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FEDERAL RESERVE BANK
OF NEW YORK
>
Oi/I %
January 2, 1990
COMMUNITY REINVESTMENT ACT
Proposed Changes to CRA Guidelines and Examination Rating System
Comments Invited by January 29, 1990
To All State Member Banks in the Second Federal
Reserve District, and Others Concerned:
Following is the text of a statement issued by the Federal Financial Institutions Examination
Council (FFIEC):
The Examination Council announced that it is issuing for public comment 1) Uniform Community
Reinvestment Act (CRA) Guidelines for Disclosure of Written Evaluations, and 2) Revisions to the CRA
Assessment Rating System.
The Council said that comments must be received by January 29, 1990.
The Council’s action is in response to amendments to the CRA contained in the Financial Insti
tutions Reform, Recovery and Enforcement Act of 1989. These amendments require disclosure to the
public of a financial institution’s CRA rating and require that the Federal regulatory agencies provide
a written evaluation of an institution’s CRA performance using a four-tiered descriptive rating system.
The comments received from the public will be used by the Council, and the four Federal depository
institution regulatory agencies that have responsibility for the C RA , to develop a uniform approach by
the agencies to the disclosure of CRA rating information and the written CRA evaluation reports. The
comments will also be used in developing modifications to existing agency regulations governing finan
cial institutions’ CRA compliance.
Printed on the following pages is the text of the notice issued by the FFIEC and reprinted from
the Federal Register of December 22, 1989. Comments thereon must be submitted by January 29,
1990, and may be sent to the FFIEC , as specified in the notice, or to our Compliance Examinations
Department.
E.
G e r a l d C o r r ig a n ,
President.
Thursday
December 22, 1989
Part VII
Federal Financial
Institutions
Examination Council
Uniform Interagency Community
Reinvestment Act Guidelines for
Disclosure of Written Evaluations and
Revisions to Assessment Rating System;
Notice
52914
Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
FEDERAL FINANCIAL INSTITUTIONS
EXAMINATION COUNCIL
Uniform Interagency Community
Reinvestment Act Guidelines for
Disclosure of Written Evaluations and
Revisions to Assessment Rating
System
AGENCY: Federal Financial Institutions
Examination Council.
a c t io n : Notice of request for comments.
The Federal Financial
Institutions Examination Council
(FFIEC) is proposing certain changes to
the current format of the Community
Reinvestment Act (CRA) rating system.
These changes are in response to the
recent amendments to the CRA
occasioned by the passage of the
Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (FIRREA).
The FIRREA amendments to the CRA
may be summarized as: (1) Requiring
disclosure to the public of an
institution’s CRA rating; (2) requiring
that the Federal regulatory agencies
provide a written evaluation of an
institution's CRA performance utilizing
a four-tiered descriptive rating system,
in lieu of the existing five-tiered
numercial rating system.
This notice represents an effort, via
the FFIEC, by the Federal depository
institutions regulatory agencies to
develop uniform procedures for both the
disclosure of CRA rating information
and standardization of written
evaluation reports using the existing
assessment factors developed for
judging CRA performance. This request
for comments is intended to provide the
public with an early opportunity to
comment on the interagency proposal.
The FFIEC will consider the
comments received in developing final
guidelines that will be issued by each of
the regulators. Further, these comments
will provide useful input prior to the
initiation of rulemakings to modify
existing regulations governing financial
institutions’ CRA compliance.
DATE: Comments must be received on or
before January 29,1990.
ADDRESS: All comments should be sent
to Robert J. Lawrence, Executive
Secretary, Federal Financial Institutions
Examination Council, 1776 G Street
NW., Suite 701, Washington, DC 20006
or delivered to the same address
between the hours of 9:00 a.m. and 5:00
p.m on business days.
sum m ary:
FOR FURTHER INFORMATION CONTACT:
Federal Reserve Board: Glenn E. Loney,
Assistant Director, Consumer and
Community Affairs (202) 452-3585.
Federal Deposit Insurance Corporation:
Janice M. Smith, Director, Office of
Consumer Affairs (202) 898-3536.
Office of the Comptroller of the
Currency: John H. McDowell, Director,
Consumer Activities Division (202)
287-4265.
Office of Thrift Supervision: Jerauld C.
Kluckman, Director, Division of
Compliance Programs (202) 785-5442.
SUPPLEMENTARY INFORMATION:
Background
Section 1212 of the Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA),
Public Law No. 101-73,103 Stat. 183
(1989), amended the Community
Reinvestment Act of 1977 (CRA), Title
VIII. Public Law No. 95-128,91 Stat. 1147
(12 U.S.C. 2901
The new section
807, added by FIRREA, promotes the
enforcement of CRA by affording the
public an opportunity to learn of an
institution’s rating, while at the same
time making available the findings and
conclusions used by the applicable
Federal depository institution regulator
in reaching its specified rating.
The manner in which the disclosure
and written evaluation requirements of
section 807 are to be implemented is the
subject of the following FFIEC proposal.
The FFIEC Consumer Compliance Task
Force has thoroughly discussed and
reviewed the CRA Subcommittee’s
proposals to comply with the provisions
of FIRREA and has recommended them
for adoption by the Council. The
proposal discusses the implementation
of the disclosure provisions, and
provides a detailed breakdown of the
revised method of evaluating the
existing assessment factors to provide
written evaluations as mandated by the
amendment.
etseq.).
Request for comments
This notice of request for comments is
intended to provide an opportunity to
comment on the procedure for disclosure
of written evaluations and the revisions
of the assessment rating system. The
FFIEC and the financial regulators will
use the comments received to develop
final guidelines. The financial regulators
will issue the final guidelines to the
institutions they supervise. Further, the
financial regulators will use the
comments in developing proposals to
modify their existing regulations
governing CRA activities. The FFIEC
requests comments regarding any aspect
of the attached proposal.
Dated: December 18,1989.
Robert J. Lawrence,
Executive Secretary, Federal Financial
Institutions Examination Council.
Uniform Interagency Community
Reinvestment Act Guidelines for
Disclosure of Written Evaluations and
Revisions to Assessment Rating System
Disclosure of Written Evaluations
The new section 807 of the
Community Reinvestment Act (CRA)
requires that the appropriate Federal
depository institution regulatory agency
shall prepare a written evaluation of the
institution’s record of meeting the credit
needs of its entire community, including
low- and moderate-income
neighborhoods. Section 807, in addition,
requires that these written evaluations
have a public and confidential section.
The following proposed procedures
detail the manner in which financial
institutions will be required to disclose
the public portions of their CRA written
evaluations.
Recommended Method of Disclosure
Disclosure by the Financial Institution
Under this approach:
• The CRA evaluation will be:
—Prepared by the institution’s
supervisory agency upon completion
of CRA examinations commencing on
and after July 1,1990;
—Transmitted to the institution at the
same time the agency sends the
written CRA examination report; a
separate document, distinct from the
examination report, thereby
maintaining the confidentiality of the
exam report.
