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12 USC CHAPTER 30 - COMMUNITY REINVESTMENT 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

.

-HEAD-

CHAPTER 30 - COMMUNITY REINVESTMENT

-MISC1-

Sec.

2901. Congressional findings and statement of purpose.

2902. Definitions.

2903. Financial institutions; evaluation.

(a) In general.

(b) Majority-owned institutions.

(c) Financial holding company requirement.

2904. Report to Congress.

2905. Regulations.

2906. Written evaluations.

(a) Required.

(b) Public section of report.

(c) Confidential section of report.

(d) Institutions with interstate branches.

(e) Definitions.

2907. Operation of branch facilities by minorities and women.

(a) In general.

(b) Definitions.

2908. Small bank regulatory relief.

(a) In general.

(b) No exception from CRA examinations in connection

with applications for deposit facilities.

(c) Discretion.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 1430, 1831y, 1835a, 1843,

3103, 4565 of this title.

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12 USC Sec. 2901 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2901. Congressional findings and statement of purpose

-STATUTE-

(a) The Congress finds that -

(1) regulated financial institutions are required by law to

demonstrate that their deposit facilities serve the convenience

and needs of the communities in which they are chartered to do

business;

(2) the convenience and needs of communities include the need

for credit services as well as deposit services; and

(3) regulated financial institutions have continuing and

affirmative obligation to help meet the credit needs of the local

communities in which they are chartered.

(b) It is the purpose of this chapter to require each appropriate

Federal financial supervisory agency to use its authority when

examining financial institutions, to encourage such institutions to

help meet the credit needs of the local communities in which they

are chartered consistent with the safe and sound operation of such

institutions.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 802, Oct. 12, 1977, 91 Stat.

1147.)

-MISC1-

SHORT TITLE

Section 801 of title VIII of Pub. L. 95-128 provided that: ''This

title (enacting this chapter) may be cited as the 'Community

Reinvestment Act of 1977'.''

RESPONSIVENESS TO COMMUNITY NEEDS FOR FINANCIAL SERVICES

Pub. L. 106-102, title VII, Sec. 715, Nov. 12, 1999, 113 Stat.

1470, provided that:

''(a) Study. - The Secretary of the Treasury, in consultation

with the Federal banking agencies (as defined in section 3(z) of

the Federal Deposit Insurance Act (12 U.S.C. 1813(z))), shall

conduct a study of the extent to which adequate services are being

provided as intended by the Community Reinvestment Act of 1977 (12

U.S.C. 2901 et seq.), including services in low- and

moderate-income neighborhoods and for persons of modest means, as a

result of the enactment of this Act (see Tables for

classification).

''(b) Reports. -

''(1) In general. - The Secretary of the Treasury shall -

''(A) before March 15, 2000, submit a baseline report to the

Congress on the study conducted pursuant to subsection (a); and

''(B) before the end of the 2-year period beginning on the

date of the enactment of this Act (Nov. 12, 1999), in

consultation with the Federal banking agencies, submit a final

report to the Congress on the study conducted pursuant to

subsection (a).

''(2) Recommendations. - The final report submitted under

paragraph (1)(B) shall include such recommendations as the

Secretary determines to be appropriate for administrative and

legislative action with respect to institutions covered under the

Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.).''

REPORT ON COMMUNITY DEVELOPMENT LENDING

Pub. L. 102-550, title IX, Sec. 910, Oct. 28, 1992, 106 Stat.

3874, provided that:

''(a) In General. - Not later than 12 months after the date of

enactment of this section (Oct. 28, 1992), the Board of Governors

of the Federal Reserve System, in consultation with the Comptroller

of the Currency, the Chairman of the Federal Deposit Insurance

Corporation, the Director of the Office of Thrift Supervision, and

the Chairman of the National Credit Union Administration, shall

submit a report to the Congress comparing residential, small

business, and commercial lending by insured depository institutions

in low-income, minority, and distressed neighborhoods to such

lending in other neighborhoods.

''(b) Contents of Report. - The report required by subsection (a)

shall -

''(1) compare the risks and returns of lending in low-income,

minority, and distressed neighborhoods with the risks and returns

of lending in other neighborhoods;

''(2) analyze the reasons for any differences in risk and

return between low-income, minority, and distressed neighborhoods

and other neighborhoods; and

''(3) if the risks of lending in low-income, minority, and

distressed neighborhoods exceed the risks of lending in other

neighborhoods, recommend ways of mitigating those risks.''

