§__.12(g) – 3
Q: Does the regulation provide flexibility in considering performance in high-cost areas?
A3: Yes, the flexibility of the performance standards allows examiners to account in their evaluations for conditions in high-cost areas. Examiners consider lending and services to individuals and geographies of all income levels and businesses of all sizes and revenues. In addition the flexibility in the requirement that community development loans, community development services, and qualified investments have as their “primary” purpose community development allows examiners to account for conditions in high-cost areas. For example, examiners could take into account the fact that activities address a credit shortage amount middle-income people or areas caused by the disproportionately high cost of building, maintaining or acquiring a house when determining whether an institution’s alone to or investment in an organization that funds affordable housing for middle-income people or areas, as well as low- and moderate-income people or areas, has as its primary purpose community development.
See also Q&A §__12(h) – 8 for more information on “primary purpose.”
Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016