Community Reinvestment Act Regulations, 31209-31217 [E9-15204]
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Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules
will not be required before parties may
file suit in court challenging this rule.
National Environmental Policy Act
To provide the public with
documentation of APHIS’ review and
analysis of any potential environmental
impacts associated with the proposed
amendments to the regulations
providing for the interstate movement of
regulated fruit from areas quarantined
for citrus canker, we have prepared an
environmental assessment. The
environmental assessment was prepared
in accordance with: (1) The National
Environmental Policy Act of 1969
(NEPA), as amended (42 U.S.C. 4321 et
seq.), (2) regulations of the Council on
Environmental Quality for
implementing the procedural provisions
of NEPA (40 CFR parts 1500–1508), (3)
USDA regulations implementing NEPA
(7 CFR part 1b), and (4) APHIS’ NEPA
Implementing Procedures (7 CFR part
372).
The environmental assessment may
be viewed on the Regulations.gov Web
site or in our reading room. (A link to
Regulations.gov and information on the
location and hours of the reading room
are provided under the heading
ADDRESSES at the beginning of this
proposed rule.) In addition, copies may
be obtained by calling or writing to the
individual listed under FOR FURTHER
INFORMATION CONTACT.
Paperwork Reduction Act
This proposed rule contains no new
information collection or recordkeeping
requirements under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
List of Subjects in 7 CFR Part 301
Agricultural commodities, Plant
diseases and pests, Quarantine,
Reporting and recordkeeping
requirements, Transportation.
Accordingly, we propose to amend 7
CFR part 301 as follows:
PART 301—DOMESTIC QUARANTINE
NOTICES
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1. The authority citation for part 301
continues to read as follows:
Authority: 7 U.S.C. 7701–7772 and 7781–
7786; 7 CFR 2.22, 2.80, and 371.3.
Section 301.75–15 issued under Sec. 204,
Title II, Public Law 106–113, 113 Stat.
1501A–293; sections 301.75–15 and 301.75–
16 issued under Sec. 203, Title II, Public Law
106–224, 114 Stat. 400 (7 U.S.C. 1421 note).
2. In § 301.75–1, the definition of
commercial packinghouse is revised to
read as follows:
§ 301.75–1
Definitions.
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§ 301.75–4
[Amended]
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Done in Washington, DC, this 26th day of
June 2009.
Cindy Smith,
Acting Deputy Under Secretary for Marketing
and Regulatory Programs.
[FR Doc. E9–15508 Filed 6–29–09; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
3. Section 301.75–4 is amended as
follows:
a. In paragraph (d)(2)(ii)(D), by
removing the first sentence.
b. By removing paragraph (d)(6).
4. Section 301.75–7 is revised to read
as follows:
12 CFR Part 25
§ 301.75–7 Interstate movement of
regulated fruit from a quarantined area.
[Docket No. R–1360]
(a) Regulated fruit produced in a
quarantined area or moved into a
quarantined area for packing may be
moved interstate with a certificate
issued and attached in accordance with
§ 301.75–12 if all of the following
conditions are met:
(1) The regulated fruit was packed in
a commercial packinghouse whose
owner or operator has entered into a
compliance agreement with APHIS in
accordance with § 301.75–13.
(2) The regulated fruit was treated in
accordance with § 301.75–11(a).
(3) The regulated fruit is free of
leaves, twigs, and other plant parts,
except for stems that are less than 1 inch
long and attached to the fruit.
(4) If the fruit is repackaged after
being packed in a commercial
packinghouse and before it is moved
interstate from the quarantined area, the
person that repackages the fruit must
enter into a compliance agreement with
APHIS in accordance with § 301.75–13
and issue and attach a certificate for the
interstate movement of the fruit in
accordance with § 301.75–12.
(b) Regulated fruit that is not eligible
for movement under paragraph (a) of
this section may be moved interstate
only for immediate export. The
regulated fruit must be accompanied by
a limited permit issued in accordance
with § 301.75–12 and must be moved in
a container sealed by APHIS directly to
the port of export in accordance with
the conditions of the limited permit.
(Approved by the Office of Management and
Budget under control number 0579–0325)
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19:49 Jun 29, 2009
Commercial packinghouse. An
establishment in which space and
equipment are maintained for the
primary purpose of disinfecting and
packing citrus fruit for commercial sale.
A commercial packinghouse must also
be licensed, registered, or certified with
the State in which it operates and meet
all the requirements for the license,
registration, or certification that it holds.
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31209
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[Docket ID OCC–2009–0010]
RIN 1557–AD24
FEDERAL RESERVE SYSTEM
12 CFR Part 228
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 345
[RIN 3064–AD45]
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563e
[Docket ID OTS–2009–0010]
RIN 1550–AC35]
Community Reinvestment Act
Regulations
AGENCY: Office of the Comptroller of the
Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); Office of
Thrift Supervision, Treasury (OTS).
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The OCC, the Board, the
FDIC, and the OTS (collectively, ‘‘the
Agencies’’) are issuing this notice of
proposed rulemaking that would revise
our rules implementing the Community
Reinvestment Act (CRA). The proposed
rule would incorporate into our rules
recently adopted statutory language that
requires the Agencies, when assessing
an institution’s record of meeting
community credit needs, to consider, as
a factor, low-cost education loans
provided by the financial institution to
low-income borrowers. The proposal
also would incorporate into our rules
statutory language that allows the
Agencies, when assessing an
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Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules
institution’s record, to consider as a
factor capital investment, loan
participation, and other ventures
undertaken by nonminority-owned and
nonwomen-owned financial institutions
in cooperation with minority- and
women-owned financial institutions
and low-income credit unions.
DATES: Comments must be received by:
July 30, 2009.
ADDRESSES: Comments should be
directed to:
OCC: Because paper mail in the
Washington, DC area and at the
Agencies is subject to delay,
commenters are encouraged to submit
comments by the Federal eRulemaking
Portal or e-mail, if possible. Please use
the title ‘‘Community Reinvestment Act
Regulation’’ to facilitate the organization
and distribution of the comments. You
may submit comments by any of the
following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to https://
www.regulations.gov, under the ‘‘More
Search Options’’ tab click next to the
‘‘Advanced Docket Search’’ option
where indicated, select ‘‘Comptroller of
the Currency’’ from the agency dropdown menu, then click ‘‘Submit.’’ In the
‘‘Docket ID’’ column, select ‘‘OCC–
2009–0010’’ to submit or view public
comments and to view supporting and
related materials for this joint notice of
proposed rulemaking. The ‘‘How to Use
This Site’’ link on the Regulations.gov
home page provides information on
using Regulations.gov, including
instructions for submitting or viewing
public comments, viewing other
supporting and related materials, and
viewing the docket after the close of the
comment period.
• E-mail:
regs.comments@occ.treas.gov.
• Mail: Office of the Comptroller of
the Currency, 250 E Street, SW., Mail
Stop 2–3, Washington, DC 20219.
• Fax: (202) 874–5274.
• Hand Delivery/Courier: 250 E
Street, SW., Mail Stop 2–3, Washington,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
Number OCC–2009–0010’’ in your
comment. In general, OCC will enter all
comments received into the docket and
publish them on the Regulations.gov
Web site without change, including any
business or personal information that
you provide such as name and address
information, e-mail addresses, or phone
numbers. Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
enclose any information in your
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19:49 Jun 29, 2009
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comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
joint notice of proposed rulemaking by
any of the following methods:
• Viewing Comments Electronically:
Go to https://www.regulations.gov, under
the ‘‘More Search Options’’ tab click
next to the ‘‘Advanced Document
Search’’ option where indicated, select
‘‘Comptroller of the Currency’’ from the
agency drop-down menu, then click
‘‘Submit.’’ In the ‘‘Docket ID’’ column,
select ‘‘OCC–2009–0010’’ to view public
comments for this rulemaking action.
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC, 250 E Street,
SW., Washington, DC. For security
reasons, the OCC requires that visitors
make an appointment to inspect
comments. You may do so by calling
(202) 874–4700. Upon arrival, visitors
will be required to present valid
government-issued photo identification
and submit to security screening in
order to inspect and photocopy
comments.
• Docket: You may also view or
request available background
documents and project summaries using
the methods described above.
Board: You may submit comments,
identified by Docket No. R–1360, by any
of the following methods:
• Agency Web Site: https://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• Fax: 202/452–3819 or 202/452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at https://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper in Room MP–500 of the Board’s
Martin Building (20th and C Streets,
NW.) between 9 a.m. and 5 p.m. on
weekdays.
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FDIC: You may submit comments,
identified by RIN number 3064–AD45
by any of the following methods:
• Agency Web Site: https://
www.fdic.gov/regulations/laws/federal/
propose.html. Follow instructions for
submitting comments on the Agency
Web site.
• E-mail: Comments@FDIC.gov.
Include the RIN number in the subject
line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
Instructions: All submissions received
must include the agency name and RIN
number. All comments received will be
posted without change to https://
www.fdic.gov/regulations/laws/federal/
propose.html, including any personal
information provided.
OTS: You may submit comments
identified by OTS–2009–0010, by any of
the following methods:
• Federal eRulemaking Portal‘‘Regulations.gov’’: Go to https://
www.regulations.gov, under the ‘‘more
Search Options’’ tab click next to the
‘‘Advanced Docket Search’’ option
where indicated, select ‘‘Office of Thrift
Supervision’’ from the agency dropdown menu, then click ‘‘Submit.’’ In the
‘‘Docket ID’’ column, select ‘‘OTS–
2009–0010’’ to submit or view public
comments and to view supporting and
related materials for this proposed rule.
The ‘‘How to Use This Site’’ link on the
Regulations.gov home page provides
information on using Regulations.gov,
including instructions for submitting or
viewing public comments, viewing
other supporting and related materials,
and viewing the docket after the close
of the comment period.
• Mail: Regulation Comments, Chief
Counsel’s Office, Office of Thrift
Supervision, 1700 G Street, NW.,
Washington, DC 20552, Attention: OTS–
2009–0010.
• Fax: (202) 906–6518.
• Hand Delivery/Courier: Guard’s
Desk, East Lobby Entrance, 1700 G
Street, NW., from 9 a.m. to 4 p.m. on
business days, Attention: Regulation
Comments, Chief Counsel’s Office,
Attention: OTS–2009–0010.
• Instructions: All submissions
received must include the agency name
and docket number for this rulemaking.
All comments received will be entered
into the docket and posted on
Regulations.gov without change,
including any personal information
provided. Comments including
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attachments and other supporting
materials received are part of the public
record and subject to public disclosure.
Do not enclose any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
• Viewing Comments Electronically:
Go to https://www.regulations.gov, under
the More Search Options’’ tab click next
to the ‘‘Advanced Document Search’’
option where indicated, select ‘‘Office of
Thrift Supervision’’ from the agency
drop-down menu, then click ‘‘Submit.’’
In the ‘‘Docket ID’’ column, select
‘‘OTS–2009–0010’’ to view public
comments for this rulemaking action.
• Viewing Comments On-Site: You
may inspect comments at the Public
Reading Room, 1700 G Street, NW., by
appointment. To make an appointment
for access, call (202) 906–5922, send an
e-mail to public.info@ots.treas.gov, or
send a facsimile transmission to (202)
906–5618. (Prior notice identifying the
materials you will be requesting will
assist us in serving you.) We schedule
appointments on business days between
10 a.m. and 4 p.m. In most cases,
appointments will be available the next
business day following the date we
receive a request.
FOR FURTHER INFORMATION CONTACT:
OCC: Margaret Hesse, Special
Counsel, Community and Consumer
Law Division, (202) 874–5750; or Karen
Tucker, National Bank Examiner,
Compliance Policy, (202) 874–4428,
Office of the Comptroller of the
Currency, 250 E Street, SW.,
Washington, DC 20219.
