OCC Publishes
Newsletter Covering Revisions to the Community Reinvestment Act
WASHINGTON - National banks invested $638 million to
revitalize and stabilize communities in the second quarter of 2006 just one
year after revised Community Reinvestment Act regulations took effect,
according to a new Office of the Comptroller of the Currency publication.
In its latest edition of "Community Developments Investments," the OCC highlights how changes
promulgated by the OCC, the Federal Reserve, and the Federal Deposit Insurance
Corporation give greater flexibility
for banks to make investments to help distressed or underserved rural
areas and federally designated disaster areas while reducing regulatory burden on banks with assets between
$250 million and $1 billion.
During the first six months of this year (January 2006-June
2006), national banks have made $1.73 billion of "Part 24" investments, a 23
percent increase over the same time period in 2005.
Articles in this edition also discuss how banks and
examiners are applying these new rules and how banks can satisfy the new CRA
requirements. Key changes in the
regulations that took effect last year include expanding the definition of
"community development" and creating a new intermediate small bank test for
banks with assets between $250 million and $1 billion.
Based on OCC guidance published in February 2006, one
article specifically looks at the CRA consideration banks may receive when
helping to rebuild communities after a disaster. That guidance further clarified that national banks could receive CRA credit for
activities that help rebuild designated disaster areas even though the lender
may be based outside the affected region.
It also stated that national banks may receive consideration for
activities benefiting people who have been displaced by natural disasters like
Hurricane Katrina.
Over the last decade, national banks have used the Public
Welfare Investment Authority, known as "Part 24," to invest more than $16
billion in community redevelopment.
"The Public Welfare Investment Authority has been so
successful, both for banks and their communities they serve, that some banks
are bumping up against the 10 percent limit," said Comptroller of the Currency
John C. Dugan in a speech before a Washington
D.C. community development
corporation in June. "Fortunately,
Congress is considering raising the limit to 15 percent - a change that has the
potential to support as much as $30 billion in additional investment from
national banks."
The newsletter is available on the OCC Web site at: http://www.occ.gov/cdd/summer06/index.html.
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The
Office of the Comptroller of the Currency was created by Congress to charter
national banks, to oversee a nationwide system of banking institutions, and to
assure that national banks are safe and sound, competitive and profitable, and
capable of serving the banking needs of their customers in the best possible
manner. OCC press releases and other
information are available at http://www.occ.gov. To receive OCC press releases and issuances
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