Community Development Corporations, Community Development Projects, and Other Public Welfare Investments

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 24

[Docket No. 99-20]

RIN 1557-AB69

Community Development Corporations, Community Development

Projects, and Other Public Welfare Investments

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is

changing its regulation governing national bank investments that are

designed primarily to promote the public welfare. This final rule

simplifies the prior notice and self-certification requirements that

apply to national banks' public welfare investments; permits eligible

national banks to self-certify any public welfare investment; includes

the receipt of Federal low-income housing tax credits by the project in

which the investment is made (directly or through a fund that invests

in such projects) as an additional way of demonstrating community

support or participation for a public welfare investment; expands the

types of investments that a national bank may self-certify by removing

geographic restrictions; clarifies that the list of investments that

were authorized

[[Page 70987]]

to be made without prior approval now is illustrative of eligible

public welfare investments; revises and expands the illustrative list

of eligible public welfare investments; removes the private market

financing requirement for public welfare investments; and makes

clarifying and technical changes.

Taken together, these changes will simplify procedural requirements

and will make it easier for national banks to make public welfare

investments, consistent with the underlying statutory authority.

DATES: January 19, 2000.

FOR FURTHER INFORMATION CONTACT: Barry Wides, Director, Community

Development Division, (202) 874-4930; Michael S. Bylsma, Director,

Community and Consumer Law Division, (202) 874-5750; or Heidi M.

Thomas, Senior Attorney, Legislative and Regulatory Activities

Division, (202) 874-5090, Office of the Comptroller of the Currency,

250 E Street, SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

The Proposal

On June 10, 1999, the OCC published a notice of proposed rulemaking

(proposal) to amend 12 CFR part 24, the OCC's rule governing national

banks' investments in community development corporations (CDCs),

community development (CD) projects, and other public welfare

investments. 64 FR 31160. Part 24 implements 12 U.S.C. 24(Eleventh),

which authorizes national banks to make investments designed primarily

to promote the public welfare, including the welfare of low-and

moderate-income communities and families, subject to certain percentage

of capital limitations. (The investments authorized pursuant to 12

U.S.C. 24(Eleventh) are referred to collectively as ``public welfare

investments.'') The proposal sought to make burden-reducing changes

that would make it easier for national banks to use the public welfare

investment authority that the statute and regulation provide.

Specifically, we proposed simplifying the prior notice and self-

certification requirements that apply to national banks' public welfare

investments; expanding the types of investments a national bank may

self-certify by removing geographic restrictions; and permitting an

eligible community bank 1 to self-certify any public welfare

investment. The proposal asked whether the OCC should modify the

requirements for demonstrating community involvement in a national

bank's public welfare investments, other ways in which we could

simplify part 24 standards or streamline procedures, and about its

impact on community banks.

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\1\ Part 24 defines an ``eligible bank'' as a national bank that

is well capitalized, has a composite rating of 1 or 2 under the

Uniform Financial Institutions Rating System (the CAMELS rating),

has a Community Reinvestment Act rating of ``Outstanding'' or

``Satisfactory,'' and is not subject to a cease and desist order,

consent order, formal written agreement, or Prompt Corrective Action

directive. 12 CFR 24.2(e). The proposal defined an eligible

community bank as an eligible bank with total assets of less than

$250 million.

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Description of Comments Received and Final Rule

The OCC received 18 comments on the proposal. These comments

included: 7 from banks, bank holding companies, and related entities; 8

from community reinvestment or other public interest organizations; and

3 from banking trade associations. The majority of the commenters

supported the proposed changes. A summary of the comments and a

description of the final rule follows.

Community Benefit Information Requirement (Sec. 24.3(c))

Currently, Sec. 24.6 lists certain public welfare investments that

an eligible bank may make by submitting a self-certification letter to

the OCC within 10 working days after it makes the investment, provided

the bank's aggregate public welfare investments do not exceed 5 percent

of the bank's capital and surplus. No prior notification or approval is

required. For all other public welfare investments, a national bank

must submit an investment proposal to the OCC for prior approval.

