Welcome to CRA Defined Terms and look at key definitional changes under the modernized CRA regulations. Please note, for best optimal experience, it is recommended you sign out of Teams, Outlook, and any other programs you may have running in your background. Audio for today's webinar is broadcast via your computer speakers, so be sure to adjust the volume accordingly. With the large amount of content to get through today, unfortunately there will not be enough time for questions. If you do have questions, please feel free to submit them through the Q&A box on your screen. We will work to answer them as part of future articles and webinars where possible. I will now pause to start the recording. This meeting is being recorded. Welcome to CRA Defined Terms and look at key definitional changes under the modernized CRA regulations. It is now my pleasure to hand it over to Kris Stewart. Welcome, Kris. Thank you, Ayesha, and thank you everybody for joining us. We're excited to be talking to you today about all the fun stuff going on in CRA. So, Matt, you can advance. Before we jump in, we just want to remind you that this presentation is being provided for informational purposes only and it doesn't constitute legal or other professional advice or services. With that, let's move on to introductions. I'm Kris Stewart. I work at Wolters Kluwer in our regulatory compliance and data sciences areas. I support our compliance-related system development and implementations. With me today is Jason Keller, who's a director in our advisory services. Jason does a lot of things, but he specifically works in the area of CRA and he's been working with our customers in that area. So I think we're really fortunate to have him today and his insights. So we're excited to be here with you. Let's get started. Quickly, what we're going to be covering today, it may look like we're going to spend a lot of time before we get to definitions, but it's not true. I promise I'm going to talk fast. We're going to move very quickly through those first three items because the meat of this, we want to spend the bulk of our time with Jason talking about the select definitions that we're going to cover today. You can advance. So, as you know, the final rule was published in the Federal Register on February 1st of this year. We're going to talk a little bit about effective dates in a moment. This is the first big overhaul of CRA in 30 years, so there's a lot to learn and a lot more than we can experience here today in a single hour. Very briefly, among the things that are new and big in CRA are new and different assessment area requirements. We have some new categories of community development, new CRA performance tests, and of course, substantial revisions to defined terms. The definitions are really what we're going to be focusing on today. So there are too many of them to be able to go through as many as we'd like to. So we're going to focus on those that we think are critical to get you started on planning for implementation. Next. So when you have a reg as big as this, it's a big undertaking to think about how to dig into it. I used to say things like eating the elephant, but I'm not sure that we should talk about poor elephants that way anymore. So frankly, this was a big challenge for us too, and this is what some of our people do for a living every single day. There's over 600 pages in the final rule and supplementary material, so it's pretty daunting. We think about it in terms of a framework of who does it apply to based on your asset size, what performance tests are going to be applicable to you, what are the assessment areas that we need to be concerned about in evaluation frameworks. We're going to focus on definitions related to some of those categories. But before we do that, I want to spend just a minute on some important dates because the very first one is April 1st of this year. Next. So as you know, the final rule is effective April 1st, which is only, what, a couple of weeks away. But some of the changes have immediate impact on April 1st and others are delayed. Most of the substance requirements, fortunately, are delayed until January 2026. January 1st, 2026 is when the data collection and maintenance is set to begin, and the majority of the definitions, asset size thresholds, and performance tests and appendices will take effect then. January 1, 2027 is when the data reporting requirements are set to commence, and the first report is due April 1st, 2027. But as I mentioned, there are some things effective April 1st that I did want to mention briefly. Just a couple of the areas that we're going to mention, there are a few other areas. Most of the other areas that are effective immediately are not substantive. Section 43, which is content and availability of the public file, does have a fairly significant change, and it's related to your website where you have to maintain the public file. You'll want to pay attention to the requirements around maintaining that public file as well as updating that. I'm hopeful, of course, that you're already prepared for that since that date is fast approaching. Then Section 44, I wanted to mention this is the public notice by banks. The content of that notice appears in Appendix F, which is not effective until January 1st of 2026, but Section 44 showed up in the area that's effective in coming up here this year. There was some clarification by the agencies in a recent webinar, and they clarified that although the section is effective April 1st, that you can continue posting your existing public notice until January 1st, 2026. So let's move on to the next slide, and we'll talk a little bit about some of the definitions, which is what you're here to hear today. With that, we're going to be talking primarily about Section 12 definitions, and they have a lot of newly defined terms. More than half the definitions in Section 12 are either new or new to this section. There's also a new Section 13, which covers community development. The pie chart here is illustrating the great majority of the Section 12 definitions are new or revised, and there's a very small portion that were revised without substantive change. So let's turn to the next slide to look at another way of thinking about this. CRA definitions, here's some of the stats that might be of interest to you. Those first two columns are all the new ones, new or yeah, new ones. So there's 51 new terms in Section 12, and there's 18 that are revised, and as you can see, only a small handful that have been removed or didn't have any impact. So while we encourage you to read all the defined terms, we're only going to be able to cover a few today. So we're going to be using the performance test as a general outline for discussion. So let's hop in and take a