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Adopted Regulations

Emergency Adoption of Amendments to Part 76 of the General Regulations of the Banking Board (Compliance With Community Reinvestment Act Requirements)

November 20 , 2006

Part 76 of the General Regulations of the Banking Board is hereby amended as follows:

General Regulations of the Banking Board

Part 76

COMPLIANCE WITH COMMUNITY REINVESTMENT ACT  
REQUIREMENTS
(Statutory authority: Banking Law, §§ 10, 14[1], 28-b)

Sec.

76.1     Statement of policy; explanation
76.2     Definitions
76.3     Filing requirements
76.4     Review of applications
76.5     [Biennial] Community Reinvestment Act assessments; public disclosure
76.6     Assessment area delineation
76.7     Performance tests and standards
76.8     Lending test
76.9     Investment test
76.10   Service test
76.11   Community development test for wholesale or limited purpose banking institutions
76.12   Small banking institution performance standards
76.13   Strategic plan
76.14   High cost areas
76.15   Other documents

§ 76.1  Statement of policy; explanation. 

In enacting the CRA, the New York State Legislature required the superintendent to assess a banking institution's record of helping to meet the credit needs of the local communities in which the banking institution is chartered, consistent with the safe and sound operation of the banking institution, and to take this record into account in the Banking Department's evaluation of those applications by banking institutions which are enumerated in sections 28-b, 225 and 413 of the New York State Banking Law. This Part is intended to carry out the purposes of the CRA.  This Part establishes the framework and criteria by which the Banking Department assesses a banking institution's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the banking institution. In conducting such an assessment, the Banking Department may evaluate the banking institution by performing its CRA examination on-site at the institution or, alternatively, at the Banking Department; may require the submission of written responses to Banking Department requests for documentation and other information, including responses to the so-called "First Day Letter" or similar requests; may interview banking institution personnel; may conduct branch visits; and may require any other information or documentation, or utilize any other procedure[,] that the superintendent may deem necessary. With respect to New York State-chartered multi-state banking institutions, the Banking Department will rely, in part, on the CRA evaluation by the host state, commonwealth or territory with regard to the branches located in the host state, commonwealth or territory or, in those instances in which there is no host state, commonwealth or territory CRA evaluation, upon the CRA evaluation of the appropriate Federal regulatory authorities; however, the Banking Department will independently review the factors set forth in section 28-b.3(a)(1), (2) and (3) of the Banking Law.

§ 76.2  Definitions. 

For purposes of this Part, the following definitions apply:

  1. Affiliate means any company, including a subsidiary, that controls, is controlled by, or is under common control with another company.

  2. Area median income means: 

  1. the median family income for the MSA, if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions;  or

  2. the statewide nonmetropolitan median family income, if a person or geography is located outside an MSA.

  1. Assessment area means a geographic area delineated in accordance with section 76.6 of this Part.

  2. Banking institution means a New York State-chartered commercial bank, trust company, savings bank, savings and loan association or FDIC insured branch of a foreign bank.

  3. Branch means a staffed banking facility approved 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.

  4. Community development means: 

  1. affordable housing (including multifamily rental housing) for low- or moderate-income individuals;

  2. community services targeted to low- or moderate-income individuals;

  3. 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;

  4. activities that revitalize or stabilize:

  1. low- or moderate-income geographies; [or]

  2. designated disaster areas; or

  3. distressed or underserved nonmetropolitan middle-income geographies designated by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and OCC, based on:

  1. Rates of poverty, unemployment and population loss; or

  2. Population size, density, and dispersion.  Activities revitalize and stabilize geographies designated based on population size, density and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals. 

  1. activities that seek to prevent defaults and/or foreclosures in loans included in paragraphs (1) and (3) of this subdivision. 

  1. Community development loan means a loan that: 

  1. has as its primary purpose community development; and

  2. except in the case of a wholesale or limited purpose banking institution: 

  1. has not been reported or collected by the banking institution or an affiliate for consideration in the banking institution's evaluation as a home mortgage,  small business, small farm, or consumer loan, unless it is a multifamily dwelling loan; and

  2. benefits the banking institution's assessment area(s) or a broader statewide or regional area that includes the banking institution's assessment area(s).

  1. Community development service means a service that: 

  1. has as its primary purpose community development;

  2. is related to the provision of financial services; and

  3. has not been considered in the evaluation of the banking institution's retail banking services. 

