Alert October 19, 2010

Federal Banking Agencies Issue Final CRA Rule

The federal banking agencies issued a final Community Reinvestment Act rule requiring consideration of low-cost education loans and participation in ventures with women- and minority-owned financial institutions in assessing a financial institution’s CRA record. The rule implements a provision of the Higher Education Opportunity Act that amended the CRA to require the agencies to consider low-cost higher education loans to low-income borrowers as a positive factor when assessing a financial institution’s record of meeting community credit needs. The rule also incorporates a CRA statutory provision that permits the agencies to consider a nonwomen- and nonminority-owned financial institution’s ventures with women-owned and minority-owned financial institutions and low-income credit unions when assessing a financial institution’s CRA record. The rule is effective on November 3, 2010. Click here for the rule.