I am familiar with the procedures for closing a bank branch, but what I am unfamiliar with is how those procedures may differ if the proposed branch is located in an underserved/distressed area? Are there additional requirements due to the location?

I am not aware of any guidance on this. However, we treat a closing in a distressed/underserved census tract the same as if it occured in a LMI census tract.

Be sure and document in depth the reasoning for the closure. We had to shut down some branches in rural areas that were losing money bigtime. They could not be sold, there was still adequate access to banking facilities, services, products, etc....

Agree with Pale. In one instance we donated the closed branch to a town who now makes it their town hall. Much better than leaving a vacant building.

This 'branch' is in a Walmart store so donating the building is out of the question. Pale, I will definitely document, and thanks everyone for your help!

Responses are correct. There is no special guidance so make sure you document reasons for closing, what access to banking services the area residents still have, etc.

While I agree with the responses, we did get marked down in CRA for closing a distressed area branch. We had all the documentation showing that the branch was a financial drain on the bank, it didn't seem t matter when it came to our CRA exam.

That's harsh. We had closed a branch in a moderate-income census tract, and we had a ton of documentation why it was a legitimate business decision. The examiner looked through all the documentation; agreed we had made our case; did not hold it against us in the exam.

Sometimes I think it all depends on what examiner you get.

CRA does depend on the examiner, unfairly so.

When closing any branch make sure you consider the effect on consumers in the area, not just the bank, in your documentation. What alternatives to banking services you offered that still exist. What you could leave behind...a deposit taking ATM? What other banks are in the area offering all needed services.

Show you considered all aspects of the closure.

I agree with both of you... I hope he's retired now that OCC took over OTS.

Kathleen B hit the mark on this. Besides documenting the business decision on why you needed to close the branch, also document or somehow otherwise furnish to your examiners a description of your alternative delivery systems to cover the underserved or LMI population. If there aren't any alternative systems to cover the people left behind, so to speak, then you'll want to develop something showing why your delivery to underserved or LMI is still good in spite of the branch closing. AR.