Recent revisions to Community Reinvestment Act (CRA) rules expand the definition of community development and increase the number of banks designated as "small" by adding "intermediate small banks" to the category.
The changes—approved by the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency—went into effect Sept. 1, 2005.
The new rules ease the regulatory burden on community banks while making CRA evaluations more effective in persuading banks to meet community development needs.
The final rules are essentially the same as ones the agencies proposed last spring. They increase the asset-size threshold for small banks to less than $1 billion, without regard to holding company affiliation. Intermediate small banks are those with assets of at least $250 million and less than $1 billion. The changes are also intended to encourage banks to provide meaningful community development lending, investment and services.
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