  1. Consumer loan means a loan to one or more individuals for household, family, or other personal expenditures. A consumer loan does not include a home mortgage, small business, or small farm loan. Consumer loans include the following categories of loans: 

  1. motor vehicle loan, which is a consumer loan extended for the purchase of and secured by a motor vehicle;

  2. credit card loan, which is a line of credit for household, family, or other personal expenditures that is accessed by a borrower's use of a "credit card;"

  3. home equity loan, which is a consumer loan secured by a residence of the borrower;

  4. other secured consumer loan, which is a secured consumer loan that is not included in one of the other categories of consumer loans; and

  5. other unsecured consumer loan, which is an unsecured consumer loan that is not included in one of the other categories of consumer loans. 

  1. Geography means a census tract [or a block numbering area] delineated by the United States Bureau of the Census in the most recent decennial census.

  2. Home mortgage loan means a home improvement loan, a home purchase loan, a multi-family loan or a refinance loan, including a refinance loan involving a modification, extension and consolidation agreement.

  3. Home state means the state where a state-chartered multi-state banking institution is chartered.

  4. Host state means a state other than the home state of a multi-state banking institution where the banking institution maintains a branch.

  5. Income level includes: 

  1. Low-income, which means an individual income that is less than 50 percent of the area median income, or a median family income that is less than 50 percent, in the case of a geography.

  2. Moderate-income, which means an individual income that is at least 50 percent and less than 80 percent of the area median income, or a median family income that is at least 50 and less than 80 percent, in the case of a geography.

  3. Middle-income, which means an individual income that is at least 80 percent and less than 120 percent of the area median income, or a median family income that is at least 80 and less than 120 percent, in the case of a geography.

  4. Upper-income, which means an individual income that is 120 percent or more of the area median income, or a median family income that is 120 percent or more, in the case of a geography.

  1. Limited purpose bank means a banking institution 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 banking institution is in effect.

  2. Loan location. A loan is located as follows: 

  1. A consumer loan is located in the geography where the borrower resides;

  2. A home mortgage loan is located in the geography where the property to which the loan relates is located; and

  3. 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. 

(q) Metropolitan division means a metropolitan division as defined by the Director of the Office of Management and Budget.

[(q)] (r)  MSA means a metropolitan statistical area [or a primary metropolitan statistical area] as defined by the Director of the Office of Management and Budget.

[(r)] (s) Multi-state banking institution means a banking institution that maintains branches in one or more host states.

[(s)] (t) Qualified investment means a lawful investment, deposit, membership share, or grant that has as its primary purpose community development.

[(t)] (u) Small banking institution

  1. Definition.  Small banking institution means a banking institution that, as of December 31 of either of the prior two calendar years, had total assets of less than [$250 million and was independent or an affiliate of a holding company that, as of December 31 of either of the prior two calendar years, had total banking and thrift assets of less than $1 billion.] $1 billion.  Intermediate small banking institution means a small banking institution with assets of at least $250 million as of December 31 of both of the prior two calendar years and less than $1 billion as of December 31 of either of the prior two calendar years.

  2. Adjustment.  The dollar figures in paragraph (u)(1) of this section shall be adjusted annually and published by the Federal Financial Institutions Examination Council, based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each twelve-month period ending in November, with rounding to the nearest million.

[(u)] (v) Small business loan means a small business loan as defined in Regulation BB of the Board of Governors of the Federal Reserve System (12 CFR part 228), issued on April 24, 1995, as amended from time to time.  This definition is based on the size of the loan. (This publication may be viewed at the [New York State Banking Department located at 2 Rector Street, New York, NY  10006] New York City office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G 1, and the Department of State located at 41 State Street, Albany, NY 12231. It is published by the Office of the Federal Register, National Archives and Records Administration and is for sale by the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington , DC 20402-9328 .)

[(v)] (w) Small farm loan means a small farm loan as defined in Regulation BB of the Board of  Governors of the Federal Reserve System (12 CFR part 228), issued on April 24, 1995, as amended from time to time. This definition is based on the size of the loan. (This publication may be viewed at the [New York State Banking Department located at 2 Rector Street, New York, NY 10006] New York City office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G 1, and the Department of State located at 41 State Street, Albany, NY 12231. It is published by the Office of the Federal Register, National Archives and Records Administration and is for sale by the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington , DC 20402-9328 .)

[(w)] (x) Wholesale banking institution means a banking institution 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 banking institution by the appropriate Federal regulatory authority is in effect.

§ 76.3  Filing requirements.  