Unless otherwise notified in writing by the OCC, the proposed

investment is deemed approved 30 calendar days from the date on which

the OCC receives the bank's investment proposal.

Regardless of which procedure applies, Sec. 24.3(c) currently

requires a national bank making a public welfare investment to

demonstrate the extent to which the investment benefits communities

otherwise served by the bank. (The requirement of Sec. 24.3(c) is

referred to herein as the community benefit information requirement.)

Section 24.5 requires the bank to provide a statement in its self-

certification letter or investment proposal certifying that it has

complied with this requirement.

In the proposal, we proposed to remove the community benefit

information requirement. Eight of the 11 commenters addressing this

amendment supported this change on the grounds that it is unnecessary,

not required by statute, and may constrict national banks from making

otherwise qualifying public welfare investments. Two commenters

objected to the change, noting that national banks should be required

to submit a description of the project to the OCC. However, these

commenters misconstrue the nature of the community benefit information

requirement, which does not require a national bank to describe its

proposal, but only to demonstrate the extent to which the investment

benefits communities otherwise served by the bank. The investing

national bank is, however, required to provide a description of the

project under Sec. 24.5(a) (if the bank is using the self-certification

procedures) or Sec. 24.5(b) (if the bank is seeking prior OCC

approval).

In addition, one commenter stated that without the community

benefit information requirement, a national bank could self-certify

investments ``of a predatory nature'' that harm communities. However,

all of the investments authorized pursuant to 12 U.S.C. 24(Eleventh)

and part 24 must, by statute, promote the public welfare. In addition,

Sec. 24.3(d) imposes a requirement that the bank demonstrate non-bank

community support for or participation in the proposed investment. A

bank is unlikely to be able to satisfy these requirements if the target

community opposes the investment. Therefore, we have concluded that the

community benefit information requirement serves no independent purpose

that contributes to our ability to ensure that an investment made

pursuant to part 24 comports with 12 U.S.C. 24(Eleventh). Accordingly,

the final rule removes the community benefit information requirement

from part 24.

We also proposed changing Sec. 24.5 to provide that a national bank

that wants the OCC to consider a specific public welfare investment

during a Community Reinvestment Act (CRA) examination may include a

simple statement to that effect (a CRA statement) in its public welfare

investment proposal or self-certification letter.2 Although,

as a matter of law, a bank's authority to make public welfare

investments pursuant to 12 U.S.C. 24(Eleventh) and part 24 is

independent of its obligation to serve the credit needs of its entire

community under the CRA, we proposed this provision because we

[[Page 70988]]

recognized that a bank may want the OCC to consider a public welfare

investment for CRA purposes.

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\2\ The OCC's approval of a public welfare investment made

pursuant to part 24 does not affect how the investment is evaluated

for CRA purposes, and an investment approved under part 24 is not

necessarily a qualified investment for purposes of CRA.

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Several commenters requested that the OCC modify this provision to

indicate that a bank may seek to have the investment qualify during a

CRA examination even if it did not make this request in its investment

proposal or self-certification letter. We agree with these commenters

that the CRA statement is not, and should not be, a prerequisite for

consideration of the investment during the CRA examination. Based on

these comments, it appears that the CRA statement provision may cause

needless confusion on this point. Therefore, we have removed the CRA

statement from the final rule. However, a national bank still may

choose to provide a CRA statement in its investment proposal or self-

certification letter, and these statements will be treated as voluntary

and not determinative of whether the OCC will consider the investment

for purposes of CRA. A national bank continues to have an affirmative

obligation to provide examiners with information about public welfare

investments that it wishes to have considered during a CRA examination.

