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Inactive Financial Institution Letters


August 2, 2001

SUBJECT: Revised and New Interagency Questions and
Answers Regarding Community Reinvestment

The Federal Financial Institutions Examination Council (FFIEC) published the attached "Interagency Questions and Answers Regarding Community Reinvestment" (Q&As) in the Federal Register on July 12, 2001. The Q&As were effective upon publication.

These interagency Q&As have been prepared by staff of the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. This version amends and supplements the Q&As published by the FFIEC on April 28, 2000. As with the prior version of the Q&As, this document incorporates all previously issued questions and answers that are still in effect.

The Q&A document is available on the FFIEC's Web site at and on the FDIC's Web site at Entries listed in the index to the document will be hyperlinked to corresponding questions and answers to facilitate quick reference.

The FFIEC has adopted a revised Q&A originally proposed on May 3, 1999, and reproposed in April 2000. The revised and reissued Q&A addresses whether there must be an immediate or direct benefit to an institution's assessment area(s) to satisfy the regulatory requirement that qualified investments and community development loans and services benefit an institution's assessment area(s) or a broader statewide or regional area that includes the assessment area(s).

This revised Q&A expands current guidance and provides two approaches to determine whether qualified investments and community development loans or services benefit an institution's assessment area(s) or a broader statewide or regional area that includes the institution's assessment area(s). First, if an activity supports an organization or program that benefits the institution's assessment area(s) or a broader statewide or regional area that is larger than, but includes, the assessment area(s), the activity will be considered if the purpose, mandate or function of the organization or activity includes serving the assessment area(s). Second, if, in view of its performance context, an institution has adequately addressed the community development needs of its assessment area(s), examiners will consider community development activities that benefit low- and moderate-income individuals or geographies somewhere in the broader statewide or regional area that includes the assessment area(s), even if those activities do not have a purpose, mandate or function of benefiting the institution's assessment area(s). A conforming amendment to a related Q&A clarifies what is meant by the term "regional area."

The FFIEC also has adopted six new Q&As that discuss the types of activities that revitalize and stabilize low- and moderate-income areas; the types of lending activities that may warrant favorable consideration as being responsive to the credit needs of an institution's community; "indirect" community development services; the activities of credit card banks; the effect of evidence of other illegal credit practices on an institution's performance; and electronic public file maintenance. Minor revisions also have been made to eight existing Q&As.

We invite public comment on any of the new and revised Q&As, and any other community reinvestment issues not addressed in the document.

In addition, we direct your attention to the "Advance Notice of Proposed Rulemaking" (ANPR) published in the Federal Register on July 19, 2001, seeking public comment on a broad range of questions as the four federal supervisory agencies begin a joint review of the Community Reinvestment Act (CRA) regulations. Commenters also may discuss other aspects of the CRA regulations, including suggesting ways to improve the effectiveness of the regulations. The ANPR can be found at and See FIL-65-2001, dated August 2, 2001, which discusses the ANPR and attaches the July 19, 2001, Federal Register notice.

For more information, please contact Robert W. Mooney, Assistant Director, Division of Compliance and Consumer Affairs (DCA), on 202-942-3378; Stephanie Caputo, Fair Lending Specialist, on 202-942-3413; or A. Ann Johnson, Counsel, Legal Division, on 202-898-3573. You may also contact your DCA Regional Office shown on the attached list.

Stephen M. Cross


Distribution: FDIC-Supervised Banks (Commercial and Savings)

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).

Last Updated 08/02/2001

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