its local community and
economy, its business strategy, its lending capacity or that otherwise assists in the
evaluation of the institution.

Review the institution's public file and any comments received by the institution or the
agency since the last CRA performance evaluation for information that assists in the
evaluation of the institution.

By reviewing public evaluations and other financial data, determine whether any
similarly situated institutions (in terms of size, financial condition, product offerings,
and business strategy) serve the same or similar assessment area(s) and would provide
relevant and accurate information for evaluating the institution's CRA performance.
Consider, for example, whether the information could help identify:

lending opportunities available in the institution's assessment area(s) that are
compatible with the institution's business strategy and consistent with safe and

Large Institution Examination Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

sound banking practices;

constraints affecting the opportunities to make safe and sound loans, and
qualified investments compatible with the institution's business strategy in the
assessment area(s); and

successful CRA-related product offerings or activities utilized by other lenders
serving the same or similar assessment area(s).

Document the performance context information gathered for use in evaluating the
institution's performance.

ASSESSMENT AREA
1.

Review the institution’s stated assessment area(s) to ensure that it:
a.

consists of one or more MS As or contiguous political subdivisions (i.e.,
counties, cities, or towns);

consists only of whole census tracts and block numbering areas;

consists of separate delineations for areas that extend substantially across CMSA
or state boundaries unless the assessment area is in a multi-state MSA;

does not reflect illegal discrimination; and

does not arbitrarily exclude any low- or moderate-income area(s) taking into
account the institution's size and financial condition.

I f the assessment area(s) does not coincide with the boundaries of an MSA or political
subdivisions), assess whether the adjustments to the boundaries were made because the
assessment area would otherwise be too large for the institution to reasonably serve,
have an unusual configuration, or include significant geographic barriers.

L arge Institution Examination Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

I f the assessment area(s) fails to comply with the applicable criteria described above,
develop, based on discussions with management, a revised assessment area(s) that
complies with the criteria. Use this assessment area(s) to evaluate the institution’s
performance, but do not otherwise consider this fact in arriving at the institution’s
rating.

LENDING , IN VESTM ENT, AND SERVICE TESTS FOR
LARGE R E TA IL IN STITU TIO N S
Lending Test
1.

Identify the institution's loans to be evaluated by reviewing:
a.

the most recent HM D A and CRA Disclosure Statements, the interim HM DA
LAR, and any interim CRA loan data collected by the institution;

a sample of consumer loans if consumer lending represents a substantial
majority of the institution's business so that an accurate conclusion concerning
the institution's lending record could not be reached without a review of
consumer loans; and

any other information the institution chooses to provide, such as small business
loans secured by non-farm residential real estate, home equity loans not
reported for HM DA, unfunded commitments, any information on loans
outstanding, and loan distribution analyses conducted by or for the institution,
including any explanations for identified concerns or actions taken to address
them.

Test a sample of loan files to verify the accuracy of data collected and/or reported by
the institution. In addition, ensure that:
a.

affiliate loans reported by the institution are not also attributed to the lending
record of another affiliate subject to CRA. This can be accomplished by
requesting the institution to identify how loans are attributed and how it ensures
that all the loans within a given lending category (e.g., small business loans,
home purchase loans, motor vehicle, credit card, home equity, other secured,
and other unsecured loans) in a particular assessment area are reported for all of
the institution's affiliates if the institution elects to count any affiliate loans;

Large Institution Examination Procedures
F F IE C November 13 ,1 9 9 5 _______________

loans reported as community development loans (including those originated or
purchased by consortia or third parties) meet the definition of community
development loans. Determine whether community development loans benefit
the institution's assessment area(s) or a broader statewide or regional area that
includes the institution's assessment area(s). Except for multi-family loans,
ensure that community development loans have not also been reported by the
institution or an affiliate as HM D A, small business or farm, or consumer loans.
Review records provided to the institution by consortia or third parties or
affiliates to ensure that the amount of the institution’s third party or consortia or
affiliate lending does not account for more than the institution's percentage
share (based on the level of its participation or investment) of the total loans
originated by the consortia, third parties, or affiliates; and

all consumer loans in a particular loan category have been included when the
institution collects and maintains the data for one or more loan categories and
has elected to have the information evaluated.

Identify the volume, both in dollars and number, of each type of loan being evaluated
that the institution has made or purchased within its assessment area. Evaluate the
institution's lending volume considering the institution's resources and business
strategy and other information from the performance context, such as population,
income, housing, and business data. Note whether the institution conducts certain
lending activities in the institution and other activities in an affiliate in a way that could
inappropriately influence an evaluation of borrower or geographic distribution.

Review any analyses prepared by or for and offered by the institution for insight into
the reasonableness of the institution's geographic distribution of lending. Test the
accuracy of the data and determine if the analyses are reasonable. If areas of low or no
penetration were identified, review explanations and determine whether action was
taken to address disparities, if appropriate.

Supplement with an independent analysis of geographic distribution as necessary. As
applicable, determine the extent to which the institution is serving geographies in each
income category and whether there are conspicuous gaps unexplained by the
performance context. Conclusions should recognize that institutions are not required to
lend in every geography. The analysis should consider:
a.

(excluding affiliate lending) the number, dollar volume, and percentage of the
institution's loans located within any of its assessment areas, as well as the

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number, dollar volume, and percentage of the institution's loans located outside
any of its assessment areas;

the number, dollar volume, and percentage of each type of loan in the
institution's portfolio in each geography, and in each category of geography
flow-,' moderate-, middle-, and upper-income);

the number of geographies penetrated in each income category, as determined in
step (b), and the total number of geographies in each income category within the
assessment area(s);

the number and dollar volume of its home purchase, home refinancing, and
home improvement loans, respectively in each geography compared to the
number of one-to-four family owner-occupied units in each geography;

the number and dollar volume of multi-family loans in each geography
compared to the number of multi-family structures in each geography;

the number and dollar volume of small business and farm loans in each
geography compared to the number of small businesses/farms in each
geography; and

whether any gaps exist in lending activity for each income category, by
identifying groups of contiguous geographies that have no loans or those with
low penetration relative to the other geographies.

If there are groups of contiguous geographies within the institution's assessment area
with abnormally low penetration, the examiner may determine if an analysis of the
institution's performance compared to other lenders for home mortgage loans (using
reported HM DA data) and for small businesses and small farm loans (using data
provided by lenders subject to CRA) would provide an insight into the institution's
lack of performance in those areas. This analysis is not required, but may provide
insight if:
a.

the reported loan category is substantially related to the institution's business
strategies;

the area under analysis substantially overlaps the institution's assessment
area(s);

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the analysis includes a sufficient number and volume of transactions, and an
adequate number of lenders with assessment area(s) substantially overlapping
the institution's assessment area(s); and

the assessment area data is free from anomalies that can cause distortions such
as dominant lenders that are not subject to the CRA, a lender that dominates a
part of an area used in calculating the overall lending, or there is an
extraordinarily high level of performance, in the aggregate, by lenders in the
institution's assessment area(s).

Using the analysis from step #6, form a conclusion as to whether the institution's
abnormally low penetration in certain areas should constitute a negative consideration
under the geographic distribution performance criteria of the lending test by
considering:
a.

the institution's share of reported loans made in low- and moderate-income
geographies versus its share of reported loans made in middle- and upperincome geographies within the assessment area(s);

the number of lenders with assessment area(s) substantially overlapping the
institution's assessment area(s);

the reasons for penetration of these areas by other lenders, if any, and the lack
of penetration by the institution being examined developed through discussions
with management and the community contact process;

the institution's ability to serve the subject area in light of (i) the demographic
characteristics, economic condition, credit opportunities and demand; and (ii)
the institution's business strategy and its capacity and constraints;

the degree to which penetration by the institution in the subject area in a
different reported loan category compensates for the relative lack of penetration
in the subject area; and

the degree to which penetration by the institution in other low- and moderateincome geographies within the assessment area(s) in reported loan categories
compensates for the relative lack of penetration in the subject area.

Review any analyses prepared by or for and offered by the institution for insight into

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the reasonableness of the institution's distribution of lending by borrower
characteristics. Test the accuracy of the data and determine if the analyses are
reasonable. If areas of low or no penetration were identified, review explanations and
determine whether action was taken to address disparities, if appropriate.
9.

10.

Supplement with an independent analysis of the distribution of the institution’s lending
within the assessment area by borrower characteristics as necessary and applicable.
Consider factors such as:
a.

the number, dollar volume, and percentage of the institution’s total home
mortgage loans and consumer loans, if included in the evaluation, to low-,
moderate-, middle-, and upper-income borrowers;

the percentage of the institution’s total home mortgage loans and consumer
loans, if included in the evaluation, to low-, moderate-, middle-, and upperincome borrowers compared to the percentage of the population within the
assessment area who are low-, moderate-, middle-, and upper-income;

the number and dollar volume of small loans originated to businesses or farms
by loan size of less than $100,000; at least $100,000 but less than $250,000;
and at least $250,000 but less than or equal to $1,000,000;

the number and amount of the small loans to businesses or farms that had
annual revenues of less than $1 million compared to the total reported number
and amount of small loans to businesses or farms; and

if the institution adequately serves borrowers within the assessment area(s),
whether the distribution of the institution's lending outside of the assessment
area based on borrower characteristics would enhance the assessment of the
institution's overall performance.

Review data on the number and amount of the institution’s community development
loans. Using information obtained in the performance context procedures, especially
with regard to community credit needs and institutional capacity, evaluate the extent,
innovativeness, and complexity of community development lending to determine: •
a.

the extent to which community development lending opportunities have been
available to the institution;

Large Institution Examination Procedures
F F IE C November 1 3 ,1 9 9 5 _______________

11.

the responsiveness of the institution's community development lending; and

the extent of leadership the institution has demonstrated in community
development lending.

Evaluate whether the institution’s performance under the lending test is enhanced by
offering innovative loan products or products with more flexible terms to meet the
credit needs of low- and moderate-income individuals or geographies. Consider:
a.

the degree to which the loans serve low- and moderate-income creditworthy
borrowers in new ways or loans serve groups of creditworthy borrowers not
previously served by the institution; and

the success of each product, including number and dollar volume of loans
originated during the review period.

12.

Discuss with management the preliminary findings in this section.

13.

Summarize your conclusions regarding the institution's lending performance under the
following criteria:

14.

lending activity;

geographic distribution;

borrower characteristics;

community development lending; and

use of innovative or flexible lending practices.

Prepare comments for the public evaluation and the examination report.

Investment Test
1.

Identify qualified investments by reviewing the institution's investment portfolio, and at
the institution's option, its affiliate's investment portfolio. As necessary, obtain a
prospectus, or other information that describes the investments). This review should

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encompass qualified investments that were made since the previous examination
(including those that have been sold or have matured) and may consider qualified
investments made prior to the previous examination still outstanding. Also consider
qualifying grants, donations, or in-kind contributions of property since the last
examination that are for community development purposes.
2.

Evaluate investment performance by determining:
a.

whether the investments benefit the institution's assessment area(s) or a broader
statewide or regional geographic area that includes the institution's assessment
area(s);

whether the investments have been considered under the lending and service
tests;

whether an affiliate's investments, if considered, have been claimed by another
institution;

the dollar volume of investments made to entities that are in or serve the
assessment area, in relation to the institution's capacity and constraints, and
assessment area characteristics and needs;

the use of any innovative or complex investments, in particular those that are
not routinely provided by other investors; and

the degree to which investments serve low- and moderate-income areas or
individuals and are responsive to available opportunities for qualified
investments.

Discuss with management the preliminary findings in this section.

Summarize conclusions about the institution's investment performance after
considering:

the number and dollar amount of qualified investments;

innovativeness and complexity of qualified investments;

degree to which these types of investments not routinely provided by other

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private investors; and
d.
5.

responsiveness of qualified investments to available opportunities. .

Write comments for the public evaluation and the examination report.

Service Test
Retail Banking Services
1.

Determine from information available in the institution's Public File:
a.

the distribution of the institution's branches among low-, moderate-, middle-,
and upper-income geographies in the institution's assessment area(s); and

banking services, including hours of operation and available loan and deposit
products.

Obtain the institution's explanation for any material differences in the hours of
operations of, or services available at, branches within low-, moderate-, middle-, and
upper-income geographies in the institution's assessment area(s).

Evaluate the institution's record of opening and closing branch offices since the
previous examination and information that could indicate whether changes have had a
positive or negative effect, particularly on low- and moderate-income geographies or
individuals.

