On April 28 the FFIEC released the new Census 2020 tracts with their respective income classes to be implemented as of the beginning of 2022.

This means every bank must update its public file to include maps with the new tracts and their income classifications.

For banks that include counties in their entirety, the development of new AA maps should be straightforward. However, for banks that delineate their AAs to include parts of counties, it is a little more challenging because not only was there an enormous increase in tracts (looks like more than 10,000 new tracts have been created, from about 74,000 tracts to more than 85,000 tracts!), all tract boundaries were subject to change.

When we mapped our clients' AAs 10 years ago we found the only way to address this issue was to conduct online dynamic mapping sessions during which bankers can see the new census tract configurations and how they may overlap their current AA boundaries.

Given the enormous changes in the tracts every bank should review the changes in and around their Assessment Areas. For sure, many LMI tracts and majority-minority tracts will change significantly.

We are already entering the 5th month of the year and these tracts affect the entire year (right from the very beginning), so everyone responsibile for CRA and Fair Lending should make updating their tracts a very high-level priority.
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Interesting. I was just on the FFIEC.gov website and the new information is not there. Still only shows 2021 as the latest year.

If you are referring to the geocoding website then you are right, 2022 data is not populating yet, but the data is available for download. https://www.ffiec.gov/censusapp.htm

One of the difficulties with the new data is there are more than 10,000 new census tracts, plus many of the old tracts had their boundaries changed (so their shape and size are different), plus many tracts changed income class and/or minority status changed. If you don't have the ability to map the tracts understanding and analyzing the changes and their effects will be very difficult.

For example, there were 16,801 census tracts designated as moderate-income during 2021. Now, in 2022 that number changes to 19,190 moderate-income tracts. The number of "NA" income tracts increased from 1,319 to 2,358 census tracts. At the same time, low-income tracts decreased from 5,959 to 5,602 tracts.

How dramatically a bank is affected by the changes depends on the location of a bank's assessment area. Each bank will be affected differently depending on the configuration of its assessment areas.

We have been looking at Assessment Area maps for our clients and have noticed the impact of the new 2022 tracts can vary quite a bit from bank to bank. Because there are so many new tracts many banks will find that their AA's may include more tracts, not because the bank expanded the AA, but simply because old tracts were split in two while other tracts were partly combined, etc. Many tracts also have had their income class changed too.

In some cases, the changes may merit a review of your AA delineation to make sure there are no new LMI or MM tracts on the border of your AA that create the appearance of redlining. This is an exercise that demands more attention than merely producing a new AA map.

The 80% increase in NA tracts tells me something is off. Is there any indication of why this occurred, or if the FFIEC will revise this?

A lot more prisons or interchanges?