12 CFR 24.2 – Definitions
For purposes of this part, the following definitions apply:
Terms Used In 12 CFR 24.2
- Community Reinvestment Act: The Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. It was enacted by the Congress in 1977. Source: OCC
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
(a) Adequately capitalized has the same meaning as adequately capitalized in 12 CFR 6.4.
(b) Capital and surplus means:
(1) For qualifying community banking organizations that have elected to use the community bank leverage ratio framework, as set forth under the OCC’s Capital Adequacy Standards at part 3 of this chapter:
(i) A qualifying community banking organization’s tier 1 capital, as used under § 3.12 of this chapter; plus
(ii) A qualifying community banking organization’s allowance for loan and lease losses or adjusted allowances for credit losses, as applicable, as reported in the Consolidated Reports of Condition and Income (Call Report); or
(2) For all other national banks:
(i) A bank’s tier 1 and tier 2 capital calculated under the OCC’s risk-based capital standards set forth in part 3 of this chapter, as applicable, as reported in the Call Report; plus
(ii) The balance of a bank’s allowance for loan and lease losses or adjusted allowances for credit losses, as applicable, not included in the bank’s tier 2 capital, for purposes of the calculation of risk-based capital described in paragraph (b)(2)(i) of this section, as reported in the Call Report.
(c) Community and economic development entity (CEDE) means an entity that makes investments or conducts activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a governmental entity for redevelopment, or would receive consideration as “qualified investments” under 12 CFR 25.23. The following is a non-exclusive list of examples of the types of entities that may be CEDEs:
(1) National bank community development corporation subsidiaries;
(2) Private or nonbank community development corporations;
(3) CDFI Fund-certified Community Development Financial Institutions or Community Development Entities;
(4) Limited liability companies or limited partnerships;
(5) Community development loan funds or lending consortia;
(6) Community development real estate investment trusts;
(7) Business development companies;
(8) Community development closed-end mutual funds;
(9) Non-diversified closed-end investment companies; and
(10) Community development venture or equity capital funds.
(d) Community development Project (CD Project) means a project to make an investment that meets the requirements of § 24.3.
(e) Eligible bank means, for purposes of § 24.5, a national bank that:
(1) Is well capitalized;
(2) Has a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System;
(3) Has a Community Reinvestment Act (CRA) rating of “Outstanding” or “Satisfactory”; and
(4) Is not subject to a cease and desist order, consent order, formal written agreement, or Prompt Corrective Action directive (see 12 CFR part 6, subpart B) or, if subject to any such order, agreement or directive, is informed in writing by the OCC that the bank may be treated as an “eligible bank” for purposes of this part.
(f) Low-income and moderate-income have the same meanings as “low-income” and “moderate-income” in 12 CFR 25.12(m).
(g) Significant risk to the deposit insurance fund means a substantial probability that any Federal deposit insurance fund could suffer a loss.
(h) Small business means a business, including a small farm or minority-owned small business, that meets the qualifications for Small Business Administration Development Company or Small Business Investment Company loan programs in 13 CFR 121.301.
(i) Well capitalized has the same meaning as well capitalized in 12 CFR 6.4.