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December
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A ddressee:
E n clo se d
"C om m u n ity
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R e in v e s tm e n t,"
A d d itio n a l
upon
15,
in
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of
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n ew R e g u l a t i o n
BB,
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re g u la tio n
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be
fu rn ish e d
requ est.
C ircu la rs
Federal
D iv isio n
R eserve
B an k o f
New Y o r k
BOARD OF GOVERNORS
of the
FEDERAL RESERVE SYSTEM
COM M UN ITY REINVESTMENT
REGULATION BB
(12 CFR 228)
Effective November 6, 1978
CONTENTS
Page
SEC. 2 2 8 .1 — AUTHORITY
...........................................................................................................................................
3
.................................................................................................................................................
3
SEC. 2 2 8 .3 — DELINEATION OFC O M M U N I T Y ....................................................................................................
3
SEC. 2 2 8 .4 — C O M M U N IT Y REIN VESTM EN T A C T S T A T E M E N T .............................................................
4
SEC. 2 2 8 .5 — FILES OF PUBLIC C O M M E N T S AND R E C E N T C R A S T A T E M E N T S .........................
4
SEC. 2 2 8 .6 — PUBLIC NOTICE
......................................................................................................................
4
SEC. 2 2 8 .7 — ASSESSING THE RECORD OF P E R F O R M A N C E ......................................................................
5
SEC. 2 2 8 .8 — E F FE C T ON A P P L IC A T IO N S ............................................................................................................
6
SEC. 2 2 8 .2 — PURPOSES
STATUTORY
A P P E N D IX ................................................................................................................................................................................
INTERPRETATIONS ..............................................................................................................................................................
8
STATUTORY AUTHORITY
This regulation is based upon and issued pursuant to provisions of section 806 of the Community Re
investment Act of 1977, U.S.C., Title 12, sec. 2901 et seq.
R E G U L A T I O N BB
(12 C R F 228)
Effective November 6, 1978
C O M M U N I T Y R E IN V E S T M E N T
SECTION 228.1— A U T H O R IT Y
SECTION 228.3— D E LIN E ATIO N OF
C O M M U N IT Y
The Board o f Governors o f the Federal Reserve
System issues this Part to implement the C om
munity Reinvestment Act (12 U.S.C. 2901
et seq.). The regulations comprising this Part are
issued under the authority o f the Community
Reinvestment Act and under the provisions o f the
United States Code authorizing the Board to con
duct examinations o f State-chartered banks that
are members o f the Federal Reserve System (12
U.S.C. 325), to conduct examinations o f bank
holding companies and their subsidiaries (12 U.S.C.
1844), and to consider applications for domestic
branches by State member banks (12 U.S.C.
321), for Federal deposit insurance in connec
tion with applications for membership in the
Federal Reserve System by State banks (12 U.S.C.
321, 1814, 1816), for merger in which the
resulting bank would be a State member bank
(12 U.S.C. 1828), and for formation of, acquisi
tions o f banks by, and mergers of, bank holding
companies (12 U.S.C. 1842).
(a) Each State member bank shall prepare, and
at least annually review, a delineation o f the local
community or communities that comprise its en
tire community, without excluding low- and
moderate-income neighborhoods. Maps shall be
used to portray community delineations. The
reasonableness o f the delineations will be reviewed
by Federal Reserve System examiners.
(b ) A local community consists o f the contig
uous areas surounding each office or group o f
offices, including any low- and moderate-income
neighborhoods in those areas. M ore than one o f
fice o f a State member bank may be included in
the same local community. Unless the Board de
termines otherwise, a community delineation need
not take account o f an off-premises electronic
facility that receives deposits for more than one
depository institution. In preparing its delineation,
a bank may use any one o f the three bases set
forth below.
