Each depositor insured to at least $250,000 per insured bank

The revised Community Reinvestment Act (CRA) regulations that went into effect January 1, 1996, continue to prompt questions from the banking industry. In response, the Federal Financial Institutions Examination Council (FFIEC) has published the attached "Interagency Questions and Answers Regarding Community Reinvestment" (Q&As) in the Federal Register on behalf of its member banking regulatory agencies -- the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve System and the Office of Thrift Supervision. The agencies consider the Q&As to be their primary vehicle for disseminating guidance on interpreting CRA regulations.

The agencies have revised three Q&As that were previously issued on October 21, 1996, and have added two new Q&As. These Q&As address whether all activities that finance businesses and farms meeting the regulation's size eligibility standards will be considered "community development"; how to find income level data on the Internet; how to "geocode" addresses consisting of post office boxes or rural routes and box numbers; how examiners evaluate, under the lending test, loans to middle- or upper- income borrowers in low- and moderate-income areas; and whether inclusion on the published list of institutions to be examined in the upcoming quarter means an institution must be examined during that quarter.

The agencies also have proposed Q&As in response to numerous inquiries about whether certain activities have the necessary "primary purpose" of community development to qualify as a community development loan, qualified investment or service. These Q&As also explain how the qualitative and quantitative criteria will be considered by examiners. The agencies are seeking public comment on the proposed Q&As, which address the following issues:

• What is meant by the term "primary purpose" since that term is used to define what constitutes a community development loan, a qualified investment or service (preamble discussion can be found on pages 52108 and 52109).

• Whether an examiner may distinguish community development loans on the basis of the actual amount of the loan that advances the purpose of community development (preamble discussion can be found on page 52109).

• Whether an examiner may distinguish qualified investments on the basis of how much of the investment actually supports the purpose of community development (preamble discussion can be found on page 52109).

• Whether an institution will receive only partial consideration for a loan whose primary purpose is affordable housing when only a certain percentage of the housing units qualify as affordable housing (preamble discussion can be found on page 52109).