Demonstration of Community Support (Sec. 24.3(d))

Under Sec. 24.3(d), a national bank may make investments pursuant

to part 24 if it demonstrates that it has non-bank community support

for, or participation in, the investment. Section 24.3(d) provides a

nonexclusive list of ways that a national bank may demonstrate this

support or participation.

The proposal invited comment on whether this approach is effective

in encouraging community involvement in national banks' public welfare

investments. In particular, the proposal sought comment on whether the

current non-bank community support or participation requirement is

appropriate and whether there are other ways of demonstrating support

or participation.

A number of commenters thought that the current regulatory approach

is adequate while other commenters suggested eliminating the

requirement because it is not required by statute and may constrict a

national bank's ability to make otherwise qualifying and beneficial

public welfare investments. A few commenters also recommended specific

methods for meeting the participation requirement that the OCC should

add to the list provided in Sec. 24.3(d). These included investments in

projects that receive Federal low-income housing tax credits, letters

of support, and representations by sponsors of national or regional

funds that the investment will primarily benefit activities with

community support or participation.

Based on the comments received, the final rule includes the receipt

of Federal low-income housing tax credits by the project in which the

investment is made (directly or through a fund that invests in such

projects) as an additional method of demonstrating community support or

participation for a public welfare investment. Under the United States

Tax Code, for a project to qualify for the low-income housing tax

credit, 20 percent or more of the residential units in the project must

be both rent-restricted and occupied by individuals whose income is 50

percent or less of area median gross income, or 40 percent or more of

the residential units in the project must be both rent-restricted and

occupied by individuals whose income is 60 percent or less of area

median gross income. 26 U.S.C. 42(g). Because Congress has deemed these

projects worthy of special tax treatment due to their focus on low-

income individuals and because the Federal low-income housing tax

credit program imposes an application and review process implemented by

State allocation agencies that requires public input and community

support for the affordable housing project, we believe that these

projects benefit, and are supported by, the communities in which they

are located.

In addition, we have amended the introductory paragraph of this

section to remove superfluous language.

Self-Certification of Public Welfare Investments by an Eligible Bank

(Sec. 24.5(a))

The proposal changed Sec. 24.5(a) to permit eligible community

banks (national banks with less than $250 million in assets) to self-

certify all public welfare investments, not only those investments

listed in Sec. 24.6 as eligible for self-certification. In the preamble

to the proposal, we expressed the view that this change would reduce

the regulatory burden and costs associated with the part 24 prior

approval process for eligible community banks, which operate with more

limited resources than larger institutions. This could encourage more

community banks to make public welfare investments in local CDCs and CD

projects that might not be able to attract investments from other

sources. The proposal also noted that this change is consistent with 12

U.S.C. 24(Eleventh), which does not require a national bank to receive

prior OCC approval before making a public welfare investment within the

5 percent of capital aggregate limit.

Although many of the commenters who addressed this issue supported

the expansion of the self-certification process for community banks, a

number of other commenters requested that we raise the asset size of an

eligible community bank from $250 million to $500 million or $1

billion. Still other commenters supported expanding the availability of

the self-certification process to all eligible national banks,

regardless of asset size. These commenters stated that there is no

statutory basis for distinguishing between small and large banks in the

context of public welfare investments. One commenter specifically

stated that because the nature of the investment should determine

whether it qualifies for self-certification, there is no reason to have

one set of criteria for eligible community banks, and another for

eligible large banks. In addition, these commenters noted that many of

the reasons that support expanding the self-certification process to

community banks also apply to larger banks. Specifically, the

commenters noted that: there is no statutory requirement for national

banks of any asset size to receive prior OCC approval before making a

public welfare investment within the 5 percent of capital aggregate

limit; the investment must still meet the definition of public welfare

investment set forth in the regulation; safety and soundness concerns

are not raised because only ``eligible'' banks (banks with CAMELS

ratings of 1 or 2, among other things) may utilize the self-

certification process; a bank's public welfare investments are subject

to review during the examination process; and, finally, if the OCC

finds that an investment violates the law, is inconsistent with the

safe and sound operation of the bank, or poses a risk to the deposit

insurance fund, it may require the bank to take appropriate remedial

action.