Board: Rebecca Lassman, Supervisory
Consumer Financial Services Analyst,
(202) 452–2080; or Brent Lattin, Senior
Attorney, (202) 452–3667, Division of
Consumer and Community Affairs,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
FDIC: Deirdre Foley, Senior Policy
Analyst, Division of Supervision and
Consumer Protection, Compliance
Policy Branch, (202) 898–6612; or Susan
van den Toorn, Counsel, Legal Division,
(202) 898–8707, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
OTS: Stephanie Caputo, Senior
Compliance Program Analyst, Consumer
Regulations Section, (202) 906–6549; or
Richard Bennett, Senior Compliance
Counsel, Regulations and Legislation
Division, (202) 906–7409, Office of
Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
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Background
The Community Reinvestment Act
(CRA) requires the federal banking and
thrift regulatory agencies to assess the
record of each insured depository
institution (hereinafter, ‘‘institution’’) in
meeting the credit needs of its entire
community, including low- and
moderate-income neighborhoods,
consistent with the safe and sound
operation of the institution, and to take
that record into account when the
agency evaluates an application by the
institution for a deposit facility.1 The
Agencies have promulgated
substantially similar regulations to
implement the requirements of the
CRA.2
Discussion of the Proposal on Low-Cost
Education Loans
Under the existing CRA regulations,
education loans are evaluated as
consumer loans.3 An institution’s
consumer lending must be evaluated if
consumer lending makes up a
substantial majority of an institution’s
business. Institutions that do not meet
this criterion may choose to have
consumer loans evaluated when the
institution’s CRA record is being
examined. Institutions must collect and
maintain data about consumer loans if
they choose to have those loans
evaluated.4 Like other consumer loans,
institutions’ education loans are
generally evaluated by total number and
amount; borrower characteristics (i.e.,
distribution among borrowers of
different income levels); geographic
distribution (i.e., distribution among
borrowers in geographies with different
income levels and whether the loans are
made to borrowers in the institution’s
assessment areas); and, for large retail
institutions, whether the education loan
program is innovative or flexible in
addressing the credit needs of low- or
moderate-income individuals or
geographies.5
Section 1031 of the Higher Education
Opportunity Act, Public Law 110–315,
122 Stat. 3078 (August 14, 2008) (the
‘‘HEOA’’), revised the CRA to require
1 12
U.S.C. 2903.
12 CFR parts 25 (OCC), 228 (Board), 345
(FDIC), and 563e (OTS).
3 ‘‘Consumer loan’’ is defined in the CRA
regulations as a loan to one or more individuals for
household, family, or other personal expenditures.
Consumer loans include the following categories of
loans: motor vehicle loans, credit card loans, home
equity loans, other secured consumer loans, and
other unsecured consumer loans. 12 CFR 25.12(j),
228.12(j), 345.12(j), and 563e.12(j).
4 See 12 CFR 25.22(a)(1) and 25.42(c); 12 CFR
228.22(a)(1) and 228.42(c); 12 CFR 345.12(a)(1) and
345.42(c); and 12 CFR 563e.22(a)(1) and 563e.42(c).
5 See, e.g., 12 CFR 25.22 and 25.26; 228.22 and
228.26, 345.22 and 345.26, and 563e.22 and 563.26.
2 See
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the Agencies, when evaluating an
institution’s record of meeting
community credit needs, to consider, as
a factor, low-cost education loans
provided by the institution to lowincome borrowers. 12 U.S.C. 2903(d).
The revisions being proposed today
would implement this statutory
provision.
The Agencies are proposing to define
‘‘low-cost education loans’’ to mean (1)
education loans originated by an
institution through a U.S. Department of
Education loan program or (2) any
private education loan as defined in the
Truth in Lending Act, including loans
under a State or local education loan
program, originated by an institution for
a student at an ‘‘institution of higher
education,’’ with interest rates and fees
no greater than those of comparable
education loans offered through loan
programs of the U.S. Department of
Education.
Under the first prong of the definition,
loans that institutions make through a
Department of Education loan program
would be considered ‘‘low-cost
education loans.’’ Institutions currently
make those loans through the Federal
Family Education Loan (FFEL) Program.
However, since Department of
Education loan programs may change
over time, the proposed definition does
not specifically refer to any particular
program by name.6
Under the second prong of the
definition, ‘‘private education loans’’
that institutions make would be
considered ‘‘low-cost education loans,’’
provided that the interest rates and fees
are no greater than those of comparable
education loans offered through loan
programs of the U.S. Department of
Education. The proposal would adopt
the terms ‘‘private education loan,’’
‘‘private educational lender,’’ and
‘‘postsecondary educational expenses,’’
each of which is defined in the HEOA
for purposes of the Truth in Lending
Act. Section 1011 of the HEOA added
section 140 of the Truth in Lending Act
to provide the following definition:
[T]he term ‘‘private education loan’’—
(A) Means a loan provided by a
private educational lender that—
(i) Is not made, insured, or guaranteed
under title IV of the Higher Education
Act of 1965 (20 U.S.C. 1070 et seq.); and
(ii) Is issued expressly for
postsecondary educational expenses to a
6 The Agencies note that other Department of
Education loan programs currently exist, such as
the William D. Ford Direct Loan Program and the
Federal Perkins Loan Program, in which loans are
made directly by the Department of Education or a
school rather than by a financial institution. As
these programs do not involve lending by an
institution, they are not relevant to the evaluation
of CRA performance.
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borrower, regardless of whether the loan
is provided through the educational
institution that the subject student
attends or directly to the borrower from
the private educational lender; and
(B) Does not include an extension of
credit under an open end consumer
credit plan, a reverse mortgage
transaction, a residential mortgage
transaction, or any other loan that is
secured by real property or a dwelling.7
In turn, HEOA defines a ‘‘private
educational lender’’ to include, among
others, any financial institution that
solicits, makes, or extends private
education loans.8
Although section 1031 of the HEOA is
not expressly limited to loans for higher
education, the Agencies have included
this limitation in the definition of lowcost education loans. The proposal,
thus, would provide for consideration of
low-cost education loans to attend
‘‘institutions of higher education,’’
including accredited colleges,
universities, and vocational schools, as
discussed more fully below. The new
statutory requirement to consider
education loans was adopted as a part
of the HEOA, which specifically
addresses higher education reform. The
HEOA defines ‘‘postsecondary
educational expenses’’ to mean any of
the expenses that are included as part of
the cost of attendance of a student, as
defined under section 472 of the Higher
Education Act of 1965 (20 U.S.C.
1087ll). That definition includes tuition
and fees, books, supplies, miscellaneous
personal expenses, room and board, and
an allowance for any loan fee,
origination fee, or insurance premium
charged to a student or parent for a loan
incurred to cover the cost of the
student’s attendance.9
The Agencies are proposing to define
‘‘low-cost education loan’’ consistent
with HEOA. The purpose of H.R. 4137,
which introduced the incentive of CRA
consideration for low-cost education
loans, as stated in H.R. Report No. 500,
was ‘‘to make college more affordable
and accessible;’’ to ‘‘expand college
access and support for low-income and
minority students;’’ and to provide
incentives for lenders to provide ‘‘lowcost private student loans to lowincome borrowers.’’ 10 Although the
HEOA does not define ‘‘private student
loan,’’ it does define the similar term,
7 Section 140(a)(7) of the Truth in Lending Act,
as added by section 1011 of the HEOA.
8 Section 140(a)(6)(A) of the Truth in Lending
Act, as added by section 1011 of the HEOA.
9 See 20 U.S.C. 1087ll (definition of ‘‘cost of
attendance’’).
10 H.R. Rep. No. 110–500 at 203, 297 (2007)
(emphasis added).
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19:49 Jun 29, 2009
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‘‘private education loan,’’ as discussed
above.
Further, the HEOA defines the term
‘‘education loan’’ in other contexts. In
Section 120 of the HEOA, ‘‘education
loan’’ is defined as any loan made,
insured, or guaranteed under the FFEL
Program, any loan made under the
William D. Ford Direct Loan Program, or
a private education loan.11 As discussed
above, institutions’ FFEL loans would
be covered by the first prong of the
definition, while private education
loans would be covered by the second
prong of the definition.12
The second prong of the definition
would encompass any ‘‘institution of
higher education’’ as that term is
generally defined in sections 101 and
102 of the Higher Education Act of 1965
(HEA), 20 U.S.C. 1001 and 1002. Such
institutions generally include accredited
public or non-profit colleges and
vocational schools, accredited private
colleges and vocational schools, and
certain foreign institutions offering
postsecondary education that are
comparable to institutions of higher
education in the United States based on
standards approved by the U.S.
Department of Education. The Agencies
are not proposing to cover unaccredited
colleges, universities, or vocational
schools because we lack sufficient
information regarding these institutions,
but are soliciting comment on this issue.
The term ‘‘low-income’’ will have the
same meaning as that term is defined in
the existing CRA rule with respect to
individuals.13 Consequently, it will
mean an individual income that is less
than 50 percent of the area median
income. If an institution considers the
income of more than one person in
connection with an education loan, the
gross annual incomes of all primary
obligors on the loan, including coborrowers and co-signers, would be
combined to determine whether the
borrowers are ‘‘low-income.’’ 14
Consistent with the statutory focus on
the community in which an institution
is chartered to do business and the
regulatory emphasis on an institution’s
activities in its assessment area(s), the
Agencies have clarified in the proposed
11 Section 120 of Public Law 110–315, 122 Stat.
3118 (Aug. 14, 2008). Sections 432 and 493 use the
same definition.
12 As noted above, the William D. Ford Direct
Loan Program is a direct loan program where the
loans are made by the Department of Education
rather than a financial institution. Thus, this loan
program is not relevant for purposes of CRA
consideration for an institution.
13 12 CFR 25.12(m)(1), 228.12(m)(1), 345.12(m)(1),
and 563e.12(m)(1).
14 See ‘‘Interagency Questions and Answers
Regarding Community Reinvestment,’’ 74 FR 498,
533 (Jan. 6, 2009) (Q&A § __.42(c)(1)(iv)–4).
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revision that low-cost education loans
will be considered as a factor if they are
made to low-income borrowers in an
institution’s assessment area(s). This
clarification also appears consistent
with the legislative history of the Act,
which indicates that the Agencies are to
consider ‘‘low-cost education loans
provided by a financial institution to
low-income borrowers in assessing and
taking into account the record of a
financial institution in meeting the
credit needs of its local community.’’ 15
The Agencies propose to add the new
provision addressing favorable CRA
consideration for low-cost education
loans to low-income borrowers to
sections 25.21, 228.21, 345.21, and
563e.21 of title 12 of the Code of Federal
Regulations. These sections are entitled,
‘‘Performance tests, standards, and
ratings, in general.’’ They apply to all
types and sizes of institutions, without
regard to the performance test under
which an institution is evaluated. The
new provision also is applicable to all
institutions.
The Agencies also are proposing a
conforming amendment to Appendix A
of the regulations to include
consideration of low-cost education
loans to low-income borrowers as a
factor when assigning a rating to a
financial institution.
Description of the Proposal on Activities
Undertaken in Cooperation With
Minority- and Women-Owned Financial
Institutions and Low-Income Credit
Unions
When the Agencies assess and take
into account the community
reinvestment record of a nonminorityor nonwomen-owned financial
institution, the CRA allows the Agencies
to consider as a factor capital
investment, loan participation, and
other ventures undertaken by the
institution in cooperation with
minority- and women-owned financial
institutions and low-income credit
unions, provided that these activities
help meet the credit needs of local
communities in which such institutions
and credit unions are chartered.16 The
Agencies propose to incorporate this
statutory language into their regulations
and to clarify, consistent with the
statutory language, that, in order to
receive favorable CRA consideration,
such activities need not also benefit the
assessment area(s) or the broader
statewide or regional area that includes
the assessment area(s) of the
nonminority- and nonwomen-owned
15 H. Rep. No. 110–500, at 366 (2007) (emphasis
added).
16 12 U.S.C. 2903(b).
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institution. Activities undertaken to
assist minority- and women-owned
financial institutions and low-income
credit unions will be considered as part
of the overall assessment of the
nonminority- and nonwomen-owned
institution’s CRA performance.
This proposed revision to the rule
would reinforce to examiners, financial
institutions, and the public that the
Agencies may consider and take into
account nonminority- and nonwomenowned financial institutions’ activities
in connection with minority- and
women-owned financial institutions
and low-income credit unions. The
Agencies note their recent revisions to
the ‘‘Interagency Questions and
Answers Regarding Community
Reinvestment’’ that clarify this point.17
The proposed rule is intended to codify
this clarification in the rule.
