Dear Dr. CRA:
I just got back from my summer vacation, and it seems like a lot has happened with the CRA. Can you help me get caught up?
Signed,
Summer Provides Freedom
Dear SPF,
I hope you had a good summer vacation. Yes, things
have been busy with the proposal to expand the definition
of community development and the announcement
of the CRA public hearings. And it’s all happening right
in the middle of some major regulatory reforms, so I
know it can feel a little overwhelming. Here’s a quick
recap:
Proposed Changes for the NSP
The agencies issued a proposal to temporarily expand
the CRA’s definition of “community development” to
encourage more financial institutions to participate in
the Neighborhood Stabilization Program (NSP) and
NSP-related activities. The proposal was submitted
because while NSP targets up to 120 percent of area
median income, the CRA rules require a target of less
than 80 percent of AMI. To receive consideration under
the proposed new rule, the activity must:
1. Be an NSP-eligible activity. (Note that the activity just
has to be NSP-eligible, it doesn’t necessarily have to be
something that is actually using NSP money.)
2. Be in an NSP-targeted geography (i.e. in a geography
identified in a HUD-approved NSP plan)
3. Be within the bank’s assessment area. However, if the
bank has adequately addressed the community development needs of its assessment area, it can get credit
for NSP-related activities outside of its assessment area.
4. Occur within two years of the last date that appropriated
funds are required to be spent by the grantees.
To see the press release and the proposal itself, visit
the Board's website. Comments on the proposal
were due in late July and the agencies are currently reviewing
the documentation to make a determination
on the temporary expansion.
Public Hearings on the CRA
The other big news was the announcement that the
regulatory agencies will be holding four public hearings
around the country to gather public comment on
suggested changes to the CRA regulations. If you’ve
ever daydreamed about what you would do if you had
the chance to change the CRA regulations, this is your
chance! Whether you come to a public hearing in person
or write a letter, it’s important that this process include
as many perspectives as possible, so please participate!
Comments are due August 31st. Visit the Board's website to
see the dates and locations of the public hearings, information
on how to submit a comment letter, and a list of
questions that includes everything from the definition of
community development to ratings and data collection.
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