The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF NEW YORK ]* Circular No 8 4 4 1 " ! L October 19, 1978 J R EG U LA TIO N BB New Regulation Implementing the Community Reinvestment Act 7"o .SVaff awd BaM^^ attdBaw^ in ZXffWft; The Board o f Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board have announced the adoption of final regulations implementing the Community Reinvestment Act of 1977, effective November 6, 1978. Following is the text of a statement issued by the Board of Governors of the Fed eral Reserve System: Federal regulators of banks and savings and loan associations today 7d] announced Anal regulations implementing the Community Reinvestment Act (C R A ), to take effect November 6, 1978. The Act requires the agencies to have in force regulations by that date and to encourage institutions they regulate to help meet the credit needs of their communities, including low- and moderate-income neighbor hoods, consistent with safe and sound operations. Before issuing these Anal rules, the agencies considered more than 500 comment letters from the pub lic. In response to numerous suggestions, the requirements were clariAed and simpliAed. The Federal Reserve Board, the Comptroller of the Currency, the Federal Deposit Insurance Corpora tion and the Federal Home Loan Bank Board will be assessing institutions' records of providing local credit services. Key factors are listed in the regulations for examiners to use in assessing a lender's record. An institu tion's performance will be taken into account when it applies for branches, mergers, charters and insurance, and certain other approvals. Past performance may be grounds for denial of an application. The regulation applies to all such applications pending on November 6, 1978, as well as to those Aled on or after that date. The agencies will also consider the views of State supervisory authorities when State-chartered institu tions apply for Federal deposit insurance or other approvals. The CRA regulation approved by the agencies includes the following principal provisions designed to assist lenders in complying with the Act, to inform the public and to help regulators discharge their responsi bilities : 1. Of COMMMMMffy Lenders subject to the Act are required to prepare, and review at least annually, a map delineating the local community or communities comprising the lender's entire community, without excluding low- and mod erate-income neighborhoods. A local community consists of the contiguous areas around each ofAce or group of ofAces of the institution, but need not take account of off-premises electronic facilities that receive deposits for more than one lender. The regulation speciAes three bases for delineation of a community: — Boundaries such as those of a Standard Metropolitan Statistical Area (SM SA ), or counties, where an institution's office or ofAces are located. Where appropriate, adjacent areas may be included, and adjust ments may be made for boundaries such as State lines. Small institutions may delineate those areas of an SMSA or county it may reasonably be expected to serve. — A lender may use its effective lending territory as delineating its local community, deAned as areas where it makes a substantial portion of its loans, and other equidistant areas around each of its ofAces. —A lender may use any other reasonably delineated area that meets the purposes of the Act and does not exclude low- and moderate-income areas. (O V E R ) 2. Within 90 days after November 6, 1978, the board of directors of each institution subject to the Act shall adopt a Community Reinvestment Act Statement (CRA Statement) for each delineated local community in cluding the following main features: 1. The delineation of the local community; 2. A list of the principal types of credit the lender is prepared to extend in the local community; 3. A copy of the Community Reinvestment Act Notice cited below. Lenders are encouraged to include also in their CRA Statement a statement of how they are helping to meet community credit needs, a periodic report on their record of helping to meet community credit needs and how they attempt to ascertain the credit needs of its local community. The lender's board of directors shall review and update the lender's CRA Statement at least annually. Within 90 days after November 6, 1978, each lender shall provide in the lobby of each of its premises the following public notice: "The Federal Community Reinvestment Act (C R A ) requires the regulator to evaluate our performance in helping to meet the credit needs of this community, and to take this evaluation into account when the regulator decides on certain applications submitted by us. Your involvement is encouraged. You should know that: * You may obtain our current CRA Statement for this community in this office. (Current CRA State ments for other communities served by us are available at our head office, located at (address).) * You may send signed, written comments about our CRA Statement(s) or our performance in helping to meet community credit needs to (title and address of State member bank official) and to Community Reinvestment Officer (appropriate Reserve Bank) (address). Your letter, together with any responses by us may be made public. * You may look at a file of all signed, written comments received by us within the past two years, any responses we have made to the comments, and all CRA Statements in effect during the past two years at our office located at (address). (You also may look at the hie about this community at (name and ad dress of designated ofhce).) * You may ask to look at any comments received by the (appropriate Federal Reserve Bank). * You also may request from (the appropriate Federal Reserve Bank) an announcement of applica tions covered by the CRA hied with the Federal Reserve. * We are a subsidiary of (name of bank holding company), a bank holding company. Applications hied by bank holding companies that are covered by the CRA are included in (the Federal Reserve's) announce ment of applications referred to in a previous paragraph." (Certain of the above statements, which are within parentheses, apply only to lenders that serve more than one local community.) Consumers should note that they may request to be placed on a roster to receive announcements of CRAcovered applications that have been hied with the supervisory agency. of Each lender shall maintain hies, readily available upon request for inspection by any member of the public, of all signed, written comments received from the public within the past two years referring specifically to any CRA Statement or to the lender's performance in helping to meet the credit needs of its community or communities. The lender may include its responses in this hie. Any comments reflecting adversely upon the good name or reputation of any persons (natural or legal) or violating specihc provisions of a law, shall be deleted. Also, hies respecting all offices of a lender shall be maintained at its head office. Materials relating to a local community shall be maintained at an office in that community. All letters in these hies are open to pub lic inspection. Copies of the new Regulation BB pamphlets will be sent to you as soon as they become avail able. Questions regarding the new regulation may be directed to our Consumer Affairs Division (Tel. No. 212-791-5919). PAUL A . VOLCKER, (
@FedFRASER