(1) Existing boundaries such as those o f stand
ard metropolitan statistical areas (SM SA's) or
counties in which the bank's office or offices are
located may be used to delineate a local com
munity. Where appropriate, portions o f adjacent
areas should be included. The bank may make
adjustments in the case o f areas divided by State
borders or significant geographic barriers, or areas
that are extremely large or o f unusual configura
tion. In addition, a small bank may delineate those
portions o f SMSA's or counties it reasonably may
be expected to serve.
SECTION 228.2— PURPOSES
The purposes o f this regulation are to encourage
State member banks to help meet the credit needs
o f their local community or communities; to pro
vide guidance to State member banks as to how
the Board will assess the records o f State member
banks in satisfying their continuing and affirma
tive obligations to help meet the credit needs o f
their local communities, including low- and
moderate-income neighborhoods, consistent with
the safe and sound operation o f those banks; and
to provide for taking into account those records
in connection with certain applications.
(2) A bank may use its effective lending terri
tory, which is defined as that local area or areas
around each office or group o f offices where it
makes a substantial portion o f its loans and all
other areas equidistant from its offices as those
3
R E G U L A T I O N BB
§ 2 2 8 .6
areas. Adjustments such as those indicated in
paragraph (b)(1) o f this section may be made.
(3 )
A bank may use any other reasonablydelineated local area that meets the purposes o f
the Community Reinvestment A ct (C R A ) and
does not exclude low- and moderate-income neigh
borhoods.
(1) At the head office o f the bank; and
(2) At each office o f the bank in the local com
munity delineated in the Statement, except offpremises electronic deposit facilities.
(f)
Copies o f each current C R A Statement shall
be provided to the public upon request. A State
member bank may charge a fee not to exceed the
cost o f reproduction.
SECTION 228.5— FILES OF PUBLIC
C O M M E N TS A N D REC EN T C R A
STATEM EN TS
SECTION 228.4— C O M M U N IT Y REIN VE ST
M E N T A C T STA T E M E N T
(a) Within 90 days after the effective date o f
this Part, the board o f directors o f each State
member bank shall adopt a Community Reinvest
ment A ct (C R A ) Statement for each delineated
local community.
(b) Each C R A Statement shall include at least
the following:
( ! ) The delineation o f the local community;
(2) A list o f specific types o f credit within cer
tain categories, such as residential loans for l-to-4
dwelling units, residential loans for 5 dwelling
units and over, housing rehabilitation loans, home
improvement loans, small business loans, farm
loans, community development loans, commercial
loans, and consumer loans, that the bank is pre
pared to extend within the local community; and
(3) A copy o f the C O M M U N IT Y REIN VEST
M E N T A C T N O TICE provided for in § 228.6.
(c) Each State member bank is encouraged to
include the following in each C R A Statement:
(1) A description o f how its current efforts,
including special credit-related programs, help to
meet community credit needs;
(a) Each State member bank shall maintain
files that are readily available for public inspection
consisting of:
(1) Any signed, written comments received from
the public within the past two years that specifi
cally relate to any C R A Statement or to*the bank's
performance in helping to meet the credit needs of
its community or communities;
(2) Any responses to the comments that the
bank wishes to make; and
(3) Any C R A Statements in effect during the
past two years.
(b) These hies shall not contain any comments
or responses that reflect adversely upon the good
name or reputation o f any person other than the
bank, or publication o f which would violate spe
cific provisions o f law.
(c) These files shall be maintained by each
State member bank as follows:
(1) All materials at the head office; and
(2) Materials relating to each local community,
at a designated office in that community.
(2) A periodic report regarding its record o f
helping to meet community credit needs; and
(3) A description o f its efforts to ascertain the
credit needs o f its community, including efforts
to communicate with members o f its community
regarding credit services.
SECTION 228.6— PUBLIC NO TICE
Within 90 days after the effective date o f this
Part, each State member bank shall provide, in the
public lobby o f each o f its offices other than offpremises electronic deposit facilities, the public
notice set forth below. Bracketed material shall be
used only by banks having more than one local
community. The last item in this notice shall be
included only if the bank is a subsidiary o f a hold
ing company that is not prevented by statute from
acquiring additional banks.
