HOW WE SERVE
Banks choose to invest in LIHTC for several reasons. When properly managed, investments in LIHTCs will:
- Earn attractive rates of return while making a positive impact to Earning Per Share (EPS)
- Spur additional commercial lending opportunities
- Qualify for CRA
- Have a positive social impact to the communities you serve, while meeting the “Social” in ESG
- Provide additional value to customer relationships by offering a tax credit product and earn fee income
Community Reinvestment Act
Banks may receive positive CRA consideration for community development activities related to LIHTC projects and funds, provided the activities benefit a bank’s assessment area or a broader statewide or regional area that includes the bank’s assessment area(s) (AA). The bank’s AA(s) need not receive an immediate or direct benefit from the bank’s participation in the activity, provided the purpose, mandate, or function of the activity includes serving geographies or individuals located within the institution’s AA(s). Examiners will consider these activities even if they will not benefit the bank’s AA(s) as long as the bank has been responsive to community development needs and opportunities in its AA(s).
Investments in LIHTC funds consisting of several projects are eligible investments for national banks under the OCC’s Part 24 authority.