Each banking institution, as that term is defined in section 76.2 of this Part, to which the act of Congress entitled the Community Reinvestment Act of 1977 (P.L. 95-221) applies shall file with the Superintendent of Banks a copy of each report and document which it is required to prepare and/or file with one or more Federal agencies by the Community Reinvestment Act of 1977 and the rules and regulations promulgated pursuant thereto, at the same time as it shall file such reports and documents with such agencies.  Such documents shall include, but not be limited to, annual Home Mortgage Disclosure Act ("HMDA") data, annual small business and farm loan data, a copy of its designation as a wholesale or a limited purpose banking institution, if any, community development loan data, if any, and assessment area data, if any.  Community development loan data should include the aggregate number and aggregate amount of community development loans originated or purchased. With regard to assessment area data, a banking institution, except a small banking institution or a banking institution that was a small banking institution during the prior calendar year, shall submit a copy of the most recent list for each assessment area showing the geographies within the area which was submitted to the appropriate Federal regulatory authority. In addition, nothing shall preclude the superintendent from requiring the submission of additional information which he or she deems necessary, in order to appropriately evaluate an institution.

§ 76.4  Review of applications. 

The superintendent and the Banking Board will consider the factors set forth in section 28-b of the Banking Law and the performance tests and standards set forth in section 76.7 of this Part in assessing a banking institution's record of performance.  Such assessment of a banking institution's record of performance, as set forth in this Part, may be the basis for denying an application by the superintendent or the Banking Board, as applicable.  Furthermore, the superintendent or the Banking Board may condition the approval of any application as the facts and circumstances warrant.

§ 76.5  [Biennial] Community Reinvestment Act assessments; public disclosure. 

  1. From time to time, as determined by the superintendent, [T]the Banking Department will [make biennial (every other year)] conduct community reinvestment evaluations of each banking institution to which this Part applies.  To the extent feasible, such evaluations will occur with the same frequency as, and coincide with, CRA examinations conducted by a banking institution’s primary Federal regulator.  In general, the Banking Department will evaluate the CRA performance of a banking institution once every 24 to 36 months; except that banking institutions with total assets below $250 million and rated “Satisfactory” or “Outstanding” in their most recent CRA examination performed by the Banking Department generally will be examined once every 48 or 60 months, respectively.  The assessment will be based upon information compiled by the Banking Department or obtained from other sources, including information obtained from other State and Federal banking regulators.  This information will pertain to the factors set forth in section 28-b of the Banking Law and the performance tests and standards set forth in section 76.7 of this Part.  The Banking Department assigns a rating for a banking institution assessed under the factors set forth in Banking Law, section 28-b and the tests set forth in section 76.7 of this Part.  The lending, investment and service performance for each banking institution evaluated under section 76.7(a)(1) of this Part shall be assigned one of the five following ratings: outstanding, high satisfactory, low satisfactory, needs to improve or substantial noncompliance.  A banking institution's performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others.  The banking institution's overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile.  The Banking Department assessment shall form the basis of the biennial numerical CRA rating based on a 1-4 scoring system assigned to each such institution by the Banking Department.  Specifically, such numerical scores shall represent performance assessments as follows: 

[(1)] - outstanding record of meeting community credit needs (“Outstanding” or “1”);

[(2)] -  satisfactory record of meeting community credit needs (“Satisfactory” or “2”);

[(3)] -  needs to improve record of meeting community credit needs (“Needs to Improve” or “3”); and

[(4)] -  substantial noncompliance in meeting community credit needs (“Substantial Noncompliance” or “4”).

  1. Evidence of discriminatory or other illegal credit practices. [adversely affects the Banking Department's evaluation of a banking institution's performance.  In determining the effect on the banking institution's assigned rating, the Banking Department considers the nature and extent of the evidence, the policies and procedures that the banking institution has in place to prevent discriminatory or other illegal credit practices, any corrective action that the banking institution has taken or has committed to take, particularly voluntary corrective action resulting from self-assessment, and other relevant information.] 

  1. The Banking Department’s evaluation of a banking institution’s CRA performance is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the banking institution or in any assessment area by any affiliate whose loans have been considered as part of the banking institution’s lending performance.  In connection with any type of lending activity described in section 76.8(a) of this Part, evidence of discriminatory or other credit practices that violate an applicable law, rule or regulation includes, but is not limited to:

  1. discrimination against applicants on a prohibited basis in violation, for example, of Section 296-a of the New York State Executive Law, the Equal Credit Opportunity Act or the Fair Housing Act;

  2. violations of either Section 6-l of the Banking Law or the Home Ownership and Equity Protection Act;

  3. violations of section 5 of the Federal Trade Commission Act;

  4. violations of section 8 of the Real Estate Settlement Procedures Act; and

  5. violations of the Truth in Lending Act provisions regarding a consumer’s right of rescission.

