So we have 20+ counties within our assessment area. They are separated by what WE call three assessment areas; three because each of the three contains about 8 or 9 contiguous counties. We recently had a third party do a geo-code analysis and they named about 9 assessment areas. Even though the footprint stayed the same, they named an assessment area based on its MSA or non-MSA status. For instance, one of OUR named AAs may have two or three MSAs located in it. Is naming the AA immaterial to the regulators? I assume they will test the AA according to their own procedures, so whether we have three AAs or nine by definition, the overall AA remains the same.... This may not make any sense at all, but I'm not sure how else to explain it.

Thanks in advance for your responses!

You will want your AAs to line up closely to your regulators definition for self-assessment purposes. Not all of those will receive a full scope exam and I know I would want to know how I was doing in the ones that would receive one. The regulation is pretty clear as to how they must be defined, I don't think you could have two MSAs in one AA.

§25.41 Assessment area delineation.
(a) In general. A bank shall delineate one or more assessment areas within which the OCC evaluates the bank's
record of helping to meet the credit needs of its community. The OCC does not evaluate the bank's delineation of its
assessment area(s) as a separate performance criterion, but the OCC reviews the delineation for compliance with the
requirements of this section.
(b) Geographic area(s) for wholesale or limited purpose banks. The assessment area(s) for a wholesale or limited
purpose bank must consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan
division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or
more contiguous political subdivisions, such as counties, cities, or towns, in which the bank has its main office, branches,
and deposit-taking ATMs.
(c) Geographic area(s) for other banks. The assessment area(s) for a bank other than a wholesale or limited purpose
bank must:
(1) Consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division
boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more
contiguous political subdivisions, such as counties, cities, or towns; and
(2) Include the geographies in which the bank has its main office, its branches, and its deposit-taking ATMs, as well
as the surrounding geographies in which the bank has originated or purchased a substantial portion of its loans (including
home mortgage loans, small business and small farm loans, and any other loans the bank chooses, such as those
consumer loans on which the bank elects to have its performance assessed).
(d) Adjustments to geographic area(s). A bank may adjust the boundaries of its assessment area(s) to include only
the portion of a political subdivision that it reasonably can be expected to serve. An adjustment is particularly appropriate
in the case of an assessment area that otherwise would be extremely large, of unusual configuration, or divided by
significant geographic barriers.
(e) Limitations on the delineation of an assessment area. Each bank's assessment area(s):
(1) Must consist only of whole geographies;
(2) May not reflect illegal discrimination;
(3) May not arbitrarily exclude low- or moderate-income geographies, taking into account the bank's size and financial condition; and
(4) May not extend substantially beyond an MSA boundary or beyond a state boundary unless the assessment area is
located in a multistate MSA. If a bank serves a geographic area that extends substantially beyond a state boundary, the
bank shall delineate separate assessment areas for the areas in each state. If a bank serves a geographic area that
extends substantially beyond an MSA boundary, the bank shall delineate separate assessment areas for the areas inside
and outside the MSA.
(f) Banks serving military personnel. Notwithstanding the requirements of this section, a bank whose business
predominantly consists of serving the needs of military personnel or their dependents who are not located within a defined
geographic area may delineate its entire deposit customer base as its assessment area.
(g) Use of assessment area(s). The OCC uses the assessment area(s) delineated by a bank in its evaluation of the
bank's CRA performance unless the OCC determines that the assessment area(s) do not comply with the requirements of
this section.

Thank you, Jen. This is exactly what I was looking for... not sure how I didn't come up with it myself, but I appreciate your help!

You are most welcome!

I have over 20 counties in 3 states. I've got 10 assessment areas. They do not line up with the "regions" we have defined by the bank. At one point, one non-MSA AA was split between two regional presidents. That was a good time.

Actually you can have multiple MSA's in the same MSA if they are in the same CSA and the areas are contiguous. The exception allowing this is cited in the Q&A's

Naming the AA's is not material although it would be helpful to have some area recognition inherent in the name.

OK. It's early, but what is a CSA?

Combined Statistical Area (more than one MSA combined with another)

Correct, I wasn't thinking about that since I don't have any. Thank you for clarifying.

Question: can two NON Contiguous counties that are not in an MSA be made as one assessment area. The two counties have an MSA in between them. Our regulator is saying they have been given permission to combine non MSA counties as one AA if the demographics are similar. Just because they want to combine them for their purposes doesn't mean we have to call it one AA, correct? I have never seen anything that said you could have non-contiguous counties be an AA.

I've not ran across that either...the word contiguous is repeated in the regulation.

Our exam team has grouped non-contiguous non-msa counties together into a single AA. This is only in states where we have multiple AA's, thus already have a full-scope AA. Before my first exam, I was convinced they would make us separate but they were the ones who insisted that the counties be grouped into a single AA. And you're right. I've never seen it written anywhere either. We're OCC btw.