Federal bank regulatory agencies today announced an interim final rule that supports the Treasury Department’s implementation of a program established by Congress to make capital investments in minority depository institutions and community development financial institutions.
The Treasury Department’s Emergency Capital Investment Program (ECIP) will support the efforts of these financial institutions to provide loans, grants, and forbearance to small businesses, minority-owned businesses, and consumers, especially in low-income and underserved communities, which may be disproportionately affected by COVID-19. Under the program, Treasury will purchase preferred stock or subordinated debt from qualifying minority depository institutions and community development financial institutions, with the corresponding dividend or interest rate based on the institution meeting lending targets.
To facilitate implementation of ECIP, the agencies are revising their capital rules to provide that Treasury’s investments under the program qualify as regulatory capital of insured depository institutions and holding companies. The rule is effective immediately upon publication in the Federal Register and comments will be accepted for 60 days after publication.