PROPOSED CRA CHANGE ENCOURAGES NEIGHBORHOOD STABILIZATION PROGRAM INVESTMENT
The federal bank and thrift regulatory agencies today announced a proposed change to the Community Reinvestment Act (CRA) regulations to encourage depository institutions to provide services and make loans and investments to support the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program (NSP). The proposal would supplement existing CRA consideration for community development activities, including neighborhood stabilization activities. 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. The agencies believe that the regulatory change would create 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 will be published in the Federal Register. The agencies will accept comments until 30 days after the notice is published.