Prohibition Against Interstate Deposits: Annual Host State Loan-to-Deposit Ratios
Annual publication of host state loan-to-deposit ratios for Section 109 IBBEA compliance assessment
Advisory Assessment
Impact. Community banks with interstate branches must update their Section 109 IBBEA compliance calculations using the OCC's newly published host state loan-to-deposit ratios. This annual data refresh affects the mathematical benchmarks used to determine whether your institution's statewide lending activity satisfies the deposit production prohibition test.
Risk. Examination scrutiny centers on banks that fail to incorporate current ratios into their compliance monitoring, particularly institutions operating near the 50% threshold that triggers enhanced CRA examination requirements. The compliance function bears responsibility for ensuring accurate ratio applications in ongoing Section 109 assessments.
Recommended Action. Have your compliance team pull the updated ratios and recalculate your bank's statewide loan-to-deposit performance against each applicable host state benchmark within the next month. Document the analysis and flag any states where your ratio falls below 50% of the host state ratio, as this triggers additional CRA examination protocols.
Watch. Monitor your quarterly lending and deposit volumes against these updated benchmarks throughout 2024, particularly if your institution operates close to triggering thresholds. The OCC will publish fresh ratios again next year, requiring another compliance calculation update.
Classification
- Regulatory Program
- Community Reinvestment Act (CRA)
- Doc Type
- Guidance
- Effective Date
- — Date not stated
- Days to Action
- —
- Comment Deadline
- —
- Published
- 2026-05-01
Urgency Basis
Annual data update with no new compliance obligations or immediate actions required
Operational Context
Impact by Category
Key Requirements
Scoring Rationale
This is a routine annual data update with minimal impact. The bulletin provides updated host state loan-to-deposit ratios used for existing Section 109 compliance testing but creates no new obligations. Only community banks with covered interstate branches need to review the data. The compliance score reflects awareness and monitoring requirements rather than substantive regulatory changes.