  1. in determining the effect of evidence of practices described in paragraph (b)(1) of this section on the banking institution’s assigned rating, the Banking Department considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the banking institution (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the banking institution (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from self-assessment; and other relevant information.

[(b)] (c) The Banking Department will prepare a written summary of the results of such assessment.  The CRA rating and the written summary will be made available to the public.  In addition, each banking institution shall include a copy of such rating and the three most recent summaries in the banking institution's public file as required to be maintained by Federal CRA regulations.

§ 76.6  Assessment area delineation.  

  1. In general.  A banking institution shall delineate one or more assessment areas within which the Banking Department evaluates the banking institution's record of helping to meet the credit needs of its community.  The Banking Department does not evaluate the banking institution's delineation of its assessment area(s) as a separate performance criterion, but the Banking Department reviews the delineation for compliance with the requirements of this section.

  2. Geographic area(s) for wholesale or limited purpose banking institutions.  The assessment area(s) for wholesale or limited purpose banking institutions must consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns, in which the bank has its main office, branches, and deposit-taking ATMs.

  3. Geographic area(s) for other banking institutions.  The assessment area(s) for a banking institution other than a wholesale or limited purpose banking institution must: 

  1. consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns; and

  2. include the geographies in which the banking institution has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding geographies in which the banking institution has originated or purchased a substantial portion of its loans (including home mortgage loans, small business and small farm loans, and any other loans the banking institution chooses, such as those consumer loans on which the banking institution elects to have its performance assessed). 

  1. Adjustments to geographic area(s).  A banking institution may adjust the boundaries of its assessment area(s) to include only the portion of a political subdivision that it reasonably can be expected to serve.  An adjustment is particularly appropriate in the case of an assessment area that otherwise would be extremely large, of unusual configuration, or divided by significant geographic barriers.

  2. Limitations on the delineation of an assessment area.  Each banking institution's assessment area(s): 

  1. must consist only of whole geographies;

  2. may not reflect illegal discrimination;
  3. may not arbitrarily exclude low- or moderate-income geographies, taking into account the banking institution's size and financial condition; and

  4. must delineate separate assessment areas for the areas served by the banking institution in each state in those instances in which a banking institution serves a geographic area that extends substantially beyond a state boundary. 

  1. Use of assessment area(s).  The Banking Department uses the assessment area(s) delineated by a banking institution in its evaluation of the banking institution's CRA performance unless the Banking Department determines that the assessment area(s) do not comply with the requirements of this section.

§ 76.7  Performance tests and standards.  

  1. Performance tests and standards.  The Banking Department shall assess the CRA performance of banking institutions in an evaluation as set forth below: 

  1. Lending, investment and service tests.  The Banking Department applies the lending, investment and service tests, as provided in sections 76.8, 76.9  and 76.10 of this Part, in evaluating the performance of a banking institution, except as provided in paragraphs (2), (3) and (4) of this subdivision.

  2. Community development test for wholesale or limited purpose banking institutions.  The Banking Department applies the community development test for a wholesale or limited purpose banking institution, as provided in section 76.11 of this Part, except as provided in paragraph (4) of this subdivision.

  3. Small banking institution performance standards. The Banking Department applies the small banking institution performance standards, as provided in section 76.12 of this Part, in evaluating the performance of a small banking institution or a banking institution that was a small banking institution during the prior calendar year, unless the banking institution elects to be assessed as provided in paragraph (1), (2) or (4) of this subdivision.  The banking institution may elect to be assessed as provided in paragraph (1) of this subdivision only if it collects and reports the Federal CRA data required for other banking institutions which are assessed pursuant to paragraph (1) of this subdivision.

  4. Strategic plan.  The Banking Department evaluates the performance of a banking institution under a strategic plan if the banking institution submits, and the Banking Department approves, a strategic plan as provided in section 76.13 of this Part.

  1. Performance context.  The Banking Department [may] will apply the tests and standards in subdivision (a) of this section and may also consider whether to approve a proposed strategic plan in the context of: 

  1. demographic data including housing data and any other relevant data pertaining to a banking institution's assessment area(s);

  2. the performance of all, including similarly situated, lenders in the banking institution's  assessment area(s);

  3. lending, investment and service opportunities in the banking institution's assessment area(s);

  4. the banking institution's product offerings and business strategy;

  5. institutional capacity and constraints;

  6. the banking institution's past performance;

  7. the banking institution's public file as required to be maintained  by Federal CRA regulations;

  8. the banking institution's market share in its assessment area;

  9. community input; and

  10. any other information deemed relevant by the Banking Department.

