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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 25

Docket ID OCC-2007-0021

RIN 1557-AD05

FEDERAL RESERVE SYSTEM

12 CFR Part 228

[Regulation BB; Docket No. R-1302]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 345

RIN 3064-AD24

DEPARTMENT OF TREASURY

Office of Thrift Supervision

12 CFR Part 563e

Docket ID OTS-2007-0024

RIN 1550-AC18

Community Reinvestment Act Regulations

AGENCIES: Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); Office of Thrift Supervision (OTS).

ACTION: Joint final rule; technical correction.

SUMMARY: The OCC, the Board, the FDIC, and the OTS (collectively, the "agencies") are amending their Community Reinvestment Act (CRA) regulations to adjust the asset-size thresholds used to define "small bank" or "small savings association" and "intermediate small bank" or "intermediate small savings association." As required by the CRA regulations, the adjustment to the threshold amount is based on the annual percentage change in the Consumer Price Index. The agencies are also correcting a paragraph heading that is inaccurate as a result of annual revisions to the small institution threshold.

DATE: Effective January 1, 2008.

FOR FURTHER INFORMATION CONTACT:

OCC: Margaret Hesse, Special Counsel, Community and Consumer Law Division, (202) 874-5750; or Karen Tucker, National Bank Examiner, Compliance Policy Division, (202) 874-4428, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.

Board: Anjanette M. Kichline, Senior Supervisory Consumer Financial Services Analyst, (202) 785-6054; or Brett Lattin, Attorney, (202) 452-3667, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551.

FDIC: Deirdre Foley, Senior Policy Analyst, Compliance Policy Section, (202) 898-6612, and Faye Murphy, Review Examiner, Compliance Examination Support, (202) 898-6613, Division of Supervision and Consumer Protection; or Susan van den Toorn, Counsel, Legal Division, (202) 898-8707, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.

OTS: Celeste Anderson, Senior Project Manager, Compliance and Consumer Protection, (202) 906-7990; or Richard Bennett, Senior Compliance Counsel, Regulations and Legislation Division, (202) 906-7409, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

Background and Description of the Joint Final Rule

The agencies' CRA regulations establish CRA performance standards for small and intermediate small banks and savings associations. The regulations define small and intermediate small institutions by reference to asset-size criteria expressed in dollar amounts, and they further require the agencies to publish annual adjustments to these dollar figures based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW), not seasonally adjusted, for each twelve-month period ending in November, with rounding to the nearest million. 12 CFR 25.12(u)(2), 228.12(u)(2), 345.12(u)(2), and 563e.12(u)(2).

The threshold for small banks was revised most recently for the OCC, the Board, and the FDIC effective January 1, 2007 (71 FR 78335 (Dec. 29, 2006)). These agencies' CRA regulations, as revised on December 29, 2006, provide that banks that, as of December 31 of either of the prior two calendar years, had assets of less than $1.033 billion are "small banks." Small banks with assets of at least $258 million as of December 31 of both of the prior two calendar years and less than $1.033 billion as of December 31 of either of the prior two calendar years are "intermediate small banks." 12 CFR 25.12(u)(1), 228.12(u)(1), 345.12(u)(1). The threshold for small savings associations was revised in the same way and the same threshold for intermediate small savings associations was established by OTS effective July 1, 2007 (72 FR 13435 (Mar. 22, 2007). 12 CFR 563e.12(u)(1). This joint final rule further revises these thresholds.

During the period ending November 2007, the CPIW increased by 2.7 percent. As a result, the agencies are revising 12 CFR 25.12(u)(1), 228.12(u)(1), 345.12(u)(1), and 563e.12(u)(1) to make this annual adjustment. Beginning January 1, 2008, banks and savings associations that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion are "small banks" or "small savings associations." Small banks or small savings associations with assets of at least $265 million as of December 31 of both of the prior two calendar years and less than $1.061 billion as of December 31 of either of the prior two calendar years are "intermediate small banks" or "intermediate small savings associations." The agencies also publish current and historical asset-size thresholds on the website of the Federal Financial Institutions Examination Council at http://www.ffiec.gov/cra/.

