I. INTRODUCTION
The Office of the Comptroller of the Currency (OCC) recently published:
The OCC will publish these two lists and the median hourly compensation value annually under the June 2020 CRA rule, which applies to national banks, federal savings associations, and federal branches of foreign banking organizations that are subject to the OCC's regulations under CRA.
II. BANK TYPE DETERMINATIONS
“Bank type” (see link https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-16a.xlsx) is the term that the OCC uses to identify banks that are small, intermediate, wholesale, and limited purpose or banks subject to general performance standards (GPS). Bank type is determined by a bank’s asset size in the case of small, intermediate, and GPS banks and by business model in the case of wholesale and limited purpose banks. A bank’s type generally determines the performance standards and related examination procedures used to evaluate the bank’s CRA performance.
The OCC applied the asset size thresholds in the June 2020 rule to determine that:
Bank type determinations are unchanged for banks currently designated by the OCC as wholesale or limited purpose. Additionally, banks currently operating under an OCC-approved strategic plan are categorized on the list of bank type determinations as “strategic plan.”
Bank types apply to activities conducted during the calendar year 2021.
III. distressed and underserved areas
The OCC designates distressed and underserved areas in accordance with the June 2020 rule.
A distressed area is a middle-income census tract identified by the OCC that meets one or more of the following conditions:
An underserved area is a middle-income census tract identified by the OCC as:
The designations for 2021 (see link https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-16b.xlsx) reflect local economic conditions, including unemployment, poverty, and population changes.
The census tract designations reflected on the “List of 2021 Distressed and Underserved Census Tracts” apply to activities conducted in calendar year 2021. The OCC will also apply a one-year lag period for census tracts that were listed in the 2020 interagency list of distressed or underserved nonmetropolitan middle-income geographies but are no longer designated as distressed or underserved in the 2021 list. Qualifying activities in census tracts on the 2020 interagency list are eligible to receive CRA credit for 12 months after publication of the list if the activities meet the criteria in 12 CFR 25.04.
IV. banking industry median hourly compensation value
The OCC’s computation of the banking industry median hourly compensation is used to quantify the value of a bank’s community development services under the June 2020 rule. The June 2020 rule provides that the dollar value of a community development service is determined by multiplying “compensation” by the total number of hours one or more employees spent performing the service. If the community development service is a partially qualifying activity, the full dollar value of the activity calculated above is multiplied by the percentage of the activity that is qualifying.
The June 2020 rule defines compensation as the median hourly compensation value (i.e., total salaries and benefits divided by full-time equivalent employees) for the banking industry based on aggregate call report data for (1) median salaries and employee benefits from Schedule RI, Item 7.a. and (2) the median number of full-time equivalent employees from Schedule RI Memorandum Item 5.
The median hourly compensation value for the banking industry to be applied to qualifying community development activities that are effective October 1, 2020, through December 31, 2021, is $39.03. Banks may round the median hourly compensation value to the nearest dollar.