Evaluate the accessibility and use of alternative systems for delivering retail banking
services, (e.g., proprietary and non-proprietary ATMs, loan production offices (LPOs),
banking by telephone or computer, and bank-at-work or by-mail programs) in low- and
moderate-income geographies and to low- and moderate-income individuals.

Assess the quantity, quality and accessibility of the institution's service-delivery
systems provided in low-, moderate-, middle-, and upper-income geographies.
Consider the degree to which services are tailored to the convenience and needs of each
geography (e.g., extended business hours, including weekends, evenings or by
appointment, providing bi-lingual services in specific geographies, etc.).

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Community Development_Seryices
6.

Identify the institution's community development services, including at the institution's
option, services through affiliates, through discussions with management and a review
of materials available from the public. Determine whether the services:

qualify under the definition of community development services;

benefit the assessment area(s) or a broader statewide or regional area
encompassing the institution's assessment area(s); and

if provided by affiliates of the institution, are not claimed by other affiliated
institutions.

Evaluate in light of information gathered through the performance context procedures:
a.

the extent of community development services offered and used;

their innovativeness, including whether they serve low- or moderate-income
customers in new ways or serve groups of customers not previously served; and

the degree to which they serve low- or moderate-income areas or individuals
and their responsiveness to available opportunities for community development
services.

Discuss with management the preliminary findings.

Summarize conclusions about the institution's system for delivering retail banking and
community development services, considering:

the distribution of branches among low-, moderate-, middle-, and upper-income
geographies;

the institution's record of opening and closing branches, particularly branches
located in low- or moderate-income geographies or primarily serving low- or
moderate-income individuals;

the availability and effectiveness of alternative systems for delivering retail

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hanking services;

10.

the extent to which the institution provides community development services;

the innovativeness and responsiveness of community development services; and

the range and accessibility of services provided in low-, moderate-, middle-,
and upper-income geographies.

Write comments for the public evaluation and the examination report.

RATINGS
1.

Summarize conclusions regarding the institution's performance in each MSA and nonMSA portion of each state in which an assessment area was examined using these
procedures. I f two or more assessment areas in the MSA or the non-MSA portion of a
state was examined using these procedures, determine the relative significance of the
institution's performance in each assessment area by considering:

the significance of the institution’s lending, qualified investments, and lendingrelated services in each compared to the institution’s overall activities;

the lending, investment, and service opportunities in each;

the significance of the institution’s lending, qualified investments, and lendingrelated services for each, particularly in light of the number of other institutions
and the extent of their activities in each; and

demographic and economic conditions in each.

For assessment areas in MSAs and non-MSA areas that were not examined using these
procedures, consider facts and data related to the institution's lending, investment, and
service activities to ensure that performance in those assessment areas is not

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inconsistent with the conclusions based on the assessment areas examined in Step 2,
above.
4.

To determine the relative significance of each MSA and non-MSA area to the
institution's overall performance (institutions operating in one state) or state-wide or
multi-state MSA performance (institutions operating in more that one state), consider:
a.

the significance of the institution’s lending, qualified investments, and lendingrelated services in each compared to the institution’s overall activities;

the lending, investment, and service opportunities in each;

demographic and economic conditions in each.

Using the Component Test Ratings chart, below, assign component ratings that reflect
the institution’s lending, investment, and service performance. In the case of an
institution with branches in just one state, one set of component ratings will be assigned
to the institution. In the case of an institution with branches in two or more states and
multi-state MS As, component ratings will assigned be for each state or multi-state
MSA reviewed.
Component Test Ratings

Lending

Investment. Service

Outstanding
High Satisfactory
Low Satisfactory
Needs to Improve
Substantial Noncompliance

12 points
9 points
6 points
3 points
0 points

6 points
4 points
3 points
1 point
0 points

Assign a preliminary composite rating for the institutions operating in only one state
and a preliminary rating for each state or multi-state MSA reviewed for institutions
operating in more than one state. In assigning the rating, sum the numerical values of
the component test ratings for the lending, investment and service tests and refer to the
chart, below. However, no institution may receive an assigned rating of “Satisfactory”
or higher unless it receives a rating of at least “Low Satisfactory” on the lending test.

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In addition, an institution’s assigned rating can be no more than three times the score
on the lending test.
Composite Rating
Outstanding%
Satisfactory
Needs to Improve
Substantial Noncompliance

20 points or over
11 through 19 points
5 through 10 points
0 through 4 points

Consider an institution's past performance if the prior rating was "Needs to
Improve." If the poor performance has continued, an institution could be
considered for a "Substantial Noncompliance" rating.

For institutions with branches in more than one state or multi-state MSA, assign a
preliminary overall rating. To determine the relative importance of each state and
multistate MSA to the institution's overall rating, consider:

the significance of the institution’s lending, qualified investments, and lendingrelated services in each compared to the institution’s overall activities;

the lending, investment, and service opportunities in each;

demographic and economic conditions in each.

Review the results of the fair lending component of the compliance examination and
determine whether the findings should lower the institution's preliminary overall CRA
rating, or the preliminary CRA rating for a state or multi-state MSA. If evidence of
discrimination was uncovered, consider the following:
a.

the nature and extent of the evidence;

the policies and procedures that the institution has in place to prevent
discriminatory or other illegal credit practices;

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any corrective action the institution took or committed to take, particularly
voluntary corrective action resulting from a self-assessment conducted prior to
the examination; and

other relevant information, such as the institution's past fair lending
performance.

10.

Assign final overall rating to the institution and discuss conclusions with management.

11.

Write comments for the public evaluation and examination report.

12.

Prepare recommendations for supervisory strategy and matters that require attention for
follow-up activities.

PUBLIC FILE CHECKLIST
1.

There is no need to review each branch or each complete public file during every
examination. In determining the extent to which the institution's public files will be
' reviewed, consider the institution’s record of compliance with the public file
requirements in previous examinations; its branching structure and changes to it since
its last examination; complaints about the institution’s compliance with the public file
requirements, and any other relevant information.

In any review of the public file undertaken, determine, as needed, whether branches
display an accurate public notice in their lobbies and the file(s) in the main office and
in each state contains:

the institution's most recent CRA Public Performance Evaluation;

a map of each assessment area showing its boundaries, and on the map or in a
separate list, the geographies contained within the assessment area;

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a list of the institution's branches, branches opened and closed during the
current and each of the prior two calendar years, and their street addresses and
geographies;

a list of services Goan and deposit products and transaction fees generally
offered, and hours of operation at the institution’s branches), including a
description of any material differences in the availability or cost of services
between these locations;

the institution’s CRA disclosure statements for the prior two calendar years;

a quarterly report of the institution's efforts to improve its record if it received a
less than satisfactory rating during its most recent CRA examination;

the HMD A Disclosure Statement for the prior two calendar years for the
institution and for each non-depository affiliate the institution has elected to
include in assessment of its CRA record, if applicable; and

if applicable, the number and amount of consumer loans made to the four
income categories of borrowers and geographies Gow, moderate, middle and
upper), and the number and amount located inside and outside of the assessment
area(s).

In any branch review undertaken, determine whether the branch provides the most
recent public evaluation and a list of services generally available at its branches and a
description of any material differences in availability or cost of services at the branch
(or a list of services available at the branch).

L E N D IN G T E S T M A TR IX
C H A R A C TE R ISTIC

O UTSTANDING

H IG H SA TISF A C TO R Y

L O W SA TISF A C TO R Y

N EED S TO
IM PRO VE

Lending Activity

Lending levels reflect
excellent responsiveness to
assessment area credit
needs.

Lending levels reflect good
responsiveness to
assessment area credit
needs.

Lending levels reflect
adequate responsiveness to
assessment area credit
needs.

Lending levels reflect Lending levels reflect very poor
poor responsiveness
responsiveness to assessment
to assessment area
area credit needs.
credit needs.
,

Assessm ent area(s)
concentration.

A substantial majority o f
loans are made in the
institution’s assessment
area(s).

A high percentage o f loans
are made in the
institutions *assessments
area(s).

A n adequate percentage o f
loans are made in the
institution ’s assessment
area(s).

A small percentage
o f loans are made in
the institution ’s
assessments area(s).

A very small percentage o f
loans are made in the
institutions assessment area(s).

Geographic
distributions o f
loans.

The geographic
distribution o f loans
reflects excellent
penetration throughout the
assessm ent area(s).

The geographic
distribution o f loans
reflects good penetration
throughout the assessment
area(s).

The geographic distribution
o f loans reflects adequate
penetration throughout the
assessment area(s).

The geographic
distribution o f loans
reflects poor
penetration
throughout the
assessment area(s),
particularly to lowo r moderate-income
geographies in the
assessment area(s).

The geographic distribution o f
loans reflects very poor
penetration throughout the
assessment area(s), particularly
to low- or moderate-income
geographies in the assessment
area(s).

Borrowers *profile

The distribution o f
borrowers reflects, given
the product lines offered
by the institution, excellent
penetration among retail
customers o f different
income levels and business
customers o f different size.

The distribution o f
borrowers reflects, given
the product lines offered
by the institution, good
penetration am ong retail
customers o f different
income levels and business
customers o f different
size.

The distribution o f
borrowers reflects, given the
product lines offered by the
institution, adequate
penetration am ong retail
customers o f different
income levels and business
customers o f different size.

The distribution o f
borrowers reflects,
given the product
lines offered by the
institution, poor
penetration among
retail customers o f
different income
levels and business
customers o f
different size.

The distribution o f borrowers
reflects, given the product lines
offered by the institution, very
p o o r penetration among retail
customers o f different income
levels a n d business customers
o f different size.

S U B ST A N T IA L NONCO M PLIANCE

The institution exhibits an
excellent record o f serving
the credit needs o f the
m ost economically
disadvantaged area(s) o f its
assessm ent area(s), lowincome individuals, and/or
very sm all businesses,
consistent with safe and
sound banking practices.

The institution exhibits an
good record o f serving the
credit needs o f the most
economically
disadvantaged area(s) o f its
assessment area(s), lowincome individuals, and/or
very small businesses,
consistent with safe and
sound banking practices.

The institution exhibits
adequate record o f serving
the credit needs o f the most
economically disadvantaged
area(s) o f its assessment
area(s), low-income
individuals, and/or very
small businesses, consistent
with safe and sound
banking practices.

The institution
exhibits an poor
record o f serving the
credit needs o f the
most economically
disadvantaged
area(s) o f its
assessment area(s),
low-income
individuals, and/or
very small
businesses,
consistent with safe
and sound banking
practices.

Community
development lending
activities

The institution is a leader
in m aking community
development loans.

The institution has made a
relatively high level o f
community development
loans.

The institution has made an
adequate level o f
community development
loans.

The institution has
made a low level o f
community
development loans.

The institution has made few ,
i f any, community development
loans.

Product Innovation

The institution makes
extensive use o f innovative
and/or flexible lending
practices in order to serve
assessm ent area credit
needs.

The institution uses
innovative and/or flexible
lending practices in order
to serve assessment area
credit needs.

The institution makes
limited use o f innovative
and/or flexible lending
practices in order to serve
assessment area credit
needs.

The institution
m akes little use o f
innovative and/or
flexible lending
practices in order to
serve assessment
area credit needs.

The institution m akes no use o f
innovative and/or flexible
lending practices in order to
serve assessment area credit
needs.

Responsiveness to
credit needs o f
highly economically
disadvantaged
geographies and lowincome persons,
small business

The institution exhibits a very
poor record o f serving the
credit needs o f the m ost
economically disadvantaged
area o f its assessm ent area(s),
low-income individuals, and/or
very small businesses,
■consistent with safe and sound
banking practices.

IN V E ST M E N T

M A TR IX

C H A R A C TE R ISTIC

OUTSTANDING

H IG H
SATISFACTO RY

L O W SA TISF A C TO R Y

N E E D S TO IM PRO VE

SU B STA N TIA L NO NCOM PLIANCE

Investm ent and
G rant Activity

The institution has
an excellent level o f
qualified community
development
investment and
grants, often in a
leadership position,
particularly those
that are not routinely
provided by private
investors.

The institution has a
significant level o f
qualified community
development
investments and
grants, occasionally in
a leadership position,
particularly those that
are not routinely
provided by private
investors.

The institution has an
adequate level o f
qualified community
development
investments and grants,
although rarely in a
leadership position,
particularly those that
are not routinely
provided by private
investors.

The institution has a
poor level o f qualified
community
development
investments and grants,
but not in a leadership
position, particularly
those that are not
routinely provided by
private investors.

The institution has a few ,
i f any, qualified
community development
investments or grants,
particularly those that are
not routinely provided by
private investors.