quick look at the performance tests. This slide generally illustrates the evaluation framework under the final rule. We're not going to be covering the technical requirements of these tests, but rather we'll focus on some of the key definitions that help describe the evaluation criteria and standards. The CRA evaluations will continue to be based on bank size, asset size, and business model, but there were some changes, and there are changes to some of the tests that apply at that asset size or can be opted into. Just to note, the final rule did increase some of the asset size thresholds, so you'll want to make sure you know which group you fall into. For our purposes today, we're really going to be focusing on definitions relevant to the facility-based assessment areas, the retail lending assessment areas, and community development. So with that, I'm going to turn it over to Jason and let him dig into some of those definitions. Hello and thank you, Kris, for a very nice introduction there. There is just so much content that we're going to try to cover over the next 50 minutes. Really, as we started to think about how to set up this webinar, the goal is to define terms. We want each of you to walk away with highlights of what you know, what you think you know, and what you'd like to know more about. There is just no way to cover all of these definitions in one webinar, but we are very much open to other ideas and suggestions of how we may be of assistance going forward. Again, the goal of this webinar is to walk through the definitions themselves, or at least those ones that we think are the most substantive here in March of 2024. This webinar would not have been possible without the assistance of Tatiana Wendler, as well as Matt Huppert, as well as the dedicated WK folks that have come together to put together something that we're going to reveal here at the end that I think all of you will be very excited to hear about. So with that being said, let's delve into the first slide here around facility-based assessment areas. Really, the term here isn't all that different in that it does align the new rule does similarly align with what's happening in the current regulation, but a single definition has been replaced with three separate geographic area categories. Because this is an expansion of those areas of how banks will be assessed, we wanted to spend a little bit more time on it. So really, the final rule uses the term facility-based assessment area, or FBAA for short, and the related delineation requirements begin to apply on April 1st and belong in your public file, as Kris already mentioned. While the general requirements and restrictions for assessment areas are still based on your physical locations, those have relatively remained the same, but we have to remember that those assessment areas should not reflect any sort of illegal discrimination and no arbitrary exclusion of LMI census tracts. But what are the differences? We still see the focus around main offices, around branches, around deposit-taking remote service facilities, but the loan categories that we're starting to think about are now just based on home mortgage, multifamily, small business, small farm, and automobile loans. Today's small and intermediate banks will be able to draw facility-based assessment areas around partial counties; however, large banks will have to take advantage of large counties within their current FBAAs. As we start to think about flexibility and what your facility-based assessment area will look like, know that the one definition has essentially blossomed into three, but we'll get into more detail as we go through. Next slide, please. Now, the definition of county is defined to include what are called county equivalents. At the end of the day, this is essentially just a county, meaning a statistically equivalent entity, and refers to the definition used by the Census Bureau. But you're going to see in that second arrow all of the different areas that fall into the county category, none of which of these are different, but this slide is really just built to point out what you think you know and what you already are working with under the current rule. Next slide, please. What are some of the most important changes related to facility-based assessment areas? And let's get into the definitions. What is a closed-end mortgage, closed-end home mortgage loan? Not any different than what you utilize today. However, it does still correspond with the CFPB's HMDA regulation C, but the term in the CRA regulation excludes a multifamily loan, which is recognized as a separate lending category under the final rule. Transactions that are not in scope of regulation C are also excluded from the definition of what a closed-end home mortgage loan is. Note also that unlike closed-end loans, open-end home mortgage loans, which are also defined in reference under Regulation C, are not considered for purposes for designating facility-based assessment areas. And we'll talk a little bit more about that as we move forward. But as mentioned, multifamily loans are also defined consistently with HMDA, but multifamily loans are a separate loan category under the final regulations and are considered amongst other things in delineating FBAAs and other types of assessment areas that we will cover next. Next slide, please. Now, there's been a lot of discussion around what a retail lending assessment area is and is not. And what you will see here is the definitional requirement of what an RLAA is. And note really that second bullet, that intermediate or I'm sorry, that first bullet, where intermediate and small banks are exempt from defining RLAAs. This is really something that large banks will have to focus on. But what is an RLAA? I'm sorry, large banks will be evaluated in retail lending assessment areas if applicable, but the bank will not delineate RLAAs if lending in specific loan categories is mostly 80% within their facility-based assessment areas. So essentially, if you were lending in and around your branches 80% of the time, you will not have to designate any RLAAs. And then to reinforce, the loan types and scope for RLAAs are home mortgage loans, multifamily loans, small business loans, small farm loans, and if a major product line, automobile loans, and we'll talk a little bit more about automobiles. However, and this is a key point, if a large bank originates or purchases these specific types of loans outside of their FBAAs, essentially that 20% rule, large banks, again, will be exempted from having to draw RLAAs. If so, though, the bank will then be evaluated if the RLAA has 150 or more originations for closed-end home mortgage loans or 400 or more small business loans. But again, these are originations only. Purchases will not impact