State Bank Regulators Support Proposed CRA Expansion

Posted by Orb Staff on July 29, 2010 No Comments
Categories : Residential Mortgage

The Conference of State Bank Supervisors (CSBS) and the American Council of State Savings Supervisors (ACSSS) have issued a comment letter this week indicating their support of a proposed rule that would allow banks to receive Community Reinvestment Act consideration for investment activities under the U.S. Department of Housing and Urban Development's (HUD) Neighborhood Stabilization Program (NSP). NSP provides funding to state and local governments and nonprofit organizations to buy and redevelop abandoned and foreclosed properties in areas with HUD-approved plans.

‘We believe that this proposal, if enacted, will provide considerable incentive to institutions to promote community-development activities in their own assessment areas and the targeted areas,’ CSBS President Neil Milner and ACSSS President Doug Foster stated in a joint comment letter to the four federal bank regulatory agencies.

Additionally, CSBS and ACSSS endorse the provisions of the proposal that precludes an institution from receiving CRA credit for performing NSP-approved activities out of its assessment area before addressing community-development needs of its own assessment area.

The CSBS and the ACSSS also say the proposed sunset date for the program should be reconsidered, claiming that ‘the need for NSP-eligible activities will persist, and the agencies can encourage banks to continue working to revitalize and stabilize designated target areas by allowing institutions to receive CRA credit consideration for performing these activities.’

SOURCE: CSBS, ACSSS

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