Data on host state loan-to-deposit ratios that banking regulators use to determine banks’ compliance with a federal prohibition on acquiring branches outside their home states primarily to acquire more deposits was published Tuesday by the three federal bank regulatory agencies.
The agencies – the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the currency (OCC) – noted in a joint release that the ratios are used to evaluate compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.
“By law, a bank is generally prohibited from establishing or acquiring branches outside of its home state primarily for the purpose of acquiring additional deposits,” the agencies said. “This prohibition seeks to ensure that interstate bank branches will not take deposits from a community without the bank also reasonably helping to meet the credit needs of that community.”
The ratios published Tuesday, the release states, replace those from June 2021.