Does the bank need to expand our assessment area for CRA purposes when Loan Production Offices (LPOs) are opened in new counties or MSAs?
No, the bank does not need to automatically expand its CRA assessment area, because LPOs are not deposit taking facilities. However, when LPOs are outside of the bank's current assessment area, loan production can affect the bank's inside/outside ratio. If the ratio of loans outside of the bank's assessment area exceed the loans inside the assessment area, then the bank should consider whether it should open a branch and adjust the assessment area.
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