[Federal Register Volume 64, Number 243 (Monday, December 20, 1999)]
[Rules and Regulations]
[Pages 70986-70991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32635]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 24
[Docket No. 99-20]
RIN 1557-AB69
Community Development Corporations, Community Development
Projects, and Other Public Welfare Investments
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Office of the Comptroller of the Currency (OCC) is
changing its regulation governing national bank investments that are
designed primarily to promote the public welfare. This final rule
simplifies the prior notice and self-certification requirements that
apply to national banks' public welfare investments; permits eligible
national banks to self-certify any public welfare investment; includes
the receipt of Federal low-income housing tax credits by the project in
which the investment is made (directly or through a fund that invests
in such projects) as an additional way of demonstrating community
support or participation for a public welfare investment; expands the
types of investments that a national bank may self-certify by removing
geographic restrictions; clarifies that the list of investments that
were authorized
[[Page 70987]]
to be made without prior approval now is illustrative of eligible
public welfare investments; revises and expands the illustrative list
of eligible public welfare investments; removes the private market
financing requirement for public welfare investments; and makes
clarifying and technical changes.
Taken together, these changes will simplify procedural requirements
and will make it easier for national banks to make public welfare
investments, consistent with the underlying statutory authority.
DATES: January 19, 2000.
FOR FURTHER INFORMATION CONTACT: Barry Wides, Director, Community
Development Division, (202) 874-4930; Michael S. Bylsma, Director,
Community and Consumer Law Division, (202) 874-5750; or Heidi M.
Thomas, Senior Attorney, Legislative and Regulatory Activities
Division, (202) 874-5090, Office of the Comptroller of the Currency,
250 E Street, SW, Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
The Proposal
On June 10, 1999, the OCC published a notice of proposed rulemaking
(proposal) to amend 12 CFR part 24, the OCC's rule governing national
banks' investments in community development corporations (CDCs),
community development (CD) projects, and other public welfare
investments. 64 FR 31160. Part 24 implements 12 U.S.C. 24(Eleventh),
which authorizes national banks to make investments designed primarily
to promote the public welfare, including the welfare of low-and
moderate-income communities and families, subject to certain percentage
of capital limitations. (The investments authorized pursuant to 12
U.S.C. 24(Eleventh) are referred to collectively as ``public welfare
investments.'') The proposal sought to make burden-reducing changes
that would make it easier for national banks to use the public welfare
investment authority that the statute and regulation provide.
Specifically, we proposed simplifying the prior notice and self-
certification requirements that apply to national banks' public welfare
investments; expanding the types of investments a national bank may
self-certify by removing geographic restrictions; and permitting an
eligible community bank 1 to self-certify any public welfare
investment. The proposal asked whether the OCC should modify the
requirements for demonstrating community involvement in a national
bank's public welfare investments, other ways in which we could
simplify part 24 standards or streamline procedures, and about its
impact on community banks.
---------------------------------------------------------------------------
\1\ Part 24 defines an ``eligible bank'' as a national bank that
is well capitalized, has a composite rating of 1 or 2 under the
Uniform Financial Institutions Rating System (the CAMELS rating),
has a Community Reinvestment Act rating of ``Outstanding'' or
``Satisfactory,'' and is not subject to a cease and desist order,
consent order, formal written agreement, or Prompt Corrective Action
directive. 12 CFR 24.2(e). The proposal defined an eligible
community bank as an eligible bank with total assets of less than
$250 million.
---------------------------------------------------------------------------
Description of Comments Received and Final Rule
The OCC received 18 comments on the proposal. These comments
included: 7 from banks, bank holding companies, and related entities; 8
from community reinvestment or other public interest organizations; and
3 from banking trade associations. The majority of the commenters
supported the proposed changes. A summary of the comments and a
description of the final rule follows.
Community Benefit Information Requirement (Sec. 24.3(c))
Currently, Sec. 24.6 lists certain public welfare investments that
an eligible bank may make by submitting a self-certification letter to
the OCC within 10 working days after it makes the investment, provided
the bank's aggregate public welfare investments do not exceed 5 percent
of the bank's capital and surplus. No prior notification or approval is
required. For all other public welfare investments, a national bank
must submit an investment proposal to the OCC for prior approval.
Unless otherwise notified in writing by the OCC, the proposed
investment is deemed approved 30 calendar days from the date on which
the OCC receives the bank's investment proposal.
