The final rule on education loans indicates the agencies will consider low-cost education loans to low-income borrowers as a positive factor when assessing a financial institution's record of meeting community credit needs under the CRA. The rule:
- Provides a definition of "low-income borrower" consistent with current CRA definitions (50 percent of area median income), including borrowers' and co-borrowers' income;
- Defines "low-cost" based on the rates and fees charged under U. S. Department of Education lending programs;
- Includes loans for higher education by accredited institutions listed by the U. S. Department of Education and loans covered by Truth in Lending protections;
- Enables consideration of loans outside assessment areas if the needs are adequately addressed inside assessment areas; and
- Does not require any institution to make low-cost loans to low-income students or change how consumer loans are otherwise considered during CRA evaluations.
The provisions on minority- and women-owned financial institutions and low-income credit unions were previously communicated in Interagency Questions and Answers Regarding Community Reinvestment, published on March 11, 2010 (see FIL-9-2010).
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officers
Community Reinvestment Act
Joint Final Rule - PDF (PDF Help)
Janet Gordon, Senior Policy Analyst, Compliance Policy Section, firstname.lastname@example.org or (202) 898-3850; or Susan van den Toorn, Counsel, email@example.com or (202) 898-8707
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2010/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).