Banking

The federal bank regulatory agencies recently announced the annual adjustment to the asset-size standards used to determine how small and medium-sized financial institutions are examined with regard to the Community Reinvestment Act, or CRA.

Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification. Those meeting the small and intermediate small asset-size threshold are not subjected to the reporting requirements applicable to large banks. The annual adjustments are required by the CRA rules.

Under the new adjustments:

• "Small bank" or "small savings association" means an institution that, as of December 31 of either of the previous two calendar years, had assets of less than $1.16 billion.
• "Intermediate small bank" or "intermediate small savings association" means a small institution with assets of more than $290 million at the end of both of the previous two calendar years and less than $1.16 billion at the end of either of the previous two calendar years.

Annual adjustments to these asset-size thresholds are based on the change in the average of the consumer price index (CPI) for urban wage earners and clerical workers, not seasonally adjusted, for each 12-month period ending in November.

The adjustments are effective January 1, 2012. The agencies—the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency—will publish the adjustments in the Federal Register. In addition, the agencies will post a list of the current and historical asset-size thresholds on the website of the Federal Financial Institutions Examination Council.

December 23, 2011