§__.22(c)(2)(ii) Affiliate Lending Constraint

§__.22(c)(2)(ii) – 1

Q: Regardless of examination type, how is this constraint [“if an institution elects to have its supervisory Agency consider loans within a particular lending category made by one or more of the institution’s affiliates in a particular assessment area, the institution shall elect to have the Agency consider all loans within that lending category in that particular assessment area made by all of the institution’s affiliates”] on affiliate lending applied?

A1. This constraint prohibits “cherry-picking” affiliate loans within any one category of loans. The constraint requires an institution that elects to have a particular category of affiliate lending in a particular assessment area considered to include all loans of that type made by all of its affiliates in that particular assessment area. For example, assume that an institution has several affiliates, including a mortgage company that makes loans in the institution’s assessment area. If the institution elects to include the mortgage company’s home mortgage loans, it must include all of its affiliates’ home mortgage loans made in its assessment area. In addition, the institution cannot elect to include only those low- and moderate-income home mortgage loans made by its affiliates and not home mortgage loans to middle- and upper-income individuals or areas.

 

Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016

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