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12 USC Sec. 2902 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2902. Definitions

-STATUTE-

For the purposes of this chapter -

(1) the term ''appropriate Federal financial supervisory

agency'' means -

(A) the Comptroller of the Currency with respect to national

banks;

(B) the Board of Governors of the Federal Reserve System with

respect to State chartered banks which are members of the

Federal Reserve System and bank holding companies;

(C) the Federal Deposit Insurance Corporation with respect to

State chartered banks and savings banks which are not members

of the Federal Reserve System and the deposits of which are

insured by the Corporation; and

(2) (FOOTNOTE 1) section 1818 of this title, by the Director

of the Office of Thrift Supervision, in the case of a savings

association (the deposits of which are insured by the Federal

Deposit Insurance Corporation) and a savings and loan holding

company;

(FOOTNOTE 1) So in original. Text reading ''(2) section 1818 of

this title, by the Director'' probably should read ''(D) the

Director''.

(2) the term ''regulated financial institution'' means an

insured depository institution (as defined in section 1813 of

this title); and

(3) the term ''application for a deposit facility'' means an

application to the appropriate Federal financial supervisory

agency otherwise required under Federal law or regulations

thereunder for -

(A) a charter for a national bank or Federal savings and loan

association;

(B) deposit insurance in connection with a newly chartered

State bank, savings bank, savings and loan association or

similar institution;

(C) the establishment of a domestic branch or other facility

with the ability to accept deposits of a regulated financial

institution;

(D) the relocation of the home office or a branch office of a

regulated financial institution;

(E) the merger or consolidation with, or the acquisition of

the assets, or the assumption of the liabilities of a regulated

financial institution requiring approval under section 1828(c)

of this title or under regulations issued under the authority

of title IV (FOOTNOTE 2) of the National Housing Act (12 U.S.C.

1724 et seq.); or

(FOOTNOTE 2) See References in Text note below.

(F) the acquisition of shares in, or the assets of, a

regulated financial institution requiring approval under

section 1842 of this title or section 408(e) (FOOTNOTE 2) of

the National Housing Act (12 U.S.C. 1730a(e)).

(4) A financial institution whose business predominately

consists of serving the needs of military personnel who are not

located within a defined geographic area may define its ''entire

community'' to include its entire deposit customer base without

regard to geographic proximity.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 803, Oct. 12, 1977, 91 Stat.

1147; Pub. L. 95-630, title XV, Sec. 1502, Nov. 10, 1978, 92 Stat.

3713; Pub. L. 101-73, title VII, Sec. 744(q), title XII, Sec.

1212(a), Aug. 9, 1989, 103 Stat. 440, 526.)

-REFTEXT-

REFERENCES IN TEXT

The National Housing Act, referred to in par. (3)(E), (F), is act

June 27, 1934, ch. 847, 48 Stat. 1246, as amended. Title IV of the

National Housing Act which was classified generally to subchapter

IV (Sec. 1724 et seq.) of chapter 13 of this title, was repealed by

Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103 Stat. 363.

Section 408 of the National Housing Act, which was classified to

section 1730a of this title, was also repealed by section 407 of

Pub. L. 101-73. For complete classification of this Act to the

Code, see section 1701 of this title and Tables.

-MISC2-

AMENDMENTS

1989 - Par. (1)(D). Pub. L. 101-73, Sec. 744(q), directed the

general amendment of par. (1)(D) but then set out ''(2)'' followed

by the text of the new provisions. Prior to amendment, par. (1)(D)

read as follows: ''the Federal Home Loan Bank Board with respect to

institutions the deposits of which are insured by the Federal

Savings and Loan Insurance Corporation and to savings and loan

holding companies;''.

Par. (2). Pub. L. 101-73, Sec. 1212(a), substituted ''insured

depository institution (as defined in section 1813 of this title)''

for ''insured bank as defined in section 1813 of this title or an

insured institution as defined in section 401 of the National

Housing Act''.

1978 - Par. (4). Pub. L. 95-630 added par. (4).

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective Nov. 10, 1978, see section

1505 of Pub. L. 95-630, set out as a note under section 27 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1831y, 3103 of this

title.

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12 USC Sec. 2903 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2903. Financial institutions; evaluation

-STATUTE-

(a) In general

In connection with its examination of a financial institution,

the appropriate Federal financial supervisory agency shall -

(1) assess the institution's record of meeting the credit needs

of its entire community, including low- and moderate-income

neighborhoods, consistent with the safe and sound operation of

such institution; and

(2) take such record into account in its evaluation of an

application for a deposit facility by such institution.

