Federal Financial Institutions Examination Council
|For Immediate Release||July 29, 1999|
The Federal Financial Institutions Examination Council (FFIEC) today 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) under the Community Reinvestment Act regulations.
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 aggregate reports for each of the metropolitan statistical areas and each of the nonmetropolitan counties in the United States and its territories.
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 The CRA data include information only on loans originated or purchased, not on applications that are turned down or withdrawn by the customer. Unlike HMDA data, the CRA data do not include information about applicant income, sex, or racial or ethnic background, although the CRA data do indicate whether a loan is extended to a borrower with revenues of $1 million or less. The CRA data are not reported application-by-application as HMDA data are, but rather, are aggregated into three loan size categories and then reported at the census tract level.
The 1998 CRA 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 for 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. Most small farm loans are made in rural areas regardless of income. For 1998, lending to small businesses in low- and moderate-income areas declined by about 3 percent in both number and dollar amount from 1997, and the number of small business loans in high income areas dropped slightly from 1997. This decline is due in part to a change in reporting requirements. To reduce burden and the erroneous identification of the census tracts associated with reported loans, reporting institutions may report loans made in 1998 or later without a census tract identifier if the specific location of the business cannot be determined. For 1998, 40,000 of the reported small business loans, or about 1.5 percent of the total of such loans, were reported without a census tract identifier. In earlier years, these loans would have been distributed among the four census tract income groupings.
For 1998, commercial banks and savings associations reported community development lending that totaled $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 or small farms, or activities 01/15/2009 10:56 AMods. In general, community development loans are not reported for CRA purposes as consumer, home-mortgage, small business, or small farm loans (except for multifamily dwelling loans reported under the Home Mortgage Disclosure Act).
The FFIEC has distributed aggregated disclosure statements to central depositories throughout the nation, where they are available for public inspection. An order form for CRA data and related items, with descriptions of the various reports and formats available, is attached to this release. 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 at the FFIEC Web site ( www.ffiec.gov/cra).