| August 2008 |
| 2008-1 |
Investment in fund for solar energy producing
facilities - A national bank may invest in limited liability
entities each of which will develop, acquire, install and maintain solar
energy-producing facilities and provide electricity for specified properties.
07/31/2008
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| March 2007 |
| 2007-1 |
Investment in the renovation and resale of single
family properties - A national bank through its wholly owned
subsidiary community development corporation may invest, using a combination of
debt and equity, in the acquisition and renovation of single family homes
located in low- or moderate-income communities, which are then resold.
08/17/2007
|
| 2007-2 |
Investment in the construction and sale of single
family properties - A national bank through its subsidiary
community development corporation may invest, using a combination of debt and
equity, in the construction of single family homes located in low- or
moderate-income communities, which are then sold to low and moderate income
individuals. 10/11/2007
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| 2006-1
|
Fund Comprised of SBA Guaranteed Loans: A
national bank may make an investment in a fund which invests in the federally
guaranteed portion of Small Business Administration 7(a) loans.
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| December 2006 |
| 1076
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Separation between Investment Limits and Legal Lending
Limits
The letter clarifies that the investment authority contained in 12 U.S.C. § 24
(Eleventh) is separate and distinct from the lending limits provided in 12
U.S.C. § 84. Therefore, a national bank may make a direct or indirect
investment under the investment authority contained in 12 U.S.C. § 24
(Eleventh) that promotes the public welfare by benefiting low- and
moderate-income communities or families, subject to certain limits.
Furthermore, a national bank may make loans or extensions of credit to one
borrower up to the full amount permitted by 12 U.S.C. § 84 and implementing
regulations in 12 C.F.R. Part 32, and also hold eligible securities of the same
obligor up to the full amount permitted under 12 U.S.C. 24 (Seventh) and 12
C.F.R. Part 1.
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| August 2005 |
| 2005-1
|
Investment in nonprofit making small loans to
low-income parents transitioning from welfare to work
A national bank can make an investment in a private multi-service agency
serving low-income parents transitioning from welfare to work. The agency
provides small loans, for those workers who cannot get loans elsewhere, for the
purposes of helping family members pay for unexpected expenses that can
interfere with their ability to keep a job or stay in school.
WORD 04/07/2005 |
| 2005-2
|
Investment in financing source for charter school
facilities
A national bank may make an investment in a financing source for charter school
facilities when the funds will be made available to charter schools in the
mid-Atlantic region that enroll students from predominantly low-income
households or are located in predominantly low-income neighborhoods.
WORD 04/13/2005 |
| 2005-3
|
Investment in the purchase, construction, and
operation of an ethanol plant
A national bank may make an investment in a community and economic development
entity that will purchase, construct, and operate an ethanol plant because it
is located in an LMI geography and will provide jobs to unskilled individuals.
WORD 07/20/2005 |
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| February 2005 |
| 2004-2
|
Transitional Housing for Homeless
A national bank may invest, through its subsidiary community development
corporation, in the acquisition and rehabilitation of a single-family dwelling
to provide transitional housing for the homeless. The CDC will own and manage
the property and residents of the facility will receive case management support
from an established nonprofit social services provider.
WORD 04/26/2004
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| 2004-3
|
2nd Trust Deed Permanent Loans
A national bank may invest, as a limited partner, in a community development
entity formed under the federal New Markets Tax Credit program which acquires
real estate loan made to qualified, active, low-income community businesses.
The specific investment fund invests in 2nd trust deed permanent loans on
retail, office, commercial, and industrial projects.
WORD 11/22/2004
|
| 2004-4
|
Bridge Loans for Infrastructure Construction
A national bank's subsidiary community development corporation may provide
bridge loans to low- and moderate-individuals and individuals living in low-
and moderate-income areas to finance in the installation of water and sewer
infrastructure improvements.
WORD 12/27/2004
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| October 2004 |
| 2004-1
|
New Markets Tax Credit Investment Fund
A national bank invested in a leveraged new markets tax credit multi-investor
limited partnership (Fund). The sponsor of the Fund is a Community Development
Entity certified by the U.S. Treasury Department's Community Development
Financial Institutions Fund. The Fund will make loans to or investments in
qualified, active, low-income community businesses that, in turn, will qualify
the Fund to receive new markets tax credits that have previously been allocated
to the sponsor.
WORD 08/30/2004 |
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| September 2004 |
| 1999-1
|
Investment in a real estate investment trust
Letter approves an investment in a real estate investment trust (REIT) created
to foster affordable housing and community development. The REIT will provide
capital investments to projects that are designed to support community
development including affordable housing for low-or moderate-income
individuals; community services targeted to low- or moderate-income
individuals; activities that promote economic development by financing small
businesses, and activities that revitalize or stabilize low- or moderate-income
geographies. This REIT was formed in conjunction with a national nonprofit,
community development intermediary that will be responsible for managing and
maintaining the properties in the trust's portfolio.