• The institution will make its most
current evaluation available to the
public within 30 days of its receipt.
An evaluation will be considered
“current" until 30 days following the
date of receipt of a new evaluation from
the institution’s supervisory agency. • The evaluation, at a minimum, will
be placed in the institution’s CRA public
file located at the main office.
• The availability of an institution’s
evaluation will be set forth in the
institution’s required CRA public notice,
posted in each depository facility, by
adding language such as:
You may obtain our current CRA
Performance Evaluation, which was prepared
by
at
{name of agency), [address).
•
Each institution will be required to
add this language to its CRA notice and
complete the posting of such revised
notices in all offices, within 30 days of
receipt of the first evaluation.
Federal Register / Vol. 54, No. 245 / Friday Etecember 22, 1989 / Notices
• The institution will be required to
provide a copy of its current evaluation
to any person, upon request, and will be
authorized to charge a fee not to exceed
the cost of reproduction.
• The format and content of the
institution’s evaluation, as prepared and
transmitted to the institution by its
supervisory agency, will not be altered
in any manner.
• The institution will be encouraged
to include its response to the evaluation
in its CRA public file.
Rationale and Benefits
This approach will provide convenient
access by the public to each institution’s
evaluation. It will:
• Ensure public access to the
evaluation in communities served by the
institution.
• Be consistent with other
requirements already imposed on
financial institutions by current CRA
regulations
maintenance of CRA
statements and public file; posting of
CRA notice).
• Facilitate comparisons by the public
of the CRA statement prepared by the
institution with the evaluation prepared
by the supervisory agency. Indirectly, it
could encourage development of well
documented, expanded CRA statements
by each institution, as recommended by
the
[e.g.,
Statement of the Federal Financial
Supervisory Agencies Regarding the
Community Reinvestment Act. See 54
F R 13742 (April 5,1989).
• Help encourage greater attention by
the institution’s board of directors,
management and employees to the
institution’s CRA performance in all
community areas served by local
depository offices.
Format and Content of Required Written
Evaluation
In addressing the format and content
of disclosures, the FFIEC believes two
considerations should be emphasized.
First, the Agencies should try to achieve
consistency in preparing the
evaluations. Consistency will facilitate
public understanding of evaluations and
promote a common understanding of
CRA. A common understanding shared
by community groups* regulators, and ,
depository institutions regarding CRA
will result in reasonable expectations
and constructive dialogue with respect
to CRA issues.
Second, the language used in
preparing the CRA evaluations should
be simple and concise. Evaluations
should be written in a manner
understandable to the public. The use of
acronyms,, technical banking or
regulatory terminology, and unexplained
banking concepts is.discouraged.
Uniform Format
Because of the need for confidential
treatment of the examination report, the
CRA evaluation will be prepared as a
stand-alone document that may be
extracted from the CRA examination
report, eliminating information
precluded by statute or deemed by the
agencies to be confidential.
Content of Evaluation
To facilitate understanding of CRA, it
is desirable to preface the evaluation
with background information outlining
the general purposes of the CRA and
explaining the evaluation.
The FFIEC also recommends that the
agencies do not include in the
evaluation the institution's response to
CRA examination findings because the
response is considered part of the
supervisory function. Evaluations should
be based only on the examiners’
findings. The regulatory agencies will
encourage financial institutions to
include their response to the evaluation
in their CRA public file.
Evaluation^ormat
To ensure maximum consistency, the
regulators will use a standard format.
The evaluation will consist of four
distinct sections:
Section I—Cover Page and General
Information Page
Section II—Rating Information—Summary of
CRA Ratings and the Institution's
Specific Rating
Section III—Narrative Discussing
Performance Under the Assessment
Factors and Supporting Facts
Section IV—Additional Information
Section I—Cover Page and General
Information
The cover page will include:
1. The date of the evaluation.
2. T h e nam e and ad d ress o f the
institution.
3. The name and address of the
supervisory agency.
A standard “General Information”
page will address the purpose of both
the CRA and the public written
evaluation. It will also provide a
statement on the basis for die rating.
Section 11—Rating Information
This page will contain:
• The four ratings specified in section
807 of the CRA. A brief description of
each of die ratings will precede the
presentation of the particular
institution’s rating and will provide a
standard for comparison. For example,
presentation of a “Needs to Improve”
rating will clearly be identified as not
being the worst possible rating.
52915
• The rating for the institution
resulting from the examination.
Section III—Assessment Factors and
Supporting Facts
The performance categories will be
listed in order. For each category, the
relevant assessment factors, as written
in the regulation, will be spelled out
followed by a narrative supporting the
conclusion under each factor.
Section IV—Additional Information
This section may include any other
relevant information that does not
appropriately fit in other sections, such
as the Metropolitan Statistical Area
(MSA) in which the institution is
located, the location of branches, and
the location of the appropriate HMDA
depository.
Appendix A
A sample evaluation is presented
below.
Appendix A
Sample Evaluation
Public Disclosure
[Date of Evaluation}
Community Reinvestment Act
Performance Evaluation
Name of Depository Institution
Address
Name of Supervisory Agency
Address
General Information
This document is an evaluation of the
Community Reinvestment Act (CRA)
performance of
] prepared by
the institution's supervisory agency.
The evaluation represents the agency’s
current assessment and rating of the
institution's CRA performance based on an
examination completed as of
It does not reflect any CRA-related
activities that may have been initiated or
discontinued by the institution after that
date.
The purpose of the Community
Reinvestment Act of 1977 (12 U.S.C, 2901), as
amended, is to encourage each financial
institution to help meet the credit needs of
the communities in which it operates. The
Act requires that in connection with its
examination of a financial institution, each
federal financial supervisory agency shall (1)
assess the institution’s record of helping to
meet the credit needs of its entire community,
including low- and moderate-income
neighborhoods, consistent with safe and'
sound operations of the institution, and (2)
take that record of performance into account
when deciding whether to approve an
application of the institution for a deposit
facility.
The Financial Institutions Reform,
Recovery and Enforcement Act of 1989, Pub.
L. No. 101-73, amended the CRA to require
institution
cover].
[Name of depository
[Name o f agency],
(the date on the
52916
' ^Federal Register / Vol. 54* No. 245 / Friday, December 22, 1989 / Notices
the Agencies to make public certain portions
of their CRA performance assessments of
financial institutions.
Basis for the Rating
The assessment of the institution’s record
takes into account its financial capacity and
size, legal impediments and local economic
conditions and demographics, including the
competitive environment in which it operates.
Assessing the CRA performance is a process
that does not rely on absolute standards.
Institutions are not required to adopt specific
activities, nor to offer specific types or
amounts of credit. Each institution has
considerable flexibility in determining how it
can best help to meet the credit needs of its
entire community. In that light, evaluations
are based on a review of 12 assessment
factors, which, are grouped together under 5
performance categories, as detailed in the
following section of this evaluation.