these loan count thresholds. So the takeaway here is to do your math now, understand where your retail lending assessment areas will be if you do believe you will be having to designate those, and start to think about those strategies to comply. Next slide, please. Now, getting further on what is a reported loan. Now, again, this is the provisions described in delineating what an RLAA will be for the purposes of the retail lending test. But all of this is outlined in Appendix A. There's no way for us to get through all those details here today. But know that HMDA reportable, CRA reportable, again, the transactional amendments under the Consumer Financial Protection Bureau's Section 1071 will all fall under reported loans for the purposes of the modernized rule. But again, the home mortgage loan generally means a closed-end or open-end home mortgage loan, but it refers to closed-end home mortgage loans specifically under Regulation C. So the linkage between CRA and Regulation C is really your guideline there. But while this definition did not substantively change, we want to make sure that you're focused only on closed-end home mortgage loans for the purposes of RLAAs. Next slide, please. Your next question might be, well, what are some other definitional changes around product line? And really, as I mentioned, closed-end mortgages, small business, small farm, and in some cases, automobile. But automobile loans are only considered a product line if the bank is a majority automobile lender. So again, a majority automobile lender, which the agencies have put forward, that that list is not very large. But other lenders may have opportunities or opt in to having your automobile loans or other commercial or other consumer loans evaluated under the retail lending test. So we'll cover this definition again shortly. Next slide, please. So a lot of conversation in the industry right now is around the ORLA. And there have been multiple conversations at conferences and in other webinars. But definitionally, let's focus on what an ORLA is. This is a brand new term. This rule, again, or I'm sorry, this definition is really focused on geographic areas that are not a facility-based assessment area, not a retail lending assessment area. This is essentially everything else. But only certain intermediate banks will have ORLAs. This is really a large bank requirement. Small banks that elect to be evaluated under the retail lending test will also have an ORLA. But an intermediate bank will be evaluated and this is a caveat, if you were an intermediate bank, will be evaluated under an ORLA if, in the prior two calendar years, the bank originated or purchased the majority, that is, more than 50% of your covered loans, again, home mortgage loans, multifamily loans, small business loans, small farm loans, and automobile loans, if applicable, outside of your facility-based assessment areas. And then the second caveat is if your bank elects to have its major product lines evaluated in outside retail lending areas. So really, this whole conversation around ORLAs is going to be mostly impactful to large institutions, to large banks. But if you are an intermediate bank, understanding the ORLA definition will be key to you setting up your programmatic, looking at your program to be able to get ready for the modernized rule. Next slide, please. So what does the term outside retail lending assessment area mean in more detail? So again, banks are not examined outside their assessment areas today. So the outside retail lending area is an expansion compared to existing requirements. A large bank will be evaluated in its Outside Retail Lending Area if that bank originated or purchased loans in any product lines that are subject to the Retail Lending Test during the evaluation period. So as with the RLAAs, the requirements for drawing ORLAs will focus on whether the bank has a specific level of lending. And let's get a little bit more into what that specific level is. But note that bottom slide or that bottom bullet, meaning that a limited-purpose bank means a bank that is not in the business of extending loans and product lines. So this whole conversation of what a major product line is or is not is a definition that each of you, we are advising you to study further as you move forward. Next slide, please. So this grid is essentially built to provide some clarity to what I just talked about. So let's look at the loan types on the left-hand side. Closed-end home mortgage, small business, small farm. If you are a large institution, you will have a facility-based assessment area and an ORLA. But if a major product line is designated for a respective product line, you want to look to see if at least 15% of your reported loans or other loans considered across all product lines in the same geographic area during the evaluation period applies. This is research and analysis you can do today. If you are an automobile lender, it's really the same concept. It is your facility-based assessment area and your ORLA. If a majority of your loans in that automobile category if you do a majority of your lending in automobile or if you opt in. If you're going to opt in, you're going to want to do that analysis to determine whether or not those automobile loans look favorable from a CRA perspective if you choose to opt in. The conversation around retail lending assessment areas is really only, again, focused on closed-end home mortgage and small business. But this notion is that in a particular calendar year, you have to exceed those thresholds. Now, it's very small font at the bottom, but the 150 reported closed-end home mortgage loans by year or 400 reported small business loans in each of the prior two calendar years is an analysis that each of your organizations should be doing to determine whether or not you are going to have to comply with the RLAA standard. Now, the first asterisk there is this percentage is calculated based on a combination of loan dollars and loan count. And that's where we're going to turn on the next slide, please. So what do these bullets mean? And granted, this is an area that I've studied quite a bit myself, so I'm going to try to articulate this as cleanly as I can. But generally speaking, when you're talking about the combination of loan dollars and loan counts, this is the average of two ratios. And really, where it's intended to balance the amount of credit provided and the number of borrowers you are serving. And how does the ratio work? The ratio of loans in dollars is really the first category. But secondly, it's the ratio of loans in numbers where the dollars represent the total amount of credit provided and the count where the number of borrowers you are serving by those loans. So the dollars and count approach is used to determine