The Agencies propose to add the new
provision addressing favorable CRA
consideration for activities in
cooperation with minority- and womenowned financial institutions and lowincome credit unions to §§ 25.21,
228.21, 345.21, and 563e.21 of title 12
of the Code of Federal Regulations. As
discussed above, these sections apply to
all types and sizes of institutions,
without regard to the performance test
under which an institution is evaluated.
The new provision also is applicable to
all financial institutions.
The Agencies also are proposing a
conforming amendment to Appendix A
of the regulations to include
consideration of a financial institution’s
activities in cooperation with minorityand women-owned financial
institutions as a factor when assigning a
rating to the institution.
Request for Comments
sroberts on PROD1PC70 with PROPOSALS
General Request for Comments
The Agencies request comments on
the proposed revisions. Smaller
financial institutions are invited to
comment on whether the proposed
regulations should be modified to
address any implementation issues
unique to their lines of business or to
provide additional flexibility.
Request for Comments on ‘‘Education
Loans’’
The new statutory provision specifies
that the Agencies must consider lowcost ‘‘education loans’’ to low-income
borrowers. The Agencies specifically
request comment on how to define
‘‘education loans.’’
• As proposed, the definition
includes only loans for post-secondary
17 74
education (i.e., education at a level
beyond high school). As explained
above, section 1031 of the HEOA is not
expressly limited to loans for higher
education. Should the definition also
extend to loans for elementary or
secondary education?
• Should the definition include loans
made for education expenses at an
‘‘institution of higher education’’ as that
term is generally defined in sections 101
and 102 of the Higher Education Act of
1965 (‘‘HEA’’), 20 U.S.C. 1001 and 1002,
which would include accredited public
and private colleges and universities,
whether for-profit or nonprofit, as well
as accredited vocational institutions that
prepare students for gainful
employment in a recognized occupation
and certain institutions outside the
United States? Should the scope be
expanded or narrowed?
• Should the scope of the definition
be expanded to include loans made for
education expenses at any ‘‘covered
educational institution’’ as that term is
defined in section 140 of the Truth in
Lending Act, 15 U.S.C. 1650, which
would also encompass unaccredited
institutions, consistent with the Board’s
proposed approach to defining that term
for purposes of Regulation Z? 18 Are
there reasons that weigh against
including loans to attend unaccredited
institutions?
• Should the scope of the definition
be narrowed to encompass only loans
made for education expenses at an
‘‘institution of higher education’’ as that
term is defined for general purposes in
section 101 of the HEA, 20 U.S.C. 1001,
which is limited to accredited public
and nonprofit colleges, universities, and
employment training schools in the
United States for high school graduates
or the equivalent, and public or
nonprofit educational institutions in the
United States that admit students
beyond the age of compulsory school
attendance, even if they are not high
school graduates or the equivalent?
• ‘‘Private education loans,’’ as
defined in section 140(a)(7) of the Truth
in Lending Act, would include
education loans made by financial
institutions under local and State
education loan programs. Should all
education loans offered to low-income
borrowers under State or local
education programs, regardless of
whether the fees and costs are
comparable to those under Department
of Education programs, be eligible for
CRA consideration? Should private
loans not made, insured, or guaranteed
under a Federal, State, or local
FR 498, 507 (Jan. 6, 2009) (Q&A § __.12(g)–
18 See
4).
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education program be considered for
CRA purposes?
• ‘‘Private education loans,’’ as
defined in section 140(a)(7) of the Truth
in Lending Act, include only closedend, unsecured loans. That means, for
example, that if a borrower obtained a
home equity loan for a student’s
education, it would not be considered a
private education loan. Is it appropriate
to limit CRA consideration to only
closed-end, unsecured private education
loans? Why or why not?
• The Agencies request comment on
whether our proposal to limit education
loans to those originated by the
institution, rather than purchased by the
lender, is appropriate. Why or why not?
Request for Comments on ‘‘Low-Cost’’
Loans.
The statutory provision requires the
Agencies to consider institutions’ ‘‘lowcost’’ education loans to low-income
borrowers, but does not define ‘‘lowcost.’’ Guaranteed education loans
provided by financial institutions
through the U.S. Department of
Education’s Federal Family Education
Loan Program (FFEL Loans) are subject
to maximum interest rates, which are
calculated using statutory formulas.
These rates are the same as rates
charged to borrowers under the William
D. Ford Direct Loan Program. Currently,
the interest rate in effect for
unsubsidized fixed-rate loans under the
FFEL Stafford loan program or the
William D. Ford Direct Loan program,
which are made to undergraduate and
graduate students, is 6.8 percent. The
current interest rate for FFEL Plus loans,
which are made to parents of dependent
undergraduate students and to graduate
or professional degree students, is 8.5
percent.
Although variable-rate loans are no
longer available under the Department
of Education programs, the Department
of Education publishes rates annually
for those variable rate student loans that
remain outstanding. The rate effective
July 1, 2008 through June 30, 2009, for
variable-rate loans in repayment is 4.21
percent under both the FFEL Stafford
loan program and the William D. Ford
Direct Loan program. Fees that may be
charged by lenders on FFEL Stafford
and Plus loans are also comparable to
fees charged on loans made directly by
the U.S. Department of Education. The
loan fee/origination fee on a Direct
Stafford loan is 2.5 percent of the loan
amount; the loan fee/origination fee on
a Direct Plus loan is 4 percent.
The Agencies are proposing to define
‘‘low-cost education loans’’ as education
loans that are originated by financial
institutions through a program of the
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U.S. Department of Education or any
private education loans, including loans
under State or local education loan
programs, originated by financial
institutions with interest rates and fees
no greater than those of comparable
education loan programs offered by the
U.S. Department of Education. The
Agencies note that currently the rates
and fees allowed under the FFEL
Stafford loan program and the FFEL
Plus loan program would typically be
used to evaluate whether an
institution’s education loan is low cost.
• Is the Agencies’ definition of the
term ‘‘low-cost education loans’’
appropriate? If not, how should the
Agencies define low-cost education
loans?
• How should the Agencies
determine whether a private education
loan (including a loan made by an
institution under a State or local
education loan program) is
‘‘comparable’’ to a Department of
Education loan?
• Should the Agencies use the lowest
or highest rate and fees available under
the comparable Department of
Education program?
Request for Comments on ‘‘Low-Income
Borrower’’
The CRA regulations currently define
‘‘low-income’’ to mean an individual
income that is less than 50 percent of
the area median income. The Agencies
propose to use that definition to define
‘‘low-income borrower.’’
However, various education programs
offered by the U.S. Department of
Education are targeted to individuals
who have financial needs; and the
criteria for the programs vary. Most
relevant, for example, are the Federal
Student Aid programs available to
students seeking assistance for
education programs beyond high school.
Most Federal Student Aid programs,
other than unsubsidized programs
available through financial institutions,
including unsubsidized Stafford and
FFEL Plus loans, consider ‘‘financial
need.’’ Financial need is determined by
dividing the cost of attendance at the
school by the expected family
contribution (EFC). The EFC is
calculated according to a formula that
considers family taxable and untaxed
income, assets and benefits, e.g.,
unemployment, family size, and the
number of family members who will be
attending college. Another example of a
Department of Education program that
considers income is the TRIO program,
which encompasses the Upward Bound,
Talent Search, and Student Support
Services programs. The TRIO program is
targeted to ‘‘low-income individuals,’’
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meaning an individual whose family’s
taxable income for the preceding year
did not exceed 150 percent of the
poverty level amount.
• The proposed rule provides that the
term, ‘‘low-income,’’ will have the same
meaning as that term is defined in the
existing CRA rule with respect to
individuals. Consistent with current
guidance, if an institution considers the
income of more than one person in
connection with an education loan, the
gross annual incomes of all primary
obligors on the loan, including coborrowers and co-signers, would be
combined to determine whether the
borrowers are ‘‘low-income.’’ Should
the Agencies consider defining ‘‘lowincome’’ for purposes of this proposed
provision differently than the term is
already defined in the CRA regulation?
If so, why and how? Specifically, how
should the Agencies treat the income of
a student’s family or other expected
family contributions to ensure that the
CRA consideration provided is
consistent with HEOA’s focus on lowincome borrowers?
Request for Comments Regarding Other
Education Loan Issues
As proposed, institutions would
receive favorable qualitative
consideration for originating ‘‘low-cost
education loans to low-income
borrowers’’ as a factor in the
institutions’ overall CRA rating. Such
loans would be considered responsive
to the credit needs of the institutions’
communities.
• As discussed above, under the
current CRA regulations, institutions
may choose to have education loans
evaluated as consumer loans under the
lending test applicable to the
institution. If an institution opts to have
education loans evaluated, the loans
would be evaluated quantitatively,
based on the data the institution
provides. Should the agencies also
allow an institution to receive separate
quantitative consideration for the
number and amount of low-cost
education loans to low-income
borrowers as part of its CRA evaluation
under the performance test applicable to
that institution, without regard to other
consumer loans?
Education loans, including those that
do not qualify for consideration as ‘‘lowcost education loans for low-income
borrowers’’ (e.g., purchased education
loans, loans that are not low-cost, and
loans that are not made to low-income
borrowers) would continue to be eligible
for consideration as consumer loans, at
an institution’s option, under existing
CRA rules.
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As discussed above, the Agencies
propose to insert the revision regarding
low-cost education loans to low-income
borrowers into 12 CFR 25.21, 228.21,
345.21, and 563e.21, which apply to all
institutions, regardless of the
performance test under which an
institution is evaluated.
• Is it readily understandable to
institutions and other interested parties
that the provision is applicable to all
institutions through that placement in
the regulation?
Request for Comments on the Proposed
Inclusion in the CRA Regulations of the
Statutory Language Regarding Activities
Undertaken in Cooperation With
Minority- and Women-Owned Financial
Institutions and Low-Income Credit
Unions
The agencies request general
comment on the proposal to include in
their CRA regulations the statutory
language that allows the agencies to
consider as a factor in a nonminority- or
nonwomen-owned financial
institution’s CRA evaluation capital
investments, loan participations, and
other ventures undertaken in
cooperation with minority- and womenowned financial institutions and lowincome credit unions, consistent with
prior agency guidance.19
In addition, as discussed above, the
Agencies propose to insert the revision
regarding institutions’ activities in
cooperation with minority- and womenowned institutions and low-income
credit unions into 12 CFR 25.21, 228.21,
345.21, and 563e.21, which apply to all
institutions, regardless of which
performance test under which an
institution is evaluated.
• Is it readily understandable to
institutions and other interested parties
that the provision is applicable to all
institutions through that placement?
Request for Comments Regarding the
Use of ‘‘Plain Language’’
Section 722 of the Gramm-LeachBliley Act, Public Law 106–102, sec.
722, 133 Stat. 1338, 1471 (Nov. 12,
1999), requires the Agencies to use plain
language in all proposed and final rules
published after January 1, 2000.
Therefore, the Agencies specifically
invite your comments on how to make
this proposal easier to understand. For
example,
• Have we organized the material to
suit your needs? If not, how could this
material be better organized?
• Are the requirements in the
proposed regulations clearly stated? If
19 Interagency Questions and Answers Regarding
Community Reinvestment, 74 FR 498, 507 (Jan. 6,
2009).
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31215
not, how could the regulations be more
clearly stated?
• Do the proposed regulations contain
language or jargon that is not clear? If
so, which language requires
clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulations
easier to understand? If so, what
changes to the format would make them
easier to understand?
• What else could we do to make the
regulations easier to understand?
minority- and women-owned financial
institutions and low-income credit
unions. However, the joint proposal
would not impose new requirements on
small entities because the CRA
performance test for small entities (as
defined above) does not specify that
small institutions must engage in any
particular types of lending, just that
they will be evaluated on the types of
lending in which they choose to engage.
Accordingly, a regulatory flexibility
analysis is not required.
OCC and OTS Executive Order 13132
Determination
The OCC and the OTS have each
determined that its portion of this joint
proposed rule does not have any
Federalism implications, as required by
Executive Order 13132.
Regulatory Analysis
OCC and OTS Executive Order 12866
Determination
12 CFR Part 228
Banks, Banking, Community
development, Credit, Investments,
Reporting and recordkeeping
requirements.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. Ch.