(d) Each State member bank's board o f direc
tors shall review each C R A Statement at least
annually and shall act upon any material change
made in the interim at its first regular meeting
after the change. Such actions shall be noted in
its minutes.
(e) Each current C R A Statement shall
readily available for public inspection:
be
4
§ 2 2 8 .7
R E G U L A T I O N BB
C O M M U N IT Y R EIN VE STM E N T
A C T N O TICE
SECTION 228.7— ASSESSING THE
R EC O R D OF PE R F O R M A N C E
The Federal Community Reinvestment Act
(C R A ) requires the Federal Reserve Board
to evaluate our performance in helping to
meet the credit needs o f this community,
and to take this evaluation into account
when the Board decides on certain applica
tions submitted by us. Y our involvement is
encouraged.
In connection with its examination o f a State
member bank, the Board shall assess the record
o f performance o f the bank in helping to meet
the credit needs o f its entire community, including
low- and moderate-income neighborhoods, con
sistent with safe and sound operation o f the bank.
The Board will review the bank's C R A State
m ents) and any signed, written comments retained
by the State member bank or the Federal Reserve
Bank. In addition, the Board will consider the
following factors in assessing a bank's record o f
performance:
(a) Activities conducted by the State member
bank to ascertain the credit needs o f its com
munity, including the extent o f the bank's efforts
to communicate with members o f its community
regarding the credit services being provided by
the bank;
(b) The extent o f the State member bank's
marketing and special credit-related programs to
make members o f the community aware o f the
credit services offered by the bank;
(c) The extent o f participation by the State
member bank's board o f directors in formulating
the bank's policies and reviewing its performance
with respect to the purposes o f the Community
Reinvestment Act;
Y ou should know that:
* You may obtain our current C R A State
ment for this community in this office. [Cur
rent C R A Statements for other communities
served by us are available at our head office,
located at (address).]
* Y ou may send signed, written comments
about our C R A Statements] or our per
formance in helping to meet community
credit needs to (title and address o f State
member bank official) and to Community
Reinvestment Officer, Federal Reserve Bank
o f ------------------(address). Y our letter, to
gether with any response by us, may be
made public.
* Y ou may look at a file o f all signed,
written comments received by us within the
past 2 years, any responses we have made
to the comments, and all C R A Statements in
effect during the past 2 years at our office
located at (address). [Y ou also may look at
the file about this community at (name and
address o f designated office).]
(d) Any practices intended to discourage appli
cations for types o f credit set forth in the State
member bank's C R A Statement(s);
(e) The geographic distribution o f the State
member bank's credit extensions, credit applica
tions, and credit denials;
(f) Evidence o f prohibited
other illegal credit practices;
* Y ou may ask to look at any comments
received by the Federal Reserve Bank o f *
(g) The State member bank's record o f opening
and closing offices and providing services at offices;
(h) The State member bank's participation, in
cluding investments, in local community develop
ment and redevelopment projects or programs;
* You also may request from the Federal
Reserve Bank o f ____________an announce
ment o f applications covered by the C R A
filed with the Federal Reserve System.
(i) The State member bank's origination o f resi
dential mortgage loans, housing rehabilitation
loans, home improvement loans, and small busi
ness or small farm loans within its community, or
the purchase o f such loans originated in its com
munity;
* We are a subsidiary o f (name o f holding
company), a bank holding company. Appli
cations hied by bank holding companies that
are covered by the C R A are included in the
Federal Reserve announcement o f applica
tions referred to in the previous paragraph.
