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Subject: Expansion of Eligible Public Welfare Investments
Date: May 21, 2009
To: Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, and All Examining Personnel
Description: Final Rule
The Office of the Comptroller of the Currency (OCC) published in the Federal Register on April 7, 2009, its final rule, "Community and Economic Development Entities, Community Development Projects, and Other Public Welfare Investments." The final rule expands national banks' authority to make public welfare investments consistent with recent amendments to 12 USC 24(Eleventh). It authorizes a national bank and its subsidiaries to make public welfare investments directly or indirectly if the investments primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a governmental entity for redevelopment, or if the investment would receive consideration under 12 CFR 25.23 (the Community Reinvestment Act regulations) as a "qualified investment." The final rule became effective upon publication.
The final rule implements a provision of the Housing and Economic Recovery Act of 2008 that restores the public welfare investment test to reflect the standard that was in effect prior to enactment of the Financial Services Regulatory Relief Act of 2006. The final rule replaces, but does not change, an interim final rule published in August 2008 that gave immediate effect to the change in the statutory standard.
The final rule also makes conforming revisions to the OCC's CD-1 form (CD-1 – National Bank Community Development (Part 24) Investments). A national bank should continue to submit a completed CD-1 form to provide an after-the-fact notice or to request prior approval of a public welfare investment (see attached). The CD-1 form is also available on the OCC's Web site.
For questions concerning the changes made to section 24(Eleventh) and this final rule, please contact Karen Bellesi, Special Advisor, Community Affairs Department, at (202) 874-5556; Stephen Van Meter, Assistant Director, Community and Consumer Law Division, at (202) 874-5750; Patrick T. Tierney, Senior Attorney, or Rebecca Smith, Attorney, Legislative and Regulatory Activities Division, at (202) 874-5090.
Barry R. Wides