The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) updated the asset–size thresholds used to define “small bank” and “intermediate small bank” under their current Community Reinvestment Act (CRA) regulations.
The definitions of small banks and intermediate small banks for CRA examinations will be updated as a result of the 4.06 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI–W, for the period ending in November 2023.
So, for 2024, a small bank means an institution that, as of Dec. 31 of either of the prior two calendar years, had assets of less than $1.564 billion. An intermediate small bank means a small institution with assets of at least $391 million as of Dec. 31 of both of the prior two calendar years and less than $1.564 billion as of Dec. 31 of either of the prior two calendar years.
These new asset–size thresholds are effective Jan. 1, 2024. The asset–size thresholds defined by the agencies’ October 2023 joint final rule to strengthen and modernize their CRA regulations will apply on Jan. 1, 2026, and are not reflected in today’s announcement.
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. Financial institutions are evaluated under different CRA examination procedures based upon their asset–size classification. The asset–size thresholds are adjusted annually based on the average change in the CPI–W, which is a measure of inflation.