Responsiveness to
Credit and
Community
Development Needs

The institution
exhibits excellent
responsiveness to
credit and
community economic
development needs.

The institution
exhibits good
responsiveness to
credit and community
economic development
needs.

The institution exhibits
adequate
responsiveness to credit
and community
economic development
needs.

The institution exhibits
poor responsiveness to
credit and community
economic development
needs.

The institution exhibits
very poor responsiveness to
credit and community
economic development
needs.

Community
Development
Initiatives

The institution
m akes extensive use
o f innovative and/or
com plex investments
to support
community
development
initiatives.

The institution makes
significant use o f
innovative and/or
complex investments
to support community
development
initiatives.

The institution
occasionally uses
innovative and/or
complex investments to
support community
development initiatives.

The institution rarely
uses innovative and/or
complex investments to
support community
development initiatives.

The institution does not
use innovative and/or
complex investments to
support community
development initiatives.

S E R V IC E T E S T M A TR IX
C H A R A C T E R IS T IC

O U T S T A N D IN G

H IG H S A T IS F A C T O R Y

L O W S A T IS F A C T O R Y

N E E D S T O IM P R O V E

S U B S T A N T IA L N O N C O M P L IA N C E
D e liv e ry s y s te m s a r e in a c c e s s ib le to

A c c e s s ib ility o f

D e liv e r y s y s te m s a r e

D e liv e ry s y s te m s a re

D e liv e ry sy s te m s a r e

D e liv e ry s y s te m s a re

D e liv e ry s y s te m s

re a d ily a c c e s s ib le to a ll

a c c e s sib le to e sse n tia lly all

re a s o n a b ly a c c e s s ib le to

a c c e s s ib le to lim ite d

sig n ific a n t p o rtio n s o f th e a ss e s s m e n t

p o r tio n s o f th e

p o rtio n s o f th e in stitu tio n ’s

e s s e n tia lly all p o rtio n s o f

p o rtio n s o f th e in s titu tio n ’s

a r e a ( s ) , p a rtic u la rly lo w - a n d

in s titu tio n ’s a s s e s s m e n t

a sse ss m e n t a re a (s ).

th e in stitu tio n s a sse ss m e n t

a ssessm en t a rea (s).

m o d e ra te -in c o m e g e o g ra p h ie s a n d /o r
lo w - a n d m o d e ra te -in c o m e

a re a (s ).

a re a (s).

in d iv id u a ls .
T o th e e x te n t c h a n g e s h a v e b e e n

C h a n g e s in B ra n c h

T o th e e x te n t c h a n g e s

T o th e e x te n t c h a n g e s h a v e

T o th e e x te n t c h a n g e s

T o th e e x te n t c h a n g e s h a v e

L o c a tio n s

h a v e b e e n m a d e , th e

b e en m a d e , th e in stitu tio n ’s

h a v e b e e n m a d e , th e

b e e n m a d e , th e in s titu tio n ’s

m a d e , th e in s titu tio n ’s o p e n in g a n d

in s titu tio n ’s re c o r d o f

o p e n in g a n d c lo s in g o f

in s titu tio n ’s o p e n in g a n d .

r e c o r d o f o p e n in g a n d

c lo s in g o f b ra n c h e s h a s s ig n ific a n tly

o p e n in g a n d c lo s in g

b ra n c h e s h a s n ot a d v e rse ly

c lo s in g o f b ra n c h e s h a s

c lo s in g b ra n c h e s h a s

a d v e rs e ly a ffe c te d th e a c c e s s ib ility o f

b r a n c h e s h a s im p ro v e d

a ffe c te d th e a c c e s sib ility o f

g e n e ra lly n o t a d v e rs e ly

a d v e rs e ly a ffe c te d th e

its d e liv e ry s y s te m s , p a r tic u la r ly in

th e a c c e s s ib ility o f its

its d e liv e ry sy s te m s,

a ffe c te d th e a c c e s s ib ility

a c c e s s ib ility o f its d e liv e ry

lo w - a n d m o d e ra te -in c o m e

d e liv e ry s y s te m s ,

p a rtic u la rly in lo w - and

o f its d e liv e ry sy s te m s ,

s y s te m s , p a r tic u la r ly in lo w -

g e o g ra p h ie s a n d /o r to lo w - a n d

p a r tic u la r ly in lo w - a n d

m o d e ra te - in co m e

p a rtic u la rly in lo w -a n d

a n d m o d e ra te -in c o m e

m o d e ra te -in c o m e in d iv id u a ls .

m o d e r a te - in c o m e

g e o g ra p h ie s a n d /o r to lo w -

m o d e ra te -in c o m e

g e o g ra p h ie s a n d /o r to lo w -

g e o g r a p h ie s a n d /o r to

an d m o d e ra te -in c o m e

g e o g ra p h ie s a n d /o r to

a n d m o d e ra te -in c o m e

lo w - a n d m o d e ra te -

in d iv id u a ls .

lo w - a n d m o d e ra te -

in d iv id u a ls .

in c o m e in d iv id u a ls .

in c o m e in d iv id u a ls .
R e a s o n a b le n e s s o f

S e r v ic e s (in c lu d in g

S e rv ic e s (in c lu d in g , w h e re

S e rv ic e s (in c lu d in g ,

S e rv ic e s (in c lu d in g , w h e re

S e r v ic e s (in c lu d in g , w h e re

b u s in e s s h o u r s a n d

w h e r e a p p r o p ria te ,

a p p ro p ria te , b u sin e ss h o u rs )

w h e re a p p r o p ria te ,

a p p r o p ria te , b u s in e s s h o u rs )

a p p r o p ria te , b u s in e s s h o u rs ) v a ry in a

s e r v ic e s in m e e tin g

b u s in e s s h o u r s ) a r e

d o n ot v a ry in a w ay th a t

b u s in e s s h o u rs ) d o n o t

v a ry in a w a y th a t

w a y th a t sig n ific a n tly in c o n v e n ie n c e s

asse ssm e n t a re a (s)

ta ilo r e d to th e

in c o n v e n ie n c e s c e rta in

v a ry in a w a y th a t

in c o n v e n ie n c e s c e r ta in

m a n y p o rtio n s o f th e a ss e s s m e n t

needs

c o n v e n ie n c e a n d n e e d s

p o rtio n s o f th e a sse ss m e n t

in c o n v e n ie n c e s p o rtio n s

p o rtio n s o f th e a s s e s s m e n t

a r e a ( s ) , p a r tic u la r ly lo w - a n d

o f th e a s s e s s m e n t

a re a (s ), p a rtic u la rly lo w -

o f th e a s s e s s m e n t a r e a ( s ) ,

a r e a ( s ) , p a r tic u la r ly lo w -

m o d e ra te -in c o m e g e o g ra p h ie s a n d /o r

a r e a ( s ) , p a r tic u la r ly

a n d m o d e ra te -in c o m e

p a r tic u la r ly lo w - a n d

a n d m o d e ra te -in c o m e

in d iv id u a ls .

lo w - a n d m o d e ra te -

g e o g ra p h ie s a n d /o r

m o d e ra te -in c o m e

g e o g ra p h ie s a n d /o r

in c o m e g e o g ra p h ie s

in d iv id u a ls .

g e o g ra p h ie s a n d /o r

in d iv id u a ls .

a n d /o r in d iv id u a ls .

in d iv id u a ls.

C o m m u n ity

T h e in s titu tio n is a

T h e in stitu tio n p ro v id e s a

T h e in stitu tio n p ro v id e s

T h e in stitu tio n p r o v id e s a

T h e in stitu tio n p ro v id e s fe w , i f a n y ,

d e v e lo p m e n t s e r v ic e s

le a d e r in p r o v id in g

re la tiv e ly h ig h lev e l o f

a n a d e q u a te le v e l o f

lim ite d lev e l o f c o m m u n ity

c o m m u n ity d e v e lo p m e n t s e rv ic e s .

c o m m u n ity

c o m m u n ity d e v e lo p m e n t

d e v e lo p m e n t s e rv ic e s .

d e v e lo p m e n t s e r v ic e s .

s e rv ic e s .

Large Institution Performance Evaluation
FFIEC November 13, 1995

SAMPLE LARGE INSTITUTION EVALUATION

PUBLIC DISCLOSURE
(Date of Evaluation)

COMMUNITY REINVESTMENT ACT
PERFORMANCE EVALUATION

Name of Depository Institution
Institution’s Identification Number
Address of Institution

Name of Supervisory Agency
Address of Supervisory Agency

NOTE:

Large Institution Performance Evaluation
FFIEC November 13, 1995

TABLE OF CONTENTS*

General Information.............................................................................................. 1

II.

Institution Rating
a.
b.
c.

III.

Multistate MSA Rating........................................................................................... 5
a.
b.

IV .

Overall Rating................................................................................................2
Lending, Investment, Service Test Table..................................................... 3
Discussion...................................................................................................... 4

Discussion of assessment areas within Multistate MSA examined
using the examination procedures
Facts and data for Multistate MSA assessment areas not examined
using the examination procedures

State Rating.............................................................................................................. 6
a.

MSA Analysis
i.
Conclusions...................................................................................... 7
ii.
Discussion of assessment areas within MSA examined using the
the examination procedures
iii.
Facts and data for MSA not examined using the examination
procedures

Non-MSA Analysis
i.
Conclusions..................................................................................... 7
ii.
Discussions of non-MSA assessment areas examined using the
examination procedures
iii.
Facts and data for non-MSA not examined using the examination
procedures

Appendix
a.
Scope of Examination..............................................................................10
b.
Summary of State and Multistate MSA Ratings................................
12

This table of contents is a sample for a large, multistate institution, and should be
adjusted, as appropriate, to reflect the scope of the institution’s operations. Refer to the
Instructions for Writing Public Evaluations for further guidance.

r s F Institution Performance Evaluation
FFIEC November 13, 1995

GENERAL INFORMATION
The Community Reinvestment Act (CRA) requires each fed era l financial supervisory agency to
use its authority when examining financial institutions subject to its supervision, to assess the
institution’s reco rd o f m eeting the credit needs o f its entire community, including low - and
moderate-income neighborhoods, consistent with safe and sound operation o f the institution.
Upon conclusion o f such examination, the agency must p rep a re a written evaluation o f the
institution’s record o f m eeting the credit needs o f its community.
This document is an evaluation o f the Community Reinvestment A ct (CRA) perform ance o f (N am e
o f depository institution) p repared by (Name o f agency), the institution’s supervisory agency,
as o f (date o f exam ination). The agency evaluates perform ance in assessment area(s), as they
a re delineated by the institution, rather than individual branches.
This assessment area
evaluation may include the visits to some, but not necessarily all o f the institution’s branches.
The agency rates the CRA perform ance o f an institution consistent with the provisions set forth
in Appendix A to 12 CFR Part xxx.

Large Institution Performance Evaluation
FFIEC November 13, 1995

INSTITUTION
IN STITU TIO N ’S CRA R A TIN G : This institution is rated_______________ .

Large institution Performance Evaluation
FFIEC November 13, 1995

The follow ing table indicates the perform ance level o f name o f financial institution with
respect to the lending, investment, and service tests. [Indicate the performance level under

each criteria by marking an "X" in the appropriate row,]______________________
NAME OF FINANCIAL INSTITUTION)
PERFORMANCE
LEVELS
PERFORMANCE TESTS

Lending
Test*

Investment
Test

Service Test

Outstanding

High Satisfactory

Low Satisfactory

Needs to Improve

Substantial
Noncompliance

* Note:

The lending test is weighted more heavily than the investment and service tests
when arriving at an overall rating.

E F i r Institution Performance Evaluation
FFIEC November 13, 1995

DESCRIPTION OF IN STITU TIO N :
Write a brief description of the institution. Include relevant information regarding the
institution’s holding company and affiliates, if any, the states and assessment areas served,
the institution’s ability to meet various credit needs based on its financial condition and size,
product offerings, prior performance, legal impediments and other factors. Other
information that may be important includes total assets, asset/loan portfolio mix, primary
business focus, branching network, and any merger or acquisition activity.
CONCLUSIONS W IT H RESPECT TO PERFORMANCE TESTS:
Discuss the institution’s overall CRA performance. The facts, data and analyses that were
used to form a conclusion about the rating should be reflected in the narrative, including
institution strengths and areas for improvement. The narrative should clearly demonstrate
how the results of each of the performance test analyses and relevant information from the
performance context factored into the overall institution rating. Charts and tables should be
used whenever possible to summarize and effectively present the most critical or informative
data used by the examiner in analyzing the institution’s performance and reaching
conclusions.
Write a paragraph about the institution’s record of complying with the antidiscrimination
laws (ECOA, FHA, or HMDA) using the following guidelines.