The agencies also are amending their CRA regulations to make a technical correction to revise a paragraph heading that is inaccurate as a result of annual small institution threshold adjustments. The technical correction revises the paragraph headings found at 12 CFR 25.26(a)(1), 228.26(a)(1), and 345.26(a)(1) ("Small banks with assets of less than $250 million") and 12 CFR 563e.26(a)(1) ("Small savings associations with assets of less than $250 million"). As a result of the agencies' annual adjustments to the dollar amount threshold for small institutions, the threshold of $250 million described in the paragraph heading is inaccurate. The agencies are revising the headings so that they do not reference the dollar amount of the small bank or small savings association asset threshold.

Administrative Procedure Act and Effective Date

Under 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA), an agency may, for good cause, find (and incorporate the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.

The amendments to the regulations to adjust the asset-size thresholds for small and intermediate small banks and savings associations result from the application of a formula established by a provision in the CRA regulations that the agencies previously published for comment. See 70 FR 12148 (Mar. 11, 2005), 70 FR 44256 (Aug. 2, 2005), 71 FR 67826 (Nov. 24, 2006), and 72 FR 13429 (Mar. 22, 2007). Sections 25.12(u)(1), 228.12(u)(1), 345.12(u)(1), and 563e.12(u)(1) are amended by adjusting the asset threshold as provided for in 25.12(u)(2), 228.12(u)(2), 345.12(u)(2), and 563e.12(u)(2).

Accordingly, since the agencies' rules provide no discretion as to the computation or timing of the revisions to the asset-size criteria, the agencies have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary.

With regard to the revision amending the paragraph heading, as a result of the annual adjustment required by the regulations, the heading describing "small banks" or "small savings associations" as those with assets of less than $250 million is inaccurate. The revision merely amends the heading to correct this inaccuracy and prevent further inaccuracies when annual adjustments are made in the future. For this reason, the agencies, for good cause, find that the notice and comment procedures prescribed by the APA are unnecessary because the joint final rule is making a technical correction without substantive change to the provisions of parts 25, 228, 345, and 563e.

This joint final rule takes effect January 1, 2008. Under 5 U.S.C. 553(d)(3) of the APA, the required publication or service of a substantive rule shall be made not less than 30 days before its effective date, except, among other things, as provided by the agency for good cause found and published with the rule. The agencies find that there is good cause for shortened notice because their current rules already provide notice that the small and intermediate asset-size thresholds will be adjusted as of December 31 based on twelve-month data as of the end of November each year. Moreover, the revisions to the headings in the agencies' rules are minor, nonsubstantive, and technical.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. 5 U.S.C. 603 and 604. As noted previously, the agencies have determined that it is unnecessary to publish a notice of proposed rulemaking for this joint final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

Paperwork Reduction Act of 1995

There are no collection of information requirements in this joint final rule.

Executive Order 12866

The OCC and OTS have each determined that its portion of this joint final rule is not a significant regulatory action as defined in Executive Order 12866.

Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that an agency must prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OCC and OTS have each determined that its portion of this joint final rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more in any one year. Accordingly, this joint final rule is not subject to section 202 of the Unfunded Mandates Act.

Executive Order 13132

The OCC and OTS have each determined that its portion of this joint final rule does not have any Federalism implications as required by Executive Order 13132.

List of Subjects

12 CFR Part 25
Community development, Credit, Investments, National banks, Reporting and recordkeeping requirements.

12 CFR Part 228
Banks, banking, Community development, Credit, Investments, Reporting and recordkeeping requirements.

12 CFR Part 345
Banks, banking, Community development, Credit, Investments, Reporting and recordkeeping requirements.

12 CFR Part 563e
Community development, Credit, Investments, Reporting and recordkeeping requirements, Savings associations.

Department of the Treasury

Office of the Comptroller of the Currency

12 CFR Chapter I

For the reasons discussed in the joint preamble, 12 CFR part 25 is amended as follows:

PART 25 – COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT PRODUCTION REGULATIONS

1. The authority citation for part 25 continues to read as follows:

Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215, 215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2907, and 3101 through 3111.

