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Will the asset threshold relief apply to a bank that will be required to transition from a small bank to an ISB because of PPP loans made in 2020?
I believe you are talking about the asset threshold relief provision in the interim final rule issued by the agencies on November 17, 2020. This IFR states in footnote 13 that it will not apply to CRA asset threshold. See p. 77348, specifically footnote 13 which states (emphasis added in bold is my own):
This interim final rule does not address the exemption in the Board’s Regulation H from certain flood insurance escrow requirements for qualifying state member banks (less than $1 billion in assets as of December 31 of either of the two prior calendar years, provided other conditions are also met), 12 CFR 208.25(e)(3), or the provision in the Board’s Regulation BB defining small bank and intermediate small bank for purposes of determining applicable Community Reinvestment Act evaluation procedures. As currently defined in
Regulation BB: a small bank is a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.305 billion; an intermediate small bank is a small bank with assets of at least $326 million as of December 31 of both of the prior two calendar years and less than $1.305 billion as of December 31 of either of the prior two
calendar years; and a large bank is a bank with assets of at least $1.305 billion as of December 31 of both of the prior two calendar years, 12 CFR 228.12(u)(1). As indicated, the asset-based thresholds in these provisions take into account assets as of the end of the two previous calendar years. Therefore, the earliest that a bank with assets that did not exceed one of these thresholds as of December 31, 2019, could exceed the threshold is January 1, 2022. As a result, consistent with this interim final rule, asset growth in 2020 or 2021 will not trigger new regulatory requirements until January 1, 2022, at the earliest. For similar reasons, the interim final rule does not adjust thresholds in the OCC and the FDIC’s flood insurance escrow rule at 12 CFR 22.5(c) (OCC) and 12 CFR 339.5(c) (FDIC) and Community Reinvestment Act regulatory thresholds for small banks and intermediate banks at 12 CFR part 25 (OCC) and 12 CFR 345 (FDIC). The OCC also is not adjusting thresholds for depository institution management interlocks at 12 CFR part 26, as this part already permits any affected bank to request a waiver related to unanticipated asset growth. 14 This interim final rule only provides temporary relief with regard to the measurement date of assets. Other criteria that apply to certain of the affected regulatory provisions remain in effect, and the measurement date for other quantities has not been changed by this interim final rule.If this doesn’t answer your question let us know.
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