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Interagency Questions and Answers Regarding Community Reinvestment; Notice Thursday, March 11, 2010 Part II Department of the Treasury Office of the Comptroller of the Currency Federal Reserve System Federal Deposit Insurance Corporation Department of the Treasury Office of Thrift Supervision Community Reinvestment Act; Interagency Questions and Answers Regarding Community Reinvestment; Notice VerDate Nov<24>2008 16:51 Mar 10, 2010 Jkt 220001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\11MRN2.SGM 11MRN2 jlentini on DSKJ8SOYB1PROD with NOTICES2 11642 Federal Register / Vol. 75, No. 47 / Thursday, March 11, 2010 / Notices DEPARTMENT OF THE TREASURY OTS: Stephanie M. Caputo, Senior and a number, connected by a dash. For Compliance Program Analyst, example, the first Q&A addressing 12 Office of the Comptroller of the Compliance and Consumer Protection, CFR ll.26 would be identified as Currency (202) 906–6549; or Richard Bennett, § ll.26—1. Senior Compliance Counsel, Although a particular Q&A may [Docket ID OCC–2010–0002] Regulations and Legislation Division, provide guidance on one regulatory FEDERAL RESERVE SYSTEM (202) 906–7409, Office of Thrift provision, e.g., 12 CFR ll.22, which Supervision, 1700 G Street, NW., relates to the lending test applicable to [Docket No. OP–1349] Washington, DC 20552. large institutions, its content may also SUPPLEMENTARY INFORMATION: be applicable to, for example, small FEDERAL DEPOSIT INSURANCE institutions, which are evaluated CORPORATION Background pursuant to small institution RIN—3064–AC97 The OCC, Board, FDIC, and OTS performance standards found at 12 CFR implement the Community ll.26. Thus, readers with a particular DEPARTMENT OF THE TREASURY Reinvestment Act (CRA) (12 U.S.C. 2901 interest in small institution issues, for et seq.) through their CRA regulations. example, should also consult the Office of Thrift Supervision See 12 CFR parts 25, 228, 345, and 563e. guidance that describes the lending, The agencies’ regulations are interpreted investment, and service tests. [Docket ID OTS–2010–0004] primarily through the ‘‘Interagency The Questions and Answers are Questions and Answers Regarding Community Reinvestment Act; indexed to aid readers in locating Community Reinvestment’’ (Questions Interagency Questions and Answers specific information in the document. and Answers), which provide guidance Regarding Community Reinvestment; The index contains keywords, listed for use by agency personnel, financial Notice alphabetically, along with numerical institutions, and the public. The indicators of questions and answers that AGENCIES: Office of the Comptroller of Questions and Answers were first relate to that keyword. The list of Q&As the Currency, Treasury (OCC); Board of published under the auspices of the addressing each keyword in the index is Governors of the Federal Reserve Federal Financial Institutions not intended to be exhaustive. System (Board); Federal Deposit Examination Council (FFIEC) in 1996 New and Revised Q&As Insurance Corporation (FDIC); Office of (61 FR 54647), and were last revised on Thrift Supervision, Treasury (OTS). January 6, 2009 (2009 Questions and New Q&A: Community Services Answers) (74 FR 498). ACTION: Notice. Targeted to Low- or Moderate-Income The SUPPLEMENTARY INFORMATION Individuals SUMMARY: published with the 2009 Questions and The OCC, Board, FDIC, and The agencies proposed a new Q&A, OTS (the agencies) are adopting as final Answers also proposed for comment one new question and answer (Q&A) § ll.12(g)(2)—1, that would provide the Interagency Questions and Answers examples of ways an institution that Regarding Community Reinvestment and two revised Q&As. 74 FR 504–06. Together, the agencies received provides community services could (Questions and Answers) that were determine that the community services proposed on January 6, 2009. In comments from 19 different parties. The commenters represented financial are targeted to low- and moderate- response to comments received, the income individuals when the institution agencies made minor clarifications to institutions and their trade associations, community development advocates and does not know the actual income of the the new and revised questions and individuals. Several comments were answers that were proposed. organizations, and others. As discussed below, this document received from community groups and DATES: Effective Date: March 11, 2010. adopts the three new and revised Q&As banking organizations that supported FOR FURTHER INFORMATION CONTACT: that were proposed in January 2009, the examples in the proposal. In OCC: Gregory Nagel or Karen Tucker, with minor clarifications, as addition, one suggestion was made to National Bank Examiners, Compliance appropriate, in response to comments clarify that community services can Policy