(b) Majority-owned institutions

In assessing and taking into account, under subsection (a) of

this section, the record of a nonminority-owned and nonwomen-owned

financial institution, the appropriate Federal financial

supervisory agency may consider as a factor capital investment,

loan participation, and other ventures undertaken by the

institution in cooperation with minority- and women-owned financial

institutions and low-income credit unions provided that these

activities help meet the credit needs of local communities in which

such institutions and credit unions are chartered.

(c) Financial holding company requirement

(1) In general

An election by a bank holding company to become a financial

holding company under section 1843 of this title shall not be

effective if -

(A) the Board finds that, as of the date the declaration of

such election and the certification is filed by such holding

company under section 1843(l)(1)(C) of this title, not all of

the subsidiary insured depository institutions of the bank

holding company had achieved a rating of ''satisfactory record

of meeting community credit needs'', or better, at the most

recent examination of each such institution; and

(B) the Board notifies the company of such finding before the

end of the 30-day period beginning on such date.

(2) Limited exclusions for newly acquired insured depository

institutions

Any insured depository institution acquired by a bank holding

company during the 12-month period preceding the date of the

submission to the Board of the declaration and certification

under section 1843(l)(1)(C) of this title may be excluded for

purposes of paragraph (1) during the 12-month period beginning on

the date of such acquisition if -

(A) the bank holding company has submitted an affirmative

plan to the appropriate Federal financial supervisory agency to

take such action as may be necessary in order for such

institution to achieve a rating of ''satisfactory record of

meeting community credit needs'', or better, at the next

examination of the institution; and

(B) the plan has been accepted by such agency.

(3) Definitions

For purposes of this subsection, the following definitions

shall apply:

(A) Bank holding company; financial holding company

The terms ''bank holding company'' and ''financial holding

company'' have the meanings given those terms in section 1841

of this title.

(B) Board

The term ''Board'' means the Board of Governors of the

Federal Reserve System.

(C) Insured depository institution

The term ''insured depository institution'' has the meaning

given the term in section 1813(c) of this title.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 804, Oct. 12, 1977, 91 Stat.

1148; Pub. L. 102-550, title IX, Sec. 909(1), Oct. 28, 1992, 106

Stat. 3874; Pub. L. 106-102, title I, Sec. 103(b), Nov. 12, 1999,

113 Stat. 1350.)

-MISC1-

AMENDMENTS

1999 - Subsec. (c). Pub. L. 106-102 added subsec. (c).

1992 - Pub. L. 102-550 designated existing provisions as subsec.

(a), inserted heading, and added subsec. (b).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1831u, 1842, 2906, 2908

of this title.

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12 USC Sec. 2904 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2904. Report to Congress

-STATUTE-

Each appropriate Federal financial supervisory agency shall

include in its annual report to the Congress a section outlining

the actions it has taken to carry out its responsibilities under

this chapter.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 805, Oct. 12, 1977, 91 Stat.

1148.)

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12 USC Sec. 2905 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2905. Regulations

-STATUTE-

Regulations to carry out the purposes of this chapter shall be

published by each appropriate Federal financial supervisory agency,

and shall take effect no later than 390 days after October 12,

1977.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 806, Oct. 12, 1977, 91 Stat.

1148.)

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12 USC Sec. 2906 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2906. Written evaluations

-STATUTE-

(a) Required

(1) In general

Upon the conclusion of each examination of an insured

depository institution under section 2903 of this title, the

appropriate Federal financial supervisory agency shall prepare a

written evaluation of the institution's record of meeting the

credit needs of its entire community, including low- and

moderate-income neighborhoods.

(2) Public and confidential sections

Each written evaluation required under paragraph (1) shall have

a public section and a confidential section.

(b) Public section of report

(1) Findings and conclusions

(A) Contents of written evaluation

The public section of the written evaluation shall -

(i) state the appropriate Federal financial supervisory

agency's conclusions for each assessment factor identified in

the regulations prescribed by the Federal financial

supervisory agencies to implement this chapter;

(ii) discuss the facts and data supporting such

conclusions; and

(iii) contain the institution's rating and a statement

describing the basis for the rating.

(B) Metropolitan area distinctions

The information required by clauses (i) and (ii) of

subparagraph (A) shall be presented separately for each

metropolitan area in which a regulated depository institution

maintains one or more domestic branch offices.

(2) Assigned rating

The institution's rating referred to in paragraph (1)(C)

(FOOTNOTE 1) shall be 1 of the following:

(FOOTNOTE 1) So in original. Probably should be paragraph

''(1)(A)(iii)''.

