LPO

We are opening a Loan Production Office in a nearby city in which we are not currently located. The lender will be going after customers that he has a relationahip with that are not necessarily near our office. How should we handle this as far as expanding our assessment area?

You may not need to expand it at all. An LPO is not considered to be a branch office and not every loan originated needs to be inside your AA. Just the "majority" of loans do. Majority has been defined as anything over 50% however this seems to vary between agencies and examiners with as much as 70% being considered as the "majority" they would like to see. Also the percentage of what other institutions have originated inside their AA can be a guide.

So its going to depend on how many new loans the LPO generates as to the need to expand your AA.

And...what type of loans is this new LPO going to generate. If you can boost your LMI lending using this office, try to include it in an AA. If not, or it's all high income stuff, don't sweat it being outside, except for that % figure Don discussed

We currently have a branch and an LPO in an assessment area. We are considering closing the branch and opening a limited service branch with the lpo in it. The LPO will be mostly for commercial loans. How would we handle this?

What limited services is the branch performing? Just because the LPO has an office in this facility does not make the it all an LPO.

I.E.If you are taking deposit you have a branch operation which needs to be in your assessment area. By your own defination you are calling it a "limited service branch" so it sounds lke you still have a branch operation with an LPO in it.

It will retain branch deposits but it will be basically as a convienience to the commercial customers. It will be small. If people specifically ask for consumer services they will get them but it will not have heavy promotion.

Kat
Sounds like you still have a branch regardless of reduced services or promotion. As such it will need to be included in your assessment area.

And I sure hope it's not in an LMI geography because you now would have reduced services to that geography. Be sure to think this through, while looking to your entire AA's service levels to LMI geographies.

The current branch is not but I can hope they find the new one in an LMI. I think that is wishful thinking but I can prime the guy looking for the area.

Thanks for the help, it is appreciated.