OCC Tag Archives

OCC Rescinds Trump-Era CRA Rule

The Office of the Comptroller of the Currency (OCC) announced it will propose rescinding the Community Reinvestment Act (CRA) rule issued in May 2020. This decision follows the completion of a review initiated by Acting Comptroller of the Currency Michael Hsu shortly after he took office.

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OCC Publication Focuses on Bank Investments in Opportunity Zones

The Office of the Comptroller of the Currency (OCC) published the latest edition of its Community Developments Investments newsletter, “Strengthening Communities With Opportunity Zone Investments.”

This edition of Community Developments Investments explains how banks can support distressed communities by making investments in tax-advantaged qualified opportunity funds (QOF) as part of their community development strategies. For example, the newsletter highlights transactions in which a national bank created and sponsored its own QOF. The newsletter also highlights banks that invested in QOFs sponsored by third-party intermediaries. The newsletter discusses tools that banks can use to evaluate the social and economic benefits created by QOF-financed projects in designated opportunity zones.

Earlier in 2020, the OCC published a banker-oriented fact sheet on opportunity zones. The fact sheet explains how the tax benefit operates, outlines the risks and regulatory considerations of QOF investments, and discusses how QOF investments will be considered under OCC’s recently revised Community Reinvestment Act regulations.

OCC Codifies Rules Governing National Banks’ Lending Power to Make Tax Equity Investments

A new rule from the Office of the Comptroller of the Currency (OCC), effective April 1, 2021, codifies and expands prior OCC interpretations dealing with the use of national bank lending powers to engage in tax equity financings. Tax equity financings refer to transactions in which a national bank provides equity financing to fund projects that generate tax credits or other tax benefits, and the use of an equity-based structure allows the transfer of those credits and other tax benefits to the bank. The OCC stated that the legal permissibility of a tax equity finance transaction “is agnostic as to end-user segment and underlying asset.” As such, the rule will apply to, among other investments, transactions involving tax credits pursuant to Internal Revenue Code Sections 45 (production tax credit for renewable energy), 45Q (carbon capture and sequestration), 47 (historic preservation), and 48 (investment tax credit for renewable energy), and other types of tax benefits may also apply. The rule can also apply to Section 42 (low-income housing), although these investments are more likely to be made under the authority of the OCC’s community development regulations.

The final rule expressly supports national bank tax equity investments involving utility-scale renewable power-generation facilities, as well as solar financings involving residential installations and solar financings involving non-utility commercial offtakers. A full analysis from Nixon Peabody is available here.

Updates on CRA Reform: Senate Votes Down CRA Disapproval Bill, Fed’s Proposal Published in Federal Register

On Monday, the Senate voted down a motion to consider the House-passed resolution of disapproval (H.J. Res. 90) to nullify the Office of the Comptroller of the Currency’s new rule on Community Reinvestment Act (CRA). The Federal Reserve’s advanced notice of proposed rulemaking was officially published in the Federal Register. Comments are due by February 16, 2021; NH&RA will submit comments and encourages our members to do so as well.

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Federal Reserve Advances CRA Reform

The Board of Governors of the Federal Reserve System (Federal Reserve) unanimously approved the Advance Notice of Proposed Rulemaking (ANPR) on Community Reinvestment Act (CRA) reform. The ANPR uses a data-driven approach and solicits feedback in several areas. Comments are due 120 days after official publication in the Federal Register. NH&RA is still reviewing the ANPR with plans to submit comments and encourages our members to do so as well.

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