(A) ''Outstanding record of meeting community credit needs''.

(B) ''Satisfactory record of meeting community credit

needs''.

(C) ''Needs to improve record of meeting community credit

needs''.

(D) ''Substantial noncompliance in meeting community credit

needs''.

Such ratings shall be disclosed to the public on and after July

1, 1990.

(c) Confidential section of report

(1) Privacy of named individuals

The confidential section of the written evaluation shall

contain all references that identify any customer of the

institution, any employee or officer of the institution, or any

person or organization that has provided information in

confidence to a Federal or State financial supervisory agency.

(2) Topics not suitable for disclosure

The confidential section shall also contain any statements

obtained or made by the appropriate Federal financial supervisory

agency in the course of an examination which, in the judgment of

the agency, are too sensitive or speculative in nature to

disclose to the institution or the public.

(3) Disclosure to depository institution

The confidential section may be disclosed, in whole or part, to

the institution, if the appropriate Federal financial supervisory

agency determines that such disclosure will promote the

objectives of this chapter. However, disclosure under this

paragraph shall not identify a person or organization that has

provided information in confidence to a Federal or State

financial supervisory agency.

(d) Institutions with interstate branches

(1) State-by-State evaluation

In the case of a regulated financial institution that maintains

domestic branches in 2 or more States, the appropriate Federal

financial supervisory agency shall prepare -

(A) a written evaluation of the entire institution's record

of performance under this chapter, as required by subsections

(a), (b), and (c) of this section; and

(B) for each State in which the institution maintains 1 or

more domestic branches, a separate written evaluation of the

institution's record of performance within such State under

this chapter, as required by subsections (a), (b), and (c) of

this section.

(2) Multistate metropolitan areas

In the case of a regulated financial institution that maintains

domestic branches in 2 or more States within a multistate

metropolitan area, the appropriate Federal financial supervisory

agency shall prepare a separate written evaluation of the

institution's record of performance within such metropolitan area

under this chapter, as required by subsections (a), (b), and (c)

of this section. If the agency prepares a written evaluation

pursuant to this paragraph, the scope of the written evaluation

required under paragraph (1)(B) shall be adjusted accordingly.

(3) Content of State level evaluation

A written evaluation prepared pursuant to paragraph (1)(B)

shall -

(A) present the information required by subparagraphs (A) and

(B) of subsection (b)(1) of this section separately for each

metropolitan area in which the institution maintains 1 or more

domestic branch offices and separately for the remainder of the

nonmetropolitan area of the State if the institution maintains

1 or more domestic branch offices in such nonmetropolitan area;

and

(B) describe how the Federal financial supervisory agency has

performed the examination of the institution, including a list

of the individual branches examined.

(e) Definitions

For purposes of this section the following definitions shall

apply:

(1) Domestic branch

The term ''domestic branch'' means any branch office or other

facility of a regulated financial institution that accepts

deposits, located in any State.

(2) Metropolitan area

The term ''metropolitan area'' means any primary metropolitan

statistical area, metropolitan statistical area, or consolidated

metropolitan statistical area, as defined by the Director of the

Office of Management and Budget, with a population of 250,000 or

more, and any other area designated as such by the appropriate

Federal financial supervisory agency.

(3) State

The term ''State'' has the same meaning as in section 1813 of

this title.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 807, as added Pub. L. 101-73,

title XII, Sec. 1212(b), Aug. 9, 1989, 103 Stat. 527; amended Pub.

L. 102-242, title II, Sec. 222, Dec. 19, 1991, 105 Stat. 2306; Pub.

L. 103-328, title I, Sec. 110, Sept. 29, 1994, 108 Stat. 2364.)

-REFTEXT-

REFERENCES IN TEXT

This chapter, referred to in subsecs. (b)(1)(A)(i), (c)(3), and

(d)(1), (2), was in the original ''this Act'' and was translated as

reading ''this title'', meaning title VIII of Pub. L. 95-128, known

as the Community Reinvestment Act of 1977, to reflect the probable

intent of Congress.

-MISC2-

AMENDMENTS

1994 - Subsec. (b)(1). Pub. L. 103-328, Sec. 110(b), redesignated

existing provisions as subpar. (A) and former subpars. (A) to (C)

as cls. (i) to (iii), respectively, of subpar. (A), inserted

subpar. (A) heading, and added subpar. (B).

Subsecs. (d), (e). Pub. L. 103-328, Sec. 110(a), added subsecs.

