Is there a way to determine what % of LMI penetration of the census tracts are good enough to pass a CRA review? My bank's assessment area consists of Bergen County, parts of Kings County and parts of Rockland County. We have lent in around 10% low and in 18% moderate census tracts of the assessment area. Bergen county has basically no LMI census tracts in the entire county, we cant remove that area from the assessment area because we have a branch there...thoughts? Help? Is there a way to determine the minimum LMI penetration that is required?

Do you have your last CRA PE available? What we do is take their charts and measure ourselves against their census data and small business data. For example, there is usually a chart in your PE that breaks down your HMDA loans by low/mod/etc. and then compares it to census data for your assessment area. So their data may say your assessment area has 15% Low Income families and 20% Moderate Income families. So then you can match your HMDA data to those numbers. How do you compare?

I hope this makes sense. Let me know if I need to explain further.

Examiners apply several different benchmarks. The standards are derived from demographic data and credit market data as follows:
1- the relative distribution of LMI tracts as a % of all AA tracts
2- the relative distribution of owner-occupied housing in AA LMI tracts
3- the reported penetration rates of other lenders in the HMDA and CRA data pertaining to the Assessment area
4- the relative distribution of small businesses across AA LMI tracts