Regardless of which procedure applies, Sec. 24.3(c) currently
requires a national bank making a public welfare investment to
demonstrate the extent to which the investment benefits communities
otherwise served by the bank. (The requirement of Sec. 24.3(c) is
referred to herein as the community benefit information requirement.)
Section 24.5 requires the bank to provide a statement in its self-
certification letter or investment proposal certifying that it has
complied with this requirement.
In the proposal, we proposed to remove the community benefit
information requirement. Eight of the 11 commenters addressing this
amendment supported this change on the grounds that it is unnecessary,
not required by statute, and may constrict national banks from making
otherwise qualifying public welfare investments. Two commenters
objected to the change, noting that national banks should be required
to submit a description of the project to the OCC. However, these
commenters misconstrue the nature of the community benefit information
requirement, which does not require a national bank to describe its
proposal, but only to demonstrate the extent to which the investment
benefits communities otherwise served by the bank. The investing
national bank is, however, required to provide a description of the
project under Sec. 24.5(a) (if the bank is using the self-certification
procedures) or Sec. 24.5(b) (if the bank is seeking prior OCC
approval).
In addition, one commenter stated that without the community
benefit information requirement, a national bank could self-certify
investments ``of a predatory nature'' that harm communities. However,
all of the investments authorized pursuant to 12 U.S.C. 24(Eleventh)
and part 24 must, by statute, promote the public welfare. In addition,
Sec. 24.3(d) imposes a requirement that the bank demonstrate non-bank
community support for or participation in the proposed investment. A
bank is unlikely to be able to satisfy these requirements if the target
community opposes the investment. Therefore, we have concluded that the
community benefit information requirement serves no independent purpose
that contributes to our ability to ensure that an investment made
pursuant to part 24 comports with 12 U.S.C. 24(Eleventh). Accordingly,
the final rule removes the community benefit information requirement
from part 24.
We also proposed changing Sec. 24.5 to provide that a national bank
that wants the OCC to consider a specific public welfare investment
during a Community Reinvestment Act (CRA) examination may include a
simple statement to that effect (a CRA statement) in its public welfare
investment proposal or self-certification letter.2 Although,
as a matter of law, a bank's authority to make public welfare
investments pursuant to 12 U.S.C. 24(Eleventh) and part 24 is
independent of its obligation to serve the credit needs of its entire
community under the CRA, we proposed this provision because we
[[Page 70988]]
recognized that a bank may want the OCC to consider a public welfare
investment for CRA purposes.
---------------------------------------------------------------------------
\2\ The OCC's approval of a public welfare investment made
pursuant to part 24 does not affect how the investment is evaluated
for CRA purposes, and an investment approved under part 24 is not
necessarily a qualified investment for purposes of CRA.
---------------------------------------------------------------------------
Several commenters requested that the OCC modify this provision to
indicate that a bank may seek to have the investment qualify during a
CRA examination even if it did not make this request in its investment
proposal or self-certification letter. We agree with these commenters
that the CRA statement is not, and should not be, a prerequisite for
consideration of the investment during the CRA examination. Based on
these comments, it appears that the CRA statement provision may cause
needless confusion on this point. Therefore, we have removed the CRA
statement from the final rule. However, a national bank still may
choose to provide a CRA statement in its investment proposal or self-
certification letter, and these statements will be treated as voluntary
and not determinative of whether the OCC will consider the investment
for purposes of CRA. A national bank continues to have an affirmative
obligation to provide examiners with information about public welfare
investments that it wishes to have considered during a CRA examination.
Demonstration of Community Support (Sec. 24.3(d))
Under Sec. 24.3(d), a national bank may make investments pursuant
to part 24 if it demonstrates that it has non-bank community support
for, or participation in, the investment. Section 24.3(d) provides a
nonexclusive list of ways that a national bank may demonstrate this
support or participation.
The proposal invited comment on whether this approach is effective
in encouraging community involvement in national banks' public welfare
investments. In particular, the proposal sought comment on whether the
current non-bank community support or participation requirement is
appropriate and whether there are other ways of demonstrating support
or participation.
A number of commenters thought that the current regulatory approach
is adequate while other commenters suggested eliminating the
requirement because it is not required by statute and may constrict a
national bank's ability to make otherwise qualifying and beneficial
public welfare investments. A few commenters also recommended specific
methods for meeting the participation requirement that the OCC should
add to the list provided in Sec. 24.3(d). These included investments in
projects that receive Federal low-income housing tax credits, letters
of support, and representations by sponsors of national or regional
funds that the investment will primarily benefit activities with
community support or participation.