that performance. So as you start to think about where you are lending, where you are looking at your RLAAs, where you're looking at your ORLAs, where you're looking at your major product line, the advice here is really to look at this dollar and count approach in trying to understand your own performance. We could have devoted a whole webinar to really the metrics associated with this, but definitionally, this is something that I think you all should study, something that you should become very key on because, again, at Wolters Kluwer, we have been spending quite a bit of time on this, and we are still in the process of mastering it. Let's move on to more components of the retail lending test. So as we start to think about the retail lending test, again, this is designed to evaluate a bank's lending to LMI populations, low- and moderate-income, small businesses, and small farms within low- and moderate-income census tracts in a bank's assessment areas for FBAAs, RLAAs, and ORLAs as applicable. As the scope, the retail lending test evaluation will only apply to large banks and intermediate banks or small banks that opt into the analysis. Loans and major product lines that we've already mentioned account for a specific percentage of lending in those specific categories. So the loan categories listed here will be evaluated if applicable. But this whole conversation essentially says, do your analysis now. Know where you need to essentially address your performance. Do the work in 2024 so you can potentially make adjustments in 2025 before you have to comply with that mandatory reporting date beginning January 1st of 2026. Let's move on to the next slide. So for those of you that are thinking that you are not automobile lenders, that very well may be the case. And really, the majority standard, so over 50% of your combined lending of home mortgage loans, multifamily, small business, small farm, and automobile, really, if you are over 50% in your auto category, this is where you will apply. There won't be many institutions that do this. However, let me flag for you that bottom point, that bottom point being that an automobile loan is part of a consumer loan based on the Call Report definition. So this can include, among others, direct and indirect lending or other consumer loan categories that you may be potentially defined as a majority lender. Now, if you are designated as a majority lender in this category, again, many of you will not, all that essentially means is that definitionally, you're going to be evaluated for your performance from a CRA perspective in that category. And as you start to think about all of this, understand what that means for your markets. Understand what that means for how your loan officers, your market managers are thinking about the retail lending test. If I had to boil all of these definitional changes down into one sentence, it is know your lending. There's no one better who knows your lending than you. Understand your geographic footprint. Understand potentially where you may be doing well in a given market based on these product types, but also know potentially where you may need to devote some extra attention in 2025. So by the time you, again, have to report, start capturing and reporting this data in 2026, you'll already know. You'll have essentially a year's worth of time to be able to adjust your marketing, potentially adjust your loan officer compensation, potentially adjust where your physical branches are, start thinking about where your ATMs or other remote facilities are. This will give you a 12-month window. Do that work in 2024 to give you that 12-month window to understand how the regulators may start to be thinking about this in 2026. Let's move on. Now, Section 1071, there is a lot of information, a lot of footnotes, a lot of caveats that essentially said, "Hey, when the final CRA rule came out, Section 1071 is under an injunction." But until then, we wanted to at least put out definitionally what that means for those institutions here on the webinar we'll have to think about. So how will these terms change? So in time, the CRA final rule will align with the definition set forth by the CFPB in Section 1071. So this will essentially be a small business and small farm with gross annual revenues of less than or equal to $5 million. But until then, we are really looking at Call Report definitions of what a small business loan and small farm loan are, essentially what you all have been reporting and capturing all along. But after this transition, and we know that the agencies have committed to, once the Supreme Court comes out with its ruling, we'll make an announcement and determine new action dates potentially of when Section 1071 will go forward, if at all. But this conversation being that after that transition, know that your small business and small farm definitions will move from Call Report definitions to this definition by asset size of less than or equal to $5 million. So this whole conversation of what a reported loan is, it's important to understand what the impact is of all of the additional loans that will fall into this category. Right now, your Call Report definitions are based on the loan size. Moving forward, your reportable transactions will be based on the revenue size of that business or farm. This is a change. This is something that strategically, you're going to want to start to do the analysis on potentially today, but definitely after we hear from the agencies of how these additional loans will impact your CRA rating. So in theory, you will have many, many more loans that will be going into your analytics around what is a business or farm based on the size of that business or farm. So again, thinking about what you can do in 2024, start those analytics now to think about if there are some things that needed to be adjusted in 2025, you will have time to do so. Moving on to the next slide, please. So let's think about another new term here. And really, when we're talking about the retail services and products test, we have this new concept of Remote Service Facility. At a high level, this may look very similar to what you're doing now, but this addresses one of the goals in the final rule that is more accurately or has the ability to more accurately account for mobile and online banking. The test here will look at delivery systems in addition to what you're doing at your branches. It's looking at your products and program offerings, both physically as well as digitally, and the use rates of how those products, programs, and services can be benefited or taken advantage of by low- and moderate-income populations. Please note that this test only applies to large banks, with a targeted focus on LMI individuals, families, or households. What is a Remote