NR 2002-34
FOR IMMEDIATE RELEASE			
Contact:  Kevin Mukri (202) 874-5770
April 10, 2002				    

OCC Chief Counsel Julie L. Williams Underscores Major Increase
In the Beneficial Relationships Between Banks and CDCs

CLEVELAND - Bank involvement with Community Development Corporations has increased 
significantly in recent years, Julie L. Williams, First Senior Deputy Comptroller 
and Chief Counsel, said in a speech today.

"We at the OCC have seen large increases in bank investments under Part 24 community 
development investment authority which allows national banks to make equity investments 
in CDCs, community development projects, and other public welfare activities," Ms. 
Williams said at the annual conference of the Local Initiatives Support Corporation.  
"National banks made more than $5 billion of Part 24 investments since 1995, almost 
ten times more than the amount invested during the previous 30 years since Part 24 
was established."

Ms. Williams much of this growth has occurred through bank investments in Low Income 
Housing Tax Credit projects with nonprofit sponsors.  LISC, she said, has raised over 
$3 billion in Housing Tax Credit investments.  About three-quarters of that amount came 
from banks, she added.

"Banks have found that these types of investments and their relationships with CDCs can 
dramatically further their own ability to provide a presence in targeted segments of their 
markets, especially segments in which banks are underachieved," said Ms. Williams.  "Working 
with CDCs, banks find lending opportunities in these areas and bring needed capital to small 
business expansion."

Ms. Williams pointed out that CDCs provide the resources and personnel to do the necessary 
work to make these projects work.  "In fact, CDCs often bring "the deal" to the bank," 
she said.

"By designing innovative financing structures, CDCs are able to involve banks in funding 
projects such as shopping centers, charter schools, small business incubators, or commercial 
office space," noted Ms. Williams.  "Banks are able to participate in capacities that make 
sense for them from a business and community reinvestment perspective, local community 
development needs are served, and, by improving the local environment and economy, banks 
may gain new customers and new markets."

Ms. Williams told the conference that the New Markets Tax Credit is important for future 
growth in the beneficial relationships between banks and CDCs.

"As the Low Income Housing Tax Credit addressed the equity gap needed to develop affordable 
housing, we hope the New Markets Tax Credit will encourage capital to flow to businesses and 
other ventures in low-income areas," said Ms. Williams.  "The New markets Tax Credit will 
provide $15 billion over the next six years to promote investments in low-income areas, by 
allocating tax credits in support of for-profit enterprise development in low-income 
communities."

Ms. Williams concluded her address by encouraging intermediaries, such as the Local 
Initiatives Support Corporation, to publicize hard-learned lessons from CDCs across 
the country and promoting the best research available on good CDC practices.


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The OCC charters, regulates and examines approximately 2,200 national banks and 52 federal 
branches of foreign banks in the U.S., accounting for more than 54 percent of the nation’s 
banking assets. Its mission is to ensure a safe and sound and competitive national banking 
system that supports the citizens, communities and economy of the United States.