§ 76.8  Lending test. 

  1. Scope of test.  The scope of the lending test is as follows: 

  1. The lending test evaluates a banking institution's record of helping to meet the credit needs of its assessment area(s) through its lending activities by considering a banking institution's home mortgage, small business, small farm, and community development lending.  If consumer lending constitutes a substantial majority of a banking institution's business, the Banking Department [may] will evaluate the banking institution's consumer lending in one or more of the following categories: motor vehicle, credit card, home equity, other secured, and other unsecured loans.  In addition, at a banking institution's option, the Banking Department [may] will evaluate one or more categories of consumer lending, if the banking institution has collected and maintained the data required by Regulation BB of the Board of Governors of the Federal Reserve System (12 CFR part 228), as issued on April 24, 1995, and amended from time to time, for each category that the banking institution elects to have the Banking Department evaluate.  (This publication may be viewed at the New York City office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G 1, and the Department of State located at 41 State Street, Albany, NY 12231. It is published by the Office of the Federal Register, National Archives and Records Administration and is for sale by the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington , DC 20402-9328 .)

  2. The Banking Department considers originations and purchases of loans.  The Banking Department may also consider any other loan data the banking institution may choose to provide, including data on loans outstanding, [renewals,] commitments and letters of credit.

  3. The Banking Department may consider loans originated or purchased by consortia in which the banking institution participates or by third parties in which the banking institution has invested. 

  1. Performance criteria.  The Banking Department evaluates a banking institution's lending performance pursuant to criteria which may include the following: 

  1. Lending activity.  The number and amount of the banking institution's home mortgage, small business, small farm, and consumer loans, if applicable, in the banking institution's assessment area(s).

  2. Geographic distribution.  The geographic distribution of the banking institution's home mortgage, small business, small farm, and consumer loans, if applicable, based on the loan location, including: 

  1. the proportion of the banking institution's lending in the banking institution's assessment area(s);

  2. the dispersion of lending in the banking institution's assessment area(s); and

  3. the number and amount of loans in low-, moderate-, middle-, and upper-income geographies in the banking institution's assessment area(s).

  1. Borrower characteristics. The distribution, particularly in the banking institution's assessment area(s), of the banking institution's home mortgage, small business, small farm, and consumer loans, if applicable, based on borrower characteristics, including the number and amount of: 

  1. home mortgage loans to low-, moderate-, middle-, and upper-income individuals;

  2. small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;

  3. small business and small farm loans by loan amount at origination;

  4. consumer loans, if applicable, to low-, moderate-, middle-, and upper-income individuals; and

  5. the banking institution's use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals.

  1. Community development lending.  The banking institution's community development lending, including the number and amount of community development loans, and their complexity and innovativeness.

  2. Innovative or flexible lending practices. The banking institution's use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies. 

  1. Affiliate lending.  Affiliate lending will be considered as follows: 

  1. At a banking institution's option, the Banking Department will consider loans by an affiliate of the banking institution, if the banking institution provides data on the affiliate's loans to the Banking Department. The data provided should contain the information specified in Section 228.42 of Regulation BB of the Board of Governors of the Federal Reserve System (12 CFR part 228), issued on April 24, 1995, as amended from time to time.  (This publication may be viewed at the New York City office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G 1, and the Department of State located at 41 State Street, Albany, NY 12231. It is published by the Office of the Federal Register, National Archives and Records Administration and is for sale by the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington , DC 20402-9328 .)

  2. The Banking Department considers affiliate lending subject to the following constraints: 

  1. no affiliate may claim a loan origination or loan purchase if another institution claims the same loan origination or purchase; and

  2. if a banking institution elects to have the Banking Department consider loans within a particular lending category made by one or more of the banking institution's affiliates in a particular assessment area, the banking institution shall elect to have the Banking Department consider all the loans within that lending category in that particular assessment area made by all of the banking institution's affiliates. 

  1. The Banking Department does not consider affiliate lending in assessing a banking institution's performance under subparagraph (b)(2)(i) of this section.

  1. Lending by a consortium or a third party.  Community development [L]loans originated or purchased by a consortium in which the banking institution participates or by a third party in which the banking institution has invested: 

  1. will be considered, at the banking institution's option, if the banking institution reports to the Banking Department the data specified in Section 228.42 of Regulation BB of the Board of Governors of the Federal Reserve System (12 CFR part 228), issued on April 24, 1995, as amended from time to time, pertaining to these loans [to the Banking Department]  (This publication may be viewed at the New York City office of the Banking Department at the address set forth in section 1.1 of Supervisory Policy G 1, and the Department of State located at 41 State Street, Albany, NY 12231. It is published by the Office of the Federal Register, National Archives and Records Administration and is for sale by the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328.); and

  2. may be allocated among participants or investors, as they choose, for purposes of the lending test, except that no participant or investor: 

  1. may claim a loan origination or loan purchase if another participant or investor claims the same loan origination or purchase; or

  2. may claim loans accounting for more than its percentage share  (based on the level of its participation or investment) of the total loans originated by the consortium or third party.