Service Facility? Now, this term actually replaces an ATM, replaces the definition of what an automated teller machine is. As you start to think about what's in the final rule, the focus here is on facilities that are open to the general public that have a public-facing presence. So covered non-branch facilities will continue to include those only that are owned or operated or operated exclusively for a bank consistently with the definitions of what an ATM or an RSF is. But this whole conversation around what is open to the general public, I think about this one in whether or not there is a wealth management office or there is some sort of banking in person or how there may be a loan servicing center or some sort of processing facility that may take meetings or may have the ability to host meetings for customers but isn't necessarily open to the general public. So as you start to think about what this is and how this impacts your institution, I think there'll be some more clarity offered here over time. But definitionally speaking, know that remote service facilities essentially replace the definition of what an ATM is. Next slide, please. So what are some other terms that came forward here? And what is a digital delivery system? This is really another term that the agencies added in the final rule for clarity and to support use in the retail services and products test. So examples here are online and mobile banking, as we talked about. But let's also think about the digital or other electronic channels that you may offer your retail banking services through. So this might be telephone banking. This might be bank by mail. This might be bank at work. In other words, these are systems in which a bank offers services that are not branches, not remote service facilities, and may or may not be offered digitally. So all of these things, again, thinking about for institutions, this is really a big change for those institutions that are over $10 billion in assets. Now, other smaller institutions may opt in for these considerations, but this is really where you're going to have to support how your products, your programs, and services on both the credit side as well as the deposit side are meeting the needs of low- and moderate-income individuals. And I would also add in small businesses and small farms to that. So these are very large banks. But I want to point out a nuance here, that the Digital Delivery System test or other delivery systems will only be evaluated for those of over $10 billion in assets and large banks that do not have branches or those large banks that opt in. So this whole caveat of opting in, yes, you'll make a strategic decision of whether or not that is good for your institution. But let me also flag that this is applicable for large banks that do not have branches. So all of this digital delivery system, whether your institution is active in that space or not, and I'm hazarding to guess most of you are, this is an area that you're going to have to your program is going to have to evolve to be able to capture more about what programs you offer, how they are tailored and focused on LMI populations. But it is the use rates. It is the use rates and usability of how these populations are using these products that I think is the change as far as this definition is concerned. Let's move on to the next slide, please. Now, we talked a lot about Section 12, and all the previous definitions that we are highlighting fall under Section 12 of the final rule. As we started to think about how we would construct this webinar, one of the ideas came forward was, "Well, let's just focus specifically on Section 13." Section 13 is all of those activities that are now defined as community development. To be frank, this is where myself and my colleagues have been spending a lot of time on recently because there are so many regulatory nuances under each one of these categories. I wanted to stress the fact that those of you that are capturing and reporting and working with your regulators now on community development, there's going to be some nuance changes, and there's going to be a learning curve here. But at the end of the day, in my humble opinion, what you are doing well, you are still going to be given credit for what you are doing well. I also believe that there is an opportunity for those institutions that needed assistance in how they document their Community Development transactions, how they think about the impact of their Community Development transactions. There's just a lot more clarity in the final rule that will give institutions a sense of certainty of what qualifies, where it qualifies, and how it qualifies. But we don't have time to go into all of the regulatory nuances of each of these categorical changes, so we just have time to highlight a few. As we start to think about the complexity of this, let's note that we are moving from four existing categories of Community Development to now 11. I start to think about how each one of them has potential to improve, again, the consistency and the clarity that the industry has been looking for from a community development perspective for many years. As a longtime member of the Federal Reserve System, I talked a lot around the country on webinars and visits and exams about the importance of documentation and the importance of telling your story and the importance of highlighting, if not for your bank's participation in a given transaction, what would not have happened. And I am very excited to be able to learn how these new 11 categories will only be able to further that discussion that I think a lot of us have been interested in. So we still have components of affordable housing. We still have components of economic development. This whole conversation around community supportive service, which is a welcome addition to the final rule, and then a series of what the final rule calls place-based activities. So this idea of what revitalization is, what a community facility is, what is essential community infrastructure, this whole conversation of designated disaster areas, disaster preparedness, and weather resiliency, as we start to think about native lands and we think about essential infrastructure and disaster preparedness there, this whole support around MDIs, WDIs, low-income credit unions, and CDFIs, which is now only amplified. And this whole new category around financial literacy as a separate bucket is just a welcome change. And we're going to go into just a little bit of detail on each of these. So let's move on to the next slide and delve into affordable housing. Now, affordable housing generally aligns with the existing practice, right? There's nothing in here that essentially says those of you that have been active and understood affordable housing