One commenter stated that the OCC should continue to require an

application process as a means of ensuring that the investing bank

provides a description of the proposed investment. However, as

previously noted, a national bank must provide a description of its

proposed investment regardless of whether it is using the part 24 self-

certification or prior approval procedure. Therefore, requiring a full

application and prior approval merely to detail a description of the

project is unnecessary. See 12 CFR 24.5(a)(3)(iii).

Based on the comment letters received, we have reconsidered the

approach to expanding the self-

[[Page 70989]]

certification process. We agree with those commenters who noted that

there is no substantive reason to limit expanding the self-

certification process to community banks. Expanding the self-

certification process to any public welfare investments made by

eligible national banks regardless of asset size would make the public

welfare investment process less burdensome and costly for all national

banks, community banks included. Community banks, and their customers

and communities, would benefit from this change to the same extent as

if we had adopted the rule as proposed. However, expanding the self-

certification process to any public welfare investment made by any

eligible bank also enables larger institutions to benefit from the

savings in cost and time that the self-certification process provides.

This, in turn, should encourage more national banks to make public

welfare investments than if the expansion of the self-certification

process were limited to community banks.

Therefore, the final rule amends Secs. 24.5 and 24.6 to permit all

eligible banks, regardless of asset size, to self-certify any public

welfare investment. As a result, the self-certification process for

eligible banks is not limited to those investments listed in Sec. 24.6.

Banks that do not meet the definition of ``eligible bank'' found in

Sec. 24.2(e), as well as banks with aggregate outstanding investments

that exceed 5 percent of capital and surplus, as provided in Sec. 24.4,

must still submit an investment proposal to the OCC for prior approval.

In addition, investments that involve properties carried on the bank's

books as ``other real estate owned'' and investments that we determine

in published guidance to be inappropriate for self-certification remain

ineligible for self-certification, as currently provided in the

regulation.

The final rule continues to list those investments currently

specified in Sec. 24.6 as eligible for self-certification, but

recategorizes them as examples of qualifying public welfare

investments. We believe that this nonexclusive list remains helpful to

national banks in describing the types of investments they may make

under part 24. Because of this change, we are also amending Sec. 24.5

to include the language formerly in Sec. 24.6(b), as amended.

The Local Community Investment Requirement for Self-Certification

(Sec. 24.6(b)(2))

Currently, Sec. 24.6(b)(2) does not permit a national bank to self-

certify an investment if, among other things, more than 25 percent of

the investment is used to fund projects that are located in a State or

metropolitan area other than the States or metropolitan areas in which

the bank maintains its main office or has branches. Under

Sec. 24.5(a)(3)(vii), if any portion of a bank's investment funds

projects outside of its local areas, the bank must include in its self-

certification letter a statement that no more than 25 percent of the

investment funds these projects.

We proposed to remove this local community investment requirement

to enable a national bank to use the less burdensome self-certification

process to make eligible public welfare investments in any area. All of

the commenters that discussed this issue supported this change. The

commenters noted that this requirement is not mandated by statute and

that the proposed change would permit national banks to use the self-

certification process for investments in national community development

investment vehicles, which often provide funds for projects located

throughout the United States. Therefore, removing this requirement

could facilitate an increase in the amount of capital available for

local community and economic development projects throughout the

country.

We therefore are adopting this change as proposed. As indicated

above, we are also moving Sec. 24.6(b) to Sec. 24.5, for clarity and to

combine similar provisions. However, for the same reasons discussed in

connection with the proposal to remove the community benefit

information requirement, we are not adopting the amendment that would

have allowed a national bank the option of including a CRA statement in

its self-certification letter.

