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NYDFS Reminds Banking Institutions of Additional CRA Obligations

The New York Department of Financial Services ("NYDFS") reminded banking institutions of recent amendments to the New York Community Reinvestment Act ("CRA"), which require additional information on activities with respect to minority- and women-owned businesses. The NYDFS also said it "will make related changes to its CRA examination process in response to these amendments."

In an industry letter, the NYDFS directed each banking institution to:

  • include in its CRA performance evaluation a record of past initiatives aimed at helping minority- and women-owned businesses; and

  • prepare for information requests from the NYDFS regarding data on such initiatives.

The NYDFS noted that when reviewing a banking institution's performance evaluation, it will consider (i) investments, (ii) technical assistance programs, and (iii) loans in support of small businesses and minority- and women-owned businesses.

In a separate industry letter, the NYDFS outlined circumstances in which a financial institution may receive credit for supporting small businesses or minority- and women-owned businesses, such as, among other things, providing:

  • loans (including Paycheck Protection Program (or "PPP") loans) to small businesses in amounts less than $1 million; and

  • PPP loans that are greater than $1 million, if the loan helped to retain jobs or supported low- or moderate-income areas.

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