Interagency Q&A .23(b) – 2: If mortgage loans to low- and moderate-income borrowers have been considered in a lending test, may the institution also receive consideration for subsequent mortgage-backed securities purchases?

Compliance > Regulation BB - CRA
Q:  § __.23(b) – 2: If home mortgage loans to low- and moderate-income borrowers have been considered under an institution’s lending test, may the institution that originated or purchased them also receive consideration under the investment test if it subsequently purchases mortgage-backed securities that are primarily or exclusively backed by such loans?
 
A:  No.  Because the institution received lending test consideration for the loans that underlie the securities, the institution may not also receive consideration under the investment test for its purchase of the securities.  Of course, an institution may receive investment test consideration for purchases of mortgage-backed securities that are backed by loans to low- and moderate-income individuals as long as the securities are not backed primarily or exclusively by loans that the same institution originated or purchased.
 
 
 
This Interagency Q&A, and others, was released in July 2016.  The 2016 Q&As consolidates and supersedes all previously published “Interagency Questions and Answers Regarding Community Reinvestment,” and were noted as being effective immediately.  They may be found here:  http://www.ffiec.gov/cra/qnadoc.htm
 

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