Question: Does the Community Reinvestment Act or Regulation BB specifically address the needs of minority-owned institutions?
Answer: Yes it does. A bank can receive favorable consideration as part of its CRA performance if it invests in a minority-owned institution that serves low to moderate income areas or low to moderate income individuals. This consideration will be given even if the minority owned institution is not located in the assessment area of the investing bank, or within the broader statewide or regional areas that include the investing bank’s assessment area.
Question: Can you provide some examples of investments for which banks would receive positive CRA consideration in support of minority owned institutions?
Answer: Yes. A bank located in the northeastern United States would receive credit for investing in a minority owned institution serving a low or moderate income area in the Gulf Coast area. Credit would also be given if a bank buys CDs from minority owned institutions located throughout the country. A bank would receive consideration for purchasing participations in loans made by a minority owned institution to help businesses in the MOI’s community, thereby reducing the credit exposure of the MOI. Finally, officers of a majority-owned bank that serve on the board of directors of a minority owned bank would receive positive recognition under CRA.