Based on the comments received, the final rule includes the receipt
of Federal low-income housing tax credits by the project in which the
investment is made (directly or through a fund that invests in such
projects) as an additional method of demonstrating community support or
participation for a public welfare investment. Under the United States
Tax Code, for a project to qualify for the low-income housing tax
credit, 20 percent or more of the residential units in the project must
be both rent-restricted and occupied by individuals whose income is 50
percent or less of area median gross income, or 40 percent or more of
the residential units in the project must be both rent-restricted and
occupied by individuals whose income is 60 percent or less of area
median gross income. 26 U.S.C. 42(g). Because Congress has deemed these
projects worthy of special tax treatment due to their focus on low-
income individuals and because the Federal low-income housing tax
credit program imposes an application and review process implemented by
State allocation agencies that requires public input and community
support for the affordable housing project, we believe that these
projects benefit, and are supported by, the communities in which they
are located.
In addition, we have amended the introductory paragraph of this
section to remove superfluous language.
Self-Certification of Public Welfare Investments by an Eligible Bank
(Sec. 24.5(a))
The proposal changed Sec. 24.5(a) to permit eligible community
banks (national banks with less than $250 million in assets) to self-
certify all public welfare investments, not only those investments
listed in Sec. 24.6 as eligible for self-certification. In the preamble
to the proposal, we expressed the view that this change would reduce
the regulatory burden and costs associated with the part 24 prior
approval process for eligible community banks, which operate with more
limited resources than larger institutions. This could encourage more
community banks to make public welfare investments in local CDCs and CD
projects that might not be able to attract investments from other
sources. The proposal also noted that this change is consistent with 12
U.S.C. 24(Eleventh), which does not require a national bank to receive
prior OCC approval before making a public welfare investment within the
5 percent of capital aggregate limit.
Although many of the commenters who addressed this issue supported
the expansion of the self-certification process for community banks, a
number of other commenters requested that we raise the asset size of an
eligible community bank from $250 million to $500 million or $1
billion. Still other commenters supported expanding the availability of
the self-certification process to all eligible national banks,
regardless of asset size. These commenters stated that there is no
statutory basis for distinguishing between small and large banks in the
context of public welfare investments. One commenter specifically
stated that because the nature of the investment should determine
whether it qualifies for self-certification, there is no reason to have
one set of criteria for eligible community banks, and another for
eligible large banks. In addition, these commenters noted that many of
the reasons that support expanding the self-certification process to
community banks also apply to larger banks. Specifically, the
commenters noted that: there is no statutory requirement for national
banks of any asset size to receive prior OCC approval before making a
public welfare investment within the 5 percent of capital aggregate
limit; the investment must still meet the definition of public welfare
investment set forth in the regulation; safety and soundness concerns
are not raised because only ``eligible'' banks (banks with CAMELS
ratings of 1 or 2, among other things) may utilize the self-
certification process; a bank's public welfare investments are subject
to review during the examination process; and, finally, if the OCC
finds that an investment violates the law, is inconsistent with the
safe and sound operation of the bank, or poses a risk to the deposit
insurance fund, it may require the bank to take appropriate remedial
action.
One commenter stated that the OCC should continue to require an
application process as a means of ensuring that the investing bank
provides a description of the proposed investment. However, as
previously noted, a national bank must provide a description of its
proposed investment regardless of whether it is using the part 24 self-
certification or prior approval procedure. Therefore, requiring a full
application and prior approval merely to detail a description of the
project is unnecessary. See 12 CFR 24.5(a)(3)(iii).
Based on the comment letters received, we have reconsidered the
approach to expanding the self-
[[Page 70989]]
certification process. We agree with those commenters who noted that
there is no substantive reason to limit expanding the self-
certification process to community banks. Expanding the self-
certification process to any public welfare investments made by
eligible national banks regardless of asset size would make the public
welfare investment process less burdensome and costly for all national
banks, community banks included. Community banks, and their customers
and communities, would benefit from this change to the same extent as
if we had adopted the rule as proposed. However, expanding the self-
certification process to any public welfare investment made by any
eligible bank also enables larger institutions to benefit from the
savings in cost and time that the self-certification process provides.
This, in turn, should encourage more national banks to make public
welfare investments than if the expansion of the self-certification
process were limited to community banks.
Therefore, the final rule amends Secs. 24.5 and 24.6 to permit all
eligible banks, regardless of asset size, to self-certify any public
welfare investment. As a result, the self-certification process for
eligible banks is not limited to those investments listed in Sec. 24.6.