When substantive violations involving illegal discrimination or discouragement are
found by the [Agency] or identified through self-assessment(s), state that substantive
violations were found, whether they caused the CRA rating to be adjusted downward,
and why the rating was or was not adjusted. Identify the law(s) and regulations(s)
violated, the extent of the violation(s) (e.g., widespread, or limited to a particular
state, office, division, or subsidiary) and characterize management’s responsiveness in
acting upon the violation(s). Determine whether the institution has policies,
procedures, training programs, internal assessment efforts, or other practices in place
to prevent discriminatory or other illegal credit practices.
If no substantive violations were found, state that no violations of the substantive
provisions of the antidiscrimination laws and regulations were identified. Even if
discrimination has not been found, comments related to the institution’s fair lending
policies, procedures, training programs and internal assessment efforts may still be
appropriate. If applicable, technical violations cited in the report of examination
should be presented in general terms.

Large institution Performance Evaluation
FFIEC November 13, 1995

MULTISTATE MSA
CRA R A TIN G FO R (Name o f M U L T IST A T E M S A ):____________________
The L en d in g Test is rated:____________ The Investm ent Test is rated:____________
The Service Test is rated:______________
[ I f the institution has branches in two o r m ore states within a multistate M SA, com plete this
section fo r each multistate M SA .]

Summarize the major factors supporting the institution’s multistate MSA rating. When
illegal discrimination or discouragement has been identified and has affected the rating, the
conclusion should include a statement that the rating was influenced by violations of the
substantive provisions of the antidiscrimination laws. The conclusion should not mention any
technical violations of the antidiscrimination laws.
DESCRIPTION OF IN S TITU TIO N ’S OPERATIONS IN ( N a m e o f M U L T IST A T E
M S A ):

Describe the institution’s operations within the multistate MSA and the assessment area(s)
that it serves. Information that may be important includes: total assets; asset/loan portfolio
mix; primary business focus; branching network; any merger or acquisition activity; and a
brief description of the assessment areas within the multi-state MSA.
CONCLUSIONS W IT H RESPECT TO PERFORMANCE TESTS IN (N am e o f
M U L T IST A T E M S A ):

Discuss the institution’s CRA performance within the multistate MSA. The facts, data and
analyses that were used to form a conclusion about the rating should be reflected in the
narrative, including institution strengths and areas for improvement. The narrative should
clearly demonstrate how the results of each of the performance test analyses, as well as the
institution’s record in assessment areas not examined on-site (located in the multistate MSA),
factored into the rating.. Charts and tables should be used whenever possible to summarize
and effectively present the most critical or informative data used by the examiner in
analyzing the institution’s performance and reaching conclusions.
If the institution’s assessment area(s) are smaller than the boundaries of the multistate MSA,
a discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Large Institution Performance Evaluation
FFIEC November 13, 1995

STATE
CRA R A TIN G FO R (N am e o f S T A T E ): ___________________
T he L en d in g Test is rated:____________ The Investm ent Test is rated:____________
The Service Test is rated:______________
P ft h e institution has branches in m ore than one state, com plete this section fo r each state.
Otherwise, com plete the M etropolitan Statistical A rea and Non-M etropolitan Statistical A rea
presentations only, as applicable.]

Summarize the major factors supporting the institution’s state rating. When illegal
discrimination or discouragement has been identified and has affected the rating, the
conclusion should include a statement that the rating was influenced by violations of the
substantive provisions of the antidiscrimination laws. The conclusion should not mention any
technical violations of the antidiscrimination laws.
DESCRIPTIO N OF IN S TIT U TIO N ’S OPERATIONS IN ( N am e o f S T A T E ):
Describe the institution’s operations within the state and the assessment area(s) that it serves.
Information that may be important includes: total statewide assets; asset/loan portfolio mix;
primary business focus; branching network; any merger or acquisition activity; and a brief
description of the assessment areas within the state.
CONCLUSIONS W IT H RESPECT TO PERFORMANCE TESTS IN (N am e o f S T A T E ):
Discuss the institution’s CRA performance within the state. The facts, data and analyses that
were used to form a conclusion about the rating should be reflected in the narrative,
including institution strengths and areas for improvement. The narrative should clearly
demonstrate how the results of each of the performance test analyses factored into the rating.
Charts and tables should be used whenever possible to summarize and effectively present the
most critical or informative data used by the examiner in analyzing the institution’s
performance and reaching conclusions.

Large Institution Performance Evaluation
FFIEC November 13, 1995

METROPOLITAN STATISTICAL AREAS
CONCLUSIONS W IT H RESPECT TO PERFORMANCE TESTS IN ( Name o f M S A ):
Discuss the institution’s CRA performance within the metropolitan statistical area. The facts,
data and analyses that were used to form a conclusion should be reflected in the narrative,
including institution strengths and areas for improvement. The narrative should clearly
demonstrate how the results of each of the performance test analyses, as well as the
institution’s record in assessment areas not examined on-site (located in the MSA), factored
into the MSA conclusion. Charts and tables should be used whenever possible to summarize
and effectively present the most critical or informative data used by the examiner in
analyzing the institution’s performance and reaching conclusions.
If the institutions assessment area(s) are smaller than the boundaries of the MSA, a
discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

NON-METROPOLITAN STATEWIDE AREAS
CONCLUSIONS W IT H RESPECT TO PERFORMANCE TESTS IN (N am e o f NONM ETR O PO LITA N STA TEW ID E A R E A ):

Discuss the institution’s CRA performance within the non-metropolitan statewide area. The
facts, data and analyses that were used to form a conclusion should be reflected in the
narrative, including institution strengths and areas for improvement. The narrative should
clearly demonstrate how the results of each of the performance test analyses, as well as the
institution’s record in assessment areas not examined on-site (located in the non-metropolitan
statewide area), factored into the conclusion for the non-metropolitan statewide area. Charts
and tables should be used whenever possible to summarize and effectively present the most
critical or informative data used by the examiner in analyzing the institution’s performance
and reaching conclusions.
A discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Large Institution Performance Evaluation
FFIEC November 13,1995

ASSESSMENT AREA
(for each assessment area exam ined using the examination procedures)

Charts or tables may be useful in depicting information throughout the assessment area
presentation.
SUM M ARY OF IN S TIT U TIO N ’S OPERATIONS IN (N am e o f A S S E S S M E N T A R E A ):
Summarize the institution’s operations in the assessment area (such as the number of
branches including the number in low- and moderate-income geographies, lending
portfolio and asset mix, etc.).
DESCRIPTIO N OF (N am e o f A S S E S S M E N T A R E A ):
Describe the assessment area (including demographic information such as population
trends, income levels, type and condition of housing stock, employment information, and
general business activity). Also include a summary of any credit needs identified and
particular lending opportunities which were noted. Discuss, if appropriate, the number
and kinds of CRA-related community contacts that were consulted and relevant
information obtained and used, if any, in the CRA evaluation.
DISCUSSION OF PERFORMANCE TESTS IN (N am e o f A S S E S S M E N T A R E A ):
Summarize the institution’s CRA performance in the assessment area and include
supporting facts and data, such as the number and volume of loans and investments, by
type, across geographies and borrower categories. The narrative should demonstrate how
each of the performance criteria under the lending, investment and service tests, and
relevant information from the performance context, factored into the analysis.

ta r g e Institution Performance Evaluation
FFIEC November 13, 1995

ASSESSMENT AREA (or AREA REVIEWED)
F o r those assessment areas w here an examination was not conducted using the
examination pro ced u res: (multiple assessment areas within the sam e multistate MSA,
MSA, o r non-metropolitan statewide area and not exam ined on-site, may b e com bined into
one presentation.)

Charts or tables may be useful in depicting information throughout the presentation.

SUM M ARY OF IN S TITU TIO N ’S OPERATIONS IN (N am e o f A S S E S S M E N T
A R EA /A R EA R E V IE W E D ):

Summarize the institution’s operation in the area reviewed (number of branches, number
of branches in low- and moderate-income geographies, lending portfolio mix, etc.).
DESCRIPTION OF (N am e o f A S S E S S M E N T A R EA /A R EA R E V IE W E D ):
Describe the area reviewed (including population, income levels, type and condition of
housing stock, employment information, and general business activity).
DISCUSSION OF PERFORMANCE IN (N am e o f A S S E S S M E N T A R EA /A R EA
R E V IE W E D ):

Summarize the facts and data that were reviewed and indicate whether the institution’s
performance in the area reviewed is consistent with the institution’s record in the
multistate MSA, MSA, or non-metropolitan statewide area.

Large institution Performance Evaluation
FFIEC November 13, 1995

APPENDIX A

SCOPE OF E XA M IN A TIO N
Write a short description of the scope of the examination. At a minimum, discuss the
specific lending products reviewed, the names of (any) affiliates reviewed and their
corresponding lending products, the institution’s assessment areas and whether its
activities in the assessment areas were reviewed using the examination procedures, and the
time period covered in the review.
Large institutions with multiple assessment areas or affiliates subject to examination may
warrant the use of charts that convey information regarding the scope of the examination.
The chart contained in the appendix, may be used as a supplement to the discussion of the
scope or in lieu thereof.
S C O P E O F E X A M IN A T IO N

[SAMPLE]

[N ote: E xam ple provided for clarity]

T IM E P E R IO D R E V IE W E D

1/1/95 TO 6/30/96

FIN A N C IA L IN STIT U T IO N

PR O D U C TS
R EV IEW ED

X Y Z State Bank, Grand R apids, M I
Sm all Business
Sm all F arm
C onsum er
U nsecured

A F F IL IA T E D )

A F FIL IA T E
R E LA TIO N SH IP

PR O D U C TS
R EV IEW ED

Large institution Performance Evaluation
FFIEC November 13,1995

X Y Z M ortgage Com pany

Bank subsidiary

M ortgage loans

X Y Z C om m unity Investm ent
C orporation

H olding com pany
subsidiary

Investm ents

X Y Z C redit C ard C orporation

H olding com pany
subsidiary

C redit C ards

L IS T O F A SSESSM EN T AREAS AN D T Y P E O F E X A M IN A TIO N

A SSE SSM E N T A R EA

TY PE OF
E X A M IN A TIO N

BRAN CHES
V ISITED

ILLIN O IS
M S A 0008 D ecatur

O n - site

A dam s County

Off-site

N on-M SA rural Illinois

O n - site

M ortgage loans not
offered in nonM SA rural areas.

M IC H IG A N

M S A 0001 G rand R apids

On - site

City o l M arcellus

On - site

N on-M SA rural M ichigan

O ff - site

OTHER
IN FO R M A TIO N

T he scope o f
exam ination for
non-M SA rural
M ichigan branches,
encom passes
activities for the
past six m onths,
coinciding with
their acquisition
date.

Large Institution Performance Evaluation
FFIEC November 13, 1995

APPENDIX B
SUMMARY OF STATE AND MULTISTATE MSA RATINGS
State or
Multistate
MSA Name

Lending Test
Rating

Investment
Test
Rating

Service Test
Rating

Overall State
Rating

Wholesale and I JmHxi Purpose Institution Procedures
FFTEC Norember 1 3 ,1 9 9 5 ____________________________

C O M M U N ITY REINVESTM ENT ACT
E X A M IN A TIO N PROCEDURES
FOR

L IM IT E D PURPOSE AND W HOLESALE IN STITU TIO N S

Wholesale a n d P u r p o s e Instthirton Procedures
PF1KC November 1 3 .1 9 9 5

COMMUNITY DEVELOPMENT TEST PROCEDURES
FOR WHOLESALE AND LIMITED PURPOSE INSTITUTIONS

EXAMINATION SCOPE
1.

For institutions with more than one assessment area, select assessment areas for
examination on-site. To select one or more assessment areas for an on-site
examination, review prior performance evaluations, available community contact
materials, reported lending data and demographic data on each assessment area and
consider factors such as:
a.

the lending, investment, and service activity in the different assessment areas,
particularly community development activities;

the lending, investment, and service opportunities available in the different
assessment areas, particularly community development opportunities;

the length of time since the assessment area(s) was most recently reviewed on
site;

the institution’s prior CRA performance in different assessment areas;

the number of other institutions in the assessment areas and the importance of
the institution under examination in addressing community development needs
in the different assessment areas, particularly in areas with a limited number of
financial service providers;

the existence of apparent anomalies in the reported HM DA data for any
particular assessment area;

the experience of examiners in the same or similar assessment areas; and

comments from the public regarding the institution’s CRA performance.

