§ 228.11. Authority, purposes, and scope.

550 words·~3 min read·/us/cfr/t12/s§ 228.11·

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(a)Authority. The Board of Governors of the Federal Reserve System (the Board) issues this part to implement the Community Reinvestment Act (12 U.S.C. 2901 et seq.) (CRA). The regulations comprising this part are issued under the authority of the CRA and under the provisions of the United States Code authorizing the Board:

(1)To conduct examinations of State-chartered banks that are members of the Federal Reserve System (12 U.S.C. 325);

(2)To conduct examinations of bank holding companies and their subsidiaries (12 U.S.C. 1844) and savings and loan holding companies and their subsidiaries (12 U.S.C. 1467a); and

(3)To consider applications for:

(i)Domestic branches by State member banks (12 U.S.C. 321);

(ii)Mergers in which the resulting bank would be a State member bank (12 U.S.C. 1828(c));

(iii)Formations of, acquisitions of banks by, and mergers of, bank holding companies (12 U.S.C. 1842);

(iv)The acquisition of savings associations by bank holding companies (12 U.S.C. 1843); and

(v)Formations of, acquisitions of savings associations by, conversions of, and mergers of, savings and loan holding companies (12 U.S.C. 1467a).

(b)Purposes. This part implements the requirement in the CRA that the Board assess a bank's record of helping to meet the credit needs of the local communities in which the bank is chartered, consistent with the safe and sound operation of the bank, and to take this record into account in the agency's evaluation of an application for a deposit facility by the bank. Accordingly, this part:

(1)Establishes the framework and criteria by which the Board assesses a bank's record of responding to the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank; and

(2)Provides that the Board takes that record into account in considering certain applications.

(c)Scope—(1) General. This part applies to all banks except as provided in paragraph (c)(3) of this section.

(2)Foreign bank acquisitions. This part also applies to an uninsured State branch (other than a limited branch) of a foreign bank that results from an acquisition described in section 5(a)(8) of the International Banking Act of 1978 (12 U.S.C. 3103(a)(8)). The terms “State branch” and “foreign bank” have the same meanings as given to those terms in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101 et seq.); the term “uninsured State branch” means a State branch the deposits of which are not insured by the Federal Deposit Insurance Corporation; the term “limited branch” means a State branch that accepts only deposits that are permissible for a corporation organized under section 25A of the Federal Reserve Act (12 U.S.C. 611 et seq.).

(3)Certain exempt banks. This part does not apply to banks that do not perform commercial or retail banking services by granting credit to the public in the ordinary course of business, other than as incident to their specialized operations and done on an accommodation basis. These banks include bankers' banks, as defined in 12 U.S.C. 24 (Seventh), and banks that engage only in one or more of the following activities: providing cash management controlled disbursement services or serving as correspondent banks, trust companies, or clearing agents. [Reg. BB, 89 FR 7188, Feb. 1, 2024, as amended at 89 FR 22068, Mar. 29, 2024]

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