3506; 5 CFR 1320 Appendix A.1), each
agency reviewed its proposed rule and
determined that there are no new
collections of information contained
therein. However, the amendments may
have a negligible effect on burden
estimates for existing information
collections, including recordkeeping
requirements for consumer loans.
sroberts on PROD1PC70 with PROPOSALS
Regulatory Flexibility Act
Under section 605(b) of the
Regulatory Flexibility Act (RFA), 5
U.S.C. 605(b), the initial regulatory
flexibility analysis otherwise required
under section 603 of the RFA is not
required if an agency certifies, along
with a statement providing the factual
basis for such certification, that the
proposed rule will not have a significant
economic impact on a substantial
number of small entities. The Small
Business Administration (SBA) has
defined ‘‘small entities’’ for banking
purposes as a bank or savings
association with $165 million or less in
assets. See 13 CFR 121.201. Each agency
has reviewed the impact of this joint
proposed rule on the small entities
subject to its regulation and supervision
and certifies that the proposal will not
have a significant economic impact on
a substantial number of the small
entities that it regulates and supervises.
The proposal would incorporate into
the CRA regulations statutory language
that requires the Agencies to consider as
a factor in evaluating an institution’s
CRA performance low-cost education
loans provided by the financial
institution to low-income borrowers.
The proposal also would incorporate
into the CRA regulations existing
statutory language that allows the
agencies to consider as a factor in
evaluating CRA performance certain
activities of nonminority- and
nonwomen-owned financial institutions
entered into in cooperation with
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The OCC and the OTS have each
determined that its portion of this joint
proposed rule is not a significant
regulatory action as defined in
Executive Order 12866.
OCC and OTS Unfunded Mandates
Reform Act of 1995 Determination
Section 202 of the Unfunded
Mandates Reform Act of 1995
(Unfunded Mandates Act) (2 U.S.C.
1532) requires that covered agencies
prepare a budgetary impact statement
before promulgating a rule that includes
any Federal mandate that may result in
the expenditure by State, local, and
tribal governments, in the aggregate, or
by the private sector, of $100 million or
more in any one year. If a budgetary
impact statement is required, section
205 of the Unfunded Mandates Act also
requires covered agencies to identify
and consider a reasonable number of
regulatory alternatives before
promulgating a rule. The OCC and the
OTS have determined that this joint
proposed rule will not result in
expenditures by State, local, and tribal
governments, or by the private sector, of
$100 million or more in any one year.
Accordingly, neither agency has
prepared a budgetary impact statement
or specifically addressed the regulatory
alternatives considered.
The Treasury and General Government
Appropriations Act, 1999—Assessment
of Impact of Federal Regulation on
Families
The FDIC has determined that this
joint proposed rule will not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act,
enacted as part of the Omnibus
Consolidated and Emergency
Supplemental Appropriations Act of
1999, Public Law 105–277 (5 U.S.C. 601
note).
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List of Subjects
12 CFR Part 25
Community development, Credit,
Investments, National banks, Reporting
and recordkeeping requirements.
12 CFR Part 345
Banks, Banking, Community
development, Credit, Investments,
Reporting and recordkeeping
requirements.
12 CFR Part 563e
Community development, Credit,
Investments, Reporting and
recordkeeping requirements, Savings
associations.
Department of the Treasury
Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons discussed in the joint
preamble, the Office of the Comptroller
of the Currency proposes to amend part
25 of chapter I of title 12 of the Code
of Federal Regulations as follows:
PART 25—COMMUNITY
REINVESTMENT ACT AND
INTERSTATE DEPOSIT PRODUCTION
REGULATIONS
1. The authority citation for part 25 is
revised to read as follows:
Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36,
93a, 161, 215, 215a, 481, 1814, 1816, 1828(c),
1835a, 2901 through 2908, and 3101 through
3111.
2. In § 25.21, add new paragraphs (e)
and (f) to read as follows:
§ 25.21 Performance tests, standards, and
ratings, in general.
*
*
*
*
*
(e) Low-cost education loans provided
to low-income borrowers. In assessing
and taking into account the record of a
bank under this part, the OCC considers,
as a factor, low-cost education loans
provided by the bank to borrowers in its
assessment area(s) who have an
individual income that is less than 50
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percent of the area median income. For
purposes of this paragraph, ‘‘low-cost
education loans’’ means:
(1) Education loans originated by the
bank through a loan program of the U.S.
Department of Education; or
(2) Any other private education loan,
as defined in section 140(a)(7) of the
Truth in Lending Act (including a loan
under a state or local education loan
program), originated by the bank for a
student at an ‘‘institution of higher
education,’’ as that term is generally
defined in sections 101 and 102 of the
Higher Education Act of 1965 (20 U.S.C.
1001 and 1002) and the implementing
regulations published by the
Department of Education, with interest
rates and fees no greater than those of
comparable education loans offered
through loan programs of the U.S.
Department of Education.
(f) Activities in cooperation with
minority- or women-owned financial
institutions and low-income credit
unions. In assessing and taking into
account the record of a nonminorityowned and nonwomen-owned bank
under this part, the OCC considers as a
factor capital investment, loan
participation, and other ventures
undertaken by the bank in cooperation
with minority- and women-owned
financial institutions and low-income
credit unions, provided that such
activities help meet the credit needs of
local communities in which the
minority- and women-owned financial
institutions and low-income credit
unions are chartered. To be considered,
such activities need not also benefit the
bank’s assessment area(s) or the broader
statewide or regional area that includes
the bank’s assessment area(s).
3. In Appendix A to Part 25,
paragraph (a)(1) is revised to read as
follows:
Appendix A to Part 25—Ratings
(a) * * * (1) In assigning a rating, the OCC
evaluates a bank’s performance under the
applicable performance criteria in this part,
in accordance with §§ 25.21 and 25.28. This
includes consideration of low-cost education
loans provided to low-income borrowers and
activities in cooperation with minority- or
women-owned financial institutions and
low-income credit unions, as well as
adjustments on the basis of evidence of
discriminatory or other illegal credit
practices.
sroberts on PROD1PC70 with PROPOSALS
*
*
*
*
*
Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the joint
preamble, the Board of Governors of the
Federal Reserve System proposes to
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amend part 228 of chapter II of title 12
of the Code of Federal Regulations as
follows:
3. In Appendix A to Part 228,
paragraph (a)(1) is revised to read as
follows:
PART 228—COMMUNITY
REINVESTMENT (REGULATION BB)
Appendix A to Part 228—Ratings
1. The authority citation for part 228
is revised to read as follows:
Authority: 12 U.S.C. 321, 325, 1828(c),
1842, 1843, 1844, and 2901 through 2908.
2. In § 228.21, add new paragraphs (e)
and (f) to read as follows:
§ 228.21 Performance tests, standards,
and ratings, in general.
*
*
*
*
*
(e) Low-cost education loans provided
to low-income borrowers. In assessing
and taking into account the record of a
bank under this part, the Board
considers, as a factor, low-cost
education loans provided by the bank to
borrowers in its assessment area(s) who
have an individual income that is less
than 50 percent of the area median
income. For purposes of this paragraph,
‘‘low-cost education loans’’ means:
(1) Education loans originated by the
bank through a loan program of the U.S.
Department of Education; or
(2) Any other private education loan,
as defined in section 140(a)(7) of the
Truth in Lending Act (including a loan
under a State or local education loan
program), originated by the bank for a
student at an ‘‘institution of higher
education,’’ as that term is generally
defined in sections 101 and 102 of the
Higher Education Act of 1965 (20 U.S.C.
1001 and 1002) and the implementing
regulations published by the
Department of Education, with interest
rates and fees no greater than those of
comparable education loans offered
through loan programs of the U.S.
Department of Education.
(f) Activities in cooperation with
minority- or women-owned financial
institutions and low-income credit
unions. In assessing and taking into
account the record of a nonminorityowned and nonwomen-owned bank
under this part, the Board considers as
a factor capital investment, loan
participation, and other ventures
undertaken by the bank in cooperation
with minority- and women-owned
financial institutions and low-income
credit unions, provided that such
activities help meet the credit needs of
local communities in which the
minority- and women-owned financial
institutions and low-income credit
unions are chartered. To be considered,
such activities need not also benefit the
bank’s assessment area(s) or the broader
statewide or regional area that includes
the bank’s assessment area(s).
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(a) * * * (1) In assigning a rating, the
Board evaluates a bank’s performance under
the applicable performance criteria in this
part, in accordance with §§ 228.21 and
228.28. This includes consideration of lowcost education loans provided to low-income
borrowers and activities in cooperation with
minority- or women-owned financial
institutions and low-income credit unions, as
well as adjustments on the basis of evidence
of discriminatory or other illegal credit
practices.
*
*
*
*
*
Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint
preamble, the Board of Directors of the
Federal Deposit Insurance Corporation
proposes to amend part 345 of chapter
III of title 12 of the Code of Federal
Regulations as follows:
PART 345—COMMUNITY
REINVESTMENT
1. The authority citation for part 345
is revised to read as follows:
Authority: 12 U.S.C. 1814–1817, 1819–
1920, 1828, 1831u and 2901–2908, 3103–
3104, and 3108(a).
2. In § 345.21, add new paragraphs (e)
and (f) to read as follows:
§ 345.21 Performance tests, standards,
and ratings, in general.
*
*
*
*
*
(e) Low-cost education loans provided
to low-income borrowers. In assessing
and taking into account the record of a
bank under this part, the FDIC
considers, as a factor, low-cost
education loans provided by the bank to
borrowers in its assessment area(s) who
have an individual income that is less
than 50 percent of the area median
income. For purposes of this paragraph,
‘‘low-cost education loans’’ means:
(1) Education loans originated by the
bank through a loan program of the U.S.
Department of Education; or
(2) Any other private education loan,
as defined in section 140(a)(7) of the
Truth in Lending Act (including a loan
under a State or local education loan
program), originated by the bank for a
student at an ‘‘institution of higher
education,’’ as that term is generally
defined in sections 101 and 102 of the
Higher Education Act of 1965 (20 U.S.C.
1001 and 1002) and the implementing
regulations published by the
Department of Education, with interest
E:\FR\FM\30JNP1.SGM
30JNP1
31217
Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules
rates and fees no greater than those of
comparable education loans offered
through loan programs of the U.S.
Department of Education.
(f) Activities in cooperation with
minority- or women-owned financial
institutions and low-income credit
unions. In assessing and taking into
account the record of a nonminorityowned and nonwomen-owned bank
under this part, the FDIC considers as a
factor capital investment, loan
participation, and other ventures
undertaken by the bank in cooperation
with minority- and women-owned
financial institutions and low-income
credit unions, provided that such
activities help meet the credit needs of
local communities in which the
minority- and women-owned financial
institutions and low-income credit
unions are chartered. To be considered,
such activities need not also benefit the
bank’s assessment area(s) or the broader
statewide or regional area that includes
the bank’s assessment area(s).
3. In Appendix A to Part 345,
paragraph (a)(1) is revised to read as
follows:
Appendix A to Part 345—Ratings
(a) * * * (1) In assigning a rating, the FDIC
evaluates a bank’s performance under the
applicable performance criteria in this part,
in accordance with §§ 345.21 and 345.28.
This includes consideration of low-cost
education loans provided to low-income
borrowers and activities in cooperation with
minority- or women-owned financial
institutions and low-income credit unions, as
well as adjustments on the basis of evidence
of discriminatory or other illegal credit
practices.
*
*
*
*
*
Office of Thrift Supervision
12 CFR Chapter V
For the reasons set forth in the joint
preamble, the Office of Thrift
Supervision proposes to amend part
563e of chapter V of title 12 of the Code
of Federal Regulations as follows:
PART 563e—COMMUNITY
REINVESTMENT
1. The authority citation for part 563e
is revised to read as follows:
Authority: 12 U.S.C. 1462a, 1463, 1464,
1467a, 1814, 1816, 1828(c), and 2901 through
2908.
sroberts on PROD1PC70 with PROPOSALS
2. In § 563e.21, add new paragraphs
(e) and (f) to read as follows:
§ 563e.21 Performance tests, standards,
and ratings, in general.
