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helping meet the credit needs of its entire community be
evaluated periodically. That record is taken into account in
considering an institution’s application for deposit facilities,
including mergers and acquisitions. CRA examinations are
conducted by the Federal agencies that are responsible for
supervising depository institutions, such as FDIC and the Office
of Thrift Supervision (OTS). Inasmuch as Peoples was insured by
FDIC, it was subject to FDIC examination with respect to its CRA
compliance. Peoples' designated CRA area included all of Warrick
County. Peoples reduced the size of its CRA area in August 1992
at the suggestion of an FDIC examiner because of its compliance
difficulties. If Evansville had been included in Peoples'
designated CRA area, Peoples would have had significantly greater
difficulty complying, because it would have had to prove it was
fairly serving Evansville's low- and moderate-income
neighborhoods.
Peoples received CRA performance ratings of "needs to
improve" on two occasions. In its CRA Performance Report as of
the close of business on November 10, 1990 (first CRA report),
FDIC cited three principal CRA compliance issues: (1) Lack of
adequate effort by Peoples to determine the credit needs of the
community, (2) lack of adequate effort by Peoples to publicize
the types of loans it offered, and (3) generally conservative
lending practices. In a memorandum of understanding dated
March 13, 1991 (first MOU), and signed by all directors of
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