I'd just like to be sure that I understand the impact of the "intermediate bank" designation on those of us that are OTS regulated? The OTS did not make such a designation, and it appears that the final rule that came out this month has been issued specifically by FDIC, Fed Res. and OCC. Should I be concerned about this, being that we were able to go back to small bank status last fall when the OTS came out with their final rule October 1st 2004. Our current asset size falls within the intermediate catagory identified by the other three agencies. Anybody have some insight that you would be willing to share? Thanks in advance

The OTS unilaterally revised CRA several times in the last year. On August 14, 2004 OTS announced it had changed the definition of small bank to a $1 billion limit. On February 28, 2005 the OTS announced a new flexible approach to rating large institutions that allows the lender to select the weighting for the 3 tests applied to large lenders provided that the Lending Test must be a minimum 50% of the weight. The OTS also is considering amending the definition of community development, but I don't believe a final ruling has been issued on this matter by the Agency. The OTS position is different from the recent change announced by the OCC, FRB and FDIC in that there is no intermediate size lender and there is no requirement for a satisfactory rating on community development activities like there is for intermediate banks reporting to the other agencies. Keep in mind, however, that all agencies expect all lenders to comply with CRA and meet the need for credit services in their communities. Even though you may not be reporting, it is still good practice to maintain an on-going self-assessment process. However, I would not be concerned about the recent ruling unless the OTS decides to adopt the same position regarding community development (which is anybody's guess).

Echoing Len's comments, it's business as usual for you folks until you hear otherwise. I know from a meeting I attended in DC recently that the other agencies are not overly pleased at the OTS for going it alone, but that does not mean that YOU have to make any changes at this point, just that the agency pressure on the OTS is worth watching. I'd change nothing now (assuming you did adapt to the new reg when it was announced) and watch the news You escaped the fire this time

Thanks for the feedback. My thoughts were along those very same lines, but it really helped to have the input from you as well. For those of us OTS banks, it seems the better we do at meeting the needs of our community, the more likely it is that we will be able keep our system on the uncomplicated side of things.