§ 76.9  Investment test. 

  1. Scope of test.  The investment test evaluates a banking institution's record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader statewide or regional area that includes the banking institution's assessment area(s).

  2. Exclusion.  Activities considered under the lending or service tests may not be considered under the investment test.

  3. Affiliate investment.  At a banking institution's option, the Banking Department will consider, in its assessment of a banking institution's investment performance, a qualified investment made by an affiliate of the banking institution, if the qualified investment is not claimed by any other institution.

  4. Performance criteria.  The Banking Department evaluates the investment performance of a banking institution pursuant to criteria which may include the following: 

  1. the dollar amount of qualified investments;

  2. the innovativeness or complexity of qualified investments;

  3. the responsiveness of qualified investments to credit and community development needs; and

  4. the degree to which the qualified investments are not routinely provided by private investors.

§ 76.10  Service test.  

  1. Scope of test.  The service test evaluates a banking institution's record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of a banking institution's systems for delivering retail banking services and the extent and innovativeness of its community development services.

  2. Area(s) benefited.  Community development services must benefit a banking institution's assessment area(s) or a broader statewide or regional area that includes the banking institution's assessment area(s).

  3. Affiliate service.  At a banking institution's option, the Banking Department will consider, in its assessment of a banking institution's service performance, a community development service provided by an affiliate of the banking institution, if the community development service is not claimed by any other institution.

  4. Performance criteria.  The Banking Department evaluates the availability and effectiveness of a banking institution's systems for delivering retail banking services, pursuant to criteria which may include the following: 

  1. the current distribution of the banking institution's branches among low-, moderate-, middle-, and upper-income geographies [or primarily serving low- or moderate-income individuals], giving additional consideration to branches located adjacent to low- or moderate-income geographies when such branches can be shown to serve the needs of low- or moderate-income individuals;

  2. in the context of [its] the current distribution of [the banking institution's] its branches, the banking institution's record of opening and closing branches, particularly branches located in low- or moderate-income geographies [or primarily serving low- or moderate-income individuals] or branches in adjacent geographies when such branches can be shown to serve the needs of low- or moderate-income individuals;

  3. the availability and effectiveness of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the banking institution, banking by telephone or computer, loan production offices, and bank-at-work or bank-by- mail programs) in low- and moderate-income geographies or primarily serving low- or moderate-income individuals; and

  4. the range of services provided in low-, moderate-, middle- and upper-income geographies and to low-, moderate-, middle- and upper-income individuals and the degree to which the services are tailored to meet the needs of those geographies and individuals. 

  1. Performance criteria.  The Banking Department evaluates community development services pursuant to criteria which may include the following: 

  1. the extent to which the banking institution provides community development services; and

  2. the innovativeness and responsiveness of community development services. 

  1. Other performance criteria.  

(1) The Banking Department will favorably consider a banking institution's marketing and/or advertising of its basic banking account as defined in section 14-f of the New York Banking Law and Part 9 of this Title or offering an approved alternative account which provides more advantageous terms for consumers than is required by section 14-f of the New York Banking Law and Part 9 of this Title.

(2) The Banking Department will favorably consider a banking institution’s efforts to establish a Banking Development District, as defined in Section 96-d of the New York Banking Law andPart 8 of this Title, within one or more of the institution’s assessment areas.  

§ 76.11  Community development test for wholesale or limited purpose  banking institutions. 

  1. Scope of test.  The Banking Department assesses a wholesale or limited purpose banking institution's record of helping to meet the credit needs of its assessment area(s) under the community development test through its community development lending, qualified investments, or community development services.

  2. Designation as a wholesale or limited purpose banking institution.  In order to receive a designation as a wholesale or limited purpose banking institution, a banking institution shall file a request, in writing, with the appropriate Federal regulatory authority in compliance with its rules and regulations regarding such designations.  If the appropriate Federal regulatory authority approves the designation, it remains in effect until the banking institution requests revocation of the designation or until one year after the appropriate Federal regulatory authority notifies the banking institution that the designation has been revoked on its own initiative.