*
*
*
*
*
(e) Low-cost education loans provided
to low-income borrowers. In assessing
and taking into account the record of a
VerDate Nov<24>2008
19:49 Jun 29, 2009
Jkt 217001
savings association under this part, the
OTS considers, as a factor, low-cost
education loans provided by the savings
association to borrowers in its
assessment area(s) who have an
individual income that is less than 50
percent of the area median income. For
purposes of this paragraph, ‘‘low-cost
education loans’’ means:
(1) Education loans originated by the
savings association through a loan
program of the U.S. Department of
Education; or
(2) Any other private education loan,
as defined in section 140(a)(7) of the
Truth in Lending Act (including a loan
under a State or local education loan
program), originated by the savings
association for a student at an
‘‘institution of higher education,’’ as
that term is generally defined in
sections 101 and 102 of the Higher
Education Act of 1965 (20 U.S.C. 1001
and 1002) and the implementing
regulations published by the
Department of Education, with interest
rates and fees no greater than those of
comparable education loans offered
through loan programs of the U.S.
Department of Education
(f) Activities in cooperation with
minority- or women-owned financial
institutions and low-income credit
unions. In assessing and taking into
account the record of a nonminorityowned and nonwomen-owned savings
association under this part, the OTS
considers as a factor capital investment,
loan participation, and other ventures
undertaken by the savings association in
cooperation with minority- and womenowned financial institutions and lowincome credit unions, provided that
such activities help meet the credit
needs of local communities in which
the minority- and women-owned
financial institutions and low-income
credit unions are chartered. To be
considered, such activities need not also
benefit the savings association’s
assessment area(s) or the broader
statewide or regional area that includes
the savings association’s assessment
area(s).
3. In Appendix A to part 563e,
paragraph (a)(1) is revised to read as
follows:
Appendix A to Part 563e—Ratings
(a) * * * (1) In assigning a rating, the OTS
evaluates a savings association’s performance
under the applicable performance criteria in
this part, in accordance with §§ 563e.21 and
563e.28. This includes consideration of lowcost education loans provided to low-income
borrowers and activities in cooperation with
minority- or women-owned financial
institutions and low-income credit unions, as
well as adjustments on the basis of evidence
PO 00000
Frm 00017
Fmt 4702
Sfmt 4702
of discriminatory or other illegal credit
practices.
*
*
*
*
*
Dated: June 19, 2009.
John C. Dugan,
Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System, June 23, 2009.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 23rd day of
June 2009.
Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
Dated: June 17, 2009.
By the Office of Thrift Supervision.
John E. Bowman,
Acting Director.
[FR Doc. E9–15204 Filed 6–29–09; 8:45 am]
BILLING CODE 4810–33–P, 6210–01–P, 6714–01–P,
6720–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 370
RIN 3064–AD37
Notice of Proposed Rulemaking
Regarding Possible Amendment of the
Temporary Liquidity Guarantee
Program To Extend the Transaction
Account Guarantee Program With
Modified Fee Structure
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
SUMMARY: The FDIC is issuing this
Notice of Proposed Rulemaking to
present and request comment on two
alternatives for phasing out the
Transaction Account Guarantee (TAG)
component of the Temporary Liquidity
Guarantee Program (TLGP). Under the
first proposed alternative, the FDIC’s
guarantee of deposits held in qualifying
noninterest-bearing transaction accounts
subject to the TAG program would
continue until December 31, 2009.
There would be no modification of the
existing fee structure or any other
change in the FDIC’s guarantee of
noninterest-bearing transaction
accounts, as provided for in the current
regulation.
Under the second proposed
alternative, the TAG program would be
extended for six months until June 30,
2010. Insured depository institutions
(IDIs) that are currently participating in
the TAG program would be provided a
single opportunity to opt out of the
extended TAG program. IDIs that opt
E:\FR\FM\30JNP1.SGM
30JNP1
]]>Agencies
[Federal Register Volume 74, Number 124 (Tuesday, June 30, 2009)]
[Proposed Rules]
[Pages 31209-31217]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15204]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 25
[Docket ID OCC-2009-0010]
RIN 1557-AD24
FEDERAL RESERVE SYSTEM
12 CFR Part 228
[Docket No. R-1360]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 345
[RIN 3064-AD45]
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563e
[Docket ID OTS-2009-0010]
RIN 1550-AC35]
Community Reinvestment Act Regulations
AGENCY: Office of the Comptroller of the Currency, Treasury (OCC);
Board of Governors of the Federal Reserve System (Board); Federal
Deposit Insurance Corporation (FDIC); Office of Thrift Supervision,
Treasury (OTS).
ACTION: Joint notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The OCC, the Board, the FDIC, and the OTS (collectively, ``the
Agencies'') are issuing this notice of proposed rulemaking that would
revise our rules implementing the Community Reinvestment Act (CRA). The
proposed rule would incorporate into our rules recently adopted
statutory language that requires the Agencies, when assessing an
institution's record of meeting community credit needs, to consider, as
a factor, low-cost education loans provided by the financial
institution to low-income borrowers. The proposal also would
incorporate into our rules statutory language that allows the Agencies,
when assessing an
[[Page 31210]]
institution's record, to consider as a factor capital investment, loan
participation, and other ventures undertaken by nonminority-owned and
nonwomen-owned financial institutions in cooperation with minority- and
women-owned financial institutions and low-income credit unions.
DATES: Comments must be received by: July 30, 2009.
ADDRESSES: Comments should be directed to:
OCC: Because paper mail in the Washington, DC area and at the
Agencies is subject to delay, commenters are encouraged to submit
comments by the Federal eRulemaking Portal or e-mail, if possible.
Please use the title ``Community Reinvestment Act Regulation'' to
facilitate the organization and distribution of the comments. You may
submit comments by any of the following methods:
Federal eRulemaking Portal--``Regulations.gov'': Go to
https://www.regulations.gov, under the ``More Search Options'' tab click
next to the ``Advanced Docket Search'' option where indicated, select
``Comptroller of the Currency'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OCC-2009-0010''
to submit or view public comments and to view supporting and related
materials for this joint notice of proposed rulemaking. The ``How to
Use This Site'' link on the Regulations.gov home page provides
information on using Regulations.gov, including instructions for
submitting or viewing public comments, viewing other supporting and
related materials, and viewing the docket after the close of the
comment period.
E-mail: regs.comments@occ.treas.gov.
Mail: Office of the Comptroller of the Currency, 250 E
Street, SW., Mail Stop 2-3, Washington, DC 20219.
Fax: (202) 874-5274.
Hand Delivery/Courier: 250 E Street, SW., Mail Stop 2-3,
Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket Number OCC-2009-0010'' in your comment. In general, OCC will
enter all comments received into the docket and publish them on the
Regulations.gov Web site without change, including any business or
personal information that you provide such as name and address
information, e-mail addresses, or phone numbers. Comments received,
including attachments and other supporting materials, are part of the
public record and subject to public disclosure. Do not enclose any
information in your comment or supporting materials that you consider
confidential or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this joint notice of proposed rulemaking by any of the following
methods:
Viewing Comments Electronically: Go to https://www.regulations.gov, under the ``More Search Options'' tab click next
to the ``Advanced Document Search'' option where indicated, select
``Comptroller of the Currency'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OCC-2009-0010''
to view public comments for this rulemaking action.
Viewing Comments Personally: You may personally inspect
and photocopy comments at the OCC, 250 E Street, SW., Washington, DC.
For security reasons, the OCC requires that visitors make an
appointment to inspect comments. You may do so by calling (202) 874-
4700. Upon arrival, visitors will be required to present valid
government-issued photo identification and submit to security screening
in order to inspect and photocopy comments.
Docket: You may also view or request available background
documents and project summaries using the methods described above.
Board: You may submit comments, identified by Docket No. R-1360, by
any of the following methods:
Agency Web Site: https://www.federalreserve.gov. Follow the
instructions for submitting comments at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: regs.comments@federalreserve.gov. Include docket
number in the subject line of the message.
Fax: 202/452-3819 or 202/452-3102.
Mail: Jennifer J. Johnson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue,
NW., Washington, DC 20551.
All public comments are available from the Board's Web site at
https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical reasons. Accordingly, your
comments will not be edited to remove any identifying or contact
information. Public comments may also be viewed electronically or in
paper in Room MP-500 of the Board's Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.
FDIC: You may submit comments, identified by RIN number 3064-AD45
by any of the following methods:
Agency Web Site: https://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on
the Agency Web site.
E-mail: Comments@FDIC.gov. Include the RIN number in the
subject line of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429.
Hand Delivery/Courier: Guard station at the rear of the
550 17th Street Building (located on F Street) on business days between
7 a.m. and 5 p.m.
Instructions: All submissions received must include the agency name
and RIN number. All comments received will be posted without change to
https://www.fdic.gov/regulations/laws/federal/propose.html, including
any personal information provided.
OTS: You may submit comments identified by OTS-2009-0010, by any of
the following methods:
Federal eRulemaking Portal-``Regulations.gov'': Go to
https://www.regulations.gov, under the ``more Search Options'' tab click
next to the ``Advanced Docket Search'' option where indicated, select
``Office of Thrift Supervision'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OTS-2009-0010''
to submit or view public comments and to view supporting and related
materials for this proposed rule. The ``How to Use This Site'' link on
the Regulations.gov home page provides information on using
Regulations.gov, including instructions for submitting or viewing
public comments, viewing other supporting and related materials, and
viewing the docket after the close of the comment period.
Mail: Regulation Comments, Chief Counsel's Office, Office
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552,
Attention: OTS-2009-0010.
Fax: (202) 906-6518.
Hand Delivery/Courier: Guard's Desk, East Lobby Entrance,
1700 G Street, NW., from 9 a.m. to 4 p.m. on business days, Attention:
Regulation Comments, Chief Counsel's Office, Attention: OTS-2009-0010.
Instructions: All submissions received must include the
agency name and docket number for this rulemaking. All comments
received will be entered into the docket and posted on Regulations.gov
without change, including any personal information provided. Comments
including
[[Page 31211]]
attachments and other supporting materials received are part of the
public record and subject to public disclosure. Do not enclose any
information in your comment or supporting materials that you consider
confidential or inappropriate for public disclosure.
Viewing Comments Electronically: Go to https://www.regulations.gov, under the More Search Options'' tab click next to
the ``Advanced Document Search'' option where indicated, select
``Office of Thrift Supervision'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OTS-2009-0010''
to view public comments for this rulemaking action.
Viewing Comments On-Site: You may inspect comments at the
Public Reading Room, 1700 G Street, NW., by appointment. To make an
appointment for access, call (202) 906-5922, send an e-mail to
public.info@ots.treas.gov">public.info@ots.treas.gov, or send a facsimile transmission to (202)
906-5618. (Prior notice identifying the materials you will be
requesting will assist us in serving you.) We schedule appointments on
business days between 10 a.m. and 4 p.m. In most cases, appointments
will be available the next business day following the date we receive a
request.
FOR FURTHER INFORMATION CONTACT:
OCC: Margaret Hesse, Special Counsel, Community and Consumer Law
Division, (202) 874-5750; or Karen Tucker, National Bank Examiner,
Compliance Policy, (202) 874-4428, Office of the Comptroller of the
Currency, 250 E Street, SW., Washington, DC 20219.
Board: Rebecca Lassman, Supervisory Consumer Financial Services
Analyst, (202) 452-2080; or Brent Lattin, Senior Attorney, (202) 452-
3667, Division of Consumer and Community Affairs, Board of Governors of
the Federal Reserve System, 20th Street and Constitution Avenue, NW.,
Washington, DC 20551.
FDIC: Deirdre Foley, Senior Policy Analyst, Division of Supervision
and Consumer Protection, Compliance Policy Branch, (202) 898-6612; or
Susan van den Toorn, Counsel, Legal Division, (202) 898-8707, Federal
Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC
20429.
OTS: Stephanie Caputo, Senior Compliance Program Analyst, Consumer
Regulations Section, (202) 906-6549; or Richard Bennett, Senior
Compliance Counsel, Regulations and Legislation Division, (202) 906-
7409, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC
20552.
SUPPLEMENTARY INFORMATION:
Background
The Community Reinvestment Act (CRA) requires the federal banking
and thrift regulatory agencies to assess the record of each insured
depository institution (hereinafter, ``institution'') in meeting the
credit needs of its entire community, including low- and moderate-
income neighborhoods, consistent with the safe and sound operation of
the institution, and to take that record into account when the agency
evaluates an application by the institution for a deposit facility.\1\
The Agencies have promulgated substantially similar regulations to
implement the requirements of the CRA.\2\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 2903.