Caution: 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.
Assignment of Rating
Identification of Possible Ratings.
In connection with the assessment of each
insured depository institution's CRA
performance, a rating is assigned from the
following groups:
Outstanding record of meeting community
credit needs.
An institution in this group has an
outstanding record of, and is a leader in,
ascertaining and helping to meet the credit
needs of its entire delineated community,
including low- and moderate-income
neighborhoods, in a manner consistent with
its resources and capabilities.
S a tisfa cto ry re co rd o f m eeting com m unity
credit needs.
An institution in this group has a
satisfactory record of ascertaining and
helping to meet the credit needs of its entire
delineated community, including low- and
moderate-income neighborhoods, in a manner
consistent with its resources and capabilities.
Needs to improve record of meeting
community credit needs.
An institution in this group needs to
improve its overall record of ascertaining and
helping to meet the credit needs of its entire
delineated community, including low- and
moderate-income neighborhoods, in a manner
consistent with its resources and capabilities.
Substantial noncompliance in meeting
community credit needs.
An institution in this group has a
substantially deficient record of ascertaining
and helping to meet the credit needs of its
entire delineated community, including lowand moderate-income neighborhoods, in a
manner consistent with its resources and
capabilities.
Institution’s Rating:
[Insert Applicable Rating]
Discussion of Institution’s Performance
I. Ascertainment of Community Credit Needs
Reasonableness of Delineated Community
(Conclusion/Support):
Assessment Factor—Activities conducted
by the institution to ascertain the credit
needs of its community, including the extent
of the institution’s efforts to communicate
with members of its community regarding the
credit services being provided by the
institution.
(Conclusion/Support):
Assessment Factor—The extent of
participation by the institution's board of
directors in formulating the institution’s
policies and reviewing its performance with
respect to the purposes of the Community
Reinvestment Act.
(Conclusion/Support): '
II. Marketing and Types of Credit Extended
The extent of the
institution’s marketing and special creditrelated programs to make members of the
community aware of the credit services
offered by the institution.
Assessment Factor—
(Conclusion/Support):
Assessment Factor—The institution’s
origination of residential mortgage loans,
housing rehabilitation loans, home
improvement loans, and small business or
small farm loans within its community, or the
purchase or such loans originated in its
community.
(Conclusion/Support):
Assessment Factor—The institution’s
participation in governmentally-insured,
guaranteed or subsidized loan programs for
housing, small businesses, or small farms.
(Conclusion/Support):
III. Geographic Distribution and Record of
Opening and Closing Offices
Assessment Factor—
The geographic
distribution of the institution's credit
extensions, credit applications, and credit
denials.
(Conclusion/Support):
Assessment Factor—The institution’s
record of opening and closing offices and
providing services at offices.
(Conclusion/Support):
IV. Discrimination and Other Illegal Credit
Practices
Assessment Factor
—Any practices
intended to discourage applications for types
of credit set forth in the institution’s CRA
Statement(s).
(Conclusion/Support):
Assessment Factor—Evidence of
prohibited discriminatory or other illegal
credit practices.
(Conclusion/Support):
V. Community Development
Assessment Factor—The institution’s
participation, including investments, in local
community development and redevelopment
projects or programs.
(Conclusion/Support):
Assessment Factor—The institution’s
ability to meet various community credit
needs based on its financial condition and
size, legal impediments, local economic
conditions and other factors.
(Conclusion/Support):
Assessment Factor—Any other factors
that, in the regulatory authority’s judgment,
reasonably bear upon the’extent to which an
institution is helping to meet the credit needs
of its entire community.
(Conclusion/Support):
Proposed Revisions to the Uniform
Interagency Community Reinvestment Act
Assessment Rating System
Introduction
The revised CRA Rating System provides a
comprehensive and uniform method for
evaluating the CRA performance of federally
regulated financial institutions. It ranks the
overall performance of financial institutions
in helping to meet community credit needs,
including those of low- and moderate-income
neighborhoods, using a four-tiered descriptive
rating system.
These ratings are:
1. “Outstanding record of meeting community
credit needs.”
2. “Satisfactory record of meeting community
credit needs.”
3. “Needs to improve record of meeting
community credit needs."
4.“Substantial noncompliance in meeting
community credit needs.”
The overall performance of an institution is
based on its performance in helping to meet
various community credit needs. The
assessment process uses five “performance
categories” which represent a grouping of the
twelve assessment factors contained in the
regulations which implement the Act.
The assessment of an institution’s record in
helping to meet community credit needs takes
into account a number of factors—the
financial capacity and size of the institution,
legal impediments, local and regional
economic conditions and demographics, and
the competitive environment in which the
institution operates. All of these factors have
a significant bearing on how the institution
fulfills its obligation to help meet the credit
needs of its community.
A variety of unique, complex factors are
reviewed and assessed by examiners to
reach conclusions and appropriate
recommendations regarding an institution’s
record of CRA performance. The performance
of the institution is primarily related to the
financial and managerial capability of the
institution to meet the credit needs of the
community.
Because of the various factors considered
in the assessment of an institution’s record of
CRA performance, it should be remembered
that the guidelines provided are generally
descriptive and that all attributes do not
apply to
institution. Examiners are
expected to use their judgment in determining
the rating that best describes the institution’s
performance under CRA.
To maintain a balanced perspective,
examiners must carefully consider
information provided by both the institution
and the community. Assessing the CRA
performance of an institution is a process
that does not rely on absolute standards.
However, compliance with antidiscrimination
laws and regulations, including fair lending
and fair housing laws, has great significance
in reaching the overall conclusion.
every
Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
In applying the CRA Rating System,
consideration is given to the guidance
provided by the
Statement of the Federal
Financial Supervisory Agencies Regarding
the Community Reinvestment Act (Joint
Statement) See 54 F R 13742 (April 5,1989).
The Joint Statement identifies the various
types of policies, procedures and programs
the agencies believe constitute a financial
institution’s sound approach to fulfilling their
CRA responsibilities.
Pursuant to the Joint Statement, an
effective CRA process should include
methods to ascertain community credit needs
on an ongoing basis through outreach efforts
and methods to incorporate those findings
into the development of products and
services the institution decides to offer to
meet identified credit needs. The CRA plan
should include marketing and advertising
programs for lending products and services
that inform and stimulate awareness
throughout all segments o f the community.
The duty to coordinate and monitor the CRA
process should be assigned to a senior officer
or committee charged with the responsibility
to report periodically to the institution’s
board of directors about CRA efforts,
performance, and areas for improvement,
where appropriate. An employee training
program should be established which
\
addresses policies and procedures of the
institution designed to comply with
antidiscrimination laws and regulations and
help meet community credit needs.
