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Appeals of Material Supervisory Determinations: Guidelines & Decisions

SARC-96-06 (December 6, 1996)

The Supervision Appeals Review Committee (“Committee”) of the Federal Deposit Insurance Corporation (“FDIC”), on November 18, 1996, considered your appeal of the Community Reinvestment Act (“CRA”) rating issued to [Bank] (“Bank”), pursuant to the Community Reinvestment Act Performance Evaluation (“PE”) as of May 1, 1996.

The Committee, after a review of the material submitted with the appeal has concluded that the CRA rating should be affirmed. This decision is considered a final supervisory determination by the FDIC. The Committee reached its determination after due consideration of the information presented by the Bank and by the examiner in the PE.

An institution’s capacity to meet identified credit needs is influenced by several factors, including its financial condition and size, resource constraints, legal impediments, etc. that could affect the demand and supply of credit. Also, under the new CRA an institution’s performance is judged in the context of information about the institution, its community, its competitors and its peers. In reaching its determination, the Committee noted that credit needs for agricultural and real estate loans had been identified within the Bank’s assessment area. No material submitted with the Bank’s appeal provided any documented support that the Bank is unable to meet any identified credit needs. The Bank has the capacity and ability to address these needs both through its strong financial condition and the loan products and services presently offered.

The Committee was encouraged, however, to learn that the Bank has begun to take affirmative actions to increase its lending performance while maintaining safe and sound credit standards. The Bank is encouraged to continue those efforts. The Bank is also encouraged to contact the FDIC’s Community Affairs Officer at its Kansas City Regional Office, Ms. Deanna Caldwell, (816) 234-8151, for any special assistance that may be needed to improve its lending performance.

By direction of the Supervision Appeals Review Committee of the Federal Deposit Insurance Corporation.