(d) and (e).

1991 - Subsec. (a)(1). Pub. L. 102-242, Sec. 222(b)(1),

substituted ''financial supervisory'' for ''depository institutions

regulatory''.

Subsec. (b)(1)(A). Pub. L. 102-242, Sec. 222(b)(2), substituted

''financial supervisory'' for ''depository institutions

regulatory'' in two places.

Subsec. (b)(1)(B). Pub. L. 102-242, Sec. 222(a), inserted ''and

data'' after ''facts''.

Subsec. (c). Pub. L. 102-242, Sec. 222(b)(3), substituted

''financial supervisory'' for ''depository institutions

regulatory'' wherever appearing.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1831y of this title.

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12 USC Sec. 2907 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2907. Operation of branch facilities by minorities and women

-STATUTE-

(a) In general

In the case of any depository institution which donates, sells on

favorable terms (as determined by the appropriate Federal financial

supervisory agency), or makes available on a rent-free basis any

branch of such institution which is located in any predominantly

minority neighborhood to any minority depository institution or

women's depository institution, the amount of the contribution or

the amount of the loss incurred in connection with such activity

may be a factor in determining whether the depository institution

is meeting the credit needs of the institution's community for

purposes of this chapter.

(b) Definitions

For purposes of this section -

(1) Minority depository institution

The term ''minority institution'' (FOOTNOTE 1) means a

depository institution (as defined in section 1813(c) of this

title) -

(FOOTNOTE 1) So in original. Probably should be ''minority

depository institution''.

(A) more than 50 percent of the ownership or control of which

is held by 1 or more minority individuals; and

(B) more than 50 percent of the net profit or loss of which

accrues to 1 or more minority individuals.

(2) Women's depository institution

The term ''women's depository institution'' means a depository

institution (as defined in section 1813(c) of this title) -

(A) more than 50 percent of the ownership or control of which

is held by 1 or more women;

(B) more than 50 percent of the net profit or loss of which

accrues to 1 or more women; and

(C) a significant percentage of senior management positions

of which are held by women.

(3) Minority

The term ''minority'' has the meaning given to such term by

section 1204(c)(3) of the Financial Institutions Reform, Recovery

and Enforcement Act of 1989.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 808, as added Pub. L. 102-233,

title IV, Sec. 402(b), Dec. 12, 1991, 105 Stat. 1775; amended Pub.

L. 102-550, title IX, Sec. 909(2), Oct. 28, 1992, 106 Stat. 3874.)

-REFTEXT-

REFERENCES IN TEXT

Section 1204(c)(3) of the Financial Institutions Reform, Recovery

and Enforcement Act of 1989, referred to in subsec. (b)(3), is

section 1204(c)(3) of Pub. L. 101-73, which is set out as a note

under section 1811 of this title.

-MISC2-

AMENDMENTS

1992 - Subsec. (a). Pub. L. 102-550 substituted ''may be a factor

in determining whether the depository institution is'' for ''shall

be treated as''.

-CITE-

12 USC Sec. 2908 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 30 - COMMUNITY REINVESTMENT

-HEAD-

Sec. 2908. Small bank regulatory relief

-STATUTE-

(a) In general

Except as provided in subsections (b) and (c) of this section,

any regulated financial institution with aggregate assets of not

more than $250,000,000 shall be subject to routine examination

under this chapter -

(1) not more than once every 60 months for an institution that

has achieved a rating of ''outstanding record of meeting

community credit needs'' at its most recent examination under

section 2903 of this title;

(2) not more than once every 48 months for an institution that

has received a rating of ''satisfactory record of meeting

community credit needs'' at its most recent examination under

section 2903 of this title; and

(3) as deemed necessary by the appropriate Federal financial

supervisory agency, for an institution that has received a rating

of less than ''satisfactory record of meeting community credit

needs'' at its most recent examination under section 2903 of this

title.

(b) No exception from CRA examinations in connection with

applications for deposit facilities

A regulated financial institution described in subsection (a) of

this section shall remain subject to examination under this chapter

in connection with an application for a deposit facility.

(c) Discretion

A regulated financial institution described in subsection (a) of

this section may be subject to more frequent or less frequent

examinations for reasonable cause under such circumstances as may

be determined by the appropriate Federal financial supervisory

agency.

-SOURCE-

(Pub. L. 95-128, title VIII, Sec. 809, as added Pub. L. 106-102,

title VII, Sec. 712, Nov. 12, 1999, 113 Stat. 1469.)

-CITE-