WORD 02/25/1999
|
| 1999-2
|
Financing a regional medical office facility that will
meet essential health needs for the community
Letter approves a bank's investment in a community development corporation
(CDC) financing a regional medical office facility that will meet essential
health needs for the community. After the loan from the CDC is repaid, the
medical office building and its equipment will be given to the regional
authority developing and operating this facility.
WORD 05/11/1999
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| 1999-3
|
Affordable housing lease-purchase transaction with a
local school district
This letter approves a national bank's direct equity investment under 12 CFR
Part 24 to engage in an affordable housing lease-purchase transaction with a
local school district. This transaction involves a bank purchasing real
property that would be leased to the local school district for a term of up to
10 years, with the school district taking ownership of the property at the end
of the lease. During the 10-year lease period, the school district would sublet
the properties to teachers earning less than 80 percent of the area median
income.
WORD 09/01/1999 |
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| August 2004 |
| 2000-1
|
Consolidation of Public Welfare Investments into CDC
National bank may consolidate public welfare investment activities in an
existing community development corporation (CDC). The CDC would manage its
portfolio so that the majority of its investments qualify as public welfare
investments under 12 CFR Part 24. Thus, the CDC would be primarily engaged in
making public welfare investments, and the bank's investments in the CDC would
be designed primarily to promote the public welfare as required by 12 USC 24
(Eleventh).
WORD 02/14/2000 |
| 2000-2
|
Fund to acquire limited partnership interests in
Native American affordable housing
National bank may make and investment in a fund created to acquire limited
partnership interest in affordable rental properties that are located on, or
near Native American reservation in Arizona, Wisconsin, Minnesota, Montana,
North Dakota, south Dakota, and Wyoming. The fund's projects qualify for
federal low-income housing tax credits and historic rehabilitation tax credits
and primarily target low- and moderate-income persons and families. Each
project is sponsored by an Indian Tribe, an affiliated Tribal housing
Association, Indian Housing Authority, Indian Tribally Designated Housing
Entity, Indian Nonprofit Housing Corporation, or similar tribal entity.
WORD 04/10/2000 |
| 2000-3
|
Historic tax credit investment
National bank may invest in Historic Tax Credit investment in the Central
Vermont Arts Center Limited Partnership. The Partnership will finance the
renovation of a vacant historic property located in an economic revitalization
area in Barre City, Vermont. The general partner and project sponsor is a
nonprofit corporation that will also lease space for artists and operate an art
gallery and teaching facility. The facility will support the establishment of
small businesses by providing artists and artisans with studio space and an
opportunity to market their work. The proposal was consistent with 12 CFR Part
24 because the project was intended to serve as the cornerstone for renewed
small business investment and area revitalization, and the property was located
in an area that the local government had targeted for revitalization.
WORD 10/18/2000 |
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| July 2004 |
| 2001-1
|
Closed-End Mutual Fund
National bank may purchase an equity interest in a closed-end mutual fund that
finances affordable housing primarily for low- and moderate-income individuals.
The fund is structured as a Business Development Company under the Investment
Company Act of 1940. The fund purchases securities backed by loans to
homebuyers with incomes below 80 percent of median income as well as loans to
sponsors of multifamily housing units that use federal low-income housing tax
credits or financing provided by U.S. Department of Housing and Urban
Development (HUD).
WORD 04/20/2001 |
| 2001-2
|
Environmental Redevelopment Fund
National bank may purchase member shares in a limited liability company (LLC)
that primarily benefits low- and moderate-income areas. The LLC provides
financing to private and public sector borrowers for environmental analysis and
remediation of properties with environmental contamination issues for reuse to
attract new and growing businesses, create jobs, provide affordable housing,
and support other community development efforts.
WORD 07/18/2001 |
| 2001-3
|
CD investments up to 10% Investment Limit
In connection with a request for prior approval of an affordable housing
investment, the OCC approved a national bank's request to self-certify future
affordable housing investments that would exceed 5 percent of its capital and
surplus, up to a maximum of 10 percent of capital and surplus. The requirements
of 12 CFR 24 relating to self-certification and all other requirements of the
regulation will apply to the additional investments.
WORD 08/01/2001 |
| 2001-4
|
Agricultural Cooperative
Under Part 24, a national bank may purchase common stock in an agricultural
cooperative, where the bank's liability was limited to the amount of its equity
investment. The cooperative was initiated by a local economic development
authority and local farmers and businesses as a way to promote the economic
development of the area, and received financial support from both the economic
development authority and the federal government.
WORD 09/04/2001 |
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| June 2004 |
| 2002-1
|
Investment in shares of CDC subsidiary of affiliated
national bank
A national bank may purchase shares in an existing community development
corporation (CDC) subsidiary that previously had been formed and capitalized by
another affiliated national bank. As a result of the new investments, the CDC
subsidiary expanded its products and services to the states that the new
shareholders served.