\2\ See 12 CFR parts 25 (OCC), 228 (Board), 345 (FDIC), and 563e
(OTS).
---------------------------------------------------------------------------
Discussion of the Proposal on Low-Cost Education Loans
Under the existing CRA regulations, education loans are evaluated
as consumer loans.\3\ An institution's consumer lending must be
evaluated if consumer lending makes up a substantial majority of an
institution's business. Institutions that do not meet this criterion
may choose to have consumer loans evaluated when the institution's CRA
record is being examined. Institutions must collect and maintain data
about consumer loans if they choose to have those loans evaluated.\4\
Like other consumer loans, institutions' education loans are generally
evaluated by total number and amount; borrower characteristics (i.e.,
distribution among borrowers of different income levels); geographic
distribution (i.e., distribution among borrowers in geographies with
different income levels and whether the loans are made to borrowers in
the institution's assessment areas); and, for large retail
institutions, whether the education loan program is innovative or
flexible in addressing the credit needs of low- or moderate-income
individuals or geographies.\5\
---------------------------------------------------------------------------
\3\ ``Consumer loan'' is defined in the CRA regulations as a
loan to one or more individuals for household, family, or other
personal expenditures. Consumer loans include the following
categories of loans: motor vehicle loans, credit card loans, home
equity loans, other secured consumer loans, and other unsecured
consumer loans. 12 CFR 25.12(j), 228.12(j), 345.12(j), and
563e.12(j).
\4\ See 12 CFR 25.22(a)(1) and 25.42(c); 12 CFR 228.22(a)(1) and
228.42(c); 12 CFR 345.12(a)(1) and 345.42(c); and 12 CFR
563e.22(a)(1) and 563e.42(c).
\5\ See, e.g., 12 CFR 25.22 and 25.26; 228.22 and 228.26, 345.22
and 345.26, and 563e.22 and 563.26.
---------------------------------------------------------------------------
Section 1031 of the Higher Education Opportunity Act, Public Law
110-315, 122 Stat. 3078 (August 14, 2008) (the ``HEOA''), revised the
CRA to require the Agencies, when evaluating an institution's record of
meeting community credit needs, to consider, as a factor, low-cost
education loans provided by the institution to low-income borrowers. 12
U.S.C. 2903(d). The revisions being proposed today would implement this
statutory provision.
The Agencies are proposing to define ``low-cost education loans''
to mean (1) education loans originated by an institution through a U.S.
Department of Education loan program or (2) any private education loan
as defined in the Truth in Lending Act, including loans under a State
or local education loan program, originated by an institution for a
student at an ``institution of higher education,'' with interest rates
and fees no greater than those of comparable education loans offered
through loan programs of the U.S. Department of Education.
Under the first prong of the definition, loans that institutions
make through a Department of Education loan program would be considered
``low-cost education loans.'' Institutions currently make those loans
through the Federal Family Education Loan (FFEL) Program. However,
since Department of Education loan programs may change over time, the
proposed definition does not specifically refer to any particular
program by name.\6\
---------------------------------------------------------------------------
\6\ The Agencies note that other Department of Education loan
programs currently exist, such as the William D. Ford Direct Loan
Program and the Federal Perkins Loan Program, in which loans are
made directly by the Department of Education or a school rather than
by a financial institution. As these programs do not involve lending
by an institution, they are not relevant to the evaluation of CRA
performance.
---------------------------------------------------------------------------
Under the second prong of the definition, ``private education
loans'' that institutions make would be considered ``low-cost education
loans,'' provided that the interest rates and fees are no greater than
those of comparable education loans offered through loan programs of
the U.S. Department of Education. The proposal would adopt the terms
``private education loan,'' ``private educational lender,'' and
``postsecondary educational expenses,'' each of which is defined in the
HEOA for purposes of the Truth in Lending Act. Section 1011 of the HEOA
added section 140 of the Truth in Lending Act to provide the following
definition:
[T]he term ``private education loan''--
(A) Means a loan provided by a private educational lender that--
(i) Is not made, insured, or guaranteed under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); and
(ii) Is issued expressly for postsecondary educational expenses to
a
[[Page 31212]]
borrower, regardless of whether the loan is provided through the
educational institution that the subject student attends or directly to
the borrower from the private educational lender; and
(B) Does not include an extension of credit under an open end
consumer credit plan, a reverse mortgage transaction, a residential
mortgage transaction, or any other loan that is secured by real
property or a dwelling.\7\
---------------------------------------------------------------------------
\7\ Section 140(a)(7) of the Truth in Lending Act, as added by
section 1011 of the HEOA.
---------------------------------------------------------------------------
In turn, HEOA defines a ``private educational lender'' to include,
among others, any financial institution that solicits, makes, or
extends private education loans.\8\
---------------------------------------------------------------------------
\8\ Section 140(a)(6)(A) of the Truth in Lending Act, as added
by section 1011 of the HEOA.
---------------------------------------------------------------------------
Although section 1031 of the HEOA is not expressly limited to loans
for higher education, the Agencies have included this limitation in the
definition of low-cost education loans. The proposal, thus, would
provide for consideration of low-cost education loans to attend
``institutions of higher education,'' including accredited colleges,
universities, and vocational schools, as discussed more fully below.
The new statutory requirement to consider education loans was adopted
as a part of the HEOA, which specifically addresses higher education
reform. The HEOA defines ``postsecondary educational expenses'' to mean
any of the expenses that are included as part of the cost of attendance
of a student, as defined under section 472 of the Higher Education Act
of 1965 (20 U.S.C. 1087ll). That definition includes tuition and fees,
books, supplies, miscellaneous personal expenses, room and board, and
an allowance for any loan fee, origination fee, or insurance premium
charged to a student or parent for a loan incurred to cover the cost of
the student's attendance.\9\
---------------------------------------------------------------------------
\9\ See 20 U.S.C. 1087ll (definition of ``cost of attendance'').
---------------------------------------------------------------------------
The Agencies are proposing to define ``low-cost education loan''
consistent with HEOA. The purpose of H.R. 4137, which introduced the
incentive of CRA consideration for low-cost education loans, as stated
in H.R. Report No. 500, was ``to make college more affordable and
accessible;'' to ``expand college access and support for low-income and
minority students;'' and to provide incentives for lenders to provide
``low-cost private student loans to low-income borrowers.'' \10\
Although the HEOA does not define ``private student loan,'' it does
define the similar term, ``private education loan,'' as discussed
above.
---------------------------------------------------------------------------
\10\ H.R. Rep. No. 110-500 at 203, 297 (2007) (emphasis added).
---------------------------------------------------------------------------
Further, the HEOA defines the term ``education loan'' in other
contexts. In Section 120 of the HEOA, ``education loan'' is defined as
any loan made, insured, or guaranteed under the FFEL Program, any loan
made under the William D. Ford Direct Loan Program, or a private
education loan.\11\ As discussed above, institutions' FFEL loans would
be covered by the first prong of the definition, while private
education loans would be covered by the second prong of the
definition.\12\
---------------------------------------------------------------------------
\11\ Section 120 of Public Law 110-315, 122 Stat. 3118 (Aug. 14,
2008). Sections 432 and 493 use the same definition.
\12\ As noted above, the William D. Ford Direct Loan Program is
a direct loan program where the loans are made by the Department of
Education rather than a financial institution. Thus, this loan
program is not relevant for purposes of CRA consideration for an
institution.
---------------------------------------------------------------------------
The second prong of the definition would encompass any
``institution of higher education'' as that term is generally defined
in sections 101 and 102 of the Higher Education Act of 1965 (HEA), 20
U.S.C. 1001 and 1002. Such institutions generally include accredited
public or non-profit colleges and vocational schools, accredited
private colleges and vocational schools, and certain foreign
institutions offering postsecondary education that are comparable to
institutions of higher education in the United States based on
standards approved by the U.S. Department of Education. The Agencies
are not proposing to cover unaccredited colleges, universities, or
vocational schools because we lack sufficient information regarding
these institutions, but are soliciting comment on this issue.
The term ``low-income'' will have the same meaning as that term is
defined in the existing CRA rule with respect to individuals.\13\
Consequently, it will mean an individual income that is less than 50
percent of the area median income. If an institution considers the
income of more than one person in connection with an education loan,
the gross annual incomes of all primary obligors on the loan, including
co-borrowers and co-signers, would be combined to determine whether the
borrowers are ``low-income.'' \14\
---------------------------------------------------------------------------
\13\ 12 CFR 25.12(m)(1), 228.12(m)(1), 345.12(m)(1), and
563e.12(m)(1).
\14\ See ``Interagency Questions and Answers Regarding Community
Reinvestment,'' 74 FR 498, 533 (Jan. 6, 2009) (Q&A Sec. --
--.42(c)(1)(iv)-4).
---------------------------------------------------------------------------
Consistent with the statutory focus on the community in which an
institution is chartered to do business and the regulatory emphasis on
an institution's activities in its assessment area(s), the Agencies
have clarified in the proposed revision that low-cost education loans
will be considered as a factor if they are made to low-income borrowers
in an institution's assessment area(s). This clarification also appears
consistent with the legislative history of the Act, which indicates
that the Agencies are to consider ``low-cost education loans provided
by a financial institution to low-income borrowers in assessing and
taking into account the record of a financial institution in meeting
the credit needs of its local community.'' \15\
---------------------------------------------------------------------------
\15\ H. Rep. No. 110-500, at 366 (2007) (emphasis added).
---------------------------------------------------------------------------
The Agencies propose to add the new provision addressing favorable
CRA consideration for low-cost education loans to low-income borrowers
to sections 25.21, 228.21, 345.21, and 563e.21 of title 12 of the Code
of Federal Regulations. These sections are entitled, ``Performance
tests, standards, and ratings, in general.'' They apply to all types
and sizes of institutions, without regard to the performance test under
which an institution is evaluated. The new provision also is applicable
to all institutions.
The Agencies also are proposing a conforming amendment to Appendix
A of the regulations to include consideration of low-cost education
loans to low-income borrowers as a factor when assigning a rating to a
financial institution.
Description of the Proposal on Activities Undertaken in Cooperation
With Minority- and Women-Owned Financial Institutions and Low-Income
Credit Unions
When the Agencies assess and take into account the community
reinvestment record of a nonminority- or nonwomen-owned financial
institution, the CRA allows the Agencies to consider as a factor
capital investment, loan participation, and other ventures undertaken
by the institution in cooperation with minority- and women-owned
financial institutions and low-income credit unions, provided that
these activities help meet the credit needs of local communities in
which such institutions and credit unions are chartered.\16\ The
Agencies propose to incorporate this statutory language into their
regulations and to clarify, consistent with the statutory language,
that, in order to receive favorable CRA consideration, such activities
need not also benefit the assessment area(s) or the broader statewide
or regional area that includes the assessment area(s) of the
nonminority- and nonwomen-owned
[[Page 31213]]
institution. Activities undertaken to assist minority- and women-owned
financial institutions and low-income credit unions will be considered
as part of the overall assessment of the nonminority- and nonwomen-
owned institution's CRA performance.
---------------------------------------------------------------------------
\16\ 12 U.S.C. 2903(b).
---------------------------------------------------------------------------
This proposed revision to the rule would reinforce to examiners,
financial institutions, and the public that the Agencies may consider
and take into account nonminority- and nonwomen-owned financial
institutions' activities in connection with minority- and women-owned
financial institutions and low-income credit unions. The Agencies note
their recent revisions to the ``Interagency Questions and Answers
Regarding Community Reinvestment'' that clarify this point.\17\ The
proposed rule is intended to codify this clarification in the rule.
---------------------------------------------------------------------------
\17\ 74 FR 498, 507 (Jan. 6, 2009) (Q&A Sec. ----.12(g)-4).
---------------------------------------------------------------------------
The Agencies propose to add the new provision addressing favorable
CRA consideration for activities in cooperation with minority- and
women-owned financial institutions and low-income credit unions to
Sec. Sec. 25.21, 228.21, 345.21, and 563e.21 of title 12 of the Code
of Federal Regulations. As discussed above, these sections apply to all
types and sizes of institutions, without regard to the performance test
under which an institution is evaluated. The new provision also is
applicable to all financial institutions.
The Agencies also are proposing a conforming amendment to Appendix
A of the regulations to include consideration of a financial
institution's activities in cooperation with minority- and women-owned
financial institutions as a factor when assigning a rating to the
institution.
