FAQs attempt to clarify interaction between CRA and coronavirus crisis responses

Questions, and answers, about the interaction between anti-redlining laws and the impact of the coronavirus crisis were published Tuesday by the federal regulator national banks.

In what it called “interagency frequently asked questions” (FAQs), the Office of the Comptroller of the Currency (OCC) indicated that the answers to the queries were intended to clarify a number of issues related to the pandemic and compliance with Community Reinvestment Act (CRA) rules.

Among other things, the FAQs indicate:

  • COVID-19-affected areas will be considered under major disaster declarations (including all 50 states, the District of Columbia, and certain territories) as disaster areas for CRA purposes for a period extending six months after the disaster declaration is lifted.
  • Banks will receive favorable CRA consideration for community development activities that are responsive to community needs and conducted in response to COVID-19.
  • Banks that are responsive to community development needs and opportunities in their assessment areas will receive favorable consideration for community development activities located in a broader statewide or regional area that includes the banks’ CRA assessment area(s).
  • PPP loans in amounts greater than $1 million may be considered as community development loans if they also have a primary purpose of community development as defined under the CRA.
  • When evaluating CRA performance, federal regulators will take into account the unique circumstances affecting borrowers and banks resulting from the COVID-19 emergency and will not penalize a bank for making a large volume of loans for which gross annual revenue information is not available.
  • A bank may receive CRA consideration for Main Street Lending Program (MSLP) loans that meet relevant CRA requirements. Specifically, small business loans, including MSLP loans, in amounts of $1 million or less to for-profit businesses, or to nonprofit organizations that are secured by nonfarm, nonresidential real estate, are reported and considered as small business loans under the applicable CRA retail lending test.
  • Examiners will consider bank activities that help to maintain affordable housing for low- or moderate-income individuals, including homeowners or renters, as responsive to community needs during the COVID-19 emergency. Community development under CRA includes activities that promote affordable housing, including single-family and multifamily rental housing, for low- or moderate-income individuals or families, the FAQs note.
  • Job loss or loss of income due to the COVID-19 emergency will be considered when determining whether an individual or family is considered to be low- or moderate-income (LMI).
  • Community services that are particularly responsive to the needs of low- and moderate-income individuals during the COVID-19 emergency include: childcare for low- or moderate-income essential workers; food banks; shelters or programs for individuals facing homelessness or domestic violence; alcohol or drug recovery programs; or utility assistance programs.

Interagency frequently asked questions on CRA, coronavirus response