Other Changes (Secs. 24.1, 24.3, and 24.6(a) and (b))

We also requested comment on other ways in which we could simplify

part 24 standards and procedures. The final rule contains the following

additional changes to part 24.

First, one commenter suggested that the OCC remove the provision in

Sec. 24.3 that requires a bank to demonstrate that it is not reasonably

practicable to obtain other private market financing for the proposed

investment. The commenter noted that this requirement is ambiguous and

often counterproductive in that it prevents the funding of worthwhile

public welfare projects that may receive funding from other for-profit

entities. We agree with this commenter and the final rule removes this

requirement.

Second, a number of commenters requested that the OCC make changes

to the list of investments eligible for self-certification in

Sec. 24.6. As discussed in the following two paragraphs, we have

revised Sec. 24.6 to reflect certain suggestions made by commenters.

However, as noted previously, this list now provides illustrative

examples of permissible public welfare investments rather than

investments eligible for self-certification.

Specifically, Sec. 24.6(a)(5) currently allows self-certification

for investments in projects that qualify for Federal low-income housing

tax credits provided the investment is made as a limited partner, or as

a partner in an entity that itself is a limited partner, and the

general partner of the project is, or is primarily owned and operated

by, a 26 U.S.C. 501(c)(3) or (4) non-profit corporation. One commenter

suggested that this provision should no longer require non-profit

participation because the vast majority of low-income housing tax

credit projects do not involve a non-profit entity. We agree that the

requirement for non-profit participation is not necessary to further

statutory and regulatory purposes. In addition, we believe that the

requirement that the investment be made as a limited partner is

unnecessary because Sec. 24.4(b) prohibits a national bank from making

an investment that would expose the bank to unlimited liability,

thereby preventing a national bank from investing as a general partner.

Therefore, the final rule removes both of these requirements as

unnecessary and includes this provision in amended Sec. 24.6 as another

example of an investment permissible under Part 24.

A number of commenters also suggested that the OCC change

Sec. 24.6(a) to permit national banks to self-certify investments in

community development financial institutions, as defined in 12 U.S.C.

4702(5). In general, these institutions have as a primary mission the

promotion of community development in low-income communities and other

areas of economic distress that lack adequate access to loans or equity

investments. See 12 U.S.C. 4702(5). These entities also provide

development services in conjunction with equity investments or loans,

and maintain accountability to residents of their investment areas or

target populations. Id. We agree with these commenters that investments

in these types of entities qualify as eligible public welfare

investments. Therefore, the final rule changes Sec. 24.6(a) to include

these types of investments as another example of an investment

permissible under Part 24.

In addition, the final rule adds a new paragraph to Sec. 24.1 to

clarify that if a

[[Page 70990]]

national bank wants to make loans or investments designed to promote

the public welfare and that are authorized under provisions of the

banking laws other than 12 U.S.C. 24(Eleventh), it may do so without

regard to the provisions of 12 U.S.C. 24(Eleventh) or part 24. For

example, a bank that wishes to make mortgage loans to low- and

moderate-income individuals or loans to CDCs may do so without

complying with part 24 (or becoming subject to part 24's investment

limitations), since the authority to make these loans is provided in 12

U.S.C. 371, and 12 U.S.C. 24(Seventh) and 12 U.S.C. 84, respectively.

The final rule also makes a conforming amendment to both

Secs. 24.5(a) and (b) to provide that the self-certification letter or

investment proposal should contain a description of the investment

activity described in Sec. 24.3(a) that the investment ``primarily''

supports. The addition of the word ``primarily'' to this provision

conforms these requirements to both 12 U.S.C. Sec. 24(Eleventh), which

provides that a national bank may make an investment designed primarily

to promote the public welfare, and section 24.3(a), which provides that

a national bank may make an investment that primarily benefits low- and

moderate-income individuals, low- and moderate-income areas, or other

areas targeted for redevelopment by local, state, tribal or Federal

governments.