Request for Comments
General Request for Comments
The Agencies request comments on the proposed revisions. Smaller
financial institutions are invited to comment on whether the proposed
regulations should be modified to address any implementation issues
unique to their lines of business or to provide additional flexibility.
Request for Comments on ``Education Loans''
The new statutory provision specifies that the Agencies must
consider low-cost ``education loans'' to low-income borrowers. The
Agencies specifically request comment on how to define ``education
loans.''
As proposed, the definition includes only loans for post-
secondary education (i.e., education at a level beyond high school). As
explained above, section 1031 of the HEOA is not expressly limited to
loans for higher education. Should the definition also extend to loans
for elementary or secondary education?
Should the definition include loans made for education
expenses at an ``institution of higher education'' as that term is
generally defined in sections 101 and 102 of the Higher Education Act
of 1965 (``HEA''), 20 U.S.C. 1001 and 1002, which would include
accredited public and private colleges and universities, whether for-
profit or nonprofit, as well as accredited vocational institutions that
prepare students for gainful employment in a recognized occupation and
certain institutions outside the United States? Should the scope be
expanded or narrowed?
Should the scope of the definition be expanded to include
loans made for education expenses at any ``covered educational
institution'' as that term is defined in section 140 of the Truth in
Lending Act, 15 U.S.C. 1650, which would also encompass unaccredited
institutions, consistent with the Board's proposed approach to defining
that term for purposes of Regulation Z? \18\ Are there reasons that
weigh against including loans to attend unaccredited institutions?
---------------------------------------------------------------------------
\18\ See 75 FR 12464 (Mar. 24, 2009).
---------------------------------------------------------------------------
Should the scope of the definition be narrowed to
encompass only loans made for education expenses at an ``institution of
higher education'' as that term is defined for general purposes in
section 101 of the HEA, 20 U.S.C. 1001, which is limited to accredited
public and nonprofit colleges, universities, and employment training
schools in the United States for high school graduates or the
equivalent, and public or nonprofit educational institutions in the
United States that admit students beyond the age of compulsory school
attendance, even if they are not high school graduates or the
equivalent?
``Private education loans,'' as defined in section
140(a)(7) of the Truth in Lending Act, would include education loans
made by financial institutions under local and State education loan
programs. Should all education loans offered to low-income borrowers
under State or local education programs, regardless of whether the fees
and costs are comparable to those under Department of Education
programs, be eligible for CRA consideration? Should private loans not
made, insured, or guaranteed under a Federal, State, or local education
program be considered for CRA purposes?
``Private education loans,'' as defined in section
140(a)(7) of the Truth in Lending Act, include only closed-end,
unsecured loans. That means, for example, that if a borrower obtained a
home equity loan for a student's education, it would not be considered
a private education loan. Is it appropriate to limit CRA consideration
to only closed-end, unsecured private education loans? Why or why not?
The Agencies request comment on whether our proposal to
limit education loans to those originated by the institution, rather
than purchased by the lender, is appropriate. Why or why not?
Request for Comments on ``Low-Cost'' Loans.
The statutory provision requires the Agencies to consider
institutions' ``low-cost'' education loans to low-income borrowers, but
does not define ``low-cost.'' Guaranteed education loans provided by
financial institutions through the U.S. Department of Education's
Federal Family Education Loan Program (FFEL Loans) are subject to
maximum interest rates, which are calculated using statutory formulas.
These rates are the same as rates charged to borrowers under the
William D. Ford Direct Loan Program. Currently, the interest rate in
effect for unsubsidized fixed-rate loans under the FFEL Stafford loan
program or the William D. Ford Direct Loan program, which are made to
undergraduate and graduate students, is 6.8 percent. The current
interest rate for FFEL Plus loans, which are made to parents of
dependent undergraduate students and to graduate or professional degree
students, is 8.5 percent.
Although variable-rate loans are no longer available under the
Department of Education programs, the Department of Education publishes
rates annually for those variable rate student loans that remain
outstanding. The rate effective July 1, 2008 through June 30, 2009, for
variable-rate loans in repayment is 4.21 percent under both the FFEL
Stafford loan program and the William D. Ford Direct Loan program. Fees
that may be charged by lenders on FFEL Stafford and Plus loans are also
comparable to fees charged on loans made directly by the U.S.
Department of Education. The loan fee/origination fee on a Direct
Stafford loan is 2.5 percent of the loan amount; the loan fee/
origination fee on a Direct Plus loan is 4 percent.
The Agencies are proposing to define ``low-cost education loans''
as education loans that are originated by financial institutions
through a program of the
[[Page 31214]]
U.S. Department of Education or any private education loans, including
loans under State or local education loan programs, originated by
financial institutions with interest rates and fees no greater than
those of comparable education loan programs offered by the U.S.
Department of Education. The Agencies note that currently the rates and
fees allowed under the FFEL Stafford loan program and the FFEL Plus
loan program would typically be used to evaluate whether an
institution's education loan is low cost.
Is the Agencies' definition of the term ``low-cost
education loans'' appropriate? If not, how should the Agencies define
low-cost education loans?
How should the Agencies determine whether a private
education loan (including a loan made by an institution under a State
or local education loan program) is ``comparable'' to a Department of
Education loan?
Should the Agencies use the lowest or highest rate and
fees available under the comparable Department of Education program?
Request for Comments on ``Low-Income Borrower''
The CRA regulations currently define ``low-income'' to mean an
individual income that is less than 50 percent of the area median
income. The Agencies propose to use that definition to define ``low-
income borrower.''
However, various education programs offered by the U.S. Department
of Education are targeted to individuals who have financial needs; and
the criteria for the programs vary. Most relevant, for example, are the
Federal Student Aid programs available to students seeking assistance
for education programs beyond high school. Most Federal Student Aid
programs, other than unsubsidized programs available through financial
institutions, including unsubsidized Stafford and FFEL Plus loans,
consider ``financial need.'' Financial need is determined by dividing
the cost of attendance at the school by the expected family
contribution (EFC). The EFC is calculated according to a formula that
considers family taxable and untaxed income, assets and benefits, e.g.,
unemployment, family size, and the number of family members who will be
attending college. Another example of a Department of Education program
that considers income is the TRIO program, which encompasses the Upward
Bound, Talent Search, and Student Support Services programs. The TRIO
program is targeted to ``low-income individuals,'' meaning an
individual whose family's taxable income for the preceding year did not
exceed 150 percent of the poverty level amount.
The proposed rule provides that the term, ``low-income,''
will have the same meaning as that term is defined in the existing CRA
rule with respect to individuals. Consistent with current guidance, if
an institution considers the income of more than one person in
connection with an education loan, the gross annual incomes of all
primary obligors on the loan, including co-borrowers and co-signers,
would be combined to determine whether the borrowers are ``low-
income.'' Should the Agencies consider defining ``low-income'' for
purposes of this proposed provision differently than the term is
already defined in the CRA regulation? If so, why and how?
Specifically, how should the Agencies treat the income of a student's
family or other expected family contributions to ensure that the CRA
consideration provided is consistent with HEOA's focus on low-income
borrowers?
Request for Comments Regarding Other Education Loan Issues
As proposed, institutions would receive favorable qualitative
consideration for originating ``low-cost education loans to low-income
borrowers'' as a factor in the institutions' overall CRA rating. Such
loans would be considered responsive to the credit needs of the
institutions' communities.
As discussed above, under the current CRA regulations,
institutions may choose to have education loans evaluated as consumer
loans under the lending test applicable to the institution. If an
institution opts to have education loans evaluated, the loans would be
evaluated quantitatively, based on the data the institution provides.
Should the agencies also allow an institution to receive separate
quantitative consideration for the number and amount of low-cost
education loans to low-income borrowers as part of its CRA evaluation
under the performance test applicable to that institution, without
regard to other consumer loans?
Education loans, including those that do not qualify for
consideration as ``low-cost education loans for low-income borrowers''
(e.g., purchased education loans, loans that are not low-cost, and
loans that are not made to low-income borrowers) would continue to be
eligible for consideration as consumer loans, at an institution's
option, under existing CRA rules.
As discussed above, the Agencies propose to insert the revision
regarding low-cost education loans to low-income borrowers into 12 CFR
25.21, 228.21, 345.21, and 563e.21, which apply to all institutions,
regardless of the performance test under which an institution is
evaluated.
Is it readily understandable to institutions and other
interested parties that the provision is applicable to all institutions
through that placement in the regulation?
Request for Comments on the Proposed Inclusion in the CRA Regulations
of the Statutory Language Regarding Activities Undertaken in
Cooperation With Minority- and Women-Owned Financial Institutions and
Low-Income Credit Unions
The agencies request general comment on the proposal to include in
their CRA regulations the statutory language that allows the agencies
to consider as a factor in a nonminority- or nonwomen-owned financial
institution's CRA evaluation capital investments, loan participations,
and other ventures undertaken in cooperation with minority- and women-
owned financial institutions and low-income credit unions, consistent
with prior agency guidance.\19\
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\19\ Interagency Questions and Answers Regarding Community
Reinvestment, 74 FR 498, 507 (Jan. 6, 2009).
---------------------------------------------------------------------------
In addition, as discussed above, the Agencies propose to insert the
revision regarding institutions' activities in cooperation with
minority- and women-owned institutions and low-income credit unions
into 12 CFR 25.21, 228.21, 345.21, and 563e.21, which apply to all
institutions, regardless of which performance test under which an
institution is evaluated.
Is it readily understandable to institutions and other
interested parties that the provision is applicable to all institutions
through that placement?
Request for Comments Regarding the Use of ``Plain Language''
Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, sec.
722, 133 Stat. 1338, 1471 (Nov. 12, 1999), requires the Agencies to use
plain language in all proposed and final rules published after January
1, 2000. Therefore, the Agencies specifically invite your comments on
how to make this proposal easier to understand. For example,
Have we organized the material to suit your needs? If not,
how could this material be better organized?
Are the requirements in the proposed regulations clearly
stated? If
[[Page 31215]]
not, how could the regulations be more clearly stated?
Do the proposed regulations contain language or jargon
that is not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the regulations easier to
understand? If so, what changes to the format would make them easier to
understand?
What else could we do to make the regulations easier to
understand?
Regulatory Analysis
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Ch. 3506; 5 CFR 1320 Appendix A.1), each agency reviewed its proposed
rule and determined that there are no new collections of information
contained therein. However, the amendments may have a negligible effect
on burden estimates for existing information collections, including
recordkeeping requirements for consumer loans.
Regulatory Flexibility Act
Under section 605(b) of the Regulatory Flexibility Act (RFA), 5
U.S.C. 605(b), the initial regulatory flexibility analysis otherwise
required under section 603 of the RFA is not required if an agency
certifies, along with a statement providing the factual basis for such
certification, that the proposed rule will not have a significant
economic impact on a substantial number of small entities. The Small
Business Administration (SBA) has defined ``small entities'' for
banking purposes as a bank or savings association with $165 million or
less in assets. See 13 CFR 121.201. Each agency has reviewed the impact
of this joint proposed rule on the small entities subject to its
regulation and supervision and certifies that the proposal will not
have a significant economic impact on a substantial number of the small
entities that it regulates and supervises.
The proposal would incorporate into the CRA regulations statutory
language that requires the Agencies to consider as a factor in
evaluating an institution's CRA performance low-cost education loans
provided by the financial institution to low-income borrowers. The
proposal also would incorporate into the CRA regulations existing
statutory language that allows the agencies to consider as a factor in
evaluating CRA performance certain activities of nonminority- and
nonwomen-owned financial institutions entered into in cooperation with
minority- and women-owned financial institutions and low-income credit
unions. However, the joint proposal would not impose new requirements
on small entities because the CRA performance test for small entities
(as defined above) does not specify that small institutions must engage
in any particular types of lending, just that they will be evaluated on
the types of lending in which they choose to engage. Accordingly, a
regulatory flexibility analysis is not required.
OCC and OTS Executive Order 12866 Determination
The OCC and the OTS have each determined that its portion of this
joint proposed rule is not a significant regulatory action as defined
in Executive Order 12866.
