1. (1) Geographic area(s). Branch-based assessment area(s) must:

   1. (i) consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns, in addition to any geographic requirements for assessment areas in this section; and
   2. (ii) include each county in which a mortgage banker has a branch, as well as the surrounding geographies in which the mortgage banker has originated or purchased a substantial portion of its mortgage loans.
2. (2) Adjustments to geographic area(s). A mortgage banker may adjust the boundaries of its assessment area(s) to include only the portion of a political subdivision that it reasonably can be expected to serve. An adjustment is particularly appropriate in the case of an assessment area that otherwise would be extremely large, of unusual configuration, or divided by significant geographic barriers.

3. (3) Limitations on the delineation of an assessment area. Each mortgage banker’s assessment area(s):

   1. (i) must consist only of whole geographies;
   2. (ii) may not reflect illegal discrimination; and
   3. (iii) may not arbitrarily exclude low- or moderate-income geographies, taking into account the mortgage banker’s size and financial condition.
4. (4) Each branch-based assessment area delineated by the mortgage banker is subject to the lending test and the service test, as provided in sections 120.7 and 120.8 of this Part.
5. (c) Assessment areas for mortgage bankers without branches. A mortgage banker with no branches within New York State shall specify one or more of its lending-based assessment areas to be subject to the lending test and the service test, as provided in sections 120.7 and 120.8 of this Part, consistent with meeting the credit needs of the community.

6. (d) In the event of an evaluation of a mortgage banker with no branches within New York State has not originated, in each of the two preceding calendar years, at least 100 mortgage loans in any MSA or nonmetropolitan area of New York State, that mortgage banker shall be subject to the lending test and the service test, as provided in sections 120.7 and 120.8 of this Part, in the MSA or nonmetropolitan area of New York State in which that mortgage banker originated the greatest number of mortgage loans over the two preceding calendar years.

   1. (1) Geographic requirements regarding lending-based assessment areas. A lending-based assessment area must consist of either:

      1. (i) the entirety of a single MSA within New York State, excluding areas inside branch-based assessment areas; or
      2. (ii) all of the areas in New York State that are not included in an MSA, excluding areas inside branch-based assessment areas, aggregated into a single lending-based assessment area.

   2. (2) Each lending-based assessment area delineated by the mortgage banker is subject to the lending test, as provided in section 120.7 of this Part.

      (f) Use of assessment area(s).

      The department uses the assessment area(s) delineated by a mortgage banker in its evaluation of the mortgage banker’s performance unless the department determines that the assessment area(s) do not comply with the requirements of this section.

   (e) Lending-based assessment areas.

   A mortgage banker must delineate a lending-based assessment area in each MSA or nonmetropolitan area of New York State, respectively, in which it originated, in each of the two preceding calendar years, at least 100 mortgage loans outside of branch-based assessment areas.

7. (g) Nothing in this section shall be construed to impose a requirement on any mortgage banker to locate any branch in a specific geographical area.

(a) In general.

A mortgage banker shall delineate one or more assessment areas within New York State, under the criteria specified in this section, within which the department evaluates the mortgage banker’s record of helping to meet the credit needs of its community. Where the mortgage banker has discretion with respect to the establishment of its assessment area(s), the department does not evaluate the mortgage banker’s delineation of its assessment area(s) as a separate performance criterion, but the department reviews the delineation for compliance with the requirements of this section.

(b) Branch-based assessment areas.

A mortgage banker with one or more branches within New York State shall delineate one or more branch-based assessment areas for evaluating performance.