2. Revise 25.12(u)(1) to read as follows:

25.12 Definitions.
* * * * *

(u) Small bank – (1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion. Intermediate small bank means a small bank with assets of at least $265 million as of December 31 of both of the prior two calendar years and less than $1.061 billion as of December 31 of either of the prior two calendar years.
* * * * *

3. Revise the paragraph heading to 25.26(a)(1) to read as follows:

25.26 Small bank performance standards.

(a) Performance criteria – (1) Small banks that are not intermediate small banks.
* * * * *

Federal Reserve System

12 CFR Chapter II

For the reasons set forth in the joint preamble, the Board of Governors of the Federal Reserve System amends part 228 of chapter II of title 12 of the Code of Federal Regulations as follows:

PART 228 – COMMUNITY REINVESTMENT (REGULATION BB)

1. The authority citation for part 228 continues to read as follows:
Authority: 12 U.S.C. 321, 325, 1828(c), 1842, 1843, 1844, and 2901 et seq.
2. Revise 228.12(u)(1) to read as follows:

228.12 Definitions.
* * * * *

(u) Small bank – (1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion. Intermediate small bank means a small bank with assets of at least $265 million as of December 31 of both of the prior two calendar years and less than $1.061 billion as of December 31 of either of the prior two calendar years.
* * * * *

3. Revise the paragraph heading to 228.26(a)(1) to read as follows:

228.26 Small bank performance standards.

(a) Performance criteria – (1) Small banks that are not intermediate small banks.
* * * * *

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance
For the reasons set forth in the joint preamble, the Board of Directors of the Federal Deposit Insurance Corporation amends part 345 of chapter III of title12 of the Code of Federal Regulations to read as follows:

PART 345 – COMMUNITY REINVESTMENT

1. The authority citation for part 345 continues to read as follows:
Authority: 12 U.S.C. 1814-1817, 1819-1820, 1828, 1831u and 2901-2907, 3103-3104, and 3108(a).
2. Revise 345.12(u)(1) to read as follows:

345.12 Definitions.
* * * * *

(u) Small bank – (1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion. Intermediate small bank means a small bank with assets of at least $265 million as of December 31 of both of the prior two calendar years and less than $1.061 billion as of December 31 of either of the prior two calendar years.
* * * * *

3. Revise the paragraph heading to 345.26(a)(1) to read as follows:

345.26 Small bank performance standards.

(a) Performance criteria – (1) Small banks that are not intermediate small banks.
* * * * *

Department of the Treasury

Office of Thrift Supervision

12 CFR Chapter V

For the reasons discussed in the joint preamble, 12 CFR part 563e is amended as follows:

PART 563e – COMMUNITY REINVESTMENT

1. The authority citation for part 563e continues to read as follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 1814, 1816, 1828(c), and 2901 through 2907.
2. Revise 563e.12(u)(1) to read as follows:

563e.12 Definitions.
* * * * *

(u) Small savings association – (1) Definition. Small savings association means a savings association that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion. Intermediate small savings association means a small savings association with assets of at least $265 million as of December 31 of both of the prior two calendar years and less than $1.061 billion as of December 31 of either of the prior two calendar years.
* * * * *

3. Revise the paragraph heading to 563e.26(a)(1) to read as follows:

563e.26 Small savings association performance standards.

(a) Performance criteria – (1) Small savings associations that are not intermediate small savings associations.
* * * * *

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL RULE ENTITLED "COMMUNITY REINVESTMENT ACT REGULATIONS."]

Dated: December 5, 2007.

Julie L. Williams (signed)


Julie L. Williams,

First Senior Deputy Comptroller and Chief Counsel.

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL RULE ENTITLED "COMMUNITY REINVESTMENT ACT REGULATIONS."]

By order of the Board of Governors of the Federal Reserve System,

December 14, 2007.

Jennifer J. Johnson (signed)


Jennifer J. Johnson,

Secretary of the Board.

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL RULE ENTITLED "COMMUNITY REINVESTMENT ACT REGULATIONS."]

By order of the Board of Directors.

Dated at Washington, D.C., this 10th day of December, 2007.

FEDERAL DEPOSIT INSURANCE CORPORATION

Robert E. Feldman (signed)


Robert E. Feldman,

Executive Secretary.

[THIS SIGNATURE PAGE PERTAINS TO THE JOINT FINAL RULE ENTITLED "COMMUNITY REINVESTMENT ACT REGULATIONS."]

Dated: December 14, 2007

By the Office of Thrift Supervision,

John M. Reich (signed)


John M. Reich,

Director.



Last Updated 12/19/2007 communications@fdic.gov