Banking Agencies Update "Host State Loan-to-Deposit Ratios" for 2020

The Federal Reserve Board, the FDIC and the OCC (collectively, the "Agencies") updated "host state loan-to-deposit ratios" for 2020.

The ratios are used in assessing compliance with Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which prohibits a bank from establishing or acquiring a branch or branches outside its home state primarily for the purpose of deposit production. Congress enacted section 109 to ensure that interstate branches would not take deposits from a community without helping to meet the credit needs of that community.

According to the Agencies, the ratios replace those published on May 28, 2019 (see previous coverage).