will have to change. But we are moving, again, from this notion of what are the specific categories. It is just more clear around the specific categories of activities and support for LMI individuals, how institutions will be able to get credit here. And here, you're talking about rental housing in conjunction with the government affordable housing plan and this whole idea of partial credit, which we'll talk a little bit about. But those of you that are engaged in affordable housing, continue doing what you're doing. There is now much more clarity around multifamily rental housing with affordable rents, much more clarity around one to four family, what I would call standard site, but also with a specific focus in non-metropolitan areas. This whole idea of owner-occupied housing that is deemed affordable based on a new calculation metric and what you've always been doing from an industry standpoint of investing in funding mortgage-backed securities. So this idea of what is affordable is still affordable, but it is adding additional clarity that, again, I think is a welcome add. Let's move forward. So when we start to think about CDFIs, low-income credit unions, minority depository institutions, and women's depository institutions, I'm not going to spend a lot of time here because I think the final rule does a very nice job clearly and concisely articulating what these entities are and what they are not. But what I will tell you here is that if you have an opportunity to lend, to invest, to serve in conjunction with any of these, this is your opportunity. This is your opportunity to really support them. If you are any attendees on this call, if you are designated as one of these, this is where your marketing can really step up and talk to banks around the country that essentially says, "Hello. Here I am. This is what I do. This is how I believe. I can help you meet your CRA mandate. Let's have a conversation." So again, this slide, fairly simple in nature, just really does offer support for these categorical elements from a definition standpoint. Next slide, please. So as we start to think about native land areas, and this really does just support the importance that banks that invest in native land areas around all of these categorical elements, this is just providing further support for the work that you do in these areas. However, if you are an institution that would say, "Well, yeah, Jason, we don't have any of these in our assessment area," the changes to community development that you will be allowed now to support a case for investment in these areas, I think gives you a whole new realm of opportunity to support a lot of these underserved markets. And as you start to think about the U.S. Census definitions, these are all outlined for you here. But there also is an opportunity for state-designated tribal statistical areas that is a new addition. So there may be pockets of Native Americans that are living in certain places that may not be designated federally but now opens the opportunity for local participation. So again, this slide is really just built to show you definitionally how native land areas are defined and give you an opportunity to invest in those going forward. Let's move on to the next slide. Now, this one here is super exciting because it is starting to define in the next couple of slides, it is starting to define with more certainty what a community development loan is, what a community development investment is, and what a community development service is. And all of this being said, as you start to think about this under the varying definitions, yes, we've always known it was a legally binding commitment. We've always known that it generally excludes home mortgage loans. But this whole conversation around multifamily still applies. And there is no exclusion for business or farm loans. So this essentially says, and this is a key takeaway definition, I encourage all of you to read this and study this definition closely. Because there is no exclusion for business or farm loans, this allows you the opportunity to essentially get credit under more than one test. This may give you the opportunity for certain transactions to give you credit under the retail lending test for certain business or farm loans as well as the community development financing test, presuming that it meets the definitions in both categories. This is a game changer because this allows you to put forward opportunities to really show your impact for certain transactions, for certain support efforts, for certain investments that are really moving the needle for how you are getting a serving low and moderate income populations, small businesses, small farms in your given market area but also in your RLAA as well as in your ORLA. ORLA specifically, you're not necessarily talking about community development. In retail lending, you're not talking specifically about community development. But you are talking, again, about your story. I think this is super exciting. The other thing exciting here is that you are going to be able to take credit for the book value of these loans year over year, exam to exam, which I think is a welcome addition because then, again, this will show examiners, show your community constituents that you are in to help not just from an investment standpoint but from a lending standpoint as well. Next slide, please. Now, as you start to think about investments, this is giving you, again, just a more refined approach. The term qualified investment was replaced with community development investment. And you're going to say, "Jason, that's not that big of a change." In reality, it isn't. But it does now also include a legally binding commitment to invest, all right? There was always some regulatory uncertainty about examiners only giving credit for dollars out the door. Now, legally binding commitments, I believe, are now something, according to this definition, that you'll be able to put forward for consideration. Why is that a neat thing? Because if there is a multi-year strategy, if there's a multi-year strategy that says we will invest X in year one, Y in year two, Z in year three, this is something that you can get credit for before you've invested in year two and year three if you have that legally binding commitment. Now, this includes monetary or in-kind donations supporting community development. And we know and value the consistent importance of Low-Income Housing Tax Credits and New Markets Tax Credits here. These are just a couple of examples. But I want to stress to you that it is important to still leverage your Call Report. It is still important to leverage the work of your chief investment officer and be able to bring forward all of this information on a flow basis as you are starting to capture