For interstate institutions, a rating must be assigned for each state where the institution
has a branch and for each multi-state MSA where the institution has branches in two or
more of the states that comprise the multi-state MSA. Select one or more assessment
areas in each state for examination using these procedures.

Wholesale and nmM«H Purpose Institution Procedures

FFffiC Worenber 13.1995

PERFORMANCE CONTEXT
1.

Consider any information the institution may provide on its local community and
economy and its community development lending, investment, and service capacity or
that otherwise assists in the evaluation of the institution's community development
activities.

Review community contact forms prepared by the regulatory agencies to obtain
information that assists in the evaluation of the institution's community development
activities. Contact local community, government, or economic development
representatives to update or supplement information about community development
activities in the assessment area(s) or the broader statewide or regional areas of which
the assessment area(s) is a part.

Identify barriers, if any, to participation by the institution in local community
development activities. For example, evaluate the institution's ability and capacity to
help meet the community development needs of its assessment area(s) through a review
of die uniform bank/thrift performance report ("UBPR/UTPR"), the consolidated
report of condition/Thrift Financial Report ("Call Report/TFR"), annual reports,
supervisory reports, prior CRA performance evaluations, and financial information for
other wholesale/limited purpose institutions serving approximately the same assessment
area(s).

Document the performance context information gathered for use in evaluating the
institution's CRA record.

Wholesale and Limited Purpose Institution Procedures
F F IE C November 13 ,1995 ___________________________

ASSESSMENT AREA

Review the institution’s stated assessment area(s) to ensure that it:
a.

consists of one or more MSAs or contiguous political subdivisions (i.e.,
counties, cities, or towns) where the institution has its main office, branches,
and deposit-taking ATMs;

consists only of whole census tracts and block numbering areas;

consists of separate delineations for areas that extend substantially across CMSA
or state boundaries unless the assessment area is located in a multistate MSA;

does not reflect illegal discrimination; and

does not arbitrarily exclude any low- or moderate-income area(s) taking into
account the institution's size and financial condition.

If the assessment area(s) does not coincide with the boundaries of an MSA or political
subdivision(s), assess whether the adjustments to the boundaries were made because the
assessment area would otherwise be too large for the institution to reasonably serve,
have an unusual configuration, or include significant geographic barriers.

If the assessment area(s) fails to comply with the applicable criteria described above,
develop, based on discussions with management, a revised assessment area(s) that
complies with the criteria. Use this assessment area(s) to evaluate the institution's
performance, but do not otherwise consider the revision in determining the institution's
rating.
C O M M U N ITY DEVELOPM ENT TEST

Identify the number and amount of the institution's community development loans
(originations and purchases of loans and any other data the institution chooses to
provide), qualified investments, and community development services. Obtain this
information through discussions with management, a review of the CRA Disclosure
Statements and the HMDA-LAR, as applicable; any interim CRA disclosure data or
HM D A data, collected by the institution, as applicable; investment portfolios; any
other relevant financial records; and materials available to the public. Include, at the

Wholesale and lim ited Purpose Institution Procedures
F F IE C November 13 ,1995 ___________________________

institution's option:
a.

qualified investments, community development loans and community
development services provided by affiliates, if they are not claimed by any other
institution; and

community development lending by consortia or third parties.

Test a sample of community development loan files to verify that they qualify as
community development loans;

If the institution participates in community development lending by consortia or third
parties, or claims activites provided by affiliates, review records provided to the
institution by the consortia or third parties or affiliates to ensure that the community
development loans claimed by the institution do not account for more than the
institution's share (based on the level of its participation or investment) of the total
loans originated by the consortium or third party.

Considering the institution's capacity and constraints and other information obtained
through the performance context review, form conclusions about:

the extent, by number and volume, of community development loans, services,
and qualified investments;

the degree of innovation in community development activities (e.g., serving
low- or moderate-income borrowers in new ways or serving groups of
creditworthy borrowers not previously served by the institution);

the complexity of those community development activities, such as the use of
enhancements or other features specifically designed to expand community
development lending;

the responsiveness to the opportunities for community development lending,
qualified investments, and community development services; and

the degree to which the institution's qualified investments serve needs not
routinely provided by other private investors.

Summarize conclusions regarding the institution's community development
performance and retain in the work papers.

Wholesale and Limited Purpote Institution Procedures
F F IE C N oran b cr 1 3 , 1 995 ____________________________

RATINGS
1.

Review the analyses of the institution's performance in each assessment area examined,
considering only those community development activities that benefit the assessment
area(s) and the broader statewide or regional area(s) that include the assessment area(s).

Group the analyses of the assessment areas examined by MSA and non-MSA areas
within each state where the institution has branches. I f an institution has branches in
two or more states of a multi-state MSA, group the assessment areas in that MSA.

Summarize conclusions about the institution's performance in each MSA and the nonMSA portion of each state in which an assessment area was examined using these
procedures. I f two or more assessment areas in an MSA or in the non-MSA portion of
a state were examined using these procedures, determine the relative significance of the
institution's performance in each assessment area by considering:
a.

the significance of the institution’s activities in each compared to the
institution's overall activities;

the community development opportunities in each;

the significance of the institution’s activities for each, particularly in light of the
number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For assessment areas in MSAs and non-MSA areas that were not examined, consider
facts and data related to the institution's community development lending, investment,
and service activities to ensure that performance in those areas is not inconsistent with
the conclusions based on the assessment areas examined.

Assign a preliminary rating for an institution with operations in one state only using the
Community Development Ratings Matrix. For an institution with operations in more
than one state or multi-state MSA, assign a preliminary rating for each state using the
Community Development Ratings Matrix. To determine the relative significance of
each MSA and non-MSA area to the institution's overall rating (institutions operating
in only one state) or state-wide or multi-state MSA rating (institutions operating in
more that one state), consider:

Wholesale and Limited Purpose Institution Procedures
F F IE C November 1 3 , 1 9 9 S _________________________________________________________________________________________________________

the significance of the institution’s activities in each compared to the
institution’s overall activities;

the community development opportunities in each;

the significance of the institution’s activities for each, particularly in light of the
number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For institutions with operations in more than one state or multi-state MSA, assign a
preliminary rating for the institutions as a whole. To determine the relative
significance of each state or multi-state MSA consider:
a.

the significance of the institution’s activities in each compared to the
institution’s overall activities;

the community development opportunities in each;

the significance of the institution’s activities for each, particularly in light of the
number of other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

If the institution is adequately meeting the community development needs of each of its
assessment area(s), consider those community development activities, if any, that
benefit areas outside of the assessment area(s) or a broader statewide or regional area
that includes the assessment area(s). Determine whether those activities enhance the
preliminary rating. If so, adjust the rating(s) accordingly.

Consider an institution’s past performance if the prior rating was “Needs to Improve.*’
If the poor performance has continued, an institution could be considered for a
“Substantial Noncompliance*’ rating.

Review the results of the fair lending component of the compliance examination and
determine whether the findings should lower, in the case of an institution with
operations in just one state, the institution's preliminary composite rating. In the case
of an institution with operations in more than one state or in multistate MSAs,
determine whether the findings should lower any of the preliminary state ratings or the
preliminary composite rating. In considering the impact of evidence of discrimination

Wholesale and lim ited Purpose Institution Procedures
FFIEC Norember 13,1995_____________________________________________________________________________________________

on a state or composite rating, consider the following:
a.

the nature and extent of the evidence;

the policies and procedures that the institution has in place to prevent
discriminatory or other illegal credit practices;

any corrective action the institution took or committed to take, particularly
voluntary corrective action resulting from a self-assessment conducted prior to
the examination; and

other relevant information, such as the institution's past fair lending
performance.

10.

Assign a final composite rating to the institution and discuss conclusions with
management.

11.

Write comments for the public evaluation and examination report.

12.

Prepare recommendations for supervisory strategy and matters that require attention for
follow-up activities.

Wholesale and IirnH»*< Purpose Institution Procedures
FFIEC November 13,1995________________________

PUBLIC FILE CHECKLIST

There is no need to review each branch or each complete public file in eveiy
examination. In determining the extent to which the public files should be reviewed,
consider the institution’s record of compliance with the public file requirements in
previous examinations, its branching structure and changes to it since its last
examination, complaints about the institution’s compliance with the public file
requirements, and any other relevant information.

In any review of the public file undertaken, determine, as needed, whether branches
display an accurate public notice in their lobbies, a complete public file is available in
the institution’s main office and at least one branch in each state, and the public file(s)
in the main office and in each state contain:

all written comments from the public relating to the institution's CRA
performance and any responses to them for the current and preceding two
calendar years (except those that reflect adversely on the good name or
reputation of any persons other than the institution);

the institution's most recent CRA Performance Evaluation;

a map of each assessment area showing its boundaries and, on the map or in a
separate list, the geographies contained within the assessment area;

a list of the institution's branches, branches opened and closed during the
current and each of the prior two calendar years, their street addresses and
geographies;

a list of services (loan and deposit products and transaction fees) generally
offered, and hours of operation at the institution's branches, including a
description of any material differences in the availability or cost of services
between those locations;

the institution’s CRA Disclosure Statements) for the prior two calendar years;

a quarterly updated progress report describing the institution's efforts to
improve its performance if it received a less than satisfactory rating during its
most recent CRA examination;
8

Wholesale and HmMM Purpose Institution Procedures
F rtltC NoTember 13,1995

HMDA Disclosure Statements for the prior two calendar years and those of
each non-depository affiliate the institution has elected to include in assessment
of its CRA record, if applicable; and

if applicable, the number and amount of consumer loans made to the four
income categories of borrowers and geographies (low, moderate, middle, and
upper), located inside and outside of the assessment area(s).

In any branch review undertaken, determine whether the branch provides the most
recent public evaluation and a list of services generally available at its branches and a
description of any material differences in the availability or cost of services at the
branch (or a list of services available at the branch).

C O M M U N IT Y D E V E L O P M E N T T E S T

C H A RA CTER ISTIC

O U TSTANDING

SATISFACTORY

N E E D S TO IM PR O V E

SUB STAN TIA L N O N CO M PLIANCE

Investm ent, Loan,
a n d Service A ctivity

The institution has a
high level o f
com m unity
developm en t loans,
com m unity
developm en t services,
o r qualified
investm ents,
particu larly investments
th at are n o t routinely
p ro v id e d by private
investors.

The institution has an
adequate level o f
community developm ent
loans, community
developm ent services,
o r qualified investments,
particularly investm ents
th at are n o t routinely
provided by private
investors.

The institution h as a p o o r level o f
com munity developm ent loans,
com munity developm ent services,
o r qualified investments,
particularly investm ents th at are
n ot routinely p ro v id ed by private
investors.

The institution has fe w , i f any,
com munity developm ent loans,
com munity developm ent services,
o r qualified investments,
particularly investm ents th at are
n ot routinely p rovided by private
investors.

Investm ent, L oan,
a n d Service
Initiatives

The institution
extensively uses
innovative o r com plex
qu alified investments,
com m unity
developm en t loans, o r
com m unity
developm en t services.

The institution
occasionally uses
innovative o r com plex
qualified investments,
community developm ent
loans, o r com munity
developm ent services,

The institution rarely uses
innovative o r com plex qualified
investments, com munity
developm ent loans, o r com m unity
developm ent services.

The institution does n ot use
innovative o r com plex qualified
investm ents, com munity
developm ent loans, o r com munity
developm ent services.

Responsiveness to
com m unity
developm ent needs

The institution exhibits
excellen t
responsiveness to credit
a n d com m unity
econom ic developm ent
n eeds in its assessm ent
area(s).

The institution exhibits
adequate responsiveness
to credit a n d com munity
economic developm ent
needs in its assessm ent
area(s).

The institution exhibits p o o r
responsiveness to credit a n d
com munity econom ic n eeds in its
assessm ent area(s).

The institution exhibits very p o o r
responsiveness to credit an d
com m unity econom ic developm ent
n eeds in its assessm ent area(s).