Finally, the final rule makes a technical change to Sec. 24.6(a)(8)

to update a citation to Federal Reserve Board regulations.

Regulatory Flexibility Act Analysis

Pursuant to section 605(b) of the Regulatory Flexibility Act, the

Comptroller of the Currency certifies that this final rule will not

have a significant economic impact on a substantial number of small

entities in accord with the spirit and purposes of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.). Accordingly, a regulatory

flexibility analysis is not required. The final rule reduces regulatory

burden on national banks by simplifying the prior approval process and

simplifying and expanding the self-certification process for part 24

investments.

Paperwork Reduction Act

For purposes of compliance with the Paperwork Reduction Act of

1995, 44 U.S.C. 3501 et seq., the OCC invites comment on:

(1) Whether the collections of information contained in this final

rule are necessary for the proper performance of the OCC's functions,

including whether the information has practical utility;

(2) The accuracy of the OCC's estimate of the burden of the

information collection;

(3) Ways to enhance the quality, utility, and clarity of the

information to be collected;

(4) Ways to minimize the burden of the information collection on

respondents, including the use of automated collection techniques or

other forms of information technology; and

(5) Estimates of capital or start-up costs and costs of operation,

maintenance, and purchase of services to provide information.

Recordkeepers are not required to respond to this collection of

information unless it displays a currently valid OMB control number.

The collection of information requirements contained in this final

rule have been approved by the Office of Management and Budget in

accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

3507(d)). Comments on the collections of information should be sent to

the Office of Management and Budget, Paperwork Reduction Project 1557-

0194, Washington, D.C. 20503, with copies to Office of the Comptroller

of the Currency, Communications Division, 250 E Street, SW, Attention:

Paperwork Reduction Project 1557-0194, Washington, D.C. 20219.

The final rule is expected to reduce annual paperwork burden for

recordkeepers because it eliminates certain application and self-

certification requirements. The collection of information requirements

in this final rule are found in 12 CFR 24.5. This information is

required for the public welfare investment self-certification and prior

approval procedures. The likely respondents are national banks.

Estimated average annual burden hours per recordkeeper: 1.9.

Start-up costs: None.

Executive Order 12866 Determination

The Comptroller of the Currency has determined that this final rule

does not constitute a ``significant regulatory action'' for the

purposes of Executive Order 12866.

Unfunded Mandates Reform Act of 1995 Determinations

Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law

104-4 requires that an agency prepare a budgetary impact statement

before promulgating a rule that includes a Federal mandate that may

result in expenditure by State, local, and tribal governments, in the

aggregate, or by the private sector, of $100 million or more in any one

year. If a budgetary impact statement is required, section 205 of the

Unfunded Mandates Act also requires an agency to identify and consider

a reasonable number of regulatory alternatives before promulgating a

rule. As discussed in the preamble, this final rule is limited to the

prior notice and self-certification process for part 24 investments and

contains no mandates within the meaning of the Unfunded Mandates Act.

The OCC therefore has determined that the final rule will not result in

expenditures by State, local, or tribal governments or by the private

sector of $100 million or more. Accordingly, the OCC has not prepared a

budgetary impact statement or specifically addressed the regulatory

alternatives considered.

List of Subjects in 12 CFR Part 24

Community development, Credit, Investments, National banks,

Reporting and recordkeeping requirements.

Authority and Issuance

For the reasons stated in the preamble, the OCC amends part 24 of

Chapter I of Title 12 of the Code of Federal Regulations as set forth

below:

PART 24--COMMUNITY DEVELOPMENT CORPORATIONS, COMMUNITY DEVELOPMENT

PROJECTS, AND OTHER PUBLIC WELFARE INVESTMENTS

1. The authority citation for part 24 continues to read as follows:

Authority: 12 U.S.C. 24(Eleventh), 93a, 481 and 1818.

2. In Sec. 24.1, a new paragraph (d) is added to read as follows:

Sec. 24.1 Authority, purpose, and OMB control number.

