Community Reinvestment Act (CRA) Performance Ratings
Definitions of Terms
Area median income means:- The median family income for the MSA, if a person or geography is located in an MSA; or
- The statewide non-metropolitan median family income, if a person or geography is located outside an MSA.
Assessment area: one or more geographical areas within which a bank is evaluated on its record of helping to meet community credit needs, including those designated as low- and moderate-income. The assessment area will generally consist of one or more MSAs or one or more contiguous political subdivisions, such as counties, cities, or towns. The assessment area will include geographies where the bank has its main office, its branches, and deposit taking ATMs, as well as surrounding geographies in which the bank has originated or purchased a majority of its loans.
Bank: any national bank, State bank, District bank, any Federal branch and insured branch and any former savings association.
Bank Certification Number: a number assigned to banks that are approved for insured status by the FDIC.
Branch: a staffed banking facility authorized as a branch, whether shared or unshared, including, for example, a mini-branch in a grocery store or a branch operated in conjunction with any other local business or nonprofit organization. The term "branch" only includes a "domestic branch" as that term is defined in Federal Regulations. (12 U.S.C. 1813(o)).
Census Tract (CTs): small subdivisions of metropolitan and other densely populated counties. Census tract boundaries do not cross county lines; They usually have between 1,200 and 8,000 persons, and their physical size varies widely depending upon population density. Census tracts are designed to be homogeneous with respect to population characteristics, economic status, and living conditions to allow for statistical comparisons.
Cert: see Bank Certification Number
Combined Statistical Area: Consists of two or more adjacent core based statistical areas (CBSAs) that have an employment interchange measure of 15 or more.
Core Based Statistical Areas (CBSAs): Refer collectively to metropolitan statistical areas and micropolitan statistical areas. CBSAs consist of the county or counties (or equivalent entities) associated with at least one core (urbanized area or urban cluster) of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties.
Community Development Corporation (CDC): A CDC allows banks and holding companies to make equity type of investments in community development projects. Bank CDCs can develop innovative debt instruments or provide near-equity investments tailored to the development needs of the community. Bank CDCs are also tailored to their financial and marketing needs. A CDC may purchase, own, rehabilitate, construct, manage, and sell real property. Also, it may make equity or debt investments in development projects and in local businesses. The CDC activities are expected to directly benefit low- and moderate-income groups, and the investment dollars should not represent an undue risk on the banking organization.
Community Development Financial Institutions (CDFIs): CDFIs are private intermediaries (either for profit or nonprofit) with community development as their primary mission. A CDFI facilitates the flow of lending and investment capital into distressed communities and to individuals who have been unable to take advantage of the services offered by traditional financial institutions. Some basic types of CDFIs include community development banks, community development loan funds, community development credit unions, micro enterprise funds, and community development venture capital funds.
A certified CDFI must meet eligibility requirements. These requirements include the following:
- Having a primary mission of promoting community development;
- Serving an investment area or target population;
- Providing development services;
- Maintaining accountability to residents of its investment area or targeted population through representation on its governing board of directors, or by other means;
- Not constituting an agency or instrumentality of the United States, of any state or political subdivision of a state.
- Affordable housing (including multifamily rental housing) for low- or moderate-income individuals;
- Community services targeted to low- or moderate-income individuals;
- Activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration's Development Company or Small Business Investment Company programs or have gross annual revenues of $1 million or less; or
- Activities that revitalize or stabilize low- or moderate-income geographies.
- Has as its primary purpose community development; and
- Except in the case of a wholesale or limited purpose bank:
- Has not been reported or collected by the bank or an affiliate for consideration in the bank's assessment as a home mortgage, small business, small farm, or consumer loan, unless it is a multifamily dwelling loan; and
- Benefits the bank's assessment area(s) or a broader statewide or regional area that includes the bank's assessment area(s).
- Has as its primary purpose community development;
- Is related to the provision of financial services; and
- Has not been considered in the evaluation of the bank's retail banking services under Federal Regulations.§ 345.24(d)
Depository Institution: any bank or savings association.
Distressed Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middle-income geography will be designated as distressed if it is in a county that meets one or more of the following triggers:
- An unemployment rate of at least 1.5 times the national average;
- A poverty rate of 20 percent or more; or
- A population loss of 10 percent or more between the previous and most recent decennial census or a net migration loss of 5 percent or more over the 5-year period preceding the most recent census.<
Family: includes a householder and one or more other persons living in the same household who are related to the householder by birth, marriage, or adoption. The number of family households always equals the number of families; however, a family household may also include non-relatives living with the family. Families are classified by type as either a married-couple family or other family which is further classified into "male householder" (a family with a male householder and no wife present) or "female householder" (a family with a female householder and no husband present).
Family Income: includes the income of all members of a family that are age 15 and older.
Federal Depository Institution: any national bank, any Federal savings association, and any Federal branch.
