[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR228.41]

[Page 510-511]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 228--COMMUNITY REINVESTMENT (REGULATION BB)--Table of Contents
 
       Subpart C--Records, Reporting, and Disclosure Requirements
 
Sec. 228.41  Assessment area delineation.

    Source: Reg. BB, 60 FR 22195, May 4, 1995, unless otherwise noted.


    (a) In general. A bank shall delineate one or more assessment areas 
within which the Board evaluates the bank's record of helping to meet 
the credit needs of its community. The Board does not evaluate the 
bank's delineation of its assessment area(s) as a separate performance 
criterion, but the Board reviews the delineation for compliance with the 
requirements of this section.
    (b) Geographic area(s) for wholesale or limited purpose banks. The 
assessment area(s) for a wholesale or limited purpose bank must consist 
generally of one or more MSAs (using the MSA boundaries that were in 
effect as of January 1 of the calendar year in which the delineation is 
made) or one or more contiguous political subdivisions, such as 
counties, cities, or towns, in which the bank has its main office, 
branches, and deposit-taking ATMs.

[[Page 511]]

    (c) Geographic area(s) for other banks. The assessment area(s) for a 
bank other than a wholesale or limited purpose bank must:
    (1) Consist generally of one or more MSAs (using the MSA boundaries 
that were in effect as of January 1 of the calendar year in which the 
delineation is made) or one or more contiguous political subdivisions, 
such as counties, cities, or towns; and
    (2) Include the geographies in which the bank has its main office, 
its branches, and its deposit-taking ATMs, as well as the surrounding 
geographies in which the bank has originated or purchased a substantial 
portion of its loans (including home mortgage loans, small business and 
small farm loans, and any other loans the bank chooses, such as those 
consumer loans on which the bank elects to have its performance 
assessed).
    (d) Adjustments to geographic area(s). A bank may adjust the 
boundaries of its assessment area(s) to include only the portion of a 
political subdivision that it reasonably can be expected to serve. An 
adjustment is particularly appropriate in the case of an assessment area 
that otherwise would be extremely large, of unusual configuration, or 
divided by significant geographic barriers.
    (e) Limitations on the delineation of an assessment area. Each 
bank's assessment area(s):
    (1) Must consist only of whole geographies;
    (2) May not reflect illegal discrimination;
    (3) May not arbitrarily exclude low- or moderate-income geographies, 
taking into account the bank's size and financial condition; and
    (4) May not extend substantially beyond a CMSA boundary or beyond a 
state boundary unless the assessment area is located in a multistate 
MSA. If a bank serves a geographic area that extends substantially 
beyond a state boundary, the bank shall delineate separate assessment 
areas for the areas in each state. If a bank serves a geographic area 
that extends substantially beyond a CMSA boundary, the bank shall 
delineate separate assessment areas for the areas inside and outside the 
CMSA.
    (f) Banks serving military personnel. Notwithstanding the 
requirements of this section, a bank whose business predominantly 
consists of serving the needs of military personnel or their dependents 
who are not located within a defined geographic area may delineate its 
entire deposit customer base as its assessment area.
    (g) Use of assessment area(s). The Board uses the assessment area(s) 
delineated by a bank in its evaluation of the bank's CRA performance 
unless the Board determines that the assessment area(s) do not comply 
with the requirements of this section.