The federal financial regulatory agencies
also expect financial institutions to maintain
reasonable documentation of the activities
conducted to implement the institution’s CRA
policies, procedures and programs. Finally,
the regulators believe it would be especially useful for a financial institution to expand its
CRA statement to include a description of the
activities the institution has undertaken to
meet its responsibilities under CRA. This
expansion would enhance the prospects for
an informed dialogue about CRA-related
issues between the institution and members
of the public.
Written Evaluations
The following CRA rating profiles have
been developed to assist the regulatory
agencies in providing meaningful written
evaluations on an institution’s CRA
performance. By providing a thorough
description of what is required for each rating
category and assessment factor, the rationale
for an institution’s ultimate CRA rating may
be more readily understood.
CRA Rating Profiles
Outstanding Record of Meeting Community
Credit Needs
An institution in this group has an
outstanding record of, and is a leader in,
ascertaining and helping to meet the credit
needs of its entire delineated community,
including low- and moderate-income
neighborhoods, in a manner consistent with
its resources and capabilities. The
institution's delineated community meets the
purpose of the CRA and does not exclude
low- and moderate-income neighborhoods.
CRA is an integral component of the
institution’s planning process and is explicitly
reflected in its formal policies, procedures,
and training programs. Documentation of
CRA-related activities is comprehensive and
readily available. The institution employs
affirmative outreach efforts to determine
community credit needs and addresses them
through innovative product development. The
board of directors and senior management
are highly involved in planning for,
implementing, and monitoring their CRArelated performance. The institution is highly
involved with a broad spectrum of
community organizations and the public
sector. The institution aggressively markets
special credit services and has, as a result,
extended loans which significantly benefit
the community. Internal monitoring
procedures assure and demonstrate
appropriate volume and distribution of credit
extensions, applications, and denials to all
segments of its delineated community. The
institution is in compliance with
antidiscrimination laws and regulations,
including fair lending and fair housing laws.
The institution has played a leadership role
in promoting economic revitalization and
growth and/or has engaged in other activities
to help meet community credit needs. Such
institutions have demonstrated the ability to
monitor and assess their own performances,
and they present no supervisory concern in
CRA matters.
Satisfactory Record of Meeting Community
Credit Needs
An institution in this group has a
satisfactory record of ascertaining and
helping to meet the credit needs of its entire
delineated community; including low- and
moderate-income neighborhoods, in a manner
consistent with its resources and capabilities.
The institution’s delineated community
reasonably meets the purpose of the CRA
and does not exclude low- and moderateincome neighborhoods. CRA is considered,
but is not an integral component of the
institution’s planning process. However, CRA
objectives have been integrated into the
institution's policies, procedures and
programs. Employee training for CRA is
adequate, but may need to be expanded.
Documentation and monitoring of the
institution's CRA-related activities is
adequate. The institution determines its
community credit needs and normally
addresses them through appropriate loan
product development. The board of directors
and senior management have occasional
involvement in the institution’s CRA
planning, implementation and monitoring
process. The institution has a satisfactory
level of involvement with most community
organizations and the public sector. The
institution has marketed credit services
which address identified community credit
needs and has extended loans which benefit
its delineated community. Records reflect a
reasonable geographic distribution of credit
extensions, applications, and denials to all
segments of its delineated community. The
institution has played a supportive role in
promoting and participating in economic
revitalization and growth and/or has
demonstrated a willingness to explore other
activities which help to meet community
credit needs. The institution is in compliance
52917
with the substantive provisions of
antidiscrimination laws and regulations,
including fair lending and fair housing laws.
Such institutions do not present a serious
supervisory concern in CRA matters. They
may, however, benefit from additional
encouragement to ascertain and help meet
community credit needs, initiate community
contacts, or pursue special programs on an
ongoing and more aggressive basis.
Needs to Improve Record of Meeting
Community Credit Needs
An institution in this group needs to
improve its overall record of ascertaining and
helping to meet the credit needs of its entire
delineated community, including low- and
moderate income neighborhoods, in a manner
consistent with its resources and capabilities.
The institution’s delineated community is
unreasonable and may exclude some lowand moderate-income neighborhoods. The
institution’s program for meeting
responsibilities under CRA is inadequate;
specific, identifiable weaknesses are
apparent. The institution does not have a
comprehensive CRA training program. The
institution does not adequately document or
monitor its CRA-related activities. The
institution engages in limited affirmative
outreach to the community, passively
determines credit needs and addresses them
primarily with existing standard loan
products. The board of directors and senior
management are rarely involved in the
institution’s CRA planning, implementation
and monitoring process, if such process
exists. The institution has limited, if any,
involvement with local community
organizations and the public sector. The
institution has limited marketing of credit
services responsive to community credit
needs, and advertisements are not generally
reflective of identified community credit
needs. The types of credit offered may not
accurately reflect the list of available credits
in the institution's CRA statement. The
geographic distribution of credit extensions,
applications, and denials demonstrates a
disproportionate lending pattern, adversely
impacting low- and moderate-income
neighborhoods. The institution has played
only a limited role in developing projects to
foster economic revitalization and growth,
but management may express a willingness
to consider participation in other activities
which help meet community credit needs if
they are presented to the institution. The
institution is not in compliance with the
substantive provision of antidiscrimination
laws and regulations, including fair lending
and fair housing laws. Such institutions are of
supervisory concern in CRA matters and
require strong encouragement to improve the
level of performance.
Substantial Noncompliance in Meeting
Community Credit Needs
An institution in this group has a
substantially deficient record of ascertaining
and helping to meet the credit needs of its
entire delineated community, including lowand moderate-income neighborhoods, in a
manner consistent with its resources and
capabilities. The institution’s delineated
community is unreasonable and excludes
Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
52918
low- and moderate-income neighborhoods.
CRA responsibilities are rarely considered
within the institution’s planning process or its
policies, procedures, or training programs.
The institution does not have a viable
program for meeting responsibilities under
CRA. The institution does not actively
monitor its CRA activities. Little or no
documentation exists that demonstrates an
adequate level of performance. The
institution is not generally aware of existing
credit needs and may not have appropriate
loan products to address them. The board of
directors and senior management are not
involved in the institution’s CRA planning,
implementation and monitoring process. The
institution has no meaningful interaction with
community organizations and the public
sector. The institution does not advertise
credit services based upon identified
community needs. Some types of credit
extended may not be reflected in the list of
available credits in the institution’s CRA
statement. Restrictive credit policies
contribute to unjustified disparate lending
patterns, adversely impacting low- and
moderate-income neighborhoods. The
institution has not actively promoted
community economic revitalization or
growth, and has shown very limited interest
in pursuing other activities to address
community credit needs. The institution is in
substantial noncompliance with
antidiscrimination laws and regulations,
including fair lending and fair housing laws.
Such institutions are of significant
supervisory concern in CRA matters and
require the strongest supervisory
encouragement to be responsive to
community credit needs.
