Banking

The Federal Reserve Board and other federal banking regulators recently revised the asset-size thresholds used to classify "small" and "intermediate small" banks and savings associations under Community Reinvestment Act (CRA) regulations.

The asset-size thresholds are updated annually according to CRA rules and are based on changes to the consumer price index (CPI) for urban wage earners and clerical workers. The thresholds are used to classify small and intermediate small financial institutions for CRA exams.

Periodic CRA exams help regulators determine how well financial institutions are meeting the banking needs of their communities, including low- and moderate-income populations. Banks face different CRA exam procedures based on their asset-size classification.

As a result of the 2.21 percent increase in the CPI for the period ending November 2010, the thresholds will change as follows:

• A financial institution with less than $1.122 billion in assets as of December 31 of either of the prior two calendar years will be considered a "small bank" or "small savings association."
• An institution with at least $280 million in assets as of December 31 of both of the prior two calendar years and less than $1.122 billion in assets as of December 31 of either of the prior two calendar years will be considered an "intermediate small bank" or "intermediate small savings association."

The changes took effect January 1, 2011, and are published in the Federal Register. The agencies will also post current and historical asset-size thresholds on the Federal Financial Institution Examination Council's website. The Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision issued the adjusted thresholds in conjunction with the Federal Reserve.

January 25, 2011