Accessible Version

Accessible Version

Figure 1. Separate Retail Lending and Community Development Tests

There are two panels Retail Test (left) and Community Development (CD) Test (right). The Retail Test panel contains two different sized text boxes. The larger box represents "Retail Lending Metrics" and the smaller box represents "Retail Services." Retail Test would not apply to wholesale banks. Retail Services subtest would not apply to small retail banks. The CD Test panel contains two different sized text boxes. The larger box represents "CD Financing Metric, CD Lending & Investments" and the smaller box represents "CD Services." CD Test would not apply to small retail banks.

Figure 2. Each Bank Could Track Retail Lending with a Dashboard

CRA Retail Lending Dashboard
ABC Bank
Assessment Area: Example County
Product: Home Mortgage Lending
Evaluation Period: 2015 to 2018

Item Borrower Distribution Geographic Distribution
Current Threshold 26% 36%
Performance to Date 34% 39%
Difference +8% +3%

Note: presumption satisfactory

Figure 3. Retail Lending Metric Correlates Well with Actual Ratings

Distribution of Performance on Retail Lending Metrics by Actual Assessment Area Level Conclusion On Past Lending Test

Percent

Performance Level Conclusion on Lending Test from Performance Evaluation
Oustanding Satisfactory Needs to Improve
-0.6 1 2 10
-0.5 3 2 0
-0.4 1 3 3
-0.3 2 4 7
-0.2 1 5 3
-0.1 3 6 6
0.0 7 11 6
0.1 8 9 1
0.2 10 11 3
0.3 16 9 0
0.4 16 7 1
0.5 8 6 0
0.6 6 2 0
0.7 3 1 0
0.8 1 1 0
0.9 2 0 1
1.0 1 0 1

Note: Bubble size represents the fraction of individual assessment areas in the Board's database that reached a given level of performance on the retail lending metric.  Fractions are calculated separately for each of the three ratings categories shown: Outstanding, Satisfactory and Needs to Improve.  A performance level of zero represents the point that best distinguishes between assessment areas which received high and low ratings on the lending test, according to staff analysis.

Figure 4. Tailoring Thresholds is Important because LMI Shares Differ Across Geographies

Comparing Percentages of LMI Families

Counties Percent LMI Families
Morgan County, Ohio 49%
O'Brien County, Iowa 31%

Note: Morgan County and O'Brien County represent the 90th and 10th percentile, respectively, of the fraction of families per county that are LMI.

Figure 5: Tailoring Thresholds is Important because LMI Retail Lending Varies Cyclically

LMI Mortgage Originations by Year

Year Both LMI Borrower LMI Tract
2004 1,068,438 4,708,017 1,640,888
2005 1,013,831 4,715,023 1,886,524
2006 866,586 4,169,715 1,811,408
2007 678,837 3,277,090 1,294,013
2008 436,615 2,219,775 695,531
2009 383,339 2,410,362 556,033
2010 322,473 2,044,933 463,423
2011 287,226 1,894,737 439,668
2012 484,447 2,601,188 759,881
2013 489,687 2,456,567 805,224
2014 350,098 1,630,395 547,947
2015 401,832 1,939,617 657,247
2016 426,960 2,086,585 772,475
2017 491,971 2,018,050 767,707
Note: Key identifies areas in order from bottom to top.

Figure 6. Each Bank Could Track CD Finance with a Dashboard

CRA CD Finance Dashboard
ABC Bank
Assessment Area: Example MSA
Activity: Community Development Financing
Evaluation Period: 2015 to 2018
CD Financing Performance to Date: 3.6%

Item National Metro Median CD-to-Deposit Ratio Assessment Area CD-to-Deposit Ratio
Benchmark 0.7% 3.2%
Difference +2.9% +0.4%

Figure 7: CD Financing Opportunities Vary Across Geographies

Urban vs Rural Assessment Areas

Assessment Area Type Median CD to Deposit Ratio
Urban 0.7%
Rural 0.4%

Two Example MSAs

City Median CD to Deposit Ratio
Mobile, Alabama 0.1%
Ashville, North Carolina 3.2%

Note: All figures reflect CD-to-Deposit ratios using existing CD and deposit data. Mobile, AL and Asheville, NC represent the 10th and 90th percentile, respectively, across MSAs of the median CD-to-Deposit ratio among banks assessed there.

Last Update: January 08, 2020