A Look Inside…

Over the past decade, national banks invested more than $2.6 billion in bank-owned community development corporations (CDCs) under the Part 24 authority. These and other CDCs have been involved in a broad spectrum of activities that primarily benefit low- and moderate-income (LMI) persons, LMI areas, and areas targeted for redevelopment. Investments range from the development of single family and multifamily housing to providing debt and equity to small and emerging businesses. Some banks have formed CDCs to institutionalize and centralize community development efforts, thus allowing them to pull together expertise in this area from diverse parts of their banks. Other banks have formed CDCs to reach new markets with creative tools.

Because of the increasing popularity of the bank-owned CDC approach to community development activities, we have decided to focus this special edition of Community Developments Investments on bank-owned community development corporations. In these pages we will discuss various considerations for a bank thinking about forming a bank-owned CDC, including:

• What regulations govern formation and operation of a CDC?
• Where within the bank to “house” a CDC.
• How to structure the CDC.
• How to manage the CDC’s activities.

Bank-owned CDCs offer an exciting option for investing in local communities and are usually eligible for Community Reinvestment Act investment test consideration. National banks are encouraged to contact OCC’s District Community Affairs Officers for more information about how to form a CDC.

We hope you enjoy this publication and find its information useful.

Barry Wides
Deputy Comptroller
Community Affairs