Federal Financial Institutions Examination Council: (Council) was established on March 10, 1979. The Council is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC), and to make recommendations to promote uniformity in the supervision of financial institutions.
FFIEC: see Federal Financial Institutions Examination Council
FFIEC-Estimated Income Data: The Federal Financial Institutions Examination Council (FFIEC) issues annual estimates which update median family income from the metropolitan and nonmetropolitan areas. The FFIEC uses American Community Survey data and factors in information from other sources to arrive at an annual estimate that more closely reflects current economic conditions.
Full-Scope Review: A full-scope review is accomplished when examiners complete all applicable interagency examination procedures for an assessment area. Performance under applicable tests is analyzed considering performance context, quantitative factors (for example, geographic distribution, borrower profile, and total number and dollar amount of investments), and qualitative factors (for example, innovativeness, complexity, and responsiveness).
Geography: a census tract delineated by the United States Bureau of the Census in the most recent decennial census.
Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders that do business or have banking offices in a metropolitan statistical area to file annual summary reports of their mortgage lending activity. The reports include such data as the race, gender, and the income of applicants; the amount of loan requested; and the disposition of the application (approved, denied, and withdrawn).
Home Mortgage Disclosure Loan Application Register (HMDA LAR): the HMDA LARs record all applications received for residential purchase, refinance, home improvement, and temporary-to-permanent construction loans.
Home Mortgage Loans: Includes home purchase and home improvement loans as defined in the HMDA regulation. This definition also includes multi-family (five or more families) dwelling loans, loans to purchase manufactured homes, and refinancings of home improvement and home purchase loans.
Household: includes all persons occupying a housing unit. Persons not living in households are classified as living in group quarters. In 100 percent tabulations, the count of households always equals the count of occupied housing units.
Household Income: includes the income of the householder and all other persons that are age 15 and older in the household, whether related to the householder or not. Because many households consist of only one person, median household income is usually less than median family income.
Housing Unit: includes a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied as separate living quarters.
Insured Bank: any bank (including a foreign bank having an insured branch) the deposits of which are insured in accordance with the provisions of this Act; and the term "noninsured bank" means any bank the deposits of which are not so insured.
Insured Depository Institution: any bank or savings association the deposits of which are insured by the FDIC. Insured Depository Institution also includes any uninsured branch or agency of a foreign bank or a commercial lending company owned or controlled by a foreign bank for purposes of section 8 of this Act.
Large Bank: any bank not otherwise defined as a small bank, unless requested designation and received approval as wholesale or limited-purpose institutions or have been approved for evaluation under a strategic plan.
Limited purpose bank:a bank that offers only a narrow product line (such as credit card or motor vehicle loans) to a regional or broader market and for which a designation as a limited purpose bank is in effect, in accordance with Federal Regulations. § 345.25(b)
Limited-Scope Review: A limited scope review is accomplished when examiners do not complete all applicable interagency examination procedures for an assessment area. Performance under applicable tests is often analyzed using only quantitative factors (for example, geographic distribution, borrower profile, total number and dollar amount of investments, and branch distribution).
Loan location: a loan is located as follows:
- A consumer loan is located in the geography where the borrower resides;
- A home mortgage loan is located in the geography where the property to which the loan relates is located; and
- A small business or small farm loan is located in the geography where the main business facility or farm is located or where the loan proceeds otherwise will be applied, as indicated by the borrower.
Low-Income: individuals and geographies having a median family income less than 50 percent of the area median income.
Low Income Housing Tax Credit: The Low-Income Housing Tax Credit Program is a housing program contained within the Internal Revenue Code of 1986, as amended. It is administered by the U.S. Department of the Treasury and the Internal Revenue Service. The U.S. Treasury Department distributes low-income housing tax credits to housing credit agencies through the Internal Revenue Service. The housing agencies allocate tax credits on a competitive basis.
Developers who acquire, rehabilitate, or construct low-income rental housing may keep their tax credits. Or, they may sell them to corporations or investor groups, who, as owners of these properties, will be able to reduce their own federal tax payments. The credit can be claimed annually for ten consecutive years. For a project to be eligible, the developer must set aside a specific percentage of units for occupancy by low-income residents. The set-aside requirement remains throughout the compliance period, usually 30 years.
Market Share: The number of loans originated and purchased by the institution as a percentage of the aggregate number of loans originated and purchased by all reporting lenders in the metropolitan area/assessment area.
Median Income: the median income divides the income distribution into two equal parts, one having incomes above the median and other having incomes below the median.
Metropolitan Division (MD): A county or group of counties within a CBSA that contain(s) an urbanized area with a population of at least 2.5 million. A MD is one or more main/secondary counties representing an employment center or centers, plus adjacent counties associated with the main/secondary county or counties through commuting ties.
Metropolitan Statistical Area (MSA): CBSA associated with at least one urbanized area having a population of at least 50,000. The MSA comprises the central county or counties or equivalent entities containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county or counties as measured through commuting.
