Host state loan-to-deposit ratios were issued Monday by the three federal banking regulators, which informs banks about how the proportions are used to determine compliance with federal interstate banking laws.
The ratios are issued in connection with a 1994 statute barring banks from establishing or acquiring a branch or branches outside of their home states primarily to draw more deposits.
The relevant provision is section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act), which was revised by section 106 of the Gramm-Leach-Bliley Act of 1999 to include any branch of a bank controlled by an out-of-state bank holding company.
A bank that fails both steps regulators take in evaluating for compliance is in violation of section 109 and subject to sanctions by the appropriate agency, the agencies noted.
Each respective host state loan-to-deposit (LTD) ratio shows the ratio of total loans in a state to total deposits in the state for all banks that have that state as their home state. The ratios released Monday replace those issued in May 2024
Host state LTDs are published yearly, the agencies noted.
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