  3. Performance criteria.  The Banking Department evaluates the community development performance of a wholesale or limited purpose banking institution pursuant to criteria which may include the following: 

  1. the number and amount of community development loans (including originations and purchases of loans and other community development loan data provided by the banking institution, such as data on loans outstanding, commitments, and letters of credit), qualified investments, or community development services;

  2. the use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and

  3. the banking institution's responsiveness to credit and community development needs. 

  1. Indirect activities.  At a banking institution's option, the Banking Department will consider in its community development performance assessment: 

  1. qualified investments or community development services provided by an affiliate of the banking institution, if the investments or services are not claimed by any other institution;  and

  2. community development lending by affiliates, consortia and third parties, subject to the requirements and limitations set forth in section 76.8(c) and (d) of this Part.

  1. Benefit to assessment area(s).  Benefits to assessment area(s) are set forth below: 

  1. Benefit inside assessment area(s).  The Banking Department considers all qualified investments, community development loans, and community development services that benefit areas within the banking institution's assessment area(s) or a broader statewide or regional area that includes the banking institution's assessment area(s).

  2. Benefit outside assessment area(s).  The Banking Department considers the qualified investments, community development loans, and community development services that benefit areas outside the banking institution's assessment area(s), but within New York State , if the banking institution has adequately addressed the needs of its assessment area(s).

§ 76.12  Small banking institution performance standards. 

  1. Performance criteria

  1. Small banking institutions with assets of less than $250 million.  [For purposes of this section, the performance criteria are set forth below.]  The Banking Department evaluates the record of a small banking institution [or a banking institution that was a small banking institution during the prior calendar year,] that is not, or that was not during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the [following] criteria[:] set forth in paragraph (b) of this section.

  2. Intermediate small banking institutions.  The Banking Department evaluates the record of a small banking institution that is, or that was during the prior calendar year, an intermediate small banking institution, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in paragraphs (b) and (c) of this section. 

  1. Lending Test.  A small banking institution’s lending performance is evaluated pursuant to the following criteria:

[(a)] (1) the banking institution's loan-to-deposit ratio, adjusted for  seasonal variation and, as  appropriate, other lending-related activities, such as loan originations for sale to the secondary  markets, community development loans, or qualified investments;

[(b)] (2) the percentage of loans and, as appropriate, other lending-related activities located in the  banking institution's assessment area(s);

[(c)] (3)  the banking institution's record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes;

[(d)] (4) the geographic distribution of the banking institution's loans; and

[(e)] (5) the banking institution's record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s). 

  1. Community development test.  An intermediate small banking institution’s community development performance also is evaluated pursuant to the following criteria:

  1. the number and amount of community development loans;

  2. the number and amount of qualified investments;

  3. the extent to which the banking institution provides community development services; and

  4. the banking institution’s responsiveness through such activities to community development lending, investment and service needs.

§ 76.13  Strategic plan.  

  1. Alternative election.  The Banking Department will assess a banking institution's record of helping to meet the credit needs of its assessment area(s) under a strategic plan if: 

  1. the banking institution has submitted the plan to the Banking  Department as provided for in this section;

  2. the Banking Department has approved the plan;

  3. the plan is in effect; and

  4. the banking institution has been operating under an approved plan for at least one year. 

  1. Data reporting.  The Banking Department's approval of a plan does not affect the banking institution's obligation, if any, to report other required data.

  2. Plans in general.  

  1. Term.  A plan may have a term of no more than five years, and any multi-year plan must include annual interim measurable goals under which the Banking Department will evaluate the banking institution's performance. 

  2. Multiple assessment areas.  A banking institution with more than one assessment area may prepare a single plan for all of its assessment areas or one or more plans for one or more of its assessment areas.

  3. Treatment of affiliates.  Affiliated institutions may prepare a joint plan if the plan provides measurable goals for each institution.  Activities may be allocated among institutions at the institutions' option, provided that the same activities are not considered for more than one institution. 

  1. Public participation in plan development.  Before submitting a plan to the Banking Department for approval, a banking institution shall: 

  1. informally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan;

  2. once the banking institution has developed a plan, formally solicit public comment on the plan for at least 30 days by publishing notice in at least one newspaper of general circulation in each assessment area covered by the plan; and

  3. during the period of formal public comment, make copies of the plan available for review by the public at no cost at all offices of the banking institution in any assessment area covered by the plan and provide copies of the plan upon request for a reasonable fee to cover copying and mailing, if applicable. 

