WASHINGTON - The Office of Thrift Supervision has cut some of the red tape for savings associations that want to invest in low- and moderate- income housing.
Previously, thrifts seeking to make community development investments under the Home Owners' Loan Act had to get prior approval from the OTS unless their investment was in an area receiving "concentrated development assistance" under the Housing and Community Development Act.
An interpretive letter from OTS chief counsel Carolyn Buck added to the areas in which thrifts can invest without first getting approval from the agency. They now include any community that has not been excluded by a state in its submissions for Community Development Block Grant funds and any area that participates in the Small Cities program.
"This is partly just to let thrifts know they can do it, and partly to encourage it," Ms. Buck said.
The more expansive standard will allow for community development investments in most areas of the country, according to OTS.
Savings associations that want to invest in areas not covered by the new standards must continue to seek case-by-case approval from the thrift regulator.