this under the new rule. Next slide, please. Now, this next one is one that I think has gone under some significant change. Now, the Community Development Services Test is now its own categorical element, right? So community development services replaces and clarifies the term, what an old service was. But we're still seeing activities that support community development, no change. But look at the examples: credit deposit or other personal and business financial services or services that reflect the expertise of that employee or the board member. Now, this could be in the form of human resources. This could be in the form of information technology. This can be in the form of legal services. So this whole idea of expanded definition, institutions have always been held under some circumstances to using their financial acumen to be able to document CD services. And I still believe that's the bread and butter of what you all are going to do. But this notion of other elements, other skill sets within your bank to be able to put forward as qualified activities, this is going to elevate all of your services, bring more exposure to the quality work that each of you are doing but also those that are not necessarily in the CRA space, your chief human resource officer, your IT practitioner, if there are attorneys on staff that might be doing other pro bono work outside of bank hours. These are all things where your board can be more active. I just like the fact that there's just more examples. It opens up. Let's remember, consistent with the current guidance, I don't want to lose sight of this. Consistent with the current guidance, Community Development Services exclude otherwise eligible volunteer activities if the volunteer is not acting in their capacity as a representative of the bank. If they're doing things outside of the bank of their own volition, they may be capturing this information electronically and reporting it. Anything from a CD perspective has to be done on behalf of the bank. They don't necessarily need to be wearing their bank T-shirt or their bank pin. They have to be representing the bank in the work that they do. Next slide, please. Now, the next couple of slides are really focused on things that I almost could have devoted a whole webinar to. Now, we want to talk about this notion of full credit, partial credit, bona fide intent, and majority standard. Now, there's a lot of information that we can highlight here. But same as what you do in the current regulation today, you will get full credit for the activity if it's undertaken in cooperation with an MDI, WDI, LICU, or CDFI, right? That hasn't changed. You're supporting LMI. But look at that term majority standard and think about what it means for bona fide intent. So let's think about what the definition of bona fide intent is. Bona fide intent essentially says the purpose thereof is X. And that X has to be under a community development purpose or specifically structured to achieve the community development purpose. Now, this is going to be difficult. This is going to be difficult because in most prospectuses, in most conversations around how this is documented, there isn't always a bona fide intent. I would suggest now training your partners, training your loan officers, training your board members that as you start to get letters for this or opportunities for this, that you encourage your partners to expressly state what the community development mission is of that loan, that investment, or potentially that service. Now, you're also going to say, "Well, what if we don't have that?" Now, partial credit can still be given for affordable rental housing or potentially other standards. But I would rather have you have better documentation upfront that helps you focus to get the full credit. Now, the full credit under the current rule and under really, as it has been for many years, is this notion of the 51% standard, right? If 51% of the beneficiaries are low- and moderate-income, then I think that then you'll still get that. But if you can somehow better document the bona fide intent, that 51% rule may have some more flexibility. But I wouldn't want you to lose that because the documentation is such that that would be more difficult. Let's move forward to the next one because the conversation here, "Well, what is the majority standard?" And this is a new definition, right? So full credit are activities that support community development and meet those measures. But loans, investments, and services that meet the majority standard, if they primarily support financial literacy activities that assist the families of LMI areas status and other definitional support. But I don't want to lose sight of the fact that what is primary? I don't want to lose sight of the fact that all of the efforts that each of you have built now under the current rule to document this; it doesn't necessarily change. It just requires more diligence upfront about what that standard would be. But I always stress in closing here that the intent of a project, program, or service is only as good as the individuals that benefited from it. And I think that the documentation standards of all of this, yes, it provides some more clarity. It provides some more clarity of intent around the partial standard and what the majority standard will be. But it doesn't do it doesn't take away from any or all of the diligence that you all have put forward. So I've been talking for about 30 minutes straight here. I'm going to turn it back over to Kris to talk about kind of some next steps around some agency guidance and a list of action items each of you can take away as a result of this presentation. Kris, the microphone is now yours. Thank you, Jason. I imagine that felt like a bit of a whirlwind tour of definitions. Just a reminder that you're going to be getting some follow-up information from us. But let's start with the wrap-up. There's more to come, obviously. There's going to be some supervisory guidance that we're expecting. There is even some additional rulemaking that we anticipate. We expect there'll be data tools for you to use for performance testing. And as Jason was talking about, a lot of the prep work that you can be doing this year and next year so that you're prepared when 2026 rolls in. We expect some future rulemaking. So keep an eye out on that as well. We'll go to the final slide of some action items. I think you noticed in the when you signed up for this webinar, we have created a CRA Defined Terms white paper. As Jason mentioned, we had a secret partner, silent partner in all of this, Tatiana Wendler, one of our senior attorneys here at Wolters Kluwer. She's the primary author behind our CRA Defined Terms white paper. You're going to be getting that. It's a side-by-side guide