  1. Submission of plan.  The banking institution shall submit its plan to the Banking Department at least three months prior to the proposed effective date of the plan.  The banking institution shall also submit with its plan a description of its informal efforts to seek suggestions from members of the public, any written public comment received, and, if the plan was revised in light of the comment received, the initial plan as released for public comment.

  2. Plan content.  The content of the plan shall be as follows:

  1. Measurable goals.  

  1. A banking institution shall specify in its plan measurable goals for helping to meet the credit needs of each assessment area covered by the plan, particularly the needs of low- and moderate-income geographies and  low- and moderate-income individuals, through lending, investment, and services, as appropriate.

  2. A banking institution shall address in its plan all three performance categories and, unless the banking institution has been designated as a wholesale or limited purpose banking institution, shall emphasize lending and lending-related activities.  Nevertheless, a different emphasis, including a focus on one or more performance categories, may be appropriate if responsive to the characteristics and credit needs of its assessment area(s), considering public comment and the banking institution's capacity and constraints, product offerings, and business strategy. 

  1. Confidential information.  A banking institution may submit additional information to the Banking Department on a confidential basis, but the goals stated in the plan must be sufficiently specific to enable the public and the Banking Department to judge the merits of the plan.

  2. Satisfactory and outstanding goals.  A banking institution shall specify in its plan measurable goals that constitute "satisfactory" performance.  A plan may specify measurable goals that constitute "outstanding" performance.  If a banking institution submits, and the Banking Department approves, both "satisfactory" and "outstanding" performance goals, the Banking Department will consider the banking institution eligible for an "outstanding" performance rating.

  3. Election if satisfactory goals not substantially met.  A banking institution may elect in its plan that, if the banking institution fails to meet substantially its plan goals for a satisfactory rating, the Banking Department will evaluate the banking institution's performance under the lending, investment, and service tests, the community development test, or the small banking institution performance standards, as appropriate. 

  1. Plan approval.  Approval of a plan shall be as follows: 

  1. Timing.  The Banking Department will act upon a plan within 60 calendar days after receipt of the complete plan and other material required under subdivision [(d)] (e) of this section.  If the Banking Department fails to act within this time period, the plan shall be deemed approved unless the Banking Department extends the review period for good cause.

  2. Public participation.  In evaluating the plan's goals, the Banking Department considers the public's involvement in formulating the plan, written public comment on the plan, and any response by the banking institution to public comment on the plan.

  3. Criteria for evaluating plan.  The Banking Department evaluates a plan's measurable goals using the following criteria, as appropriate: 

  1. the extent and breadth of lending or lending-related activities, including, as appropriate, the distribution of loans among different geographies, businesses and farms of different sizes, and individuals of different income levels, the extent of community development lending, and the use of innovative or flexible lending practices to address credit needs;

  2. the amount and innovativeness, complexity, and responsiveness of the banking institution's qualified investments; and

  3. the availability and effectiveness of the banking institution's systems for delivering retail banking services and the extent and innovativeness of the banking institution's community development services. 

  1. Plan amendment.  During the term of a plan, a banking institution may request the Banking Department to approve an amendment(s) to the plan on grounds that there has been a material change in circumstances.  The banking institution shall develop an amendment(s) to a previously approved plan in accordance with the public participation requirements of subdivision (d) of this section.

§ 76.14  High cost areas. 

The Banking Department recognizes that the demographics and housing characteristics of an area may be such that the gap between housing costs and area median income greatly restricts the affordability of owner-occupied housing for low- and moderate-income persons residing in such an area.  At the same time, there may exist a shortage of credit which endangers the preservation, stabilization or improvement of middle-income geographies or limits access to credit for middle- income persons residing in such an area.  Where, based on relevant, current and verifiable data (including but not limited to the most recent census data pertaining to such area) these conditions are found to exist, the department may, in its assessment of the institution's performance, be flexible in its consideration of a banking institution's activities pertaining to owner-occupied housing in middle-income geographies or for middle-income individuals residing in such an area.  Consideration of such activities shall be in addition to, and not in lieu of, consideration of activities in low- or moderate-income geographies and activities which serve low- or moderate-income individuals.

§ 76.15  Other documents.  

When taking any action under section 29 of the Banking Law relating to the opening of a branch or public accommodation office or under section 601-b of the Banking Law relating to the approval or disapproval of a merger or purchase of assets, the superintendent shall request from the applicant banking institution and from the appropriate Federal bank regulatory authorities any documents, other than those required to be filed with the superintendent by this Part or by other applicable statutes or regulations:

  1. filed with the Federal bank regulatory authorities in connection with the application: or

  2. produced by the applicant banking institution or others in connection with the application.

Explanatory All Institutions Letter

 

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