Federal Regulators Release the 2012 List of Distressed, Underserved Communities

U.S. banking regulators recently released an updated list of middle-income rural communities designated as distressed or underserved.

CRA credit given for variety of areas
Financial institutions will receive credit under the Community Reinvestment Act (CRA) for revitalization or stabilization efforts in those areas. Additionally, financial institutions can continue to get CRA credit for community development efforts in the areas that are no longer designated as distressed or underserved for up to 12 months, the Federal Reserve said in a June 29 press release.

In the Southeast region, the number of distressed rural middle-income communities grew 45 percent between 2011 and 2012, according to an analysis by the Atlanta Fed’s Community and Economic Development group. The distressed areas are classified based on such factors as population loss and rates of poverty and unemployment.

The analysis compared the number of distressed rural middle-income tracts in each category (see the table).

Changes in Rural Southeastern Middle-Income Communities
Category 2011 2012 Percent Growth
Poverty 434 673 55
Unemployment 49 85 73
Population loss 51 19 –63
Source: www.ffiec.gov/cra

The number of underserved rural middle-income communities, typically those with small populations that are far removed from population centers, also increased in the region by 56 percent, according to the analysis.

The Federal Financial Institutions Examination Council (FFIEC), which includes the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, updates the list annually. The current and previous years’ lists are available on the FFIEC website.

This posting also appeared in Financial Update, July 20, 2012.