I anticipate my bank will not have an RLAA, based on the fact that over 80% of our retail lending is in our FBAAs.

That being said, I'm confused as to what parts of the complex calculations in the Retail Lending Test will apply?? Any other banks in the same position?

The exemption from having to designate RLAAs for large banks that meet the 80% inside the FBAAs threshold really provides no relief IMO. The reason why I take that position is that all the lending you are doing outside your FBAAs will be included in the ORLA. Adding a bunch of MSAs or non-MSA areas which would have been RLAAs to the other "component areas" in the ORLA means you will have to do all the calculations that what would have been done for the RLAAs anyways and will make it really confusing because the calibrated benchmarks and comparisons will need to be calculated and then weighted for determining their impact on the ORLA results.

Mel, the same complex computations will need to be done for any component areas within the ORLA.

Just confirming.... does it only take one loan in an MSA or non-MSA outside of your FBAA to create a new ORLA?

This can be confusing, but there is only 1 ORLA. Within that ORLA can be many 'component geographic areas' that are basically any MSA or nonmetro area of a state that will be included in the ORLA.

Example: Bank makes 1 loan in Miami FL and 2 loans in Denver CO (both loans are not in a FBAA or a RLAA). The bank would have 2 component geographic areas to compute in order to compile and arrive at your 1 ORLA calculation.

You could have 0, 10, 25, 50, ect component geographic areas depending on the lending practices of your bank!! That's what makes the ORLA so crazy. It is deceptive if you only read "there is one ORLA" and don't dig deeper into the actual calculation method.

I hope I summarized that accurately and welcome any corrects if needed. I have tried my best to understand all this

Mel - the loans to be evaluated are those that qualify as "major product line loans" in the ORLA. That determination is made by using the 15% criteria (based on the average % of loans in the ORLA using a combination of loan counts and loan dollars). In many cases this likely will include both closed-end mortgages and small business loans and in each component geographic area in which you originate 1 or more such loans you will need to do the calculations in the geographic and borrower distribution tests.