C O M M U N IT Y D E V E L O P M E N T T E S T

C H A R A C T E R IS T IC

O U T S T A N D IN G

S A T IS F A C T O R Y

N E E D S T O IM P R O V E

S U B S T A N T IA L N O N C O M P L IA N C E

In v e s tm e n t, L o a n , an d

T h e in s titu tio n h a s a

T h e in stitu tio n h a s an

T h e in stitu tio n h a s a p o o r lev el o f

T h e in stitu tio n h a s fe w , i f a n y ,

S e rv ic e A c tiv ity

h ig h lev e l o f c o m m u n ity

a d e q u a te lev el o f

c o m m u n ity d e v e lo p m e n t lo a n s ,

d e v e lo p m e n t lo a n s ,
c o m m u n ity d e v e lo p m e n t

c o m m u n ity d e v e lo p m e n t

c o m m u n ity d e v e lo p m e n t s e rv ic e s , o r

lo a n s , c o m m u n ity

q u a lifie d in v e s tm e n ts , p a rtic u la rly

s e r v ic e s , o r q u a lifie d

d e v e lo p m e n t se rv ic e s, o r

in v e s tm e n ts th a t a r e n o t ro u tin e ly

in v e s tm e n ts , p a r tic u la r ly
in v e s tm e n ts th a t a r e n o t

q u a lifie d in v estm e n ts,

p ro v id e d b y p r iv a te in v e s to rs .

p ro v id e d b y p riv a te in v e s to rs .

ro u tin e ly p r o v id e d b y

th at a re n ot ro u tin e ly

p r iv a te in v e s to rs .

p ro v id e d by p riv ate

p a rtic u la rly in v estm e n ts

in v e s to rs .
In v e s tm e n t, L o a n , a n d

T h e in s titu tio n

T h e in stitu tio n

T h e in stitu tio n ra re ly u s e s in n o v a tiv e

T h e in s titu tio n d o e s n o t u se

S e rv ic e I n itia tiv e s

e x te n s iv e ly u s e s

o c c a sio n a lly u se s

o r c o m p le x q u a lifie d in v e s tm e n ts ,

in n o v a tiv e o r c o m p le x q u a lifie d

in n o v a tiv e o r c o m p le x

c o m m u n ity d e v e lo p m e n t lo a n s , o r

in v e s tm e n ts , c o m m u n ity

q u a lif ie d in v e s tm e n ts ,

q u a lifie d in v estm e n ts,

c o m m u n ity d e v e lo p m e n t s e rv ic e s .

d e v e lo p m e n t lo a n s , o r c o m m u n ity

c o m m u n ity d e v e lo p m e n t

lo a n s , o r c o m m u n ity

d e v e lo p m e n t s e r v ic e s .

d e v e lo p m e n t se rv ic e s ,

d e v e lo p m e n t s e r v ic e s .

R e s p o n s iv e n e s s to

T h e in s titu tio n e x h ib its

T h e in stitu tio n e x h ib its

T h e in s titu tio n e x h ib its p o o r

c o m m u n ity

e x c e lle n t r e s p o n s iv e n e s s

a d e q u a te re sp o n siv e n e ss

r e s p o n s iv e n e s s to c r e d it a n d

d e v e lo p m e n t n e e d s

to c r e d it a n d c o m m u n ity

to c re d it an d c o m m u n ity

c o m m u n ity e c o n o m ic n e e d s in its

c o m m u n ity e c o n o m ic d e v e lo p m e n t

e c o n o m ic d e v e lo p m e n t

a s s e s s m e n t a re a (s ).

n e e d s in its a s s e s s m e n t a r e a ( s ) .

n e e d s in its a s s e s s m e n t

n e ed s in its a sse ssm e n t

a re a (s).

a re a (s ).

T h e in s titu tio n e x h ib its v e ry p o o r

Wholesale and Limited Purpose Performance Evaluation
FFUEC November 13,1995
_______

SAMPLE WHOLESALE AND LIMITED PURPOSE INSTITUTION EVALUATION

P U B L IC D IS C L O S U R E
(Date of Evaluation)

C O M M U N IT Y R E IN V E S T M E N T A C T
P E R F O R M A N C E E V A L U A T IO N

Name of Depository Institution
Institution’s Identification Number
Address of Institution

Name of Supervisory Agency
Address of Supervisory Agency

NOTE:

This evaluation is not, nor should it be construed as, an assessment of the
financial condition of this institution. The rating assigned to this
institution does not represent an analysis, conclusion or opinion of the
federal financial supervisory agency concerning the safety and soundness
of this financial institution.

Wholesale and Limited Purpose Performance Evaluation
FFEEC November 13, 1995
_______

TABLE OF CONTENTS*
I.

General Information......................................................................................

II.

Institution Rating...........................................................................................

a.
b.
III.

Multistate MSA Rating.................................................................................
a.
b.

IV.

Overall Rating
Discussion
4

Discussion of assessment areas within Multistate MSA examined
using the examination procedures
Facts and data for Multistate MSA assessment areas not examined
using the examination procedures

State Rating..................................................................................................... 5
a.

MSA Analysis...................................................................................... 6
i.
Conclusions
ii.
Discussion of assessment areaswithin MSA examined using
the examination procedures
iii.
Facts and data for MSA not examined using the examination
procedures

Non-MSA Analysis.............................................................................. 6
i.
Conclusions
ii.
Discussions of non-MSA assessment areas examined using the
examination procedures
iii.
Facts and data for non-MSA not examined using the examination
procedures

Appendix
a.
Scope of Examination......................................................................... 9
b.
Summary of State and Multistate MSA Ratings................................... 11

This table of contents is a sample for a large, multistate institution, and should be
adjusted, as appropriate, to reflect the scope of the institution’s operations. Refer to
the Instructions for Writing Public Evaluations for further guidance.

Wholesale and Limited Purpose Performance Evaluation
____
FF1EC November 13,1995

G E N E R A L IN F O R M A T IO N
The Community R einvestm ent A ct (CRA) requires each fe d e r a l fin a n c ia l su pervisory agency to
use its authority when examining fin a n c ia l institutions su bject to its supervision, to assess the
institution's reco rd o f m eeting the cred it needs o f its entire com m unity, including low - an d
m oderate-incom e neighborhoods, consistent w ith safe a n d sou n d operation o f th e institution.
Upon conclusion o f such exam ination, the agency m ust p r e p a r e a w ritten evaluation o f the
institution's reco rd o f m eeting the cred it needs o f its com m unity.
This docum ent is an evaluation o f the Community R einvestm ent A c t (CRA) perform an ce o f
(N am e o f depository in stitu tion ) p r e p a r e d by (N am e o f agen cy), the in stitu tion's supervisory
agency, a s o f (date o f exam in ation ). The agency evalu ates perform an ce in assessm ent
area(s), a s they are delin eated by the institution, rath er than individu al branches. This
assessm ent area evaluation m ay include the visits to som e, bu t n o t necessarily a ll o f the
institution's branches. The agency rates the CRA perform an ce o f an institution consistent
w ith the p ro visio n s s e t fo rth in A ppendix A to 12 CFR P a rt xxx.

WfonUcalf anrl I.imitpd Purpose Performance Evaluation*
FFEEC November 13,1995
__________ __

IN S T IT U T IO N
IN STITU TIO N ’S CRA RATING: This institution is rated______________ .

Summarize the major factors supporting the institution’s rating. When illegal discrimination
or discouragement has been identified and has affected the rating, the summary should
include a statement that the rating was influenced by violations of the substantive provisions
of the antidiscrimination laws. The summary should not mention any technical violations of
the antidiscrimination laws.
DESCRIPTION OF INSTITUTION:
Write a brief description of the institution. Include relevant information regarding the
institution’s holding company and affiliates, if any, the states and assessment areas served,
the institution’s ability to meet various credit needs based on its financial condition and size,
product offerings, prior performance, legal impediments and other factors. Other
information that may be important includes total assets, asset/loan portfolio mix, primary
business focus, branching network, and any merger or acquisition activity.
CONCLUSIONS WITH RESPECT TO PERFORMANCE:
Discuss the institution’s overall CRA performance. The facts, data and analyses that were
used to determine the overall rating should be reflected in the narrative, including institution
strengths and areas for improvement. The narrative should clearly demonstrate how the
analyses of each of the performance criteria, and relevant information from the performance
context, factored into the overall institution rating. Discuss what effect, if any, community
development activities outside of the assessment area(s) and the broader statewide or regional
area(s) that includes the institution’s assessment area(s) may have on the rating. Charts and
tables should be used whenever possible to summarize and effectively present the most
critical or informative data used by the examiner in analyzing the institution’s performance
and reaching conclusions.
Write a paragraph about the institution’s record of complying with the antidiscrimination
laws (ECOA, FHA, or HMDA) using the following guidelines.

Wholesale and Limited Purpose Performance Evaluation
FFDEC November 13,1995

violated, the extent of the violation(s) (e.g., widespread, or limited to a particular
state, office, division, or subsidiary) and characterize management’s responsiveness in
acting upon the violation(s). Determine whether the institution has policies,
procedures, training programs, internal assessment efforts, or other practices in place
to prevent discriminatory or other illegal credit practices.
If no substantive violations were found, state that no violations of the substantive
provisions of' the antidiscrimination laws and regulations were identified. Even if
discrimination has not been found, comments related to the institution’s fair lending
policies, procedures, training programs and internal assessment efforts may still be
appropriate. If applicable, technical violations cited in the report of examination
should be presented in general terms.

>V}in|pcaU anrJ t.im itprl P urpose Performance Evaluation*

FFIEC November 13, 1995

_______________

M U L T IS T A T E M S A
C R A R A T IN G F O R (N am e o f M U L T IS T A T E M S A ): ____________________
[ I f the institution has branches in tw o o r m ore sta tes within a m ultistate M SA,
section f o r each m ultistate M SA .]

com plete this

( N a m e o f M U L T IS T A T E

M S A ):

Describe the institution’s operations within the multistate MSA and the assessment area(s)
that it serves.
CONCLUSIONS WITH RESPECT TO COMMUNITY DEVELPMENT TEST IN

(N am e

o f M U L T IS T A T E M S A ):

Discuss the institution’s CRA performance within the multistate MSA. The facts, data and
analyses that were used to form a conclusion about the rating should be reflected in the
narrative, including institution strengths and areas for improvement. The narrative should
clearly demonstrate how the results of the community development test analysis, as well as
the institution’s record in assessment areas not examined on-site (located in the multistate
MSA), factored into the rating. Charts and tables should be used whenever possible to
summarize and effectively present the most critical or informative data used by the examiner
in analyzing the institution’s performance and reaching conclusions.
If the institution’s assessment area(s) are smaller than the boundaries of the multistate MSA,
a discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Wholesale and Limited Purpose Performance Evaluation"
FFEEC November 13,1995
_______________

ST A T E
C RA R A T IN G F O R (N am e o f S T A T E ) : ___________________
[ I f the institution has branches in m ore than one state, com plete th is section f o r each state.
O therwise, com plete the M etropolitan S tatistical A rea a n d N on-M etropolitan S tatistical A rea
presen tation s only, a s a p p lic a b le .]

N a m e o f S T A T E ):

Describe the institution’s operations within the state and the assessment area(s) that it serves.
Information that may be important includes: total statewide assets; asset/loan portfolio mix;
primary business focus; branching network; any merger or acquisition activity; and a brief
description of the assessment areas within the state.
CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ( N am e

o f S T A T E ):

Discuss the institution’s CRA performance within the state. The facts, data and analyses that
were used to form a conclusion about the rating should be reflected in the narrative,
including institution strengths and areas for improvement. The narrative should clearly
demonstrate how the analyses of the performance criteria factored into the rating. Charts
and tables should be used whenever possible to summarize and effectively present the most
critical or informative data used by the examiner in analyzing the institution’s performance
and reaching conclusions.