Banks that do not meet the definition of ``eligible bank'' found in
Sec. 24.2(e), as well as banks with aggregate outstanding investments
that exceed 5 percent of capital and surplus, as provided in Sec. 24.4,
must still submit an investment proposal to the OCC for prior approval.
In addition, investments that involve properties carried on the bank's
books as ``other real estate owned'' and investments that we determine
in published guidance to be inappropriate for self-certification remain
ineligible for self-certification, as currently provided in the
regulation.
The final rule continues to list those investments currently
specified in Sec. 24.6 as eligible for self-certification, but
recategorizes them as examples of qualifying public welfare
investments. We believe that this nonexclusive list remains helpful to
national banks in describing the types of investments they may make
under part 24. Because of this change, we are also amending Sec. 24.5
to include the language formerly in Sec. 24.6(b), as amended.
The Local Community Investment Requirement for Self-Certification
(Sec. 24.6(b)(2))
Currently, Sec. 24.6(b)(2) does not permit a national bank to self-
certify an investment if, among other things, more than 25 percent of
the investment is used to fund projects that are located in a State or
metropolitan area other than the States or metropolitan areas in which
the bank maintains its main office or has branches. Under
Sec. 24.5(a)(3)(vii), if any portion of a bank's investment funds
projects outside of its local areas, the bank must include in its self-
certification letter a statement that no more than 25 percent of the
investment funds these projects.
We proposed to remove this local community investment requirement
to enable a national bank to use the less burdensome self-certification
process to make eligible public welfare investments in any area. All of
the commenters that discussed this issue supported this change. The
commenters noted that this requirement is not mandated by statute and
that the proposed change would permit national banks to use the self-
certification process for investments in national community development
investment vehicles, which often provide funds for projects located
throughout the United States. Therefore, removing this requirement
could facilitate an increase in the amount of capital available for
local community and economic development projects throughout the
country.
We therefore are adopting this change as proposed. As indicated
above, we are also moving Sec. 24.6(b) to Sec. 24.5, for clarity and to
combine similar provisions. However, for the same reasons discussed in
connection with the proposal to remove the community benefit
information requirement, we are not adopting the amendment that would
have allowed a national bank the option of including a CRA statement in
its self-certification letter.
Other Changes (Secs. 24.1, 24.3, and 24.6(a) and (b))
We also requested comment on other ways in which we could simplify
part 24 standards and procedures. The final rule contains the following
additional changes to part 24.
First, one commenter suggested that the OCC remove the provision in
Sec. 24.3 that requires a bank to demonstrate that it is not reasonably
practicable to obtain other private market financing for the proposed
investment. The commenter noted that this requirement is ambiguous and
often counterproductive in that it prevents the funding of worthwhile
public welfare projects that may receive funding from other for-profit
entities. We agree with this commenter and the final rule removes this
requirement.
Second, a number of commenters requested that the OCC make changes
to the list of investments eligible for self-certification in
Sec. 24.6. As discussed in the following two paragraphs, we have
revised Sec. 24.6 to reflect certain suggestions made by commenters.
However, as noted previously, this list now provides illustrative
examples of permissible public welfare investments rather than
investments eligible for self-certification.
Specifically, Sec. 24.6(a)(5) currently allows self-certification
for investments in projects that qualify for Federal low-income housing
tax credits provided the investment is made as a limited partner, or as
a partner in an entity that itself is a limited partner, and the
general partner of the project is, or is primarily owned and operated
by, a 26 U.S.C. 501(c)(3) or (4) non-profit corporation. One commenter
suggested that this provision should no longer require non-profit
participation because the vast majority of low-income housing tax
credit projects do not involve a non-profit entity. We agree that the
requirement for non-profit participation is not necessary to further
statutory and regulatory purposes. In addition, we believe that the
requirement that the investment be made as a limited partner is
unnecessary because Sec. 24.4(b) prohibits a national bank from making
an investment that would expose the bank to unlimited liability,
thereby preventing a national bank from investing as a general partner.
Therefore, the final rule removes both of these requirements as
unnecessary and includes this provision in amended Sec. 24.6 as another
example of an investment permissible under Part 24.
A number of commenters also suggested that the OCC change
Sec. 24.6(a) to permit national banks to self-certify investments in
community development financial institutions, as defined in 12 U.S.C.
