On March 18, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (the Agencies) requested comment on proposed revisions to “Interagency Questions and Answers Regarding Community Reinvestment.” The Questions and Answers document “provides additional guidance to financial institutions and the public on the Agencies’ Community Reinvestment Act (CRA) regulations.”
The proposed revisions focus primarily on community development. Community development activities are considered as part of the CRA performance tests for large institutions, intermediate small institutions and wholesale and limited purpose institutions. Small institutions may use community development activity to receive consideration toward an outstanding CRA rating. Among other things, the proposed amendments would:
- Clarify how the Agencies consider community development activities that benefit a broader statewide or regional area that includes an institution’s assessment area.
- Provide guidance related to CRA consideration of, and documentation associated with, investments in nationwide funds.
- Clarify the consideration of certain community development services.
- Address the treatment of qualified investments to organizations that use only a portion of the investments to support a community development purpose.
- Clarify that community development lending should be evaluated in such a way that it may have a positive, neutral or negative impact on the large institution lending test rating.
The notice that will be published in the Federal Register is attached here. Comments will be due 60 days after that publication, which is expected shortly.