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Legal Authority

Public Welfare Investments

National banks may make investments that are primarily designed to promote the public welfare under the investment authority in 12 USC 24 (Eleventh) and the implementing regulation, 12 CFR 24. This authority allows banks to make investments that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a government entity for redevelopment, or if the investment would receive consideration under 12 CFR 25.23 (the Community Reinvestment Act regulation) as a "qualified investment." Examples of these investments include supporting affordable housing and other real estate development, providing equity for start-up and small business expansion, and revitalizing or stabilizing a government-designated area (see the Public Welfare Investments Fact Sheet (PDF) for details).

National banks seeking to provide financing to tax credit projects under the public welfare investment authority must either request prior OCC approval or submit an after-the-fact notice to the OCC, depending on the bank's safety and soundness profile, CRA performance, and the nature of the project financing. Federal Savings Associations may make similar public welfare investments under 12 CFR 560.36.

Federal savings associations have limited authority under 12 CFR 160.36 (De Minimus Investments) to make investments of the type permitted for national banks under 12 CFR 24.1

Federal savings associations are also authorized under 12 CFR 159 to make investments in service corporations engaged in broad range of preapproved activities, including certain community development related investments and activities that include “investments in low-income housing tax credit and new markets tax credit projects and entities authorized by statute (e.g. community development financial institutions) to promote community, inner city, and community development purposes.”

For more information, please see the Public Authority Resource Directory.

If you need additional assistance, please call the Community Affairs Department at (202) 649-6420 or contact your District Community Affairs Officer.

Community Reinvestment Act (CRA) Consideration

CRA: Community Development Loans, Investments and Services, Community Developments Fact Sheet.

 1 Investments made under 12 CFR 160.36 are limited to the greater of 1 percent of total capital or $250,000.