4702(5). In general, these institutions have as a primary mission the
promotion of community development in low-income communities and other
areas of economic distress that lack adequate access to loans or equity
investments. See 12 U.S.C. 4702(5). These entities also provide
development services in conjunction with equity investments or loans,
and maintain accountability to residents of their investment areas or
target populations. Id. We agree with these commenters that investments
in these types of entities qualify as eligible public welfare
investments. Therefore, the final rule changes Sec. 24.6(a) to include
these types of investments as another example of an investment
permissible under Part 24.
In addition, the final rule adds a new paragraph to Sec. 24.1 to
clarify that if a
[[Page 70990]]
national bank wants to make loans or investments designed to promote
the public welfare and that are authorized under provisions of the
banking laws other than 12 U.S.C. 24(Eleventh), it may do so without
regard to the provisions of 12 U.S.C. 24(Eleventh) or part 24. For
example, a bank that wishes to make mortgage loans to low- and
moderate-income individuals or loans to CDCs may do so without
complying with part 24 (or becoming subject to part 24's investment
limitations), since the authority to make these loans is provided in 12
U.S.C. 371, and 12 U.S.C. 24(Seventh) and 12 U.S.C. 84, respectively.
The final rule also makes a conforming amendment to both
Secs. 24.5(a) and (b) to provide that the self-certification letter or
investment proposal should contain a description of the investment
activity described in Sec. 24.3(a) that the investment ``primarily''
supports. The addition of the word ``primarily'' to this provision
conforms these requirements to both 12 U.S.C. Sec. 24(Eleventh), which
provides that a national bank may make an investment designed primarily
to promote the public welfare, and section 24.3(a), which provides that
a national bank may make an investment that primarily benefits low- and
moderate-income individuals, low- and moderate-income areas, or other
areas targeted for redevelopment by local, state, tribal or Federal
governments.
Finally, the final rule makes a technical change to Sec. 24.6(a)(8)
to update a citation to Federal Reserve Board regulations.
Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
Comptroller of the Currency certifies that this final rule will not
have a significant economic impact on a substantial number of small
entities in accord with the spirit and purposes of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.). Accordingly, a regulatory
flexibility analysis is not required. The final rule reduces regulatory
burden on national banks by simplifying the prior approval process and
simplifying and expanding the self-certification process for part 24
investments.
Paperwork Reduction Act
For purposes of compliance with the Paperwork Reduction Act of
1995, 44 U.S.C. 3501 et seq., the OCC invites comment on:
(1) Whether the collections of information contained in this final
rule are necessary for the proper performance of the OCC's functions,
including whether the information has practical utility;
(2) The accuracy of the OCC's estimate of the burden of the
information collection;
(3) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(4) Ways to minimize the burden of the information collection on
respondents, including the use of automated collection techniques or
other forms of information technology; and
(5) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Recordkeepers are not required to respond to this collection of
information unless it displays a currently valid OMB control number.
The collection of information requirements contained in this final
rule have been approved by the Office of Management and Budget in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)). Comments on the collections of information should be sent to
the Office of Management and Budget, Paperwork Reduction Project 1557-
0194, Washington, D.C. 20503, with copies to Office of the Comptroller
of the Currency, Communications Division, 250 E Street, SW, Attention:
Paperwork Reduction Project 1557-0194, Washington, D.C. 20219.
The final rule is expected to reduce annual paperwork burden for
recordkeepers because it eliminates certain application and self-
certification requirements. The collection of information requirements
in this final rule are found in 12 CFR 24.5. This information is
required for the public welfare investment self-certification and prior
approval procedures. The likely respondents are national banks.
Estimated average annual burden hours per recordkeeper: 1.9.
Start-up costs: None.
Executive Order 12866 Determination
The Comptroller of the Currency has determined that this final rule
does not constitute a ``significant regulatory action'' for the
purposes of Executive Order 12866.
Unfunded Mandates Reform Act of 1995 Determinations
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4 requires that an agency prepare a budgetary impact statement
before promulgating a rule that includes a Federal mandate that may
result in expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. If a budgetary impact statement is required, section 205 of the
Unfunded Mandates Act also requires an agency to identify and consider
a reasonable number of regulatory alternatives before promulgating a
rule. As discussed in the preamble, this final rule is limited to the
prior notice and self-certification process for part 24 investments and
contains no mandates within the meaning of the Unfunded Mandates Act.
The OCC therefore has determined that the final rule will not result in
expenditures by State, local, or tribal governments or by the private
sector of $100 million or more. Accordingly, the OCC has not prepared a
budgetary impact statement or specifically addressed the regulatory
alternatives considered.
