Related Organizations

Types of Investments

A bank may make public welfare investments by purchasing an interest in a community and economic development entity (CEDE) or by investing directly in a community development project.^[7]

A CEDE is an entity that makes investments or conducts activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a governmental entity for redevelopment. An entity that makes qualifying investments under the CRA regulation is also deemed a CEDE. The following is a partial list of the types of entities that may be CEDEs:

National bank community development corporation subsidiaries.
Private or nonbank community development corporations.
CDFI Fund-certified community development financial institutions (CDFIs) or community development entities.
Limited liability companies or limited partnerships.
Community development loan funds or lending consortia.
Community development real estate investment trusts.
Business development companies.
Community development closed-end mutual funds.
Nondiversified closed-end investment companies.
Community development venture or equity capital funds.

A community development project (CD project) is a project whose investment meets the public welfare requirements of 12 CFR 24.

12 CFR 24 allows national banks’ public welfare investments in a variety of structures as described in the definition of a "community and economic development entity," under 12 CFR 24.3(c), and in the definition of a "community development project," under 12 CFR 24.3(d).

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