from old definitions to new definitions. I think you'll find it incredibly helpful. Be mindful of the April 1st changes that make sure you're ready to go, in particular, with your websites. Most of this rule has the most significant impact to those of you who are in the large bank. Especially as Jason was talking about the community development strategy, one of the things we're recommending is you might think about getting an external CRA committee set up to work with you to help figure out that strategy and make sure that you're prepared when 2026 rolls around. I'm loving some of the reactions that are coming out, especially the crying person. We'll be with you throughout all of this. Keep your eye out for the additional announcements and changes. And then one of the things we have not talked about yet today is there is active litigation around this rule, much like there is in 1071. So you'll want to keep an eye on that as well to see what changes, if any, come out of that litigation. So keep an eye out on that. And then I hope Jason got a drink of water because we're going to let him close us out. Thank you very much, Kris. As we start to think about next steps, and I think the list that Kris articulated is very spot on. As we start to think about what's happening with the litigation, as we start to think about the pressures on budgets, as we start to think about our staffing pressures and the knowledge and the effort that it will take to comply with this massive change, I am very confident, again, having met a lot of you, hoping to meet the rest of you, that things like the CRA and Fair Lending Colloquium, the interagencies, National Interagency Community Reinvestment Conference that was just held, other conferences that come together, this group, this cohort, we are all on the same learning curve. We are very hopeful that the definitions guide or the white paper that Kris referenced and really the neat part, I think we've underestimated this or understated it, is that because you all are being a part of this webinar, you're going to get access to this free of charge. Yes, it'll be posted elsewhere after this. But it has taken us months. It has taken us months to generate something that we believe clearly articulates what the current rule is and the delta with the changes. Now, there is again, I realize I spoke very quickly and fumbled a few points here. And I don't like the fact that I had to read more of these bullets than I normally would if those of you who have heard me speak before. So I do apologize for that. There's so much of this that we've been practicing and understanding and trying to digest. There's just a lot of regulatory nuance. I didn't want to fumble some of the actual requirements. So I appreciate all of your patience. At the end of the day, this white paper is just going to be a huge plus for your toolkit, what I call your CRA toolkit. Where this toolkit can best be used is when we get together at the Omni Orlando Resort at ChampionsGate in Orlando, Florida, November 17th to the 20th. We plan on opening registration soon. We will have early bird pricing through June 28th. Exciting news - and I'm really excited to announce this to everyone here - that association and governments and nonprofit pricing will now be available at the colloquium. This is a big deal for nonprofits and other non-banks to be able to get out and do some networking. That will be very exciting. And also, a lot of you have talked about over the years the ask-for-group discounts. So if your institution sends more than five registrants to the colloquium, there'll be some group discounts available for you. So I think that's really a nice add. We are always very open to topics and speakers. Please submit those through the link. Or you're also free to email any WK folks directly. I'm happy to kind of talk with you about that. But also, let's get a lot of nominations in for the Community Impact Award. Please let us know how your institution is making a difference. And it's very difficult, I think, for a lot of us to tell our own story. It's very difficult for those that want to sort of stand on stage and say, "If not for our participation, this would have not happened." But I think this is a great year. There's a lot of pressures going on in 2024. We're all in the process of getting ready for this new rule. But let's not forget. Let's not forget that the work that you were doing in 2024, the work you were doing in 2025, the work that you did in 2023 is going to be examined. It's going to be considered by the regulators. Get up there. Put forward a nomination. And let's try to recognize each other for the work very well done. So I'm seeing a lot of comments coming through in the chat or, I'm sorry, the Q&A. You will receive an email with this presentation. You will be receiving a copy of this recording. And again, you will be receiving the CRA Defined Terms. But all of this being said, folks, if I could just close out by thanking each of you for your participation. We had over 1,600 people register for this. And as much as I wanted to get up here and Kris wanted to get out here and give you a list of 50 action items, we wanted to put forward something to you that was tangible, almost a checklist. I wanted to, again, reinforce things that I think you know. I wanted to reinforce things that you didn't know. But I also wanted to reinforce that I'm guessing, I'm speculating, you likely know more than you think you do about this. You've been exposed to a lot of this. There's a lot of briefs. There's been webinars. Wolters Kluwer will continue to be part of this conversation. But please teach us something. Tell us what's working well at your institution. Talk to us about your pain points. Talk to us about what you'd like to see. We are happy to do more of these. We will be out at CBA Live next week if there's anyone who wants to come and say hello, as well as several other events going forward. So I didn't think we'd get through everything by 3:00 P.M. Eastern, but we did with a couple of minutes to spare. There were several questions that we'll put forward that we just didn't have time to answer. But really, at the end of the day, please study the definitions. Please work with your managers, your senior officers, your president, understanding what those definitional changes mean today. What do they mean for you today in 2024 so you can make those changes, make those adjustments in 2025? By the time we get to New Year's Eve, December 31st of 2025, we'll be ready. We'll be confident. We'll be able to put forward all of the great things that each of you are doing from a CRA perspective. I wish all of you very much a great day. This concludes our webinar. Thank you very much. This concludes today's webinar. You may now disconnect.