(j) The State member bank's participation in
governmentally-insured, guaranteed, or subsidized
5
discriminatory or
R E G U L A T IO N BB
§ 2 2 8 .8
meeting the credit needs o f its entire community
o f each applicant bank, each subsidiary bank of
an applicant bank holding company, and each
proposed subsidiary bank o f an applicant under
section 3 o f the Bank Holding Company A ct (12
U.S.C. 1842) that has an officer, director, em
ployee, or significant stockholder associated with
the applicant. Those records o f performance may
be the basis for denying the application.
loan programs for housing, small businesses, or
small farms;
(k) The State member bank's ability to meet
various community credit needs based on its finan
cial condition and size, and legal impediments,
local econom ic conditions, and other factors; and
(l) Other factors that, in the Board's judgment,
reasonably bear upon the extent to which a State
member bank is helping to meet the credit needs
o f its entire community.
(b) In the case o f each application fo r mem
bership that would confer Federal deposit insur
ance, each application by a State member bank,
and each application by a bank holding company
with a State bank subsidiary, the Board will con
sider any views expressed by the respective State
bank supervisors as to whether the State-chartered
banks involved have been helping to meet the
credit needs o f their entire communities, includ
ing low- and moderate-income neighborhoods,
consistent with the safe and sound operation of
those banks.
SECTION 228.8— E FFE CT O N
A PPLICA TIO N S
(а) In considering any application
(1) For membership in the Federal Reserve
System where membership would confer Federal
deposit insurance on a bank,
(2) By a State member bank for the establish
ment o f a domestic branch or other facility that
would be authorized to receive deposits,
(3) By a State member bank for the relocation
o f a domestic branch,
(4) F or merger, consolidation, acquisition o f
assets, or assumption o f liabilities if the acquiring,
assuming, or resulting bank is to be a State
member bank,
(5) T o becom e a bank holding company, and
(б) By a bank holding company to acquire
ownership or control o f shares or assets o f a bank,
or to merge or consolidate with any other bank
holding company,
(c) A t the request o f an applicant, the Board
will include in its consideration o f an application
the record o f performance o f nonbanking sub
sidiaries o f bank holding companies in helping to
meet the credit needs o f the communities served
by affiliated applicant banks or by subsidiary and
proposed subsidiary banks o f applicants under
section 3 o f the Bank Holding Company A ct (12
U.S.C. 1842).
(d) At the time an application for membership
that would confer Federal deposit insurance is
made, the proposed State member bank shall
submit to the Board a proposed C R A Statement
conforming to the requirements o f § 228.4.
the Board will take into account, among other
factors it considers, the record o f performance in
6
S T A T U T O R Y A P P E N D IX
otherwise required under Federal law or reg
ulations thereunder for—
(A ) a charter for a national bank or
Federal savings and loan association;
(B) deposit insurance in connection
with a newly chartered State bank, sav
ings bank, savings and loan association
or similar institution;
(C) the establishment o f a domestic
branch or other facility with the ability
to accept deposits o f a regulated finan
cial institution;
(D) the relocation o f the home office
or a branch office o f a regulated financial
institution;
(E) the merger or consolidation with,
or the acquisition o f the assets, or the
assumption o f the liabilities o f a regu
lated financial institution requiring ap
proval under section 18(c) o f the Federal
Deposit Insurance A ct or under regula
tions issued under the authority o f title
IV o f the National Housing Act; or
(F) the acquisition o f shares in, or the
assets of, a regulated financial institution
requiring approval under section 3 o f the
Bank Holding Company A ct o f 1956 or
section 408(e) o f the National Housing
Act.
(4 )
A financial institution whose business
predominately consists o f serving the needs
o f military personnel who are not located
within a defined geographic area may define
its "entire comm unity" to include its entire
deposit customer base without regard to geo
graphic proximity.
SEC. 804. In connection with its examination of
a financial institution, the appropriate Federal
financial supervisory agency shall—
(1) assess the institution's record o f meet
ing the credit needs o f its entire community,
including low- and moderate-income neigh
borhoods, consistent with the safe and sound
operation o f such institution; and
(2) take such record into account in its
evaluation o f an application for a deposit
facility by such institution.
SEC. 805. Each appropriate Federal financial
supervisory agency shall include in its annual re
port to the Congress a section outlining the actions
it has taken to carry out its responsibilities under
this title.
