Today the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) voted to publish a new proposed rule on the Community Reinvestment Act (CRA). The Federal Reserve is notably not joining in the proposed rulemaking.
CRA is a major driver of bank investment in the Housing Credit, with an estimated 80 percent of Housing Credit investment stemming from banks motivated by CRA requirements. In particular, the presence of strong CRA investment test requirements has played an essential role in creating a robust and efficient Housing Credit program.
The proposed rule would lower the small bank threshold from $1.649 billion to $1 billion, eliminate the intermediate small bank sub-category, and create a separate intermediate bank category covering banks with assets between $1 billion and $10 billion. As a result, banks with assets between $1.649 billion and $10 billion that are currently subject to the large bank investment test would instead be evaluated under the intermediate bank community development test. The proposed rule would also change the definitions of what qualifies as affordable housing and make other changes impacting the Housing Credit.
The AHTCC will continue to advocate for a strong CRA framework that incentivizes investment in the Housing Credit.
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