Public Hearing on 209 CMR 46.00: Community Reinvestment and 209 CMR 54.00: Mortgage Lender Community Investment

Pursuant to the provisions of Massachusetts General Laws chapter 167, section 14 and chapter 255E, section 8, and in accordance with Massachusetts General Laws chapter 30A, section 2, a public hearing will be held on Monday, April 11, 2016 at 3:00 p.m., 1000 Washington Street, Hearing Room 1-E, Boston, Massachusetts, at which the Division of Banks (Division) will receive oral comments relative to the proposed amendments to 209 CMR 46.00: Community Reinvestment and proposed amendments to regulation 209 CMR 54.00: Mortgage Lender Community Investment.

Proposed Amendments to 209 CMR 46.00: Community Reinvestment                                                  

209 CMR 46.00 carries out the purpose of the Community Reinvestment Act (CRA) by establishing the framework and criteria by which the Commissioner assesses a state-chartered bank’s or state-chartered credit union’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution.  The regulation also provides that the Commissioner take that record into account in considering certain applications pursuant to 209 CMR 46.29.  The Division is proposing to amend the regulation so that there is a limited-scope CRA review for state-chartered credit unions with less than $50 million in assets and which have field of membership by-laws that are not based on residence in order to reduce the regulatory burden on these smaller institutions.  A credit union representing a specific group of employees, or representing a specific employer, would be an example of a credit union which has a field of membership by-law that is not based on residence. 

Proposed Amendments to 209 CMR 54.00: Mortgage Lender Community Investment 

The purpose of 209 CMR 54.00 is to carry out the Mortgage Lender Community Investment (MLCI) purposes of Massachusetts General Laws chapter 255E, section 8 by establishing the framework and criteria by which the Commissioner assesses a mortgage lender's record of helping to meet the mortgage credit needs of the Commonwealth, including low- and moderate-income neighborhoods and individuals, consistent with the safe and sound operation of the mortgage lender.  The regulation also provides that the Commissioner take that record into account in considering certain applications pursuant to 209 CMR 54.26.   Under this regulation, there are two tests, the Lending Test at 209 CMR 54.22, and the Service Test, at 209 CMR 54.23.  The Lending Test evaluates a mortgage lender’s record of helping to meet the mortgage credit needs of the Commonwealth through its lending activities by considering a mortgage lender’s home mortgage and community development lending.  The Service Test evaluates a mortgage lender’s record of helping to meet the mortgage credit needs in the Commonwealth by analyzing both the availability and effectiveness of a mortgage lender’s systems for delivering mortgage loan products, the extent and innovativeness of its community development services, and loss mitigation services to modify loans or otherwise keep delinquent home loan borrowers in their homes.  The proposed amendments to 209 CMR 54.00 would allow mortgage lenders who made fewer than 100 loans in the prior calendar year (eligible lenders) to be excluded from the criteria of the Service Test, with one exception.  The loss mitigation services component of the Service Test would be added to the criteria of the Lending Test, and would therefore remain part of the MLCI examination for eligible lenders.

Proposed Repeal of 209 CMR 4.00: Compliance with Federal Law and Regulation, and Proposed Amendments to 209 CMR 43.00: Audit Requirements for Credit Unions

In addition, the Division notes that two other regulatory matters are also the subject matter of this public hearing, the proposed repeal of 209 CMR 4.00: Compliance with Federal Law and Regulation, and the proposed amendments to 209 CMR 43.00: Audit Requirements for Credit Unions.  The public hearing notice, the proposed repeal and the proposed amendments were published in the Massachusetts Register on March 11, 2016. 

 Additional changes may be made based on comments received at the public hearing or during the comment period.

Written comments may be submitted to the Massachusetts Division of Banks, 1000 Washington St., 10^th Floor, Boston, MA  02118-6400 or at dob.comments@state.ma.us until 5:00 p.m. on Thursday, April 14, 2016.  Copies of the proposed amendments are available at, and copies may be obtained from, the Massachusetts Division of Banks or at www.mass.gov/dob.