The Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (OCC) have issued new rules for assessing US banks in 2020.
The three regulators have announced that they have changed the rules regarding the Community Reinvestment Act (CRA), which is a federal law encouraging depository institutions to meet the credit needs of low- and moderate-income neighbourhoods.
The changed rules adjust the CRA asset-size thresholds that define small banks, small savings associations, intermediate small banks and intermediate small savings associations.
The changes should not come as a surprise as annual adjustments are required by the CRA.
Based on the change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between November 2018 to November 2019. During that period, the CPI-W increased by 1.62%.
As a result, small banks and small savings associations are now defined as of January 1, 2020 as institutions that had assets of less than $1.305bn in the previous two years.
Intermediate small banks and intermediate small savings associations are now defined as small institutions with assets of at least $326m and less than $1.305bn as of December 31 of either of the prior two calendar years.
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