Small Bank Community Development Test

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An intermediate small bank is also examined based on the small bank community development test. The community development test does not apply to a small bank that is not an intermediate small bank. The community development test is a four prong test including the following: • The number and amount of community development loans; • The number and amount of qualified investments; • The extent to which the bank provides community development services; and • The bank’s responsiveness through such activities to community development lending, investment and service needs. WHOLESALE OR LIMITED PURPOSE BANKS Wholesale or limited purpose banks are examined under a community development test that evaluates the bank’s record to help meet the…show more content…
Examiners will consider all qualified investments, community development loans, and community development services that benefit areas within the bank’s assessment area(s). If the bank has adequately addressed the needs of its assessment area(s), an examiner will also consider qualified investments, community development loans, and community development services that benefit areas outside of the bank’s assessment area(s). A wholesale or limited purpose bank is rated as either outstanding, satisfactory, needs to improve, or substantial non-compliance based on the results of the wholesale or limited purpose bank community development test. STRATEGIC PLAN As an alternative to be graded under either the large bank or small bank tests a bank may develop a strategic plan for CRA compliance. The plan may be for a period up to five years and must contain annual measurable goals for at least satisfactory performance under the three large bank performance tests. If a bank has more than one assessment area, the bank may develop a single plan for all of its assessment areas or one or more plans for one or more of its assessment areas. Even if a large bank is operating under a plan, it must still collect and report data in accordance with the Regulation’s data reporting requirements. In the development of the plan the bank must informally seek suggestions from members of the public in the bank’s assessment area(s). After the plan is
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