[Federal Register Volume 64, Number 243 (Monday, December 20, 1999)]
[Rules and Regulations]
[Pages 70986-70991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32635]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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