NCSHA Comments on Banking Regulators’ May 2022 Joint Notice of Proposed Rulemaking on CRA Regulations
On August 5, 2022, NCSHA submitted the attached comment letter to the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal Reserve on their May 2022 joint notice of proposed rulemaking amending the agencies’ Community Reinvestment Act (CRA) regulations. The letter discusses CRA’s importance in catalyzing bank financing and investments for affordable housing and other crucial community development needs, particularly Housing Credit and Housing Bonds.
NCSHA argues that any final CRA rule should:
- Encourage banks to invest in Housing Credits, Housing Bonds, and HFA mortgage-backed securities (MBS)—including MBS purchases, lending, and letters of credit.
- Maintain a separate investment test, given its proven track record in promoting investment in Housing Credit equity and other affordable housing investments.
- If there is not a separate investment test, require that a certain threshold of a bank’s community development financing activity include equity investments.
- Give equal weighting to banks’ retail lending and community development activities.
- Allow banks to receive credit for community development financing and investment activities that occur outside their assessment areas.
- Eliminate the peer-based review system to allow banks that engage in substantial CRA activity to receive fair ratings that reflect their performance.
- Include lending, community development, and investment incentives to increase racial equity, reduce racial disparities, and better serve historically underserved and discriminated-against individuals and communities.
