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HTCC Letter Requests 50% Risk-Weighted Rule for HTC Investments

Friday, January 26, 2024 - 11:44AM

The Historic Tax Credit Coalition (HTCC) issued a letter earlier this month asking the Office of the Comptroller of Currency (OCC), the Federal Reserve Board of Governors (Fed), and the Federal Deposit Insurance Corporation (FDIC) to change its proposed risk-weighting rule for historic tax credit (HTC) investments by banks to 50%. The letter responds to proposed bank capital requirements for large banks, including their equity investments, under Basel III proposed regulations, which would align U.S. bank capital requirements with the international regulatory framework for capital adequacy, stress testing and liquidity requirements. The letter asks for proposed regulations to treat the HTC in a manner consistent with the low-income housing tax credit (LIHTC) and new markets tax credit (NMTC). Under the proposed rule, HTC investments that are not treated as community development investments under part 24 (Eleventh) of the National Bank Act would be risk-weighted at 400%.

The Novogradac Introduction to Historic Tax Credits booklet provides an introduction to the basics of the HTC incentive.

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