Chapter 1301:1-7 Reports of Condition; Qualified Housing Project Investments; United States Treasury Tax and Loan Program

(A) For purposes of this rule:

(1) “Qualified housing project” means the acquisition, rehabilitation, or new construction of residential real estate intended primarily to benefit lower income persons throughout the period of the bank’s investment that is either of the following:

(a) Eligible for the low income housing tax credit under Section 42 of the Internal Revenue Code, 12 U.S.C. 42 ;

(b) Primarily for housing purposes and not commercial use, with fifty per cent or more of the housing units to be occupied by lower income persons.

(2) “Supervisory action” includes a memorandum of understanding, written agreement, and cease and desist order.

(B) With the approval of the bank’s board of directors and unless disapproved by the superintendent of financial institutions, a bank may make investments in qualified housing projects, either directly or by purchasing interests in an entity primarily engaged in making investments in qualified housing projects, subject to all of the following:

(1) The bank’s investments in any one qualified housing project shall not exceed two per cent of the bank’s capital and unimpaired surplus fund;

(2) The bank’s aggregate investments in qualified housing projects shall not exceed ten per cent of the bank’s capital and unimpaired surplus fund;

(3) None of the bank’s investments in qualified housing projects is a general partnership interest or other interest which will expose the bank to unlimited or general liability.

(C) A bank proposing to make an investment in a qualified housing project shall submit a letter of investment intent to the superintendent prior to making the investment if any of the following applies:

(1) The bank had a composite camel rating of three, four, or five under the uniform financial institutions rating system in its last examination;

(2) The bank is under a supervisory action;

(D)(1) The letter of investment intent required by paragraph (c) of this rule shall include the following information:

(a) The identity of the qualified housing project;

(b) The nature of the bank’s proposed investment in the qualified housing project;

(c) The amount of the bank’s proposed investment in the qualified housing project, both in dollars and as a percentage of the bank’s capital and unimpaired surplus fund;

(d) The aggregate of the bank’s previous investments in the same qualified housing project, both in dollars and as a percentage of the bank’s capital and unimpaired surplus fund;

(e) The aggregate of the bank’s previous investments in all qualified housing projects, both in dollars and as a percentage of the bank’s capital and unimpaired surplus fund.

(2) Within five business days after the superintendent receives the bank’s letter, the bank may make the proposed investment in the qualified housing project unless the superintendent has disapproved the proposed investment or reserves additional time to determine whether or not to disapprove the Proposed investment because of any of the following:

(a) The proposed investment is not a qualified housing project;

(b) The proposed investment is a general partnership or other interest which will expose the bank to unlimited or general liability;

(c) The proposed investment would cause the bank’s investments in the same qualified housing project to exceed two per cent of the bank’s capital and unimpaired surplus fund;

(d) The proposed investment would cause the bank’s aggregate investments in all qualified housing projects to exceed ten per cent of the bank’s capital and unimpaired surplus fund;

(e) The bank has a composite camel rating of three, four, or five under the uniform financial institutions rating system in its last examination;

(f) The bank is under a supervisory action;

(g) The bank is not adequately capitalized.

Eff 1-19-96

Rule promulgated under: RC 111.15

Rule authorized by: RC 1125.23