On May 20, 2020, the Office of the Comptroller of the Currency (OCC), which regulates national banks, issued a Final rule intended to strengthen and modernize the implementation of the Community Reinvestment Act, 12 USC § 2901 et seq.. (the CRA). The CRA was originally enacted in 1977 to reverse decades of financial “red lines” in which banks were failing to meet the needs of all, especially communities of color, by encouraging banks to help meet the needs of people. credit needs of all the local communities they serve, including moderate income neighborhoods (LMI).1 The CRA requires federal banking agencies to assess a bank’s track record in meeting the credit needs of its entire community, including LMI neighborhoods, consistent with the safe and healthy functioning of this bank. institution, and that they take these files into account in its assessment of a request for a deposit facility by this institution.

Despite the well-intentioned goals and incentives of the ARC, it has historically had little impact on increasing access to capital and credit in Native American communities and on Indian reservations. Native Americans and Indian tribes continue to be one of the most underbanked populations in the United States and pay some of the highest interest rates for financial services, including mortgages. This new CRA rule may increase incentives and change those stats.

The final rule is intended to reflect organizational and technological changes in the banking sector and to better define and increase the incentives for banks to provide access to capital and credit for underserved communities, including tribal governments, communities and their citizens. The final rule is limited to domestic banks regulated by the OCC. Banks overseen by the Federal Reserve Board and FDIC will continue to be subject to existing CRA regulations.

The OCC’s new “Eligible Activity Criteria” include activities for Indian countries, whether or not they are in their assessment area.

  • All retail loan “located in an Indian country or other tribal and indigenous lands “is now listed as a” qualifying activity “- an action specifically eligible for the bank to receive credit under the ARC – this includes mortgages, small loans business, agricultural loans and consumer loans.

  • Funding for tribal government programs, projects or initiatives is also listed as an eligible activity if:

    • partially or mainly serves small businesses or small farms;
    • focuses on revitalization, stabilization or government stimulus package for the Indian country.

Other important activities for Native Americans and Indian countries now specifically eligible for ARC credit. Examples:

  • Tribal government programs, projects or initiatives focused on revitalization, stabilization or government recovery plan for the Indian country;

  • Home mortgages secured under the HUD 184, USDA Rural Housing and VA loan guarantee programs to LMI people living anywhere in the country (see ARC Illustrative List);

  • All of these loans if situated in Indian country:

  • All of these community development investments if situated inIndian country:

    • essential community facilities;

    • essential infrastructure;

    • low-rental housing (rental and owner-occupied), including in conjunction with tribal government housing programs;

Banks may receive additional credit in the ARC valuation measure when ARC activities take place in an Indian country:

  • ARC’s valuation measure increases the amount of credit a national bank could receive for branches in the Indian country and other tribal and indigenous lands;

  • The portion of a bank’s branches located in or serving the Indian country and other census tracts of tribal and indigenous lands will increase ARC’s credit.

Which areas qualify as “Indian country” and “other tribal and indigenous lands” for ARC credit?

The new definition of the CRA is broad and inclusive. Together, the definitions of “Indian country” and “other tribal and indigenous lands” include:

  • All land as defined by the Indian country in 18 US Code § 1151, which includes:

    • All lands within the boundaries of any Indian reserve (under the jurisdiction of the Government of the United States, notwithstanding the issuance of any patents, and, including rights of way crossing the reserve);

    • All dependent Indian communities within the borders of the United States (whether in their original or subsequently acquired territory, and within or outside state boundaries);

    • All Indian concessions (of which Indian titles have not been extinguished, including rights of way crossing them).

  • All these lands as defined by the census:

    • tribal census tracts;

    • tribal statistical areas of Oklahoma;

    • Designated Tribal Statistical Areas;

    • Statistical areas of the native villages of Alaska;

    • American Indian joint use areas;

    • Tribal statistical areas designated by the state;

  • Hawaiian origin lands

What does this mean for national banks interested in investing in an Indian country?

Doing business with Native Americans and tribal governments can be seen as untapped clientele ripe for ARC credit investment. Despite an abundance of good projects and bargains, the Indian country is generally underbanked.

There is a very common misconception that investing in an Indian country may be “unknown” or riskier than other investments. Done correctly, with sound advice, investing in an Indian country is comparable to any other investment in a similar situation and can have unique positive impacts.

There is a thirst for good and fair capital. These new ARC rules extend ARC credit to national banks investing in Native Americans, Indian countries, and with tribal governments.


112 USC §2901 (“The purpose of this chapter is to require each appropriate federal financial supervisory agency to use its authority when reviewing financial institutions, to encourage those institutions to help meet the needs of credit of the local communities in which they are licensed in accordance with the safe and healthy functioning of these institutions. ”).

© 2021 Greenberg Traurig, LLP. All rights reserved. Revue nationale de droit, volume X, number 164


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