Performance Categories Summary
To evaluate an institution's CRA
performance, the twelve assessment factors
and criteria are grouped into the following
performance categories:
I. Ascertainment of Community Credit Needs
II. Marketing and Types of Credit Extended
III. Geographic Distribution and Record of
Opening and Closing Offices
IV. Discrimination and Other Illegal Credit
Practices
V. Community. Development
Performance Categories
Below are
for determining the
level of a financial institution's performance
under each assessment factor as prescribed
in the implementing regulations (designated
below by the letters (A) through (L)). The
various performance categories are generally
descriptive, and
attributes do not apply to
institution.
guidelines
every
all
I. Ascertainment of Community Credit Needs
The institution is evaluated in this category
on activities undertaken to delineate its
community and its employment of effective
techniques for gathering information to
identify community credit needs. Examiners
evaluate the effectiveness of an institution’s
review and development of products and
services related to identified community
credit needs. This category includes an
evaluation of the reasonableness of the
institution’s community delineation and its
CRA Statement. The evaluation process
includes the following assessment factors:
(A) Activities conducted by the institution
to ascertain the credit needs of its
community, including the extent of efforts to
communicate with members of its community
regarding the credit services it is prepared to
offer to the community.
(C) The extent of participation by the
institution’s board of directors in formulating
policies and reviewing the institution’s
performance with respect to the purposes and
intent of the Community Reinvestment Act.
Outstanding
Delineated Community
The institution’s delineated community
meets the purpose of the CRA and does not
exclude low- and moderate-income
neighborhoods.
Assessment Factor A
The institution has an outstanding record
of determining the credit needs of its
community, including low- and moderateincome neighborhoods. This may take the
form of:
• Ongoing, meaningful contacts with a full
range of individuals and groups representing
civic, religious, neighborhood, minority, small
business, and commercial and residential real
estate development;
• Ongoing contact with officials from city,
county and state governments and active
participation in public programs; and,
• Established, productive relationships
with financial intermediaries resulting in
public/private partnership activities.
The institution regularly collects and
analyzes local demographic data in relation
to its lending activities.
The board of directors and senior
management maintain a proactive attitude
and a high degree of responsiveness in
addressing community credit needs through
product development, including loans for
residential mortgages, housing rehabilitation,
home improvement, small businesses and
small farms.
Senior management performs systematic
and regular reviews of lending services.
The institution offers products well-suited
to identified needs, which may include
government-insured and publicly-sponsored
programs.
The board of directors and senior
management demonstrate willingness to
explore and offer conventional products with
special features to make credit more widely
available, within the bounds of safe and
sound lending practices.
Assessment Factor C
CRA is a demonstrated and important
component of the board of director’s planning
process.
A formal, written CRA program exists with
goals, objectives and methodology for selfassessment.
The board of directors and senior
management:
• Are an integral part of the CRA process
and activities.
• Exercise active policy oversight and
conduct regular reviews of CRA activities
and performance.
• Are personally involved in activities
designed to develop, improve and enhance
the local community.
• Consistently support prudent but
innovative underwriting criteria that help
address community credit needs and that
may not fall within the criteria of the
institution’s more conventional loan products.
• Provide active support to the CRA
training of personnel.
• Have expanded their CRA Statement
describing the institution’s CRA policies and
programs, discussing the results of their selfassessment, and summarizing documentation
of the institution’s performance.
• Effectively ensure that CRA technical
regulatory requirements are consistently met.
Satisfactory
Delineated Community
The institution's delineated community
reasonably meets the purpose of the CRA
and does not exclude low- and moderateincome neighborhoods.
Assessment Factor A
The institution has a satisfactory record of
determining credit needs of its community,
including low- and moderate-income
neighborhoods. This may take the form of:
• Occasional contacts with a large range of
individuals and groups representing civic,
religious, neighborhood, minority, small
business and commercial and residential real
estate development;
• Occasional contact with officials from
city, county and state governments and some
participation in public programs; and,
• Established contact with financial
intermediaries that may be used for public/
private partnership opportunities.
The institution periodically reviews
published, local demographic data in relation
to its lending activities.
The board of directors and senior
management satisfactorily respond to local
input regarding community credit needs
through product development, including loans
for residential mortgages, housing
rehabilitation, home improvement, small
businesses and small farms.
Senior management performs informal
reviews of lending services.
The institution offers products reasonably
suited to identified needs, which may include
government-insured and publicly-sponsored
programs.
The institution offers a variety of
conventional products, and may explore and
offer conventional products with special
features to make credit more widely
available, within the bounds of safe and
sound lending practices.
Assessment Factor C
CRA is considered in the board of
director's planning process.
The institution’s CRA program, including
goals, objectives and methodology for selfassessment, is articulated and generally
understood by all levels of the institution, but
may be informal.
The board of directors and senior
management:
Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
• Are generally involved in the CRA
process and activities.
• Exercise policy oversight and conduct
occasional reviews of CRA activities and
performance.
• Have some involvement in activities
designed to develop, improve and enhance
the local community.
• Consider prudent but innovative
underwriting criteria that help address
community credit needs and that may not fall
within the criteria of the institution’s more
conventional loan products.
• Provide adequate support to the CRA
training of personnel.
• Have expanded their CRA statement to
describe the institution's CRA'policies,
programs and results; however, the material
in the expanded Statement might not be fully
descriptive.
• Generally ensure that CRA technical
regulatory requirements are consistently met.
Needs to Improve
Delineated Community
The institution’s delineated community is
unreasonable and may exclude some lowand moderate-income neighborhoods.
The institution's guidelines for defining its
community need some revision.
Assessment Factor A
The institution's CRA program is
inadequate and may lack goals, objectives
and methodology for self-assessment
The board of directors and senior
management:
• Have limited involvement in the CRA
process and activities.
May exercise policy oversight and may
conduct infrequent reviews of CRA activities
and performance.
• Have limited involvement in activities
designed to develop, improve and enhance
the local community.
• May be reluctant to consider prudent but
innovative underwriting criteria that help
address community credit needs and that
may not fall within the criteria of the
institution’s more conventional loan products.
• Provide only limited support to the CRA
training of personnel.
• Have not expanded their CRA statement
to address its program and the results
achieved.
• May be lax in ensuring that CRA
technical regulatory requirements are met
•
Substantial Noncompliance
Delineated Community
The institution's delineated community is
unreasonable and excludes low- and
moderate-income neighborhoods.
The institution's guidelines for defining its
community require substantial revision.
The institution needs to improve its
contacts within the community to determine
the credit needs of its community, including
low- and moderate-income neighborhoods.
This is represented by:
The institution does not conduct, or has
• Limited contact with individuals and
Tittle involvement in, activities that determine
groups representing civic, religious,
credit needs of its community, including lowneighborhood, minority, small business and
and moderate-income neighborhoods. This is
commercial and residential real estate
represented by few, if any, contacts with:
development;
• Representatives of civic, religious,
• Limited contact with officials from city,
neighborhood, minority, small business and
county and state governments and marginal
commercial and residential real estate
effort to participate in public programs; and,
development;
• A lack of productive contact with
• Officials from city, county and state
financial intermediaries that may be used for
governments and no effort to participate in
public/private partnership opportunities.
public programs; and,
The institution occasionally considers or
• Financial intermediaries that may be
analyzes published demographic data in
used for public/private partnership
relation to its lending activities.
opportunities.