SEC. 806. Regulations to carry out the purposes
o f this title shall be published by each appropriate
Federal financial supervisory agency, and shall
take eflect no later than 390 days after the date o f
enactment o f this title.
S T A T U T O R Y A P P E N D IX
Housing and Community Deveiopment Act
Pubiic Law 9 5 -! 28, as amended
TITLE V III— C O M M U N IT Y R E IN V E ST M E N T
SEC. 801. This title may be cited as the "C om
munity Reinvestment Act o f !977".
SEC.
802. (a ) The Congress finds that—
(1) regu!ated financial institutions are re
quired by law to demonstrate that their de
posit facilities serve the convenience and
needs o f the communities in which they are
chartered to do business;
(2) the convenience and needs o f com
munities include the need for credit services
as well as deposit services; and
(3) regulated financial institutions have
continuing and affirmative obligation to help
meet the credit needs o f the local communi
ties in which they are chartered.
(b) It is the purpose o f this title to require each
appropriate Federal financial supervisory agency
to use its authority when examining financial insti
tutions, to encourage such institutions to help meet
the credit needs o f the local communities in which
they are chartered consistent with the safe and
sound operation o f such institutions.
SEC. 803. For the purposes o f this title—
(1) the term "appropriate Federal financial
supervisory agency" means—
(A ) the Comptroller o f the Currency
with respect to national banks;
(B) the Board o f Governors o f the
Federal Reserve System with respect to
State chartered banks which are mem
bers o f the Federal Reserve System and
bank holding companies;
(C) the Federal Deposit Insurance
Corporation with respect to State char
tered banks and savings banks which
are not members o f the Federal Reserve
System and the deposits o f which are in
sured by the Corporation; and
(D) the Federal Home Loan Bank
Board with respect to institutions the de
posits o f which are insured by the Fed
eral Savings and Loan Insurance C or
poration and to savings and loan holding
companies;
(2) the term "regulated financial institu
tion" means an insured bank as defined in
section 3 o f the Federal Deposit Insurance
A ct or an insured institution as defined in
section 401 o f the National Housing Act; and
(3) the term "application for a deposit
facility" means an application to the appro
priate Federal financial supervisory agency
7
R E G U L A T I O N B B -I N T E R P R E T A T I O N
Board to encourage banks to meet the credit needs
o f their local communities. T o this end, the Board
must assess banks' records o f performance and
take those records into account in acting on cer
tain applications affecting the banks. The Board
believes that these provisions were intended to
cover all banks that are in the business o f extend
ing credit to the public including both "wholesale"
and "retail" banks. The lending activities o f these
banks affect the econom ic health o f the communi
ties in which they are chartered. However, the
Board believes it would be pointless to encourage
or to assess the credit-granting record o f institu
tions that are not organized to grant credit to the
public in the ordinary course o f business, other
than as an incident to their specialized operations.
(c)
Accordingly the term "State member bank"
as used in the Board's Regulation BB (12 CFR
228) does not include banks that engage solely in
correspondent banking business, trust company
business, or acting as a clearing agent.
C O M M U N IT Y R E IN V E S T M E N T
IN T E R P R E T A T IO N S O F R E G U L A T IO N BB
SE C TIO N 228.1
SECTION 228.101— A P P L IC A B IL IT Y OF TH E
C O M M U N IT Y R E IN V E STM E N T A C T TO
C E R T A IN SPECIAL PURPOSE B AN K S
(a) In response to its proposed Regulation BB to
implement the Community Reinvestment A ct
("C R A ") (12 U.S.C. 2901-05), the Board re
ceived several inquiries from institutions that,
although they are chartered as banks, do not per
form commercial or retail banking services. These
institutions serve solely as correspondent banks, or
as trust companies, or as clearing agents, and they
do not extend credit to the public for their own
account. The Board concludes that the C R A is not
intended to cover these institutions.
(b) It is the purpose o f the C R A to require the
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@FedFRASER