Wholesale and Limited Purpose Performance Evaluation
FFIEC November 13,1995
____________

M E T R O P O L IT A N S T A T IS T IC A L A R E A S
CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN (Name o f M SA ):
Discuss the institution’s CRA performance within the metropolitan statistical area. The facts,
data and analyses that were used to form a conclusion should be reflected in the narrative,
including institution strengths and areas for improvement. The narrative should clearly
demonstrate how the analyses of the performance criteria, as well as the institution’s record
in assessment areas not examined on-site (located in the MSA), factored into the MSA
conclusion. Charts and tables should be used whenever possible to summarize and
effectively present the most critical or informative data used by the examiner in analyzing the
institution’s performance and reaching conclusions.
If the institutions assessment area(s) are smaller than the boundaries of the MSA, a
discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

N O N -M E T R O P O L IT A N S T A T E W ID E A R E A S
CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN (Name o f NONM ETROPOLITAN STATEW IDE A REA ):

Discuss the institution’s CRA performance within the non-metropolitan statewide area. The
facts, data and analyses that were used to form a conclusion should be reflected in the
narrative, including institution strengths and areas for improvement. The narrative should
clearly demonstrate how the analyses of the performance criteria, as well as the institution’s
record in assessment areas not examined on-site (located in the non-metropolitan statewide
area), factored into the conclusion for the non-metropolitan statewide area. Charts and tables
should be used whenever possible to summarize and effectively present the most critical or
informative data used by the examiner in analyzing the institution’s performance and reaching
conclusions.
A discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Wholesale and Limited Purpose Performance Evaluation
FFTEC November 13,1995
__________

A SSESSM EN T A R E A
(for each assessm ent area exam ined using the exam ination procedu res)

Charts or tables may be useful in depicting information throughout the assessment area
presentation.
SUMMARY OF INSTITUTION’S OPERATIONS IN (N am e o f A S S E S S M E N T A R E A ):

Summarize the institution’s operations in the assessment area (such as office
locations/product offerings).
DESCRIPTION OF (N am e o f A S S E S S M E N T A R E A ):

Describe the assessment area (including demographic information such as population
trends, income levels, type and condition of housing stock, employment information, and
general business activity). Also include a summary of any particular community
development opportunities which were noted. Discuss, if appropriate, the number and
kinds of CRA-related community contacts that were consulted and relevant information
obtained and used, if any, in the CRA evaluation.
DISCUSSION OF PERFORMANCE TESTS IN (N am e o f A S S E S S M E N T A R E A ):

Summarize the institution’s CRA performance in the assessment area and broader
statewide and regional area. Include supporting facts and data, such as the number ,
volume, and types of community development loans, qualified investments, and
community development services. The narrative should demonstrate how each of the
performance criteria and relevant information from the performance context, factored into
the analysis.

Wholesale and Limited Purpose Performance Evaluation
FF1EC November 13, 1995
____

A SSE SSM E N T A R E A (or A R E A R E V IE W E D )
F or those assessm ent a rea s w here an exam ination w as n o t conducted using the
exam ination p ro ced u res: (m ultiple assessm ent areas within the sam e m u ltistate M SA,
MSA, o r non-m etropolitan statew ide area m ay b e co m b in ed into one p resen ta tio n .)

Charts or tables may be useful in depicting information throughout the presentation.
SUMMARY OF INSTITUTION’S OPERATIONS IN

(N am e o f A S S E S S M E N T

A R E A /A R E A R E V IE W E D ):

Summarize the institution’s operations in the area reviewed (such as office
locations/product offerings).
DESCRIPTION OF ( N am e

o f A S S E S S M E N T A R E A /A R E A R E V IE W E D ):

Describe the area reviewed (including population, income levels, type and condition of
housing stock, employment information, and general business activity).
DISCUSSION OF PERFORMANCE IN

(N am e o f A S S E S S M E N T A R E A /A R E A

R E V IE W E D ):

Wholesale and Limited Purpose Performance Evaluation
FFIEC November 13, 1995
_______________

APPENDIX A
SCOPE OF EXAMINATION
Write a short description of the scope of the examination. At a minimum, discuss the
specific products reviewed, the names of (any) affiliates reviewed and their corresponding
products, the institution’s assessment areas and whether its activities in the assessment
areas were reviewed using the examination procedures, and the time period covered in the
review.
Charts that illustrate the scope of the examination may be useful for large institutions with
multiple assessment areas or institution’s that use data from their affiliates. Charts, such
as the ones below, may be used as a supplement to the discussion of the scope or in lieu
thereof.

SC O P E O F EXA M IN A TIO N

[SA M PLE]

TIM E PERIOD REVIEW ED

1/195 TO 6/30/96

F IN A N C IA L IN ST IT U T IO N

P R O D U C T S R E V IE W E D

X Y Z National Bank. Wilmington, D E

Community Development Investments
Community Development Services

A F F IL IA T E

A F F IL IA T E
R E L A T IO N S H IP

P R O D U C T S R E V IE W E D

X Y Z Corporation, Chicago, IL

Bank holding
company

Qualified Investments

X Y Z Investment Corporation, Chicago,
IL

Holding company
subsidiary

Qualified Investments

Wholesale and Limited Purpose Performance Evaluation
FFEEC November 13,1995

L IS T O F A S S E S S M E N T A R E A S A N D T Y P E O F EXA M IN A TIO N

A SSESSM EN T A REA

;

TYRE O F
E X A M IN A T IO N

BRANCHES
V IS IT E D

[SA M P LE ]

OTHER
IN F O R M A T IO
N

D ELA W A R E
M SA 11111 Wilmington

On • site

None

O ff - site

Sioux F alls
operations
acquired in an
acquisition dated
1/1/95 from
A B C corp. The
scope includes
only lending
activity since that
date.

SO U T H D A K O TA
M SA 1234 Sioux Falls

Wholesale and Limited Purpose Performance Evaluation
FFIEC November 13,1995

APPENDIX B
SUMMARY OF STATE AND MULTISTATE MSA RATINGS

State Rating

State or Multistate MSA Name

Strategic Plan Examination Procedures
FFIEC November 13,1995

COMMUNITY REINVESTMENT ACT
EXAMINATION PROCEDURES
FOR

INSTITUTIONS WITH STRATEGIC PLANS

STRATEGIC PLAN EXAMINATION PROCEDURES

Strategic Plan Examination Procedures
FFIEC November 13,1995

EXAMINATION SCOPE

For institution's with more than one assessment area, select assessment areas for review.
To select one.or more assessment areas for an on-site examination, review prior
performance evaluations, available community contact materials, reported lending data
and demographic data on each assessment area and consider factors such as:
a.

the level of the institution's lending, investment and service activity in the
different assessment areas, particularly in low- and moderate-income areas;

the number of other institutions in the different assessment areas and the
importance of the institution under examination in meeting credit needs in the
different assessment areas, particularly in areas with a limited number of
financial service providers;

the existence of apparent anomalies in the reported lending data for any
particular assessment area(s);

the time since the assessment area(s) was most recently examined on-site;

performance that falls short of plan goals based on a review of available data;

the institution's prior CRA performance in the different assessment areas; and

comments from the public regarding the institution's CRA performance.

For interstate institutions, a rating must be assigned for each state where the institution
has a branch and in every multistate MSA where the institution has branches in two or
more of the states that comprise that multistate MSA. Select one or more assessment
areas in each state for examination using these procedures.
PERFORMANCE CONTEXT

Review the institution’s public file for any comments received by the institution or the
agency since the last CRA performance evaluation that assists in evaluating the
institution’s record of meeting plan goals.

Consider any information that the institution provides on its record of meeting plan
goals.

Strategic Plan Examination Procedures
FFEEC November 13,1995

Contact local community, governmental, or economic development representatives to
update or supplement information about the institution’s record of meeting plan goals.

As necessary, consider any information the institution or others may provide on local
community, and economic conditions that may affect the institution's ability to meet plan
goals or otherwise assist in the evaluation of the institution.
PERFORMANCE CRITERIA

Review the following:
a.

the approved plan and approved amendments;

the agency's approval process files; and

written comments from the public that the institution or the agency received
since the plan became effective.

Determine whether the institution achieved its performance goals for each assessment
area examined.
i

Review the plan's measurable annual goals for each performance category and
assessment area(s) to be reviewed.

Obtain information and data about the institution’s actual performance for the
period that has elapsed since the previous examination.

Compare the plan goals for each assessment area reviewed to the institution's
actual performance since its last examination in each assessment area reviewed
to determine if all of the plan’s goals have been met.

If any goals were not met, form a conclusion as to whether the plan goals were
“substantially met.” In doing so, consider the number of unmet goals, the degree to
which the goals were not met, the importance of those goals to the plan as a whole, and
the reasons why the goals were not met (e.g., economic factors beyond the institution’s
control).

Discuss with management the preliminary findings.

Summarize conclusions about the institution’s performance.

Strategic Plan Examination Procedures
FFIEC November 13,1995

RATINGS

These instructions assume that the strategic plan covers all of the institution's assessment areas.
If not, the analysis of performance for the assessment area(s) covered by the strategic plan must
be combined with the analyses for assessment areas that were subject to other assessment
method(s) in order to assign a rating.
1.

Group the analyses of the assessment areas examined by MSA and non-MSA areas
within each state where the institution has branches. If an institution has branches in two
or more states of a multi-state MSA, group the assessment areas that are in that MSA.

If the institution has substantially met its plan goals for a satisfactory rating or, if
applicable, an outstanding rating, in all assessment areas reviewed, summarize
conclusions about the institution's performance in each MSA and the non-MSA area of
each state in which an assessment area was examined using these procedures. Assign the
appropriate preliminary rating for the institution and, as applicable, each state or
multistate MSA and proceed to Step 6, below.

If the institution did not substantially meet its plan goals in each assessment area, check
to determine if the institution elected in its plan to be evaluated under an alternate
assessment method.

If the institution did not elect in the plan to be evaluated under an alternate
assessment method, assign to those assessment areas in which plan goals were
not substantially met a rating of "Needs to Improve" or "Substantial
Noncompliance" depending on the number of goals missed, the extent to which
they were missed, and their importance to the plan overall.

If the institution elected in its plan to be evaluated under an alternate assessment
method, perform the appropriate procedures to evaluate and rate the institution's
performance in those assessment areas in which the institution did not meet plan
goals.

For institutions operating in multiple assessment areas, determine the relative importance
of the assessment areas reviewed in forming conclusions for each MSA and the nonMSA area within each state and for any multistate MSA where the institution has
branches in two or more states. In making that determination, consider:
a.

the significance of the institution’s activities in each compared to the
institution’s overall activities;

the lending, service, and investment opportunities in each;

Strategic Plan Examination Procedures
FFEEC November 13,1995

the significance of the institution’s loans, qualified investments, and lendingrelated services, as applicable, for each, particularly in light of the number of
other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For an institution operating in multiple MSAs or non-MSA areas in one or more states or
multi-state MSAs, assign a preliminary rating for each state and multi-state MSA. To
determine the relative significance of each MSA and non-MSA area to the rating in a
state, consider:
a.

the significance of the institution's activities in each compared to the
institution's overall activities;

the lending, service, and investment opportunities in each;

the significance of the institution's loans, qualified investments, and lendingrelated services, as applicable, for each, particularly in light of the number of
other institutions and the extent of their activities in each; and

demographic and economic conditions in each.

For institutions with operations in more than one state, assign a preliminary overall
rating. In determining the relative significance of the institution's performance in each
state or multistate MSA to its overall rating consider:
a.

the significance of the institution’s activities in each compared to the
institution's overall activities;

the lending, service, and investment opportunities in each;

demographic and economic conditions in each.

Review the results of the fair lending component of the most recent compliance
examination. To determine whether evidence of discrimination should lower the
institution's overall CRA rating or, if applicable, any of its state or multistate MSA
ratings, consider the following:
a.

the nature and extent of the evidence;
4

Strategic Plan Examination Procedures
FFIEC November 13,1995

the policies and procedures that the institution has in place to prevent
discrimination or other illegal credit practices;

any corrective action the institution took, or committed to take, particularly
voluntary corrective action resulting from a self-assessment conducted prior, to
the examination; and

other relevant information, such as the institution's past fair lending
performance.

Discuss conclusions with management and assign a final rating to the institution and state
or multi-state MSA ratings, as applicable.

Write comments for the public evaluation and the examination report

Strategic Plan Examination Procedures
FFIEC November 13,1995

PUBLIC FILE CHECKLIST

There is no need to review each branch or each complete public file during every
examination. In determining the extent to which the institution's public files should be
reviewed, consider the institution’s record of compliance with the public file
requirements in previous examinations, its branching structure and changes to it since its
last examination, complaints about the institution's compliance with the public file
requirements, and any other relevant information.

In any review of the public file undertaken, determine, as needed, whether branches
display an accurate public notice in their lobbies; a complete public file is available in the
institution’s main office and at least one branch in each state, and the public file available
in the main office and in a branch in each state contains:

a copy of the approved strategic plan;

the institution's most recent CRA Performance Evaluation;

a map of each assessment area showing its boundaries and, on the map or in a
separate list, the geographies contained within the assessment area;

a list of the institution's branches, branches opened and closed during the current
and each of the prior two calendar years, their street addresses and geographies;

the institution's CRA Disclosure Statement(s) for the prior two calendar years;

a quarterly updated progress report of the institution's efforts to improve its
record if it received a less than satisfactory rating during its most recent CRA
examination;

HMDA Disclosure Statements for the prior two calendar years and those of each
non-depository affiliate the institution has elected to include in assessment of its
CRA record, if applicable;
6

Strategic Plan Examination Procedure*
FFIEC November 13,1995

the number and amount of consumer loans, for large banks, if applicable; and

the loan-to-deposit ratio, for small institutions.

