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Community Developments Investments (May 2018)

Community Reinvestment Act Consideration for Collaborations That Promote Community Development

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Barry Wides, Deputy Comptroller for Community Affairs, OCC

David Black, Community Development Expert, OCC

The East Baltimore Development Initiative used new markets tax credits, which is an eligible community development activity under the Community Reinvestment Act.
The East Baltimore Development Initiative used new markets tax credits, which is an eligible community development activity under the Community Reinvestment Act. (Redmellon Restoration & Development)

The Community Reinvestment Act (CRA), passed in 1977, encourages national banks and federal savings associations (collectively, banks) to help meet the credit needs of all segments of their communities, including low- and moderate-income (LMI) neighborhoods. Today, federal financial supervisory agencies, including the Office of the Comptroller of the Currency (OCC), evaluate financial institutions on their performance regarding activities that qualify for consideration under the CRA.

This article reviews ways in which banks may receive CRA consideration from partnerships with other financial institutions, including minority depository institutions (MDI), women-owned financial institutions, and low-income credit unions (MWLI financial institutions).

Community Development Activities

All federally regulated financial institutions, regardless of minority ownership designation, may receive CRA consideration for certain community development activities conducted in partnership with other entities, including other Federal Deposit Insurance Corporation-insured financial institutions.

Community development activities include loans, investments, and services that have a primary purpose of "community development," which is defined in the CRA regulations.1 The definition of "community development" includes affordable housing for LMI individuals, community services targeted to LMI individuals, activities that promote economic development by financing eligible small businesses and farms, and activities that revitalize or stabilize LMI geographies or other geographies designated in the CRA regulations.

A bank may receive CRA consideration for community development activities provided the activities benefit the bank's assessment area(s) or, in most cases, a broader statewide or regional area that includes the bank's assessment area(s).

Examples of partnerships between banks and other entities to promote community development include2

  • loans made to a financial institution that primarily lends to promote community development.
  • purchasing or selling a participation in a larger community development loan made by another financial institution. Loan participations can allow smaller institutions to originate larger loans when other banks agree to purchase participations.
  • investments or holding shares in, or making grants or deposits available to, a financial institution that primarily lends or facilitates lending in LMI areas or to LMI individuals.
  • grants that allow a financial institution to undertake community development activities, such as financial counseling to LMI individuals.
  • technical assistance, in-kind contributions, or other community development services to a financial institution whose primary purpose is community development.

Sales or Donations of Bank Branches in Predominantly Minority Neighborhoods

Under some circumstances, a sale of a bank branch on favorable terms or a branch donation to a minority- or women-owned depository institution, as these terms are defined in the CRA statute, may receive CRA consideration. The bank branch must be located in a predominantly minority neighborhood.3 The amount of the contribution or the amount of the loss incurred in connection with such activity may be a factor in determining whether the depository institution is meeting the credit needs of the institution's community.4

Partnerships Between Majority-Owned Institutions and MWLIs

CRA consideration is permitted for majority-owned institutions that partner with MWLI financial institutions. The federal financial agencies may provide CRA consideration for capital investments, loan participations, and other ventures undertaken by a majority-owned institution in cooperation with MWLI financial institutions, provided that the activities help meet the credit needs of local communities in which the MWLI financial institutions are chartered. The majority-owned institution may receive consideration for such activities even if the MWLI financial institution is not located in, or the activities do not benefit, the majority-owned institution's assessment area(s) or broader statewide or regional area that includes the institution's assessment area(s).5

For more information, contact David Black at

1 12 CFR 25.12(g) and 195.12(g).

2"Community Reinvestment Act; Interagency Questions and Answers Regarding Community Reinvestment; Guidance," 81 Fed. Reg. 48506 (July 25, 2016).

3 12 USC 2907(a).

4 Ibid.

5 OCC, Community Developments Fact Sheet,"Partnerships With Minority- and Women-Owned Financial Institutions, Low-Income Credit Unions," August 2016.

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This publication is part of:

Collection: Community Developments Investments

  • Deputy Comptroller
  • Barry Wides
  • Editorial Staff
  • David Black
  • Janet Fix
  • Emily Gold
  • Janet Fix
  • Hershel Lipow
  • Design Staff
  • Vincent Harris
  • Richard Shacklette
On the Cover

This newsletter’s cover honors this rich heritage with images of (clockwise from top right): Façade of a bank in San Francisco (Alamy); Elouise Cobell, a Native American woman who spearheaded the capital campaign to fund Blackfeet National Bank, predecessor to today’s Native American Bank, N.A. (AP Images); St. Luke Penny Savings Bank employees (National Park Service); Romana Acosta Bañuelos, Latina co-founder of Pan American Bank in East Los Angeles, Calif. and U.S. Treasurer (1971-1974), pictured with James A. Conlon, Director, Bureau of Engraving and Printing (1967-1977) (Bureau of the Public Debt); Freedman’s Savings and Trust Co. passbook (U.S. Department of the Treasury); Maggie L. Walker, the first African American woman to charter a U.S. bank and founder of St. Luke Penny Savings Bank (National Park Service); Frederick Douglas, the first president of Freedman’s Bank, the first black-owned bank (Shutterstock).

Questions or Comments

Call (202) 649-6420 or email This and previous editions are available on the OCC's website at


Articles by non-OCC authors represent the authors’ own views and not necessarily the views of the OCC.

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