WORD 02/06/2002 |
| 2002-2
|
Investment financing to renovate and lease a
commercial building to Texas Workforce Commission
A national bank's community development corporation (CDC) subsidiary may
conduct various community and economic development activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income areas,
or other areas targeted for redevelopment by local, state, federal, or tribal
governments. Approved activities include investing in an entity that renovated
a commercial building leased to a state government agency that provides
training to unemployed low- and moderate-income individuals and assists them in
finding employment.
WORD 04/16/2002 |
| 2002-3
|
Investment financing for a state chartered school
A national bank's community development corporation (CDC) subsidiary may
conduct various community and economic development activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income areas,
or other areas targeted for redevelopment by local, state, federal, or tribal
governments. Approved activities include providing financing to a corporation
that owns and operates a charter school, funded by the state, that educates
"at-risk" students, who are primarily low- and moderate-income and have
exhibited behavioral or drug problems in other schools.
WORD 05/03/2002 |
| 2002-4
|
Investment financing to a medical student
A national bank's community development corporation (CDC) subsidiary may
conduct various community and economic development activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income areas,
or other areas targeted for redevelopment by local, state, federal, or tribal
governments. Approved activities include providing financing the education of a
medical student who had committed to work after graduation for a facility that
provides medical services to low-income families.
WORD 05/03/2002 |
| 2002-5
|
Investment financing to small business owner
A national bank's community development corporation (CDC) subsidiary may
conduct various community and economic development activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income areas,
or other areas targeted for redevelopment by local, state, federal, or tribal
governments. Approved activities include providing working capital for a
convenience and hardware store in a low- and moderate-income community.
WORD 07/18/2002 |
| 2002-6
|
Investment financing for low- and moderate-income
first-time homebuyers
A national bank's community development corporation (CDC) subsidiary may
conduct various community and economic development activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income areas,
or other areas targeted for redevelopment by local, state, federal, or tribal
governments. Approved activities include providing financing at reduced rates
to low- and moderate-income families that received subsidies under state and
federal government programs for the purchase of their first homes.
WORD 09/23/2002 |
| 2002-7
|
Opinion of merchant banking regulation application of
CDC investments
Merchant banking capital regulation does not apply to investments made in
community development corporations (CDC) and community development projects.
The merchant banking capital regulation, which established minimum capital
requirements for certain equity investments in non-financial companies, does
not apply to investments made in a CDC to promote the public welfare under 12
USC 24 (Eleventh).
WORD 11/27/2002 |
| 2002-8
|
Investment in partnership with Native American Nations
A national bank's community development corporation (CDC) subsidiary may
provide financial support and financial services to assist economic development
efforts of Native American Nationals directed toward low- and moderate-income
communities. Specific proposed activities of the CDC include: (1) providing
financial literacy services; (2) buying, selling, and leasing real estate, for
example, in partnership with local housing authorities; ad (3) providing,
servicing, and maintain ATMs and ATM and debit cards.
WORD 12/20/2002 |
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| May 2004 |
| 2003-2
|
Investment in a foundation
A national bank may make an investment in a foundation that will use the funds
to help capitalize a loan pool, which makes loans that support affordable
housing, community services, or permanent jobs for low- and moderate-income
individuals, financing for small businesses; area revitalization or
stabilization; or other activities, services or facilities that primarily
promote the public welfare.
WORD 04/06/2003 |
| 2003-3
|
Preferred shares in a trust that acquires and owns
tax-exempt participating and nonparticipating first mortgage bonds and other
tax-exempt instruments
A national bank may purchase preferred shares in a trust that acquires and owns
tax-exempt participating and nonparticipating first mortgage bonds and other
tax-exempt instruments that are issued by various state or local government,
agencies, or authorities. The proceeds from the bonds are used for financing
affordable housing development and rehabilitation, and most of those properties
also benefit from the use of federal low-income housing tax credits.
WORD 09/30/2003 |
| 2003-4
|
Preferred stock in a foundation
A national bank may purchase preferred stock in a foundation that operates
crime prevention programs in the nation's nursing homes. The foundation uses
the bank's funds to purchase government and agency securities. Interest earned
on these securities is used to fund crime prevention activities in nursing
homes located in low- and moderate-income areas or occupied by low- and
moderate-income residents.
WORD 11/17/2003 |
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| April 2004 |
| 2003-1
|
Federal employment tax credits
A national bank may purchase an equity interest in a limited liability company
(LLC) whose primary purpose is to invest in an operating company that employs
individuals, which employment is expected to qualify the operating for federal
employment tax credits, including the Work Opportunity Credit, the Welfare to
Work Credit, and the Renewal Community Employment Credit.
WORD 09/26/2003 |
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