The board of directors and senior
The institution is unaware of, or ignores,
management show limited response to
the existence of demographic data and does
outside input regarding community credit
not use it to analyze its lending activities.
needs through product development,
The board of directors and senior
including loans for residential mortgages,
management rarely (or, do not) respond to
housing rehabilitation, home improvement,
community credit needs through product
small business and small farms.
development, including loans for residential
Senior management infrequently reviews
mortgages, housing rehabilitation, home
its CFR-related activities or its lending
improvement, small businesses and small
services in response to changing credit needs.
farms.
Credit products may not be structured or
Lending services are rarely (or, are not)
sufficiently varied to address the identified
reviewed to respond response to changing
credit needs of certain segments o f the
community, especially in low- and moderate- > credit needs.
Customer input and/or information on
income neighborhoods. . .
credit needs is rarely (or, is not) taken into
H ie institution is not a significant
account in product development, especially
participant in government-insured and/or
from customers in low- and moderate-income
publicly-sponsored programs.
areas.
Limited efforts have been made to offer a
There is nominal or no participation in
variety of conventional products or explore
government-insured and/or publiclyspecial features to make sound credit more
sponsored programs. - ,
widely available.
Assessment Factor A
Assessment Factor C
.
CRA is sometimes considered in the board
of director's planning process.
There is little or no effort made to offer a
variety of conventional products or explore
special features to make sound credit more
widely available.
52919
Assessment Factor C
CRA is rarely (or, is not) considered in the
board of director's planning process.
The institution does not have an articulated
and implemented program for dealing with its
responsibilities under CRA.
The board of directors and senior
management:
. ^
• Have little, if any, involvement in the
CRA process and activities.
• Exercise little, if any, policy oversight
with respect to CRA and rarely (or, do not)
conduct reviews of CRA activities and
performance.
• Have few, if any, involvement in
activities designed to develope, improve and
enhance the local community.
• Are reluctant to consider prudent but
innovative underwriting criteria that help
address community credit needs and that
may not all within the criteria of the
institution's more conventional loan products.
• Provide little, if any, support to CRA
training of personnel.
• Have not expanded, and will not
consider expansion of, their CRA statem ent
• Rarely (or, do not) ensure that CRA
technical regulatory requirements are met.
//.
Marketing and Types of Credit Extended
The institution is evaluated in this category
on its marketing efforts to promote the types
of credit it is prepared to offer to its
community, product implementation, and
overall delivery of credit services relative to
the institution's CRA statem ent Emphasis is
placed on special credit related programs.
The evaluation process will consider the
following assessment factors:
(B) The extent of the institution’s marketing
and special credit-related programs to make
members of the community aware of the
credit services it offers.
(I) The institution’s origination of
residential mortgage loans, housing
rehabilitation loans, home improvement
loans, and small business and small farm
loans within its community; the purchase of
such loans originated in its community; or
other indirect activities aimed at helping
meet local community housing, small
business and small fanning needs.
()) The institution's participation in
govemmentally-insured, guaranteed, or
subsidized loan programs for housing, small
businesses or small farms.
Outstanding
Assessment Factor B
;
-
The institution has implemented sound
marketing and advertising programs that are
approved, reviewed and monitored by senior
management and, the board of directors. The
programs inform all segments of the
community of general financial products and
services offered, including those that have
been developed to address identified
community credit needs.
Marketing strategies ensure that products
and services are responsive to identified
community needs. Advertisements are
designed to stimulate awareness of credit
services throughout the entire community,
including low- and moderate-income
neighborhoods. This includes use of special
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Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
media aimed at particular segments of the
community.
Complete, readily available marketing and
advertising records are maintained and
internally reviewed for compliance with
applicable laws and regulations.
Personnel routinely provide assistance to
individuals and groups in understanding and
applying for credit
Assessment Factor /
The institution affirmatively addresses all
of the identified community credit needs
through the origination and purchase of
loans, including those for residential
mortgages, housing rehabilitation, home
improvement small businesses and small
farms.
Lending levels reflect exceptional
responsiveness to the most pressing
community credit needs. A substantial
majority of loans are within the delineated
community. Loan volume, in relation to the
institution's resources and the community's
credit needs, exceeds normal expectations.
The CRA Statement correctly lists all o f the
credit products available throughout the
institution’s community.
Assessment Factor /
When an identified community credit need
exists, the institution takes a leadership role
in meeting that need and affirmatively
participates in govemmentaRy-insured,
guaranteed, or subsidized loan programs for
housing, small businesses and small farms.
Satisfactory
Assessment Factor B
The institution has implemented adequate
marketing and advertising programs that
function outside the formal oversight of
senior management and the board of
directors. The programs are designed to
inform all segments of the community of
general financial products and services
offered and any products that may have been
developed to address identified community
credit needs.
Although advertisements, including those
for credit products, are carried in widely
circulated local media, additional advertising
in media directed toward low- and moderateincome neighborhoods may be needed in
order for the advertising program to be
effective throughout the community.
The institution maintains adequate records
of its advertising, and these are occasionally
reviewed for effectiveness in all segments of
the community. The institution may not have
established policies and procedures to review
proposed marketing campaigns for
compliance with applicable laws and
regulations. Personnel occasionally provide
assistance to individuals and groups in
understanding and applying for credit
Assessment Factor I
The institution addresses the majority of
identified community credit needs through
the origination and purchase o f loans,
including those for residential mortgages,
housing rehabilitation, home improvement,
small businesses and small farms.
Lending levels reflect a general
responsiveness to the most pressing
community credit needs. A significant volume
of loans are within the delineated community.
Loan volume is adequate in relation to the
institution’s resources and the community’s
credit needs.
The CRA Statement correctly fists the
majority of the credit products available
throughout the institution's community.
Assessment Factor J
When an identified community credit need
exists, die institution generally takes some
steps to help meet that need and frequently
participates in govemmentaRy-insured,
guaranteed, or subsidized loan programs for
housing, small businesses and small farms.
Needs to Improve
Assessment Factor B
The institution’s marketing and advertising
programs have limited oversight by senior
management and the board of directors, and
may require revision or expansion to inform
all segments of the community of general
financial products and services offered.
Marketing strategies are primarily designed
to promote an image of the institution as a
provider of general financial products and
services or of only deposit services.
Although advertisements are carried in
primary local media, the institution does not
advertise in media specifically directed to
low- and moderate-income neighborhoods.
The institution maintains limited
documentation of advertising, and it is
infrequently reviewed for compliance with
applicable laws and regulations. Marketing
campaigns are infrequently reviewed for their
effectiveness in informing an segments of the
community.
