Federal Reserve Board – Agencies release annual asset-size thresholds under Community Reinvestment Act regulations

The Federal Reserve Board and the Federal Deposit Insurance Corporation today announced the 2023 updated asset-size thresholds used to define “small bank” and “intermediate small bank” under their Community Reinvestment Act (CRA) regulations.

Annual adjustments to these asset-size thresholds are based on the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a measure of inflation.

As a result of the 8.60 percent increase in the CPI-W for the period ending in November 2022, the definitions of small and intermediate small banks for CRA examinations will change as follows:

• Small bank means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.503 billion.
• Intermediate small bank means a small institution with assets of at least $376 million as of December 31 of 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.

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.  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.

These asset-size thresholds are effective January 1, 2023. A list of the current and historical asset-size thresholds is available here.