Community Investments Vol 22, Issue 2
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?
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.