This is a response to the 2004 MSA/MD tract income level thread. The designation of the 2004 MSA/MD boundaries will require the definition of revised MSA/MD median family income values for both new and revised geographies. The FFIEC has not yet provided revised MSA median family income values for the 2004 MSA/MD boundaries. As the Census tract income level is defined as the Census tract median family income as a percentage of the MSA/MD/non-metro area median family income, the potential for change in designation in 2004 is significant.

However, for CRA Wiz clients, PCi has used US Census methodologies to calculate a preliminary MSA/MD median family income figure. Using this value, it is possible to see the significant shifts in the tract income figures. If Don, or anyone else, would like to see a more detailed analysis of the tract changes, or receive the actual MSA/MD and non-metro area median family income figures, please contact PCi at 800.261.3111. For those who are interested, we also have approximated 2004 HUD Median values for the new MSA/MD geographies.

As a brief summary of the tract income category shifts, in initial assessments, over 3,500 Census tracts will have revised tract income levels when the revised MSA/MD boundaries become effective.

Suggested Actions to Manage the 2004 MSA/MD Definitions:
-- LMI penetration goal setting for 2004 should be revisited in light of the MSA/MD definitions and revised median family income values.

--Review Service Test performance for branch placement within new MSA/MD boundaries

--Any institutions with assessment areas in any of the new or modified geographies will need to revisit their assessment area definitions for 2004.

--Some institutions that have been lending exclusively in non-metropolitan areas will find that they now have additional obligations under HMDA and/or CRA.

--Review redlining analysis conducted, especially for non-metropolitan areas.

--Update public file information.

A few 2004 MSA/MD Facts and Figures
--The previous standard of 4-digit numbers to describe MSAs has been expanded to 5 digits. For example, the Akron, OH MSA “0080” is now MSA “10420”. The new designation for Metropolitan Divisions or MDs, which are sub-sets of MSAs, are also identified by 5 digits. Identifying code numbers are assigned alphabetically in accordance with the geography area title.

--All MSAs and MDs are comprised of whole counties. As of 2004, no counties will split into multiple metropolitan geographies.

--Non-MSA areas continue to exist in many states, but will consist of much smaller areas, and several states no longer contain non-MSA areas: District of Columbia, New Jersey, and Rhode Island are fully comprised of defined MSA/MD geographies.

--Of the 370 MSAs in the United States and Puerto Rico, 49 are new additions designated by the OMB for 2004.

--Eleven MSAs - those that contain a single core with a population of 2.5 million or more - are divided into subset areas identified as Metropolitan Divisions or MDs.

--These eleven MSAs represent 29 MDs

--In summary, there are a total of 359 MSAs and 29 MDs for 2004 HMDA/CRA reporting. The 29 MDs cover the area for the 11 MSAs removed from the geography listing.

Todd Cooper
EVP CRA & HMDA Products
PCi Corporation
Todd_cooper@pciwiz.com

As my initial post indicates the government will not provide the official 2004 adjusted census tract income data until the 3rd quarter of 2004.

Calls to the FRB, OCC, OTS and FDIC have indicated that no decision has been made so far on if they will continue to use 2000 census data, or an estimate of the 2004 adjusted data, for examinations conducted in the first 6 months of 2004.

While the estimates offered will most likely give everyone a good idea of what changes to expect, for self assessment purposes consider using the 2000 and the Estimated Data as a heads up, until examiners have decided which data they are going to use in the examinations.

Thank you for your generous offer Todd and I have called your office to request it.