District Circular Letters
August 11, 1999
BANKING SUPERVISION AND REGULATION:
FFIEC LENDING DATA AS REPORTED
UNDER THE COMMUNITY REINVESTMENT ACT
To State Member Banks
and Bank Holding Companies
in the Twelfth Federal Reserve District
FFIEC Data on Small Business, Small Farm, and Community Development
Lending
The Federal Financial Institutions Examination Council (FFIEC) today announced
the availability of data on small business, small farm, and community development
lending, as reported by commercial banks and savings associations (including
savings banks and savings and loan associations) under the Community Reinvestment
Act (CRA) regulations.
As revised in 1995, the regulations that implement the CRA generally require
the reporting of data on these types of lending by independent commercial
banks and savings associations having total assets of $250 million or more,
and by commercial banks and savings associations of any size if owned by
a holding company having consolidated assets of $1 billion or more. Analysis
of Call Report data indicates that reporting institutions account for about
two-thirds of the small business loans and one-fifth of the small farm loans
extended by all commercial banks and savings associations.
From the data reported, the FFIEC prepares a disclosure statement, in electronic
form, for each reporting commercial bank and savings association. The FFIEC
also prepares aggregate reports for each of the metropolitan statistical
areas and each of the nonmetropolitan counties in the United States and
its territories.
The small business and small farm lending data reported under the CRA regulations
are more limited than the data reported on home mortgage lending under the
Home Mortgage Disclosure Act (HMDA). The CRA data include information only
on loans originated or purchased, not on applications that are turned down
or withdrawn by the customer. Unlike HMDA data, the CRA data do not include
information about applicant income, sex, or racial or ethnic background,
although the CRA data do indicate whether a loan is extended to a borrower
with revenues of $1 million or less. The CRA data are not reported application-by-application
as HMDA data are, but rather are aggregated into three loan size categories
and then reported at the census tract level.
The 1998 CRA data reflect originations and purchases of small business and
small farm loans from 1,866 institutions, including 1,576 commercial banks
and 290 savings associations. A total of 2.6 million small business loans,
totaling $161 billion, and 208,000 small farm loans, totaling $11 billion,
were reported for 1998. Measured by number of loans, 58 percent of the reported
small business loans and 91 percent of small farm loans were extended to
borrowers with revenues of $1 million or less. For small business loans,
this proportion has increased 8 percentage points from the 50 percent reported
for 1997. The vast majority (about 86 percent, by number of loans) of small
business and small farm loans were for amounts under $100,000. Small business
loans are heavily concentrated in central city and suburban areas, as are
both the U.S. population and U.S. businesses.
The variation in small business lending among census tracts grouped into
income categories generally parallels the distribution of the population
and businesses among these categories. Most small farm loans are made in
rural areas regardless of income. For 1998, lending to small businesses
in low- and moderate-income areas declined by about 3 percent in both number
and dollar amount from 1997, and the number of small business loans in high
income areas dropped slightly from 1997. This decline is due in part to
a change in reporting requirements. To reduce burden and the erroneous identification
of the census tracts associated with reported loans, reporting institutions
may report loans made in 1998 or later without a census tract identifier
if the specific location of the business cannot be determined. For 1998,
40,000 of the reported small business loans, or about 1.5 percent of the
total of such loans, were reported without a census tract identifier. In
earlier years, these loans would have been distributed among the four census
tract income groupings.
For 1998, commercial banks and savings associations reported community development
lending that totaled $16 billion, down 13 percent from 1997. Compared with
small business and small farm lending, the typical community development
loan was relatively large ($744,000).
A community development loan has as its primary purpose affordable housing
for low- or moderate-income individuals, community services targeted to
these individuals, activities that promote economic development by financing
small businesses or small farms, or activities that revitalize or stabilize
low- or moderate-income neighborhoods. In general, loans reported for CRA
purposes as consumer, home-mortgage, small business, or small farm loans
(except for multifamily dwelling loans reported under HMDA) are not reported
as community development loans.
Copies
The FFIEC has distributed aggregated disclosure statements to central depositories
throughout the nation, where they are available for public inspection. An
order form for CRA data
and related items, with descriptions of the various reports and formats
available, is enclosed. Central depository locations, and an order form
for other data available from the FFIEC (including data on home mortgage
loans, reported under HMDA), can be found at the FFIEC
web site.
A fifteen-page 1998 Community Reinvestment Act Data Fact Sheet (with tables)
is available via the FFIEC
web site. To receive a copy of this publication via mail, please call
our Corporate Services Department, at (415) 974-2748.
For Additional Information
For additional information regarding these matters, please contact Mr. Gregory
Imm, Consumer Compliance Liaison, at (415) 974-2953, or
Ms. Christiane Price, Consumer Compliance Liaison, at (415) 974-2955,
both of our Banking Supervision and Regulation Department
FEDERAL RESERVE BANK OF SAN FRANCISCO
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