We are a small bank ( under $250m in assets) in the NW. For years we have included in our assessment area the entire two main counties where our main & branch (3) offices are located.

This year our CRA examiner says... the AA for the bank is too big. My question, could we safely use an MSA area? All our offices are located within the MSA area. We can't possibly meet the needs of the communities however, as we are competing with hundreds of banks in this same MSA... my problem though is there doesn't seem to be anything smaller that makes any more sense.. If we use the MSA area, could we also use the east half of the MSA area for example as long as we use a major HWY or river as a boundary.

If a bank's assessment area extends substantially beyond the boundaries of an MSA, separate assessment areas should be establised. You need to understand what examiners are saying. Are they saying that the assessment area is not set up properly and should be established as multiple assessment areas, or that overall the area is too large for the bank to handle?

I am still seeing wildly different viewpoints from examiners even from the same agency on whole counties vs partial counties.

Re an MSA, yes, you can select an MSA as the assessment area if that is appropriate,

Refer to the q and a at http://www.ffiec.gov/cra/pdf/2010-4903.pdf

The discussion on assessment areas starts around page 11666.

Absolutely. You can't split census tracts, but using major highways, rivers, or town/township boundaries to split a county is acceptable. Just be careful to make sure that you don't cut off at a railroad track excluding the census tracts that are the "other side of the tracts". (LMI or minority areas excluded)

Wonderful.. thank you!

You do not need to take an entire MSA. Re entire counties, I am seeing many exam teams insisting on full counties and then one pops up where the bank is told that is too much for them...could be the same county another bank was told to take the full county.

Pay close attention to low and moderate tracts, including those you exclude. Must you exclude them or can you service the,.

Also review the minority population of the selected area and the areas left out. Be prepared to discuss why the bamk cannot service areas left out.