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This opinion was issued in the second quarter of 1999.
The Commonwealth's Community Reinvestment Act ("CRA") is codified as Mass. Gen. Laws chapter 167, section 14 and its implementing regulations 209 CMR 46.00 et seq. A bank wants to know if making financial or in-kind contributions to the Massachusetts Money Management Program (the "Program") would qualify for consideration under the Commonwealth's CRA statute. The Program provides basic bill-paying services to low-income elders across the state.
In determining whether the contributions to the program would qualify under the CRA, the Division considers the "investment test" and the "service test", so-called. The investment test, as defined by 209 CMR 46.23(1), evaluates an institution's record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader region that includes the assessment area. A qualified investment is defined by 209 CMR 46.12 as "a lawful investment, deposit, membership share, or grant that has as its primary purpose community development." The definition of community development at 209 CMR 46.12 includes "...community services targeted to low- and moderate-income individuals ..." The service test, as defined by 209 CMR 46.24(1), evaluates an institution's record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of an institution's systems for delivering retail banking services and the extent and innovativeness of its community development services. A community development service is defined at 209 CMR 46.12 as a service that (a) has as its primary purpose community development; (b) is related to the provision of financial services; and (c) has not been considered in the evaluation of the institution's retail banking services under 209 CMR 46.24(5). Based on the above regulatory provisions, the Division would consider a state-chartered institution's financial contribution to the Program a qualified investment under the Commonwealth's CRA statute provided the program's activities benefit the institution's assessment area(s) or a broader statewide or regional area that includes the institution's assessment area(s). Further, the Division would consider a state-chartered institution's in-kind contribution to the Program a qualified community development service as defined under 209 CMR 46.12.