Q: § __.24(a) – 1: How do examiners evaluate retail banking services and community development services under the large institution service test?
A: Retail banking services and community development services are the two components of the service test and are both important in evaluating a large institution’s performance. In evaluating retail banking services, examiners consider the availability and effectiveness of an institution’s systems for delivering banking services, particularly in low- and moderate-income geographies and to low- and moderate income individuals; the range of services provided in low-, moderate-, middle-, and upper-income geographies; and the degree to which the services are tailored to meet the needs of those geographies. Examples of retail banking services that improve access to financial services, or decrease costs, for low- or moderate-income individuals include
• low-cost deposit accounts;
• electronic benefit transfer accounts and point of sale terminal systems;
• individual development accounts;
• free or low-cost government, payroll, or other check cashing services; and
• reasonably priced international remittance services.
In evaluating community development services, examiners consider the extent to which the institution provides such services and their innovativeness and responsiveness to community needs. Examples of community development services are listed in Q&A § __.12(i) – 3. Examiners will consider any information provided by the institution that demonstrates community development services benefit low- or moderate-income individuals or are responsive to community development needs.
This Interagency Q&A, and others, was released in July 2016.
The 2016 Q&As consolidates and supersedes all previously published “Interagency Questions and Answers Regarding Community Reinvestment,” and were noted as being effective immediately. They may be found here: http://www.ffiec.gov/cra/qnadoc.htm