Assessment Area Delineation

(1) In General. An institution shall delineate one or more assessment areas within which the Commissioner evaluates the institution's record of helping to meet the credit needs of its community. The Commissioner does not evaluate the institution's delineation of its assessment area(s) as a separate performance criterion, but the Commissioner reviews the delineation for compliance with the requirements of 209 CMR 46.41. (2) Geographic Area(s) for Wholesale or Limited Purpose Institutions. The assessment area(s) for a wholesale or limited purpose institution must consist generally of one or more MSAs/CBSAs (using the MSA/CBSA 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 institution has its main office, branches, and deposit-taking ATMs. (3) Geographic Area(s) for other Institutions. The assessment area(s) for an institution other than a wholesale or limited purpose institution or a credit union under 209 CMR 46.41(8) must: (a) consist generally of one or more MSAs/CBSAs (using the MSA/CBSA 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 (b) include the geographies in which the institution has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding geographies in which the institution 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 institution chooses, such as those consumer loans on which the institution elects to have its performance assessed). (4) Adjustments to Geographic Area(s). An institution 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. (5) Limitations on the Delineation of an Assessment Area. Each institution's assessment area(s): (a) must consist only of whole geographies; (b) may not reflect illegal discrimination; (c) may not arbitrarily exclude low- and moderate-income geographies, taking into account the institution's size and financial condition; and (d) may not extend substantially beyond a CMSA boundary or beyond a state boundary unless the assessment area is located in a multistate MSA/CBSA. If an institution serves a geographic area that extends substantially beyond a state boundary, the institution shall delineate separate assessment areas for the areas in each state. If an institution serves a geographic area that extends substantially beyond a CMSA boundary, the institution shall delineate separate assessment areas for the areas inside and outside the CMSA. (6) Institutions Serving Military Personnel. Notwithstanding the requirements of 209 CMR 46.41, an institution 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. (7) Use of Assessment Area(s). The Commissioner uses the assessment area(s) delineated by an institution in its evaluation of the institution's CRA performance unless the Commissioner determines that the assessment area(s) do not comply with the requirements of 209 CMR 46.41. (8) Credit Unions not Serving Defined Geographic Areas. Notwithstanding the requirements of 209 CMR 46.41, a credit union whose membership by-law provisions are not based on residence may delineate its membership as its assessment area.