OCC and OTS Unfunded Mandates Reform Act of 1995 Determination
Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded
Mandates Act) (2 U.S.C. 1532) requires that covered agencies prepare a
budgetary impact statement before promulgating a rule that includes any
Federal mandate that may result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, section 205 of the Unfunded Mandates Act also requires
covered agencies to identify and consider a reasonable number of
regulatory alternatives before promulgating a rule. The OCC and the OTS
have determined that this joint proposed rule will not result in
expenditures by State, local, and tribal governments, or by the private
sector, of $100 million or more in any one year. Accordingly, neither
agency has prepared a budgetary impact statement or specifically
addressed the regulatory alternatives considered.
The Treasury and General Government Appropriations Act, 1999--
Assessment of Impact of Federal Regulation on Families
The FDIC has determined that this joint proposed rule will not
affect family well-being within the meaning of section 654 of the
Treasury and General Government Appropriations Act, enacted as part of
the Omnibus Consolidated and Emergency Supplemental Appropriations Act
of 1999, Public Law 105-277 (5 U.S.C. 601 note).
OCC and OTS Executive Order 13132 Determination
The OCC and the OTS have each determined that its portion of this
joint proposed rule does not have any Federalism implications, as
required by Executive Order 13132.
List of Subjects
12 CFR Part 25
Community development, Credit, Investments, National banks,
Reporting and recordkeeping requirements.
12 CFR Part 228
Banks, Banking, Community development, Credit, Investments,
Reporting and recordkeeping requirements.
12 CFR Part 345
Banks, Banking, Community development, Credit, Investments,
Reporting and recordkeeping requirements.
12 CFR Part 563e
Community development, Credit, Investments, Reporting and
recordkeeping requirements, Savings associations.
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Chapter I
Authority and Issuance
For the reasons discussed in the joint preamble, the Office of the
Comptroller of the Currency proposes to amend part 25 of chapter I of
title 12 of the Code of Federal Regulations as follows:
PART 25--COMMUNITY REINVESTMENT ACT AND INTERSTATE DEPOSIT
PRODUCTION REGULATIONS
1. The authority citation for part 25 is revised to read as
follows:
Authority: 12 U.S.C. 21, 22, 26, 27, 30, 36, 93a, 161, 215,
215a, 481, 1814, 1816, 1828(c), 1835a, 2901 through 2908, and 3101
through 3111.
2. In Sec. 25.21, add new paragraphs (e) and (f) to read as
follows:
Sec. 25.21 Performance tests, standards, and ratings, in general.
* * * * *
(e) Low-cost education loans provided to low-income borrowers. In
assessing and taking into account the record of a bank under this part,
the OCC considers, as a factor, low-cost education loans provided by
the bank to borrowers in its assessment area(s) who have an individual
income that is less than 50
[[Page 31216]]
percent of the area median income. For purposes of this paragraph,
``low-cost education loans'' means:
(1) Education loans originated by the bank through a loan program
of the U.S. Department of Education; or
(2) Any other private education loan, as defined in section
140(a)(7) of the Truth in Lending Act (including a loan under a state
or local education loan program), originated by the bank for a student
at an ``institution of higher education,'' as that term is generally
defined in sections 101 and 102 of the Higher Education Act of 1965 (20
U.S.C. 1001 and 1002) and the implementing regulations published by the
Department of Education, with interest rates and fees no greater than
those of comparable education loans offered through loan programs of
the U.S. Department of Education.
(f) Activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions. In assessing and
taking into account the record of a nonminority-owned and nonwomen-
owned bank under this part, the OCC considers as a factor capital
investment, loan participation, and other ventures undertaken by the
bank in cooperation with minority- and women-owned financial
institutions and low-income credit unions, provided that such
activities help meet the credit needs of local communities in which the
minority- and women-owned financial institutions and low-income credit
unions are chartered. To be considered, such activities need not also
benefit the bank's assessment area(s) or the broader statewide or
regional area that includes the bank's assessment area(s).
3. In Appendix A to Part 25, paragraph (a)(1) is revised to read as
follows:
Appendix A to Part 25--Ratings
(a) * * * (1) In assigning a rating, the OCC evaluates a bank's
performance under the applicable performance criteria in this part,
in accordance with Sec. Sec. 25.21 and 25.28. This includes
consideration of low-cost education loans provided to low-income
borrowers and activities in cooperation with minority- or women-
owned financial institutions and low-income credit unions, as well
as adjustments on the basis of evidence of discriminatory or other
illegal credit practices.
* * * * *
Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the joint preamble, the Board of
Governors of the Federal Reserve System proposes to amend part 228 of
chapter II of title 12 of the Code of Federal Regulations as follows:
PART 228--COMMUNITY REINVESTMENT (REGULATION BB)
1. The authority citation for part 228 is revised to read as
follows:
Authority: 12 U.S.C. 321, 325, 1828(c), 1842, 1843, 1844, and
2901 through 2908.
2. In Sec. 228.21, add new paragraphs (e) and (f) to read as
follows:
Sec. 228.21 Performance tests, standards, and ratings, in general.
* * * * *
(e) Low-cost education loans provided to low-income borrowers. In
assessing and taking into account the record of a bank under this part,
the Board considers, as a factor, low-cost education loans provided by
the bank to borrowers in its assessment area(s) who have an individual
income that is less than 50 percent of the area median income. For
purposes of this paragraph, ``low-cost education loans'' means:
(1) Education loans originated by the bank through a loan program
of the U.S. Department of Education; or
(2) Any other private education loan, as defined in section
140(a)(7) of the Truth in Lending Act (including a loan under a State
or local education loan program), originated by the bank for a student
at an ``institution of higher education,'' as that term is generally
defined in sections 101 and 102 of the Higher Education Act of 1965 (20
U.S.C. 1001 and 1002) and the implementing regulations published by the
Department of Education, with interest rates and fees no greater than
those of comparable education loans offered through loan programs of
the U.S. Department of Education.
(f) Activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions. In assessing and
taking into account the record of a nonminority-owned and nonwomen-
owned bank under this part, the Board considers as a factor capital
investment, loan participation, and other ventures undertaken by the
bank in cooperation with minority- and women-owned financial
institutions and low-income credit unions, provided that such
activities help meet the credit needs of local communities in which the
minority- and women-owned financial institutions and low-income credit
unions are chartered. To be considered, such activities need not also
benefit the bank's assessment area(s) or the broader statewide or
regional area that includes the bank's assessment area(s).
3. In Appendix A to Part 228, paragraph (a)(1) is revised to read
as follows:
Appendix A to Part 228--Ratings
(a) * * * (1) In assigning a rating, the Board evaluates a
bank's performance under the applicable performance criteria in this
part, in accordance with Sec. Sec. 228.21 and 228.28. This includes
consideration of low-cost education loans provided to low-income
borrowers and activities in cooperation with minority- or women-
owned financial institutions and low-income credit unions, as well
as adjustments on the basis of evidence of discriminatory or other
illegal credit practices.
* * * * *
Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint preamble, the Board of
Directors of the Federal Deposit Insurance Corporation proposes to
amend part 345 of chapter III of title 12 of the Code of Federal
Regulations as follows:
PART 345--COMMUNITY REINVESTMENT
1. The authority citation for part 345 is revised to read as
follows:
Authority: 12 U.S.C. 1814-1817, 1819-1920, 1828, 1831u and
2901-2908, 3103-3104, and 3108(a).
2. In Sec. 345.21, add new paragraphs (e) and (f) to read as
follows:
Sec. 345.21 Performance tests, standards, and ratings, in general.
* * * * *
(e) Low-cost education loans provided to low-income borrowers. In
assessing and taking into account the record of a bank under this part,
the FDIC considers, as a factor, low-cost education loans provided by
the bank to borrowers in its assessment area(s) who have an individual
income that is less than 50 percent of the area median income. For
purposes of this paragraph, ``low-cost education loans'' means:
(1) Education loans originated by the bank through a loan program
of the U.S. Department of Education; or
(2) Any other private education loan, as defined in section
140(a)(7) of the Truth in Lending Act (including a loan under a State
or local education loan program), originated by the bank for a student
at an ``institution of higher education,'' as that term is generally
defined in sections 101 and 102 of the Higher Education Act of 1965 (20
U.S.C. 1001 and 1002) and the implementing regulations published by the
Department of Education, with interest
[[Page 31217]]
rates and fees no greater than those of comparable education loans
offered through loan programs of the U.S. Department of Education.
(f) Activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions. In assessing and
taking into account the record of a nonminority-owned and nonwomen-
owned bank under this part, the FDIC considers as a factor capital
investment, loan participation, and other ventures undertaken by the
bank in cooperation with minority- and women-owned financial
institutions and low-income credit unions, provided that such
activities help meet the credit needs of local communities in which the
minority- and women-owned financial institutions and low-income credit
unions are chartered. To be considered, such activities need not also
benefit the bank's assessment area(s) or the broader statewide or
regional area that includes the bank's assessment area(s).
3. In Appendix A to Part 345, paragraph (a)(1) is revised to read
as follows:
Appendix A to Part 345--Ratings
(a) * * * (1) In assigning a rating, the FDIC evaluates a bank's
performance under the applicable performance criteria in this part,
in accordance with Sec. Sec. 345.21 and 345.28. This includes
consideration of low-cost education loans provided to low-income
borrowers and activities in cooperation with minority- or women-
owned financial institutions and low-income credit unions, as well
as adjustments on the basis of evidence of discriminatory or other
illegal credit practices.
* * * * *
Office of Thrift Supervision
12 CFR Chapter V
For the reasons set forth in the joint preamble, the Office of
Thrift Supervision proposes to amend part 563e of chapter V of title 12
of the Code of Federal Regulations as follows:
PART 563e--COMMUNITY REINVESTMENT
1. The authority citation for part 563e is revised to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 1814, 1816,
1828(c), and 2901 through 2908.
2. In Sec. 563e.21, add new paragraphs (e) and (f) to read as
follows:
Sec. 563e.21 Performance tests, standards, and ratings, in general.
* * * * *
(e) Low-cost education loans provided to low-income borrowers. In
assessing and taking into account the record of a savings association
under this part, the OTS considers, as a factor, low-cost education
loans provided by the savings association to borrowers in its
assessment area(s) who have an individual income that is less than 50
percent of the area median income. For purposes of this paragraph,
``low-cost education loans'' means:
(1) Education loans originated by the savings association through a
loan program of the U.S. Department of Education; or
(2) Any other private education loan, as defined in section
140(a)(7) of the Truth in Lending Act (including a loan under a State
or local education loan program), originated by the savings association
for a student at an ``institution of higher education,'' as that term
is generally defined in sections 101 and 102 of the Higher Education
Act of 1965 (20 U.S.C. 1001 and 1002) and the implementing regulations
published by the Department of Education, with interest rates and fees
no greater than those of comparable education loans offered through
loan programs of the U.S. Department of Education
(f) Activities in cooperation with minority- or women-owned
financial institutions and low-income credit unions. In assessing and
taking into account the record of a nonminority-owned and nonwomen-
owned savings association under this part, the OTS considers as a
factor capital investment, loan participation, and other ventures
undertaken by the savings association in cooperation with minority- and
women-owned financial institutions and low-income credit unions,
provided that such activities help meet the credit needs of local
communities in which the minority- and women-owned financial
institutions and low-income credit unions are chartered. To be
considered, such activities need not also benefit the savings
association's assessment area(s) or the broader statewide or regional
area that includes the savings association's assessment area(s).
3. In Appendix A to part 563e, paragraph (a)(1) is revised to read
as follows:
Appendix A to Part 563e--Ratings
(a) * * * (1) In assigning a rating, the OTS evaluates a savings
association's performance under the applicable performance criteria
in this part, in accordance with Sec. Sec. 563e.21 and 563e.28.
This includes consideration of low-cost education loans provided to
low-income borrowers and activities in cooperation with minority- or
women-owned financial institutions and low-income credit unions, as
well as adjustments on the basis of evidence of discriminatory or
other illegal credit practices.
* * * * *
Dated: June 19, 2009.
John C. Dugan,
Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System, June 23, 2009.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 23rd day of June 2009.
Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
Dated: June 17, 2009.
By the Office of Thrift Supervision.
John E. Bowman,
Acting Director.
[FR Doc. E9-15204 Filed 6-29-09; 8:45 am]
BILLING CODE 4810-33-P, 6210-01-P, 6714-01-P, 6720-01-P
