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To: Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, All Examining Personnel, and Other Interested Parties

Description: Annual Loan-to-Deposit Ratios

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System Board, and the Federal Deposit Insurance Corporation (collectively, the agencies) recently issued updated host state loan-to-deposit ratios that the agencies use to determine compliance with section 109 of the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act). These ratios, which update data released in June 2011, are attached.

In general, section 109 prohibits any bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 106 of the Gramm–Leach–Bliley Act of 1999 amended coverage of section 109 of the Interstate Act to include any branch of a bank controlled by an out-of-state bank holding company.

Section 109 provides a process to test compliance with the statutory requirements. The process compares a bank’s estimated statewide loan-to-deposit ratio with the estimated host state loan-to-deposit ratio for banks in a particular state. If a bank’s statewide loan-to-deposit ratio in a state is less than one-half of the published host state loan-to-deposit ratio for that state, or if data are not available at the bank to calculate the ratio, the appropriate banking agency must determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank.

The estimated host state loan-to-deposit ratios and any changes in the way the ratios are calculated are publicized on an annual basis.

Please direct questions regarding this bulletin to your supervisory office or to Compliance Policy Department at (202) 649-5470.


Grovetta N. Gardineer
Deputy Comptroller for Compliance Policy

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