News Release 2008-25 | February 29, 2008
Statement of Comptroller of the Currency John C. Dugan Following Tour of Harlem and the Bronx
NEW YORK — Comptroller of the Currency John C. Dugan spoke of the need for revisions to the Community Reinvestment Act and national banks’ public welfare investment authority to help areas plagued by foreclosures on a tour of bank initiatives and community development projects in New York today. He issued the following statement:
Today, I had the rewarding opportunity to see at first hand how local organizations and national banks can make a big difference in their communities. On a visit to Harlem and the Bronx, I had the chance to see a number of housing and community development projects as well as several creative initiatives at neighborhood banks, including a bank branch run by the students of Theodore Roosevelt High School. These investments and initiatives are contributing to the vitality of these neighborhoods and enhancing financial literacy and economic well-being – thanks in large measure to involvement by national banks.
This trip highlighted in a very visible way the important role that national bank Part 24 public welfare investment authority plays in local communities. Community-based organizations have partnered with national banks that made major investments in housing and community developments for a number of key projects in Harlem using Low Income Housing Tax Credits and New Markets Tax Credits. Those investments have revitalized corridors along 125th, 116th, and 117th streets, sparking additional development further north in Harlem.
But, we also saw some troubling signs. There has been much progress, but there is the potential that some communities will backslide because of the impact of widespread foreclosures. Two weeks ago, I called for an amendment to the Community Reinvestment Act regulation to provide favorable CRA consideration for community development investments in middle-income communities that are distressed as a result of mortgage foreclosures and related economic factors affecting the area.
Congress is now considering legislation to restore the original scope of national banks’ public welfare investment authority, which would help communities like Harlem and the Bronx. Over the last decade, national banks have used this authority to invest in more than $15 billion under this authority to build affordable housing, create jobs in low-income communities, and revitalize neighborhoods across the country. But, the public welfare investment authority of national banks was limited in some key respects in 2006. I strongly support restoring the public welfare investment authority of national banks so that they can provide billions more in investments across the country to worthwhile projects like the ones that I saw today.
In addition to the CRA revision, passing the amendment to national banks’ statutory investment authority would also give banks an important tool to help foreclosure-plagued urban and suburban middle-income areas. I would hope the Senate will move quickly to pass this legislation so they can go to conference with the House and pass this important legislation.
With these changes, we would authorize and encourage loans, services, and investments in more communities suffering from the consequences of foreclosures.
Kevin M. Mukri