Academic journal article ABA Banking Journal

How Does M&A Affect CRA Assessment Areas?

Academic journal article ABA Banking Journal

How Does M&A Affect CRA Assessment Areas?

Article excerpt

Q. We recently acquired another financial institution and are in the process of redefining our Community Reinvestment Act assessment areas. We currently have three Metropolitan Statistical Areas in our assessment area and the acquired bank had three counties. Is there any issue for our mixing MSAs and Counties? Or we are required to be consistent?

A. No, the delineation of your assessment area(s) is your decision. As long as you follow the requirements of Section -.41 provided below, there is no requirement to use only one boundary type; however, each assessment area must consist of whole geographies. See Section -.41 of the Community Reinvestment Act (eRA) regulation for delineation of the Assessment Area.

Generally, a bank should delineate one or more assessment areas that typically consist of one or more MSAs or contiguous political subdivisions (such as counties, cities, or towns). Adjustments may be made to the boundaries of the assessment area, as long as it; consists only of whole geographies (i. …

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