Division, (202) 874–4428; or received. The agencies are also adopting include those provided by an entity Margaret Hesse, Special Counsel, conforming revisions to an existing with a broad mission, provided that the Community and Consumer Law Q&A. activities themselves qualify as Division, (202) 874–5750, Office of the The Interagency Questions and community services. This suggestion Comptroller of the Currency, 250 E Answers are grouped by the provision of was incorporated into the Q&A Street, SW., Washington, DC 20219. the CRA regulations that they discuss, examples as a new fourth bullet. Board: Cathy Gates, Senior Project are presented in the same order as the Another commenter suggested that Manager, (202) 452–3946; or Brent regulatory provisions, and employ an the definition of community services be Lattin, Attorney, (202) 452–3667, abbreviated method of citing to the broadened to cover financial literacy Division of Consumer and Community regulations. For example, the small bank programs provided to school children of Affairs, Board of Governors of the performance standards for national any income level in any school. Federal Reserve System, 20th Street and banks appear at 12 CFR 25.26; for Financial literacy programs are an Constitution Avenue, NW., Washington, Federal Reserve System member banks example of community development DC 20551. supervised by the Board, they appear at services. See Q&A § ll.12(i)—3. The FDIC: Janet R. Gordon, Senior Policy 12 CFR 228.26; for state nonmember commenter’s suggestion was not Analyst, Division of Supervision and banks, they appear at 12 CFR 345.26; adopted because community Consumer Protection, Compliance and for thrifts, the small savings development services must have a Policy Branch, (202) 898–3850; or Susan association performance standards primary purpose of community van den Toorn, Counsel, Legal Division, appear at 12 CFR 563e.26. Accordingly, development, which would require the (202) 898–8707, Federal Deposit the citation would be to 12 CFR ll.26. financial literacy programs to be Insurance Corporation, 550 17th Street, Each Q&A is numbered using a system targeted to low- or moderate-income NW., Washington, DC 20429. that consists of the regulatory citation individuals. VerDate Nov<24>2008 16:51 Mar 10, 2010 Jkt 220001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 E:\FR\FM\11MRN2.SGM 11MRN2 jlentini on DSKJ8SOYB1PROD with NOTICES2 Federal Register / Vol. 75, No. 47 / Thursday, March 11, 2010 / Notices 11643 The new Q&A is being adopted as for consideration as an activity that has responses. A number of commenters revised. a ‘‘primary purpose’’ of community believed that allowing pro rata development at the election of the consideration may provide an added Revised Q&A § ll.12(h)—8: Primary institution. In those cases, the proposed incentive to financial institutions. A Purpose of Community Development Q&A would allow an institution to couple of commenters, however, The regulations require community receive pro rata consideration for the believed that the revision would not development activities to have a portion of the activity that provides spur additional construction and ‘‘primary purpose of community affordable housing to low- or moderate- rehabilitation because, for example, the development.’’ See 12 CFR ll.12(h), income individuals. development of local housing is based ll.12(i), and ll.12(t). Q&A Commenters generally supported the on a local agency’s determination of its § ll.12(h)—8 historically has proposed revision. One commenter community housing needs and is not provided two methods of determining suggested that the agencies should allow influenced by a financial institution’s whether an activity has a primary only pro rata treatment in all situations CRA requirements. purpose of community development: (1) where less than a majority of an Commenters responded nearly If a majority of the dollars or activity’s dollars will be used for unanimously that the pro rata treatment beneficiaries of the activity are community development. This should not be restricted only to identifiable to one or more of the commenter further suggested that the instances where a governmental entity enumerated community development agencies should eliminate full requires a set-aside. Commenters purposes, then an activity will be consideration of activities that have an believed that the voluntary inclusion of considered to possess the requisite ‘‘express, bona fide intent’’ of affordable housing components in primary purpose; and (2) if the express, community development when the development by private developers bona fide intent of the activity, as stated, measurable portion of any benefit should also receive consideration. As for example, in a prospectus, loan bestowed or dollars applied is less than one commenter
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