An interim final rule to support a Treasury program making capital investments in minority depository institutions (MDIs) and community development financial institutions (CDFIs) is slated to publish in the Federal Register and to go into effect Monday.
The interim final rule – published jointly by the Federal Deposit Insurance Corp. (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) – will revise the agencies’ capital rules to provide that Treasury’s investments under the Emergency Capital Investment Program (ECIP) qualify as regulatory capital of insured depository institutions and holding companies. Treasury has noted that the aim of the ECIP is to support access to capital in communities “traditionally excluded from the financial system and that have struggled the most during the COVID-19 crisis.”
The agencies noted that under the program, Treasury will purchase preferred stock or subordinated debt from qualifying MDIs and CDFIs with corresponding dividends or interest rates to be based on institutions meeting lending targets.
The interim final rule will be out for a 60-day comment period ending about May 21.