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Financial Institution Letters

COMMUNITY REINVESTMENT ACT

FIL-32-2000
June 1, 2000

TO: CHIEF EXECUTIVE OFFICER AND COMPLIANCE OFFICER
SUBJECT: Proposed Rule on the Disclosure and Reporting of Community Reinvestment Act-Related Agreements

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision have jointly proposed the attached rule on the disclosure and reporting of certain agreements made in connection with the Community Reinvestment Act of 1977 (CRA). This regulation is required by 711 of the Gramm-Leach-Bliley Act (GLBA). Comments on the rule are due by July 21, 2000.

The proposed rule:

  • identifies the types of written agreements that are covered by 711 of the GLBA and defines many of the terms used in the statute;
  • describes how the parties to a covered agreement must make the agreement available to the public and the relevant supervisory agencies; and
  • explains the types of information that must be included in the annual report filed by a party to a covered agreement.

Covered Agreements

The proposed rule would implement the GLBA disclosure and reporting requirements for certain agreements (referred to as "covered agreements") made pursuant to or in connection with the CRA. Any contract, arrangement or understanding is a covered agreement under the proposed rule if:

  • the agreement is in writing;
  • the parties to the agreement include an insured depository institution or affiliate of an insured depository institution and a nongovernmental entity or person;
  • the agreement is made pursuant to, or in connection with, the fulfillment of CRA; and
  • the agreement involves funds or other resources of an insured depository institution or affiliate with an aggregate value of more than $10,000 in a calendar year, or loans with an aggregate principal value of more than $50,000 in a calendar year.

Certain types of agreements are exempt even if they would otherwise meet the definition of a covered agreement. The statute specifically exempts three types of agreements:

  • any individual mortgage loan;
  • any specific contract or commitment for a loan or extension of credit to individuals, businesses, farms or other entities if the funds are loaned at rates not substantially below market rates and if the purpose of the loan or extension of credit does not include any re-lending of the borrowed funds to other parties; and
  • any agreement between an insured depository institution or affiliate with a nongovernmental entity or person who has not commented on, testified about or discussed with the institution, or otherwise contacted the institution, about the CRA (referred to as a "CRA contact").

The agencies are seeking comment on a number of issues that would affect the scope of agreements subject to disclosure and reporting obligations. The proposed definition for covered agreements largely mirrors the statutory language. The supplementary information preceding the proposed rule text describes how the criteria and exemptions would apply, and provides examples to assist users in understanding the breadth of the proposal. The questions regarding how to apply the exemption for a loan commitment, how to define a CRA contact, and how to define a list of factors considered in fulfillment of CRA are of particular importance to the agencies in developing a final rule.

Disclosure

The GLBA and the proposed rule require each party to a covered agreement to make a complete copy of the agreement available to any member of the public upon request. Under the proposal, this obligation would terminate 12 months after the end of the agreement's term.

The parties to a covered agreement must also make the agreement available to the agencies. As proposed, insured depository institutions and affiliates would send a copy of the covered agreement to each relevant supervisory agency within 30 days after the parties enter into the agreement. Nongovernmental entities or persons would provide a complete copy of the covered agreement to the relevant supervisory agency only when the agency requests a copy.

The GLBA also requires the agencies to protect confidential or proprietary information in covered agreements. The proposed rule would allow the parties to an agreement to withhold specific information subject to prior review and approval by the supervisory agency.

Annual Reports

The GLBA requires annual reports to the relevant supervisory agency about the resources provided and used under a covered agreement. The proposed rule would adopt a fiscal year reporting period to provide the parties flexibility in using or incorporating reports prepared for other purposes.

Under the proposal, each party would file a report for each fiscal year during the term of the agreement. The annual report would be delivered to the appropriate agency within six months of the end of the party's fiscal year. Nongovernmental entities or persons could provide the annual report to the insured depository institution or affiliate that is a party to the agreement with instructions for the institution to file the report with the supervisory agency.

Submitting Comments Electronically

The FDIC has developed an electronic public comment (EPC) site at http://www.fdic.gov to facilitate and encourage public input. Comments submitted through this EPC site receive the same consideration as comments submitted in hard copy to the FDIC's street address. Through the EPC site, you can view the proposed regulation and the related Supplementary Information section by section, and provide comments on any or all sections. You can also easily locate and respond to any of the specific questions posed by the agencies in the Supplementary Information. The FDIC invites your input on this proposed rule as well as your feedback on the EPC site.

For more information on the proposed rule, please contact Deanna Caldwell, Community Affairs Officer in the FDIC's Division of Compliance and Consumer Affairs (DCA), at (202) 736-0141; Joan Bateman, Review Examiner in DCA, at (202) 736-0187; or Louise Kramer, Review Examiner in DCA, at (202) 736-0241; or A. Ann Johnson, Counsel in the FDIC's Legal Division, at (202) 898-3573.

Stephen M. Cross
Director

Attachment: May 19, 2000 Federal Register, pages 31961-32002
HTML or PDF (369 KB File - PDF Help or Hard Copy)

Distribution: FDIC-Supervised Banks (Commercial and Savings)

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).

Last Updated 06/01/2000 communications@fdic.gov