Circular
Community Reinvestment Act
Availability of 1998 Data on Small Business, Small Farm, and Community Development Lending Reported by Commercial Banks and Savings Associations
October 1, 1999
Circular No. 11189

To the Chief Executive Officers of State Member Banks in the Second Federal Reserve District:

The following is from a press release issued by the Federal Financial Institutions Examination Council (FFIEC):

The Federal Financial Institutions Examination Council (FFIEC) has announced the availability of data on small business, small farm, and community development lending reported by commercial banks and savings associations (including savings banks and savings and loan associations) pursuant to the Community Reinvestment Act (CRA).

As revised in 1995, the regulations that implement the CRA generally require the reporting of data on these types of lending by independent commercial banks and savings associations having total assets of $250 million or more, and by commercial banks and savings associations of any size if owned by a holding company having assets of $1 billion or more. Analysis of Call Report data indicates that reporting institutions account for about two-thirds of the small business loans and one-fifth of the small farm loans extended by all commercial banks and savings associations.

From the data reported, the FFIEC prepares a disclosure statement, in electronic form, for each reporting commercial bank and savings association. The FFIEC also prepares an aggregate disclosure statement for each of the metropolitan statistical areas and each of the nonmetropolitan counties in the United States and Puerto Rico.

The 1998 data reflect originations and purchases of small business and small farm loans from 1,866 institutions, including 1,576 commercial banks and 290 savings associations. (See attached fact sheet and related tables.) A total of 2.6 million small business loans, totaling $161 billion, and 208,000 small farm loans, totaling $11 billion, were reported for 1998. Measured by number of loans, 58 percent of the reported small business loans and 91 percent of small farm loans were extended to borrowers with revenues of $1 million or less. For small business loans, this proportion has increased 8 percentage points from the 50 percent reported in 1997. The vast majority (about 86 percent, by number of loans) of small business and small farm loans were for amounts under $100,000. Small business loans are heavily concentrated in central city and suburban areas, as are both the U.S. population and U.S. businesses.

The variation in small business lending among census tracts grouped into income categories generally parallels the distribution of the population and businesses among these categories.

For 1998, commercial banks and savings associations reported community development lending that totaled nearly $16 billion, down 13 percent from 1997. Compared with small business and small farm lending, the typical community development loan was relatively large ($744,000).

A community development loan has as its primary purpose affordable housing for low- or moderate-income individuals, community services targeted to these individuals, activities that promote economic development by financing small businesses and small farms, and activities that revitalize or stabilize low- or moderate-income geographies. In general, a community development loan has not been reported for CRA purposes as a consumer, home-mortgage, small business, or small farm loan (except for multifamily dwelling loan reported under the Home Mortgage Disclosure Act (HMDA)).

The FFIEC has distributed aggregate disclosure statements to central depositories throughout the nation, where they are available for public inspection.

An order form for CRA items, with descriptions of the various reports and formats available, is attached to this release. An order form for other data available from the FFIEC (including data on home mortgage loans, reported under HMDA), and the location of the central depositories can be found at the FFIEC's website or by calling (202) 634-6526.

Questions on this matter may be directed, at this Bank, to Janice A. Oser, Examining Officer, Compliance Examinations Department (212-720-8136).