National banks can get Community Reinvestment Act credit for investing in certain bank-owned life insurance programs, the Office of the Comptroller of the Currency said in a July 19 interpretive letter released last week.
The determination came at the request of an unidentified national bank that, along with its insurance partner, sought to offer a CRA investment option to other banks through a separate-account BOLI program. Participating banks would not pay its BOLI premiums to the general account of the life insurer; the premiums would be pooled in a separate account that would make CRA investments.
"The funds in this CRA separate account would be used to purchase and hold distinct investments that correspond to assessment area targets of each bank policyholder," according to the OCC's description of the plan. "All such investments would then be pooled in the separate account in a mutual fund-like manner, and the return to each bank policyholder would be based on the overall return of the portfolio."
Though the decision applied to national banks, the OCC said the other bank and thrift regulators "are in agreement with our position."
The investments must meet the OCC's other BOLI criteria.