Personnel make limited effort to assist
individuals and groups in understanding and
applying for credit.
Assessment Factor I
The institution is marginally involved in
addressing identified community credit needs
through origination and purchase of loans,
including those for residential mortgages,
housing rehabilitation, home improvement,
small businesses and small farms.
Lending levels reflect marginal
responsiveness to the most pressing
community credit needs. A significant volume
of loans may be outside the delineated
community, and/or loan volume may be low
in relation to the institution's resources and
the community's credit needs.
The CRA Statement may not accurately list
certain credit products available and/or may
list some credit products which are not
available.
Assessment Factor J
When an identified community credit need
exists, the institution sometimes becomes
involved in helping to meet that need and
infrequently participates in govemmentaRyinsured, guaranteed, or subsidized loan
programs for housing, small businesses and
small farms.
Substantial Noncompliance
Assessment Factor B
The institution’s marketing and advertising
programs are inadequate as they do not
address credit products directed to aB
segments of the community, including lowand moderate-income neighborhoods, or the
institution does not have snch programs.
The institution does not maintain sufficient
documentation o f advertising, and it is rarely
(or, is not} reviewed for compliance with
applicable laws and regulations.
There is little, if any, effort to assist
individuals and groups in understanding and
applying for credit.
Assessment Factor I
The institution is mmimaffy involved in
addressing identified community credit needs
through origination and purchase o f loans,
including those for residential mortgages,
housing rehabilitation, home improvement,
small businesses and small farms.
Lending levels reflect little, if any,
responsiveness to the moat pressing
community credit needs. A substantial
majority of loans are outside the delineated
community, and/or loan volume is
excessively low in relation to the institution's
resources and the community’s credit needs.
The CRA Statement is materially
inaccurate with respect to the types o f credit
the institution is willing to make available
throughout its community.
Assessment Factor J
When an identified community credit need
exists, the institution rarely (or, does not)
become involved in helping to meet that need
or in participating in govemmentaHy-insured,
guaranteed, or subsidized loan programs for
housing, small businesses and small farms.
III. Geographic Distribution and Record of
Opening and Closing Offices
The geographic distribution of the
institution's loans and the effects of opening
or dosing any offices are considered in this
category. The evaluation process under this
category will consider the following
assessment factors:
(E) The geographic distribution o f the
institution’s credit extensions, credit
applications, and credit denials.
(G) The institution's record o f opening and
closing offices and providing services at
offices.
Outstanding
Assessment Factor E
The institution has a documented analysis
demonstrating that the geographic
distribution of its credit extensions,
applications, and denials reflect equal access
to, and penetration of, all segments of its
delineated community, including low- and
moderate-income neighborhoods.
The institution has formulated procedures
to identify the geographic distribution of its
loan products. This information is
documented and used by die board of
directors and senior management in the
institution’s establishment of loan policies,
products and services, and marketing plans.
Assessment Factor G
Offices are readily accessible to all
segments o f the community. Business hours
and services are tailored toward the
Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
convenience and needs of the community and
are reviewed for their effectiveness on an
ongoing basis.
Prior to closing offices, the institution
assesses the potential impact on its ability to >
continue offering an appropriate level of
services throughout its community. This
assessment includes the institution's taking
into consideration information and ideas
obtained from consultations with members of
the community to minimize the adverse
impact of an office closing.
The institution’s record of closing offices
has not had an adverse impact on its
community.
particularly low- and moderate-income
neighborhoods, and they are infrequently
reviewed for effectiveness.
The institution’s assessment of the
potential adverse impact an office closing
will have on its community and of methods
needed to minimize that impact is inadequate
and needs revision or expansion. _
The institution’s record of opening and
closing offices indicates disparate impact
upon certain segments of its community,
particularly low- and moderate-income
neighborhoods, although the result may be
unintentional.
Satisfactory
Assessment Factor E
Assessment Factor E
The institution’s analysis of its geographic
distribution of credit extensions, applications,
and denials demonstrates reasonable access
to, and penetration of, all segments of the
community, including low- and moderateincome neighborhoods.
The geographic distribution of the
institution’s loan products may be used by
the board of directors and senior
management in the establishment of loan
policies, products and services, and
marketing plans.
Assessment Factor G
Offices are reasonably accessible to all
segments of the community.
Periodic review of services and business
hours assures accommodation of all segments
of the community.
The institution makes an adequate
assessment of the potential adverse impact of
an office closing on its community. This
assessment includes contacts with members
of the community for their views on the
impact and ways to minimize it.
The institution’s record of opening and
closing offices has not adversely affected the
level of services available in low- and
moderate-income neighborhoods.
Needs to Improve
Assessment Factor E
The geographic distribution of the
institution’s credit extensions, applications,
and denials demonstrates a disproportionate
pattern with respect to the activity inside its
delineated community as compared to the
activity outside the delineated community
and/or with respect to the distribution of
loans, applications and denials within the
various segments of its community.
The board of directors and senior
management may be unaware of the
geographic distribution of their loan products
or accord inadequate or no review of lending
policies and practices with regard to how
they affect lending patterns within the
community.
Senior management has not taken
adequate corrective action on previously
identified unreasonable lending patterns.
Assessment Factor G
Accessibility to the institution's offices is
difficult for certain segments of the
community.
Business hours may be inconvenient
relative to the needs of the community,
Substantial Noncompliance
The institution does not perform an
analysis of its distribution of credit
extensions, applications, and denials. The
geographic distribution does, in fact, indicate
unreasonable lending patterns inside and
outside its delineated community,
particularly in low- and moderate-income
neighborhoods.
The board of directors and senior
management disregard the geographic
distribution of the institution’s loan products
and have taken limited or no corrective
\
action on previously identified unreasonable
lending patterns.
Loan policies and procedures contain
restrictions which have or can be expected to
have a significant adverse impact on loan
availability in low- and moderate-income
neighborhoods.
Assessment Factor G
There is limited accessibility to the
institution's offices for certain segments of
the community, particularly low- and
moderate-income neighborhoods.
Business hours are inconsistent with the
needs of the community and they are rarely,
if ever, reviewed for effectiveness.
The institution rarely, if ever, makes an
assessment of the potential impact of its
office opening and closing practices on the
community.
The institution’s record of opening and
closing offices suggests a continuing pattern
of disparate impact upon certain segments of
its community, particularly low- and
moderate-income neighborhoods.
IV. Discrimination And Other Illegal Credit
Practices
The institution is evaluated in this category
on its compliance with antidiscrimination
and other related credit laws, including
efforts to avoid doing business in particular
areas or illegal prescreening. The evaluation
process will consider the following
assessment factors:
(D) Any practices intended to discourage
applications for types of credit set forth in the
institution’s CRA Statement(s).
(F) Evidence of prohibited discriminatory
or other illegal credit practices.
