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Question & Answer
Question: We're still confused about what source to use for income data for CRA purposes. Do you have any advice?
Answer: Yes - with the help of the OCC. Your concern is a widespread problem and the OCC has just issued some clarification. OCC 97-25 was sent to national banks in June. This letter explains that the federal supervisory agencies use the annual HUD estimated median family income data to classify the income levels for borrowers in CRA public evaluations. However, the decennial U.S. Census data must be used to classify income for geographies (census tracts). You thus have two data sets to work with. When using census tracts as the basis for analysis, use the decennial census data. This makes sense because the information about each census tract is based on that data. However, when evaluating loans by individuals rather than by geography, the income should be compared to HUD's most recent median family income data. Using the HUD data ensures that lending practices are reaching and responding to changes in income levels of the population.
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 14, 12/97
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