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The Affordable Housing Tax Credit Coalition The Affordable Housing Tax Credit Coalition
  • ABOUT
    • About the AHTCC
    • AHTCC Leadership
      • Board of Directors
      • Leadership Circle
      • Staff
    • Contact Us
  • HOUSING CREDIT
    • About the Housing Credit
    • How It Works
    • State Tax Credits
    • Research
      • Rent Savings Report
    • Impact
      • Resident Stories
      • Native Americans
      • Veterans
    • Finding Housing
  • POLICY
    • AHTCC Priorities
    • AHCIA
    • Related Proposals
    • Regulatory Issues
    • Advocacy Resources
  • GALLERY
    • Property Gallery
    • Property Map
  • EVENTS
  • AWARDS
    • Recognition of Housing Tax Credit Excellence
    • Affordable Housing Champion Award
    • David Reznick Lifetime Achievement Award
  • NEWS
  • MEMBERSHIP
    • AHTCC Members
    • Join AHTCC
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Oct 13

AHTCC Submits Comment Letter on CRA Proposed Rule

  • October 13, 2026
  • 2026 News, Community Reinvestment Act (CRA), Regulatory Issues

The AHTCC submitted comments today to the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) urging the agencies to reconsider proposed changes to Community Reinvestment Act (CRA) regulations that could weaken incentives for banks to invest in the Housing Credit.

Under the OCC/FDIC proposal, banks with assets between $1.649 billion and $10 billion would no longer be subject to the investment test, which has been a powerful incentive for investment in the Housing Credit. The AHTCC comment letter highlights the potential consequences for Housing Credit investment, particularly in rural communities.

AHTCC survey data show if the large bank threshold were increased to $10 billion, over 108 banks, representing approximately $1.6 billion in Housing Credit equity over the five-year survey period, would no longer be subject to the investment test. Extrapolating these results to the full Housing Credit market, the AHTCC estimates that approximately $2 billion in Housing Credit equity investment over these five years came from banks that would be affected by the proposed threshold increase.

The proposal also asks for comments on alternative thresholds, including a $3.252 billion and a $30 billion large bank threshold. Limiting the threshold increase to $3.252 billion rather than $10 billion would reduce the number of affected Housing Credit investors by approximately 63 percent and the amount of affected Housing Credit equity by 86 percent. The AHTCC’s letter urges the agencies to preserve existing investment incentives and identifies the $3.252 billion large bank threshold as a less disruptive alternative to the $10 billion threshold proposal. Additionally, the AHTCC strongly pushed back against the alternative $30 billion large bank threshold, noting that this threshold increase would be significantly more damaging to Housing Credit investment than the lower proposed thresholds. The comment letter also recommends preserving equal weighting for community development and lending test evaluations and providing greater geographic flexibility for qualifying investments.

More information about the proposed changes to CRA can be found on the AHTCC Regulatory Issues Resource Center and on the AHTCC’s blog. The AHTCC has also developed talking points to support members and industry partners in their advocacy efforts. As a reminder, the deadline to submit comments to the OCC and FDIC is tonight at 11:59pm ET.

Today, Bloomberg News also published an article about the CRA proposal, “Trump-Backed Housing Rule Could Undercut Effort to Lower Costs,” which features the AHTCC’s survey results. AHTCC CEO Emily Cadik is quoted as saying, “The proposal would have a disproportionate impact on rural housing investments, and we think it would remove the strong incentive that currently exists for a number of banks to invest in affordable housing.”

The Federal Reserve is not participating in the OCC and FDIC’s proposed rulemaking, and Federal Reserve Board Governor Michael Barr was also quoted as saying, “Community banks are really important all over the country, but especially in small towns and rural areas. So if you’re not careful about how you look at the levels of tiering in a proposal, you might end up reducing the amount of capital going into affordable housing in rural areas and small towns, in particular, and we want to make sure we don’t do that.”

The AHTCC also joined an ACTION Campaign sign-on letter expressing the affordable housing community’s concerns about the potential impact of the proposal on Housing Credit investment.

The Importance of CRA for the Housing Credit

CRA is central to supporting Housing Credit demand. Banks provide roughly 75 to 80 percent of Housing Credit equity, and at least 71 percent is considered CRA-motivated. The CRA investment test in particular has helped create a deep, competitive, and efficient market for the Housing Credit, which is especially important in light of the historic expansion of the program as part of One Big, Beautiful Bill.

The Impact of the CRA Proposed Rule on Housing Credit Investment

Removing the investment test requirement for banks under the $10 billion threshold would remove an incentive for a significant number of banks to invest in the Housing Credit. To assess the potential impact of the proposed changes, the AHTCC surveyed Housing Credit syndicators to identify bank investors that would be affected by the proposal and quantify their investments. The survey data identified at least 108 banks below the $10 billion proposed threshold, representing approximately $1.6 billion in Housing Credit equity over the five-year survey period. Extrapolating these results to the full Housing Credit market, the AHTCC estimates that approximately $2 billion in Housing Credit equity investment over those five years came from banks that would be affected by the proposed threshold increase.

The Impact of the CRA Proposed Rule on Rural Areas

Banks under the $10 billion threshold play a particularly important role in financing affordable housing in rural communities. AHTCC survey data show that approximately one-third of Housing Credit equity investments from banks under $10 billion in assets supported rural markets, indicating that banks in this asset range play an outsized role in investing in rural communities. By comparison, 8.1 percent of Housing Credit equity in a CohnReznick industry-wide sample was invested in nonmetro counties, a proxy for rural and small-town markets.

CRA Rulemaking Provides Opportunity to Reiterate Request for Lower Housing Credit Risk Weighting in Basel III Rulemaking

In addition to CRA advocacy, the AHTCC continues to urge federal banking regulators to lower the risk weight of Housing Credit investments from 100 percent to 20 percent, and in no case more than 50 percent, under a revision of bank regulatory capital rules currently in development. In June, the AHTCC submitted comments to federal banking regulators on proposed Basel III capital rules and joined a coalition letter signed by 26 other affordable housing, banking, lending, and multifamily housing organizations, urging regulators to recognize the strong performance of Housing Credit investments. Especially in light of the CRA proposed rule, which could adversely impact demand for the Housing Credit, the AHTCC urges members advocate with the banking regulators and congressional allies for a lower risk weight for Housing Credit investments in order to increase investor demand for the program. Please use our resources below in your advocacy:

  • AHTCC one-page overview of Basel III request
  • AHTCC comment letter to regulators on Basel III
  • Affordable housing industry sign-on letter to regulators on Basel III
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