Micropolitan Statistical Area: CBSA associated with at least one urbanized area having a population of at least 10,000, but less than 50,000.
Middle-Income: individuals and geographies having a median family income of at least 80 percent and less than 120 percent of the area median income.
Moderate-Income: individuals and geographies having a median family income of at least 50 percent and less than 80 percent of the area median income.
Multi-family: Refers to residential structure that contains five or more units.
Mutual Savings Bank: a bank without capital stock transacting a savings bank business, the net earnings of which inure wholly to the benefit of its depositors after payment of obligations for any advances by its organizers.
National Member Bank: any national bank which is a member of the Federal Reserve System.
National Nonmember Bank: any national bank which;
- is located in any territory of the United States, Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Northern Mariana Islands; and
- is not a member of the Federal Reserve System.
Owner-Occupied Units: includes units occupied by the owner or co-owner, even if the unit has not been fully paid for or is mortgaged.
Poverty Level: federal government bases this on income thresholds that vary by family size and composition and does not take into account noncash benefits.
Public Evaluation: an explanation of the uniform four-tiered rating system that the FDIC and other federal banking agencies use to assess the CRA performance of each regulated bank and savings institution.
Qualified Investments: any lawful investment, deposit, membership share, or grant that has as its primary purpose community development to support the following endeavors:
- affordable housing;
- community services targeting low- and moderate-income individuals;
- activities that promote economic development by financing small farms and small businesses; and
- activities that revitalize or stabilize low- and moderate-income geographies.
Remote service facility (RSF): an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank, such as an automated teller machine, cash dispensing machine, point-of-sale terminal, or other remote electronic facility, at which deposits are received, cash dispersed, or money lent.
Rural Area: territories, populations, and housing units that are not classified as urban.
Savings Bank: a bank (including a mutual savings bank) which transacts its ordinary banking business strictly as a savings bank under State laws imposing special requirements on such banks governing the manner of investing their funds and of conducting their business.
Small bank: a bank that, as of December 31 of either of the prior two calendar years, had total assets of less than $1.226 billion. Intermediate small bank means a small bank with assets of at least $307 million as of December 31 of both of the prior two calendar years and less than $1.226 billion as of December 31 of either of the prior two calendar years. (Dollar figures are adjusted annually, based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Small Business Administration (SBA): Government agency formed over 40 years ago to help businesses get started and to help them grow once they are in business through various garanteed loan program.
Small Business Investment Company (SBIC): SBICs are privately-owned investment companies which are licensed and regulated by the Small Business Administration (SBA). SBICs provide long-term loans and/or venture capital to small firms.
Small business loan:a loan included in "loans to small businesses" as defined in the instructions for preparation of the Consolidated Report of Condition and Income. These loans have original amounts of $1 million or less and are either secured by nonfarm nonresidential properties or are classified as commercial and industrial loans.
Small farm loan:a loan included in "loans to small farms" as defined in the instructions for preparation of the Consolidated Report of Condition and Income. . These loans have original amounts of $500,000 or less and are either secured by farmland, including farm residential and other improvements, or are classified as loans to finance agricultural production and other loans to farmers.
State bank: any bank, banking association, trust company, savings bank, industrial bank (or similar depository institution which the Board of Directors finds to be operating substantially in the same manner as an industrial bank), or other banking institution which;
- is engaged in the business of receiving deposits, other than trust funds (as defined in this section); and
- is incorporated under the laws of any State or which is operating under the Code of Law for the District of Columbia (except a national bank), including any cooperative bank or other unincorporated bank the deposits of which were insured by the Corporation on the day before the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
State Member Bank: any State bank which is a member of the Federal Reserve System.
State Nonmember Bank: any State bank which is not a member of the Federal Reserve System.
State Savings Association: any building and loan association, savings and loan association, or homestead association; or any cooperative which is organized and operating according to the laws of the State in which it is chartered or organized.
Underserved Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middle-income geography will be designated as underserved if it meets criteria for population size, density, and dispersion indicating the area’s population is sufficiently small, thin, and distant from a population center that the tract is likely to have difficulty financing the fixed costs of meeting essential community needs.
Upper-Income: individuals and geographies having a median family income of 120 percent or more of the area median income.
Urban Area: all territories, populations, and housing units in urbanized areas and in places of 2,500 or more persons outside urbanized areas. More specifically, "urban" consists of territory, persons, and housing units in: places of 2,500 or more persons incorporated as cities, villages, boroughs (except in Alaska and New York), and towns (except in the New England states, New York, and Wisconsin) but excluding the rural portions of "extended cities"; census designated place of 2,500 or more persons; and other territory, incorporated or unincorporated, including in urbanized areas.
Wholesale bank:a bank that is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers, and for which a designation as a wholesale bank is in effect, in accordance with Federal Regulations. § 345.25(b)
File Last Updated: 8/25/2021