In the small bank performance standard, which of the following is NOT a criterion?
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A. B. C. D.A
The small bank performance standard is a regulatory framework that applies to banks with less than $1.284 billion in assets and is designed to measure compliance with the Community Reinvestment Act (CRA). The CRA is a federal law that requires banks to meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods.
The criteria used to measure compliance with the small bank performance standard include:
A. The bank's CRA strategic plan: A bank must have a CRA strategic plan that outlines its commitment to meeting the credit needs of its communities.
B. The bank's loan-to-deposit ratio: A bank must maintain a loan-to-deposit ratio that is consistent with safe and sound banking practices and that reflects the credit needs of its communities.
C. The geographic distribution of loans: A bank must demonstrate that it is meeting the credit needs of all the geographic areas in which it operates, particularly low- and moderate-income neighborhoods.
D. The percentage of loans within the bank's assessment area(s): A bank must show that it is making a significant portion of its loans within its designated assessment area(s), which are the geographic areas in which the bank is required to meet its CRA obligations.
Therefore, to answer the question, the criterion that is NOT part of the small bank performance standard is B, which is the bank's loan-to-deposit ratio. While it is important for banks to maintain a sound loan-to-deposit ratio, it is not a direct measure of their compliance with the CRA. Instead, the focus of the CRA is on meeting the credit needs of the communities in which banks operate, particularly those in low- and moderate-income neighborhoods.