* * * * *

(d) National banks that make loans or investments that are designed

primarily to promote the public welfare and that are authorized under

provisions of the banking laws other than 12 U.S.C. 24(Eleventh), may

do so without regard to the provisions of 12 U.S.C. 24(Eleventh) or

this part.

3. In Sec. 24.3:

A. Paragraphs (b) and (c) are removed;

B. Paragraph (d) is amended by removing the phrase ``but not

limited to'' and is redesignated as paragraph (b); and

C. Newly designated paragraph (b)(6) is revised to read as follows:

Sec. 24.3 Public welfare investments.

* * * * *

(b) * * *

[[Page 70991]]

(6) Financing for the proposed investment from the public sector or

community development organizations or the receipt of Federal low-

income housing tax credits by the project in which the investment is

made (directly or through a fund that invests in such projects).

Sec. 24.4 [Amended]

4. In Sec. 24.4, paragraph (a) is amended by adding ``pursuant to

Sec. 24.5(b)'' after the phrase ``by written approval of the bank's

proposed investment(s)''.

5. In Sec. 24.5:

A. Paragraphs (a)(1) and (a)(3)(iii) are revised;

B. Paragraph (a)(3)(v) is amended by adding the word ``and'' at the

end of the paragraph;

C. Paragraph (a)(3)(vi) is amended by removing the term ``; and''

and adding a period in its place at the end of the sentence;

D. Paragraph (a)(3)(vii) is removed;

E. A new paragraph (a)(5) is added; and

F. Paragraphs (b)(1) and (b)(2)(iii) are revised.

The revisions and addition read as follows:

Sec. 24.5 Public welfare investment self-certification and prior

approval procedures.

(a) * * *

(1) Subject to Sec. 24.4(a), an eligible bank may make an

investment without prior notification to, or approval by, the OCC if

the bank follows the self-certification procedures prescribed in this

section.

* * * * *

(3) * * *

(iii) The type of investment (equity or debt), the investment

activity listed in Sec. 24.3(a) that the investment primarily supports,

and a brief description of the particular investment;

* * * * *

(5) Notwithstanding the provisions of this section, a bank may not

self-certify an investment if:

(i) The investment involves properties carried on the bank's books

as ``other real estate owned''; or

(ii) The OCC determines, in published guidance, that the investment

is inappropriate for self-certification.

(b) * * *

(1) If a national bank does not meet the requirements for self-

certification set forth in this part, the bank must submit a proposal

for an investment to the Director, Community Development Division,

Office of the Comptroller of the Currency, Washington, DC 20219.

(2) * * *

(iii) The type of investment (equity or debt), the investment

activity listed in Sec. 24.3(a) that the investment primarily supports,

and a description of the particular investment;

* * * * *

6. In Sec. 24.6:

A. The section heading and paragraph (a) introductory text are

revised;

B. Paragraphs (a)(5) and (a)(8) are revised;

C. Paragraph (a)(9) is redesignated as paragraph (a)(10);

D. A new paragraph (a)(9) is added; and

E. Paragraph (b) is removed and reserved.

The revisions and addition read as follows:

Sec. 24.6 Examples of qualifying public welfare investments.

(a) Investments that primarily support the following types of

activities are examples of investments that meet the requirements of

Sec. 24.3(a):

* * * * *

(5) Investments in a project that qualifies for the Federal low-

income housing tax credit;

* * * * *

(8) Investments of a type approved by the Federal Reserve Board

under 12 CFR 208.22 for state member banks that are consistent with the

requirements of Sec. 24.3;

(9) Investments in a community development financial institution,

as defined in 12 U.S.C. 4702(5); and

* * * * *

Dated: December 10, 1999.

John D. Hawke, Jr.,

Comptroller of the Currency.

[FR Doc. 99-32635 Filed 12-17-99; 8:45 am]

BILLING CODE 4810-33-P