In any branch review undertaken, determine whether the branch provides the most recent
public evaluation and a list of services available at the branch or a description of material
differences from the services generally available at the institution’s other branches.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

SAMPLE STRATEGIC PLAN INSTITUTION EVALUATION

P U B L IC D IS C L O S U R E
(Date of Evaluation)

C O M M U N IT Y R E IN V E S T M E N T A C T
P E R F O R M A N C E E V A L U A T IO N

Name of Depository Institution
Institution’s Identification Number
Address of Institution

Name of Supervisory Agency
Address of Supervisory Agency

NOTE:

Strategic Plan Performance Evaluation
FFIEC November 13,1995

TABLE OF CONTENTS*
I.

General Information......................................................................................

Institution Rating
a.
b.

in.

Overall Rating................................................................................... .. .
Discussion............................................................................................. 2

Multistate MSA Rating..................................................................................... 3
a.
b.

IV.

Discussion of assessment areas within Multistate MSA examined using
the examination procedures
Facts and data for Multistate MSA assessment areas not examined
using the examination procedures

State Rating.....................................................................................................4
a.

MSA Analysis........................................................................................ 5
i.
Conclusions
ii.
Discussion of assessment areaswithin MSA examined using the
examination procedures
iii.
Facts and data for MSA not examined using the examination
procedures

Non-MSA Analysis.............................................................................. 5
i.
Conclusions
ii.
Discussions of non-MSA assessment areasexaminedusing the
examination procedures

iii.
V.

Facts and data for non-MSA not examined using the examination
procedures

Appendix
a.
b.

Scope of Examination............................................................... ..
8
Summary of State and Multistate MSA Ratings................................... 10

This table of contents is a sample for a large, multistate institution, and should be
adjusted, as appropriate, to reflect the scope of the institution’s operations. Refer to the

Strategic Plan Performance Evaluation
FFTEC November 13,1995

Instructions for Writing Public Evaluations for further guidance.

Strategic Plan Performance Evaluation
FF1EC November 13,1995

G E N E R A L IN F O R M A T IO N
The Community Reinvestment Act (CRA) requires each fed eral fin an cial supervisory agency to
use its authority when examining financial institutions subject to its supervision, to assess the
institution’s record o f meeting the credit needs o f its entire community, including low- and
moderate-income neighborhoods, consistent with safe and sound operation o f the institution.
Upon conclusion o f such examination, the agency must prepare a written evaluation o f the
institution’s record o f meeting the credit needs o f its community.
This document is an evaluation o f the Community Reinvestment Act (CRA) perform ance o f (Name
o f depository institution) prepared by (Name o f agency), the institution’s supervisory agency,
a s o f (date o f exam ination). The agency evaluates performance in assessm ent area(s), a s they
are delineated by the institution, rather than individual branches. This assessm ent area
evaluation may include the visits to some, but not necessarily a ll o f the institution’s branches.
The agency rates the CRA performance o f an institution consistent with the provisions set forth
in Appendix A to 12 CFR Part xxx.
This institution elected to be evaluated under the strategic plan option. The plan, approved by
the agency, sets forth goals fo r satisfactory (and outstanding, if applicable) performance.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

IN S T IT U T IO N
IN STITU TIO N 'S CRA RATING: This institution is rated______________ .

Strategic Plan Performance Evaluation
FFTEC November 13,1995

M U L T IS T A T E M S A
CRA RATING FO R (Name o f M U LTISTATE M SA ):___________________
[I f the institution has branches in two or more states within a multistate MSA, complete this
section fo r each multistate M SA.]

Summarize the major factors supporting the institution’s multistate MSA rating. When
illegal discrimination or discouragement has been identified and has affected the rating, the
conclusion should include a statement that the rating was influenced by violations of the
substantive provisions of the antidiscrimination laws. The conclusion should not mention any
technical violations of the antidiscrimination laws.
CONCLUSIONS WITH RESPECT TO PERFORMANCE IN (Name o f M U LTISTATE
M SA ):

Discuss the institution’s CRA performance within the multistate MSA. The facts, data and
analyses that were used to form a conclusion about the rating, as well as the institution’s
record in assessment areas in the multistate MSA that were not examined on-site, should be
reflected in the narrative. The discussion should be based on the institution’s plan goals and
actual performance under the plan, and organized around the lending, investment and service
goals, as applicable. If the institution has not substantially met its goals, discuss the effect,
if any, changed circumstances may have on the rating. Charts and tables should be used
whenever possible to summarize and effectively present the most critical or informative data
used by the examiner in analyzing the institution’s performance and reaching conclusions.
If the institution’s assessment area(s) are smaller than the boundaries of the multistate MSA,
a discussion of the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

STATE
CRA R A T IN G F O R (N am e o f S T A T E ): ____________________
[ I f the institution has branches in m ore than one state, com plete this section fo r each state.
Otherwise, com plete'the M etropolitan Statistical A rea and Non-M etropolitan Statistical A rea
presentations only, as applicable.]

CONCLUSIONS WITH RESPECT TO PERFORMANCE IN (N am e o f S T A T E ):
Discuss the institution’s CRA performance within the state. The facts, data and analyses that
were used to form a conclusion about the rating, based on the institution’s plan goals and
actual performance under the plan, should be reflected in the narrative. The discussion
should be organized around the lending, investment and service goals, as applicable. If the
institution has not substantially met its goals, discuss the effect, if any, changed
circumstances may have on the rating. Charts and tables should be used whenever possible
to summarize and effectively present the most critical or informative data used by the
examiner in analyzing the institution’s performance and reaching conclusions.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

METROPOLITAN STATISTICAL AREAS
CONCLUSIONS W ITH RESPECT TO PER FO RM A N CE IN (N am e o f M S A ):
Discuss the institution’s CRA performance within the metropolitan statistical area. The facts,
data and analyses that were used to form a conclusion, as w ell as the institution’s record in
assessment areas in the M SA that were not examined on-site, should be reflected in the
narrative. The discussion should be based on the institution’s plan goals and actual
performance under the plan, and organized around the lending, investment and service goals,
as applicable. If the institution has not substantially met its goals, discuss the effect, if any,
changed circumstances may have on the rating. Charts and tables should be used whenever
possible to summarize and effectively present the most critical or informative data used by
the examiner in analyzing the institution’s performance and reaching conclusions.
I f the institutions assessment area(s) are smaller than the boundaries o f the M SA, a
discussion o f the assessment areas examined should be included. Refer to the assessment
area discussion, below.

NON-METROPOLITAN STATEWIDE AREAS
CONCLUSIONS W ITH RESPECT TO PERFO RM ANCE TESTS IN (N am e o f NON
M ETR O PO LITA N ST A TEW ID E A R E A ):

Discuss the institution’s CRA performance within the non-metropolitan statewide area. The
facts, data and analyses that were used to form a conclusion, as well as the institution’s
record in assessment areas in the non-metropolitan statewide area that were not examined on
site, should be reflected in the narrative. The discussion should be based on the institution’s
plan goals and actual performance under the plan, and organized around the lending,
investment and service goals, as applicable. If the institution has not substantially met its
goals, discuss the effect; if any, changed circumstances may have on the rating. Charts and
tables should be used whenever possible to summarize and effectively present the most
critical or informative data used by the examiner in analyzing the institution’s performance
and reaching conclusions.
A discussion o f the assessment areas examined should be included. Refer to the assessment
area discussion, below.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

ASSESSMENT AREA
(for each assessment area exam ined using the examination procedures)

Charts or tables may be useful in depicting information throughout the assessment area
presentation.

DISCUSSION OF PERFORMANCE IN (ASSESSMENT AREA NAME):
[Repeat for each assessment area.]

S T R A T E G IC P L A N G O A L S A N D A C T U A L P E R F O R M A N C E
F O R E D E N P R A IR IE A N D D A V IS C O U N T IE S IN M IN N E S O T A
T O O B T A IN S A T IS F A C T O R Y R A T IN G

S am p le

S tra te g ic P la n G oal

A ctual P e rfo rm a n c e

1 . $ 1.5 m illion in sm all fa rm loans

1. $1.32 m illion in loans

2 . $2.0 m illion in loans to sm all businesses

2 . $3.7 m illion in loans.

3 . $.5 m illion in loans to sta rt-u p businesses

3 . $ .39 m illion in loans.

4 . P ro vide co n stru ctio n /p e rm a n e n t financing fo r
24-unit elderly low-income bousing project

4 . C o n stru c tio n line o f c red it a p p ro v e d fo r $960,000.
$100,000 d isb u rsed to d a te .

Summarize the facts, data and analyses that were used to form a conclusion on the
institution’s performance in the assessment area. This should compare and contrast the
institution’s plan goals for the assessment area and actual performance under the plan.
Explain variances between the plan and actual results. If the institution has not substantially
met its goals, discuss the performance context and its impact on the conclusion. The
discussion should be organized around the lending, investment and service goals, as

Strategic Plan Performance Evaluation
FFIEC November 13,1995

applicable. Use the chart below to supplement the written summary, and note whether the
analysis was conducted on-site.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

ASSESSMENT AREA (or AREA REVIEWED)
F o r those assessment areas where an examination was not conducted using the examination
p rocedures: (multiple assessment areas within the sam e multistate MSA, MSA, d r non
metropolitan statewide area and not exam ined on-site, may b e com bined into one
presentation.)

Charts or tables may be useful in depicting information throughout the presentation.
DISCUSSIO N O F PERFO RM ANCE IN (N am e o f A S S E S S M E N T A R EA /A R EA
R E V IE W E D ):
Summarize the facts and data that were reviewed and indicate whether the institution’s
performance in the area reviewed is consistent with the institution’s record in the multistate
M SA, MSA, or non-metropolitan statewide area.

Strategic Plan Performance Evaluation
FFIEC November 13,1995

APPENDIX A
SCO PE O F EXAM INATIO N
Write a short description o f the scope o f the examination. At a minimum, discuss the
specific products reviewed, the names o f (any) affiliates reviewed and their corresponding
products, the institution’s assessment areas and whether its activities in the assessment areas
were reviewed using the examination procedures, and the time period covered in the review.
Charts that illustrate the scope o f the examination may be useful for large institutions with
multiple assessment areas or institution’s that use data from their affiliates. Charts, such as
the ones below, may be used as a supplement to the discussion o f the scope or in lieu
thereof.

SC O P E O F E X A M IN A T IO N

ISA M P L E 1

[N ote: E xam ple p ro vid ed f o r clarity]

T IM E P E R IO D R E V IE W E D

1 /1 /9 5 TO 6 /3 0 /9 6

F IN A N C IA L IN S T IT U T IO N

PRO D U C TS
R E V IE W E D

X Y Z N a tio n a l B a n k, E den P rairie,
MN

S m a ll B u sin ess
S m a ll F arm

F IN A N C IA L IN S T IT U T IO N /
A F F IL IA T E

A F F IL IA T E
R E L A T IO N S H IP

PRO D U C TS
R E V IE W E D

X Y Z B ancorp, B lu e E a rth , M N

H o lding
C om pany

In vestm en ts

X Y Z C om m unity D evelopm ent
C orporation, B lu e E a rth , M N

H olding com pany
subsidiary

In vestm en ts

X Y Z Sa vin g s B a n k, B lu e E a rth , M N

T h rift - H olding
com pany
subsidiary

M ortgage
len d in g

Strategic Plan Performance Evaluation
FFEEC November 13,1995

X Y Z N a tio n a l B a n k, Tam pa, F L

H olding com pany
subsidiary

C redit C ards

L I S T O F A S S E S S M E N T A R E A S A N D T Y P E O F E X A M IN A T IO N

A SSE SSM E N T A REA

TYPE O F
E X A M IN A T IO N

BRANCH ES
V IS IT E D

M IN N E SO T A
D avis C ounty a n ti E den P rairie C ounty
( contiguous counties)

On - site

F LO R ID A
C ity o f Tam pa

O f f- s ite

O TH ER
IN F O R M A T IO N

Strategic Plan Performance Evaluation
FFIEC November 13,1995

APPENDIX B
SUM M ARY O F STA TE A ND M ULTISTATE M SA RATING S

State Rating

State or Multistate,. M SA Name

Full text of Federal Reserve Bank of New York Circulars : 10820. Community Reinvestment Act Examination Procedures

FRASER