What actions should my institution take in order to expand our Assessment Area(s)?

As an institution grows, expanding an Assessment Area requires detailed attention to a number of variables. For example, your institution would like to include a few more census tracts on the Southwest corner of your Assessment Area rather than an entire county or number of counties. First identify the following variables:

1. What is the concentration of Loans and Deposits in this area?
2. What specific types of Loans are located in this area?
3. Are there any Low or Moderate Income areas?
4. What are the surrounding area demographics?
5. How are the MSAs delineated?
6. How are the political subdivisions defined?
7. Are roads a contributing factor to delineating the Assessment Area?
8. What are specific reasons for expanding in this area?

After identifying these variables, your institution should be able to delineate a number of Assessment Area expansion options. Institutions must able to justify why certain geographies were included or not included in regards to lending activity. The following will also provide direction when expanding your institution's Assessment Area(s):

• Low and Moderate Income Areas cannot be arbitrarily excluded
  • If a Low or Moderate Income census tract must be excluded, provide a justified reason why
• Delineate the expanded area using consistent geographic features
• Roads can be used as geographic boundaries as long as census tracts are included as whole geographies
  • Census Tracts cannot be split or modified

  
  
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  First published on BankersOnline.com 2/21/05