Assets of less than $1.053 billion would define the size of a “small bank” under anti-redlining rules for 2023, and assets of at least $376 million would define an “intermediate small bank” under those rules, according to action taken Monday by two federal banking agencies.
The definitions essentially exempt the small and intermediate small banks from reporting requirements applicable to large banks, should they choose so.
The Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) said the asset-size thresholds they adopted under regulations applying the Community Reinvestment Act (CRA) are the annual adjustments to the thresholds based on the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation.
The CPI-W increased to 8.60% in the period ending in November 2022, the agencies said.
The new thresholds are for total assets as of the end of this year. For “small bank,” the threshold applies for either of the prior two calendar years. For “intermediate small bank,” the threshold applies for both of the prior two calendar years and less than $1.503 billion as of December 31 of either of the prior two calendar years.
In 2022, the agencies set the threshold at $1.384 for small bank, and $346 for intermediate small bank (but less than $1.384 billion).
“The CRA regulations establish the framework and criteria by which the relevant agencies assess a financial institution’s record of helping to meet the credit needs of its community, including low- and moderate-income neighborhoods, consistent with safe and sound operations,” the agencies said. “Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification. For example, banks meeting the small and intermediate small bank asset-size thresholds are not subject to the reporting requirements applicable to large banks unless they choose to be evaluated as a large bank.”