Interagency Q&A .28(a) – 3: How do the Agencies weight performance under the lending, investment, and service tests for large retail institutions?

Compliance > Regulation BB - CRA
Q:  § __.28(a) – 3: How do the Agencies weight performance under the lending, investment, and service tests for large retail institutions?
 
A:  A rating of “outstanding,” “high satisfactory,” “low satisfactory,” “needs to improve,” or “substantial noncompliance,” based on a judgment supported by facts and data, will be assigned under each performance test.  Points will then be assigned to each rating as described in the first matrix set forth below.  A large retail institution’s overall rating under the lending, investment and service tests will then be calculated in accordance with the second matrix set forth below, which incorporates the rating principles in the regulation.

POINTS ASSIGNED FOR PERFORMANCE UNDER LENDING, INVESTMENT AND SERVICE TESTS
   Lending Service      Investment
 Outstanding  12  6  6
 High Satisfactory  9  4  4
 Low Satisfactory  6  3  3
 Needs to Improve  3  1  1
 Substantial Noncompliance  0  0  0

COMPOSITE RATING POINT REQUIREMENTS
[Add points from three tests] 

Rating 

  Total points  

 Outstanding                                       20 or over
 Satisfactory  11 through 19     
 Needs to Improve  5 through 10
 Substantial Noncompliance                                       0 through 4
 
Note: There is one exception to the Composite Rating matrix.  An institution may not receive a rating of “satisfactory” unless it receives at least “low satisfactory” on the lending test.  Therefore, the total points are capped at three times the lending test score.
 
 
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
 

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