The Office of the Comptroller of the Currency (OCC) wasted little time in implementing one provision of the Housing and Economic Recovery Act of 2008 (HERA), which the President signed into law on July 30. The OCC issued an interim final rule in the August 11 Federal Register to implement HERA’s changes to national banks’ public welfare investment authority. The OCC also issued a follow-up banking bulletin (2008-22) on August 21.

Section 2503 of HERA revised 12 USC 24(Eleventh) to allow national banks to “make investments directly or indirectly, each of which is designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families (such as by providing housing, service, or jobs).”

The change effectively restores the public welfare investment test that was in effect prior to enactment of the Financial Services Regulatory Relief Act of 2006 (FSRRA), which narrowed the grant of authority to making investments “directly or indirectly, each of which promotes the public welfare by benefiting primarily low- and moderate-income communities or families…”

Although there is a 30-day public comment period through September 10, the OCC interim final rule went into effect on August 11.

“This has the potential to generate additional private investments that will go toward strengthening and stabilizing our communities, and we greatly appreciate the leadership in Congress for restoring this valuable authority,” Comptroller John Dugan said. “The public welfare investment provision of the legislation, as implemented by the OCC’s regulation, provides support for the goals of the housing bill, without the expenditure of any taxpayer funds, by helping to revitalize and stabilize communities affected by rising foreclosures.”