WASHINGTON, DC -- The Office of Comptroller of
the Currency has advised national banks that they can begin taking advantage of
increased limits for public welfare investments.
The Financial Services Regulatory Relief Act of
2006 increased the limit on public welfare investments, commonly known as Part
24 investments, from 10 to 15 percent of a national bank’s capital and
surplus. While national banks generally can make public welfare
investments up to 5 percent of the bank’s capital and surplus without prior OCC
approval, the new rules allow them to invest an additional 10 percent (15
percent total) if the OCC determines that additional investment will not pose a
risk to the deposit insurance fund and that the lender is not undercapitalized.
“The increase has the potential to generate an
additional $30 billion in private investments that go toward strengthening our
communities,” said Comptroller of the Currency John C. Dugan, a strong advocate
for the increased authority. “These investments support critically needed
public welfare initiatives, helping low- and moderate-income communities and
families. They do so in a manner that not only benefits the communities
served, but also enjoys a solid track record of profitability and safety and
soundness. These investments are good for our neighborhoods, good for
citizens, and good for business.”
The bulletin also explained a change to the
standards for these investments. Each public welfare investment by a
national bank or its subsidiary must benefit primarily low- and moderate-income
communities or families (such as by providing housing, services, or
jobs). Any public welfare investment or written commitment to make such
an investment made under the standards in effect before October 13, 2006, is
not affected by this change.
The OCC Bulletin is available online at http://www.occ.gov/ftp/bulletin/2006-44.html.
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Office of the Comptroller of the Currency was created by Congress to charter
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