Federal Financial Institutions Examination Council
|For Immediate Release||July 26, 2004|
The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data on small business, small farm, and community development lending reported by certain commercial banks and thrifts.
The regulations that implement the Community Reinvestment Act (CRA) 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 owned by a holding company having assets of $1 billion or more. Analysis of Call Report and Thrift Financial Report data indicates that reporting institutions account for about 91 percent of the number of small business loans and about 33 percent of the number of small farm loans extended by all commercial banks and savings associations.
The 2003 CRA data reflect originations and purchases of small business, small farm, and community development loans from 2,103 institutions, including 1,635 commercial banks and 468 savings associations. (See attached fact sheet and related tables.) Approximately 8 million small business loans, totaling $279 billion, and approximately 289,000 small farm loans, totaling $17 billion, were reported for 2003. The number of small business loans reported in 2003 increased by 6 percent from 2002; the total dollar amount of these loans increased by about 10 percent from 2002 to 2003. The number of small farm loans reported in 2003 increased by 13 percent from 2002; the total dollar amount of these loans also increased by 7 percent.
The small business and small farm lending data reported under the CRA regulations are more limited than the data reported on home mortgage lending under the Home Mortgage Disclosure Act (HMDA). The CRA data include information on loans originated or purchased, not on applications that are denied by the institution or withdrawn by the applicant. The CRA data are not reported on an application-by-application basis; rather, the CRA data are aggregated into three loan-size categories and then reported at the census tract level.
About 38 percent of the small business loans reported for 2003 were extended to borrowers with revenues of $1 million or less, up from 31 percent in 2002, and down sharply from a high point of 60 percent in 1999. The decrease in the share of lending to small firms since 1999 is primarily the result of a substantial increase in reported lines of credit, renewals of such lines with larger limits, and credit card lending to larger firms. The proportion of small farm loans made to borrowers with revenues of $1 million or less in 2003 was 89 percent, about the same percentage as in 2002. The vast majority of reported small business loans (93 percent) and small farm loans (83 percent) extended in 2003 were for amounts under $100,000. Small business loans were heavily concentrated in central city and suburban areas, as are both the U.S. population and U.S. businesses. Small farm loans were heavily concentrated in rural areas.
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. In lower-income areas, most small business loans are made in central city census tracts; in higher-income areas, small business loans are most frequently made in suburban census tracts. Most small farm loans are made in rural areas regardless of area income. A comparison of small business lending activity in low-, moderate-, middle-, and upper-income areas in 2003 with 2002 shows that the areas' shares of the number and dollar amount of loans remained about the same.
In 2003, commercial banks and savings associations reported community development loans that totaled approximately $42.3 billion. The dollar amount of community development loans increased by about 52 percent from 2002 to 2003. The number of these loans is larger than in 2002, up about 20 percent to 36,830.
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 or small farms, or activities that revitalize or stabilize low- or moderate-income neighborhoods. Under CRA regulations, retail institutions may not report community development loans as small business or small farm loans, or as home mortgage loans under HMDA (except for multifamily dwelling loans).
The FFIEC has prepared a disclosure statement from the reported 2003 CRA data, in electronic form, for each reporting commercial bank and savings a01/15/2009 10:56 AMments of small business and small farm lending for each of the metropolitan statistical areas and each of the non-metropolitan counties in the United States and its territories, and has distributed these statements to central depositories throughout the nation where they are available for public inspection. The 2003 CRA data will be available on the FFIEC web site today (www.ffiec.gov/cra). An order form for CRA data and related items, with descriptions of the various reports and formats available, is attached to this release and is also available on the FFIEC web site. Central depository locations and an order form for other data available from the FFIEC (including data on home mortgage loans reported under HMDA) can be found on the FFIEC web site.
The FFIEC was established in March 1979 to prescribe uniform principles, standards, and report forms and to promote uniformity in the supervision of financial institutions. The Council has five member agencies: the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The Council's activities are supported by interagency task forces and by an advisory State Liaison Committee, comprised of five representatives of state agencies that supervise financial institutions.