OCC Issues Final Rule Relaxing Standard for Bank Public Welfare Investments
By Caitlin Jones & A. J. Johnson
1 min read
The federal Office of the Comptroller of the Currency (OCC) has issued an interim final rule reinstating a prior, more liberal standard for certain permitted investments by national banks.
Published 8/11/08 in the Federal Register for immediate effect, with public comments due by 9/10/08, the rule implements an amendment in Section 2503 of the new Housing and Economic Recovery Act of 2008.
Federal law permits national banks to make investments, directly or indirectly, designed primarily to promote the public welfare. A 2006 act narrowed the standard to require each public welfare investment to primarily benefit low- and moderate-income communities or families (such as by providing housing, services, or jobs). The 2008 Act repeals this tighter requirement to reinstate the pre-2006 version of the standard. Under this, reinstated standard, national banks may make investments directly or indirectly, each of which is designed to primarily promote the public welfare, “including the welfare of low- and moderate-income communities or families (such as by providing housing, services or jobs).”
The OCC in the rule’s preamble says the change will permit national banks to make a broader range of public welfare investments.
