Hi All,

Can the compliance officer of a bank change the assessment area? Or does the Board of Directors have to change the banks assessment area?

I would think the CO could recommend a change, but ultimately the BOD should be the ones to approve it.

I have worked at and with banks where senior management could make that call. I do know other banks where Board approval is required. There is no one rule. Smaller banks tend to require Board approval.

I would highly recommend that Board approval be standard policy. That is the norm for most of the banks I have worked with. It demonstrates the Board is exercising its oversight responsibilities. Technically there is no regulatory requirement, but it definitely is a best practice.

I agree with Len. Even though board approval may be not be required, it shows that the board is actively engaged in the CRA decision making process - and that is always a good thing!

Generally the bank's that don't have "Board" have a Board committee to allow responsiveness when needed. The large the bank gets, the harder to deal with sending things up to the "Board".

The decision about the configuration of an Assessment Area may very well be the most important CRA decision you can make because it affects not only your bank's results it also determines the standards that are used to rate your performance by regulators. Furthermore, even if you had a perfectly defined AA 2 years ago, facts and circumstances change continually. We recommend to all our clients that they review their AA annually and even if there is no change, Board action is desirable because it demonstrates the Board is exercising its oversight authority. Put the decision (even one that affirms continuation of the current AA) into the public file so examiners know they have the latest delineation of the AA too. Again, this is not required but is a best practice.