List of Subjects in 12 CFR Part 24
Community development, Credit, Investments, National banks,
Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons stated in the preamble, the OCC amends part 24 of
Chapter I of Title 12 of the Code of Federal Regulations as set forth
below:
PART 24--COMMUNITY DEVELOPMENT CORPORATIONS, COMMUNITY DEVELOPMENT
PROJECTS, AND OTHER PUBLIC WELFARE INVESTMENTS
1. The authority citation for part 24 continues to read as follows:
Authority: 12 U.S.C. 24(Eleventh), 93a, 481 and 1818.
2. In Sec. 24.1, a new paragraph (d) is added to read as follows:
Sec. 24.1 Authority, purpose, and OMB control number.
* * * * *
(d) National banks that make loans or investments that are designed
primarily to promote the public welfare and that are authorized under
provisions of the banking laws other than 12 U.S.C. 24(Eleventh), may
do so without regard to the provisions of 12 U.S.C. 24(Eleventh) or
this part.
3. In Sec. 24.3:
A. Paragraphs (b) and (c) are removed;
B. Paragraph (d) is amended by removing the phrase ``but not
limited to'' and is redesignated as paragraph (b); and
C. Newly designated paragraph (b)(6) is revised to read as follows:
Sec. 24.3 Public welfare investments.
* * * * *
(b) * * *
[[Page 70991]]
(6) Financing for the proposed investment from the public sector or
community development organizations or the receipt of Federal low-
income housing tax credits by the project in which the investment is
made (directly or through a fund that invests in such projects).
Sec. 24.4 [Amended]
4. In Sec. 24.4, paragraph (a) is amended by adding ``pursuant to
Sec. 24.5(b)'' after the phrase ``by written approval of the bank's
proposed investment(s)''.
5. In Sec. 24.5:
A. Paragraphs (a)(1) and (a)(3)(iii) are revised;
B. Paragraph (a)(3)(v) is amended by adding the word ``and'' at the
end of the paragraph;
C. Paragraph (a)(3)(vi) is amended by removing the term ``; and''
and adding a period in its place at the end of the sentence;
D. Paragraph (a)(3)(vii) is removed;
E. A new paragraph (a)(5) is added; and
F. Paragraphs (b)(1) and (b)(2)(iii) are revised.
The revisions and addition read as follows:
Sec. 24.5 Public welfare investment self-certification and prior
approval procedures.
(a) * * *
(1) Subject to Sec. 24.4(a), an eligible bank may make an
investment without prior notification to, or approval by, the OCC if
the bank follows the self-certification procedures prescribed in this
section.
* * * * *
(3) * * *
(iii) The type of investment (equity or debt), the investment
activity listed in Sec. 24.3(a) that the investment primarily supports,
and a brief description of the particular investment;
* * * * *
(5) Notwithstanding the provisions of this section, a bank may not
self-certify an investment if:
(i) The investment involves properties carried on the bank's books
as ``other real estate owned''; or
(ii) The OCC determines, in published guidance, that the investment
is inappropriate for self-certification.
(b) * * *
(1) If a national bank does not meet the requirements for self-
certification set forth in this part, the bank must submit a proposal
for an investment to the Director, Community Development Division,
Office of the Comptroller of the Currency, Washington, DC 20219.
(2) * * *
(iii) The type of investment (equity or debt), the investment
activity listed in Sec. 24.3(a) that the investment primarily supports,
and a description of the particular investment;
* * * * *
6. In Sec. 24.6:
A. The section heading and paragraph (a) introductory text are
revised;
B. Paragraphs (a)(5) and (a)(8) are revised;
C. Paragraph (a)(9) is redesignated as paragraph (a)(10);
D. A new paragraph (a)(9) is added; and
E. Paragraph (b) is removed and reserved.
The revisions and addition read as follows:
Sec. 24.6 Examples of qualifying public welfare investments.
(a) Investments that primarily support the following types of
activities are examples of investments that meet the requirements of
Sec. 24.3(a):
* * * * *
(5) Investments in a project that qualifies for the Federal low-
income housing tax credit;
* * * * *
(8) Investments of a type approved by the Federal Reserve Board
under 12 CFR 208.22 for state member banks that are consistent with the
requirements of Sec. 24.3;
(9) Investments in a community development financial institution,
as defined in 12 U.S.C. 4702(5); and
* * * * *
Dated: December 10, 1999.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 99-32635 Filed 12-17-99; 8:45 am]
BILLING CODE 4810-33-P