Outstanding
Assessment Factor D
The institution affirmatively solicits credit
applications from all segments of its
community, with a strong focus on low- and
moderate-income neighborhoods.
52921
The board of directors and senior
management have developed complete
written policies, procedures, and training
programs to assure the institution does not
illegally discourage or prescreen applicants.
The institution regularly assesses the
adequacy of implemented, nondiscriminatory
policies, procedures and training programs
through internal reviews and management
reporting mechanisms.
Assessment Factor F
The institution is in compliance with the
antidiscrimination laws and regulations,
including: the Equal Credit Opportunity Act,
the Fair Housing Act, the Home Mortgage
Disclosure Act, and any agency regulations
pertaining to nondiscriminatory treatment of
credit applicants.
Satisfactory
Assessment Factor D
The institution generally solicits credit
applications from all segments of its
community, including low- and moderateincome neighborhoods.
The board of directors and senior
management have developed adequate
policies, procedures and training programs
supporting nondiscrimination in lending and
credit activities. Minor revisions or
expansions may be required.
The institution periodically assesses the
adequacy of implemented, nondiscriminatory
policies, procedures and training programs
through internal reviews and management
reporting mechanisms.
Assessment Factor F
The institution is in compliance with the
substantive provisions of antidiscrimination
laws and regulations, including: the Equal
Credit Opportunity Act, the Fair Housing Act,
the Home Mortgage Disclosure Act, and any
agency regulations pertaining to
nondiscriminatory treatment of credit
applicants.
Any violations disclosed are
nonsubstantive in nature, and corrections are
made promptly by senior management.
Needs to Improve
Assessment Factor D
Although the institution accepts credit
applications from all segments of its
community, available data suggests the
possibility of isolated, illegal discouraging or
prescreening of applicants.
The institution’s policies, procedures and
training programs are inadequate and require
significant revision or expansion to support
nondiscrimination in lending and credit
activities.
The review and/or reporting mechanisms
developed by the board of directors and
senior management need improvement to
fully assure that the institution does not
illegally discourage or prescreen applicants.
Assessment Factor F
The institution is not in compliance with
the substantive provisions of
antidiscrimination laws and regulations,
including: the Equal Credit Opportunity Act,
the Fair Housing Act, the Home Mortgage
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Federal Register / Vol. 54, No. 245 / Friday, December 22, 1989 / Notices
Disclosure Act, and any agency regulations pertaining to nondiscriminatory treatment of
credit applicants.
Substantive violations are noted on an
isolated basis. Violations may be repeated
from previous examinations.
Substantial Noncompliance
impediments, local economic conditions and
other factors.
(L) Any other factors that reasonably bear
upon the extent to which an institution is
helping to meet the credit needs of its entire
community.
N
Outstanding
Assessment Factor D
Assessment Factor H
Available data indicates that the institution
rarely, if ever, considers credit applications
from all segments of its community. The
volume of applications from law- and
moderate-income neighborhoods is very low
or nonexistent.
The institution’s policies, procedures and
programs are either nonexistent or in need of
substantial revision to property support
nondiscrimination in lending and credit
activities.
The review and/or reporting mechanisms
developed by the board of directors and
senior management and designed to assess
implemented policies, procedures and
training programs to support
nondiscrimination in lending and credit
activities are inadequate and require
substantial revision. Or, the institution has
not developed any review or reporting
mechanisms to assure that the institution
does not illegally discourage or prescreen
applicants.
The institution has maintained, through
ongoing efforts, a high level of participation
in development and redevelopment programs
within its community, often in a leadership
role.
Assessment Factor F
The institution is in substantial
noncompliance with antidiscrimination laws
and regulations, including: The Equal Credit
Opportunity A ct the Fair Housing Act, the
Home Mortgage Disclosure Act, and any
agency regulations pertaining to
nondiscriminatory treatment of. credit
applicants.
The institution has demonstrated a pattern
or practice of prohibited discrimination, or
has committed a large number of substantive
violations of the antidiscrimination laws and
regulations. Violations may be repeated from
previous examinations.
V. Community Development
An institution is evaluated in this category
on its participation in community
development and/or other factors relating to
meeting local credit needs. The evaluation
process will consider the following
assessment factors:
(H) The institution’s participation,
including investments, in local community
development and redevelopment projects or
programs.
(K) The institution’s ability to meet various
community credit needs based upon its
financial condition and size, and legal
Assessment Factor K
The institution has played a leadership role
in developing and/or implementing specific
projects promoting economic revitalization
and growth, consistent with its size, financial
capacity, location, and current local
economic conditions. Its participation in
these projects may have taken, for example,
the form of investment, direct loans or loans
through intermediaries, financial services,
and technical assistance.
The institution has established good
working relationships with government and
private sector representatives to identify
opportunities for the institution’s involvement
in addressing community development needs.
Assessment Factor L
The institution has engaged in other
meaningful activities, not covered under
other performance categories, which
contribute to the institution’s efforts to help
meet community credit needs.
Satisfactory
Assessment Factor H
The institution is generally aware o f any
community development and redevelopment
programs within its community, and
periodically participates in such programs.
Assessment Factor K
The institution generally supports the
development or implementation of specific
projects promoting economic revitalization
and growth, consistent with its size, financial
capacity, location, and current local
conditions. Its participation in these projects
may have taken, for example, the form of
investment direct loans or loans through
intermediaries, financial services, and
technical assistance.
The institution has informed government
and private sector representatives of its
interest in participating in community
development projects, and is already
involved in some aspects o f planning or
implementation.
Assessment Factor L
The institution has demonstrated a
willingness to explore other activities
contributing to its efforts to help meet
community credit needs which are not
covered in other performance categories.
Needs to Improve
Assessment Factor H
The institution has limited awareness of
any community development and
redevelopment programs within its
community and rarely seeks them out or
participates in them.
Assessment Factor K
The institution has played only a limited
role in developing projects to foster economic
revitalization and growth, and has taken
limited action to learn or support the specific
features of existing programs.
The institution has rarely contacted
government and private sector
representatives to discuss community
development needs and opportunities.
Assessment Factor L
The institution expresses a willingness to
consider participation in other activities
designed to meet community credit needs
only when specific proposals or requests are
brought to its attention.
Substantial Noncompliance
Assessment Factor H
The institution is unaware of, or not
interested in, the existence and nature of
community development programs within its
community. The institution has made little or
no effort to participate in these programs.
Assessment Factor K
The institution has played a very small, if
any, role in developing or implementing
specific projects promoting economic
revitalization and growth.
The institution has made little, if any, effort
to contact government or private sector
representatives to learn about community
development needs or the features of existing
programs.
Assessment Factor L
Senior management has shown little, if any,
interest in pursuing other activities, not
covered under other performance categories,
which would enhance the institution’s
effectiveness in helping address community
credit needs.
[FR Doc. 89-29776 Filed 12-21-89; 8:45 amj
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