[CPEO-BIF] Neighborhood Stabilization Program rulemaking

[Lenny Siegel <lsiegel@cpeo.org>]

Joint Release
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

NR 2010-66
June 17, 2010	

Agencies Propose to Expand Scope of Community Reinvestment Act 
Regulations to Encourage Depository Institution Support for HUD 
Neighborhood Stabilization Program Activities

WASHINGTON - The federal bank and thrift regulatory agencies today 
announced a proposed change to the Community Reinvestment Act (CRA) 
regulations to support stabilization of communities affected by high 
foreclosure levels. The proposed change specifically would encourage 
depository institutions to support the Neighborhood Stabilization 
Program (NSP) administered by the U.S. Department of Housing and Urban 
Development (HUD).

Under the NSP, HUD has provided funds to state and local governments and 
nonprofit organizations for the purchase and redevelopment of abandoned 
and foreclosed properties. The agencies' proposal would encourage 
depository institutions to make loans and investments and provide 
services to support NSP activities in areas with HUD-approved plans.

The proposal would supplement existing CRA consideration for community 
development activities, including neighborhood stabilization activities. 
For example, for NSP areas identified in HUD-approved plans, the 
agencies would provide CRA consideration for activities that benefit 
individuals with incomes of up to 120 percent of the area median and 
geographies with median incomes of up to 120 percent of the area median. 
NSP-eligible activities would receive favorable consideration under the 
new rule only if conducted within two years after the date when NSP 
program funds are required to be spent.

Allowing banking institutions to receive CRA consideration for 
NSP-eligible activities in additional NSP-targeted areas creates an 
opportunity to leverage government funding targeted to areas with high 
foreclosure and vacancy rates and also serves the purposes of the CRA.

The proposed rule is attached. Comments on the proposed rule must be 
submitted no later than 30 days from the date of its publication in the 
Federal Register, which is expected shortly.

Separately, the agencies also announced today they will hold four 
hearings to consider public comment on all aspects of the CRA 
regulations during the summer of 2010.


# # #

For the original release and link to the attachment, go to
http://www.occ.gov/ftp/release/2010-66.htm

--


Lenny Siegel
Executive Director, Center for Public Environmental Oversight
a project of the Pacific Studies Center
278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org



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