“Banks are permitted to invest outside their CRA footprints but only if they can demonstrate that they are ‘adequately addressing the community development needs of their assessment areas.’ Since no one knows what this means, the provision has had very little practical value. The regulators have recently proposed new guidance that would considerably relax the ‘qualifier’ and permit banks that invest outside their assessment areas to receive full consideration for such investments. CohnReznick applauds the introduction of greater flexibility in the supervision of CRA investment test compliance,” Copeman adds.
These findings form the last phase of CohnReznick’s multi-part housing study. The first study, published in August 2011, offered the first comprehensive review of housing credit property performance data since the 2008 economic downturn began. The second study, released in December 2012, provided an in-depth geographic state-by-state analysis of the operating performance of apartment properties financed with low-income housing tax credits. That analysis confirmed the striking imbalance between the supply and demand of affordable rental housing.
For more information, visit www.cohnreznick.com.
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