Feds release list of poor rural areas that need affordable-housing lending

The federal banking regulators responsible for overseeing the Community Reinvestment Act (CRA) obligations of lenders they regulate have released the 2022 list of distressed or underserved rural census tracts where community-development loans, investments and services are eligible for special CRA consideration. Community-development efforts eligible for the special consideration include affordable-housing lending in these lower-income rural census tracts. The CRA was enacted in 1977 to encourage financial institutions to meet the credit needs of the local communities they serve — with a focus on addressing the community development in low- and moderate-income individuals. CRA regulations define lending and other activities focused on affordable housing for low- and moderate-income individuals as a form of community development, according to the Federal Reserve Bank of Minneapolis. Bank-information services provider Sheshunoff Consulting and Solutions adds that under the CRA “affordable-housing activities must benefit or be likely to benefit LMI [low- and moderate-income]” individuals. An analysis of the census tracts identified by federal banking regulators for 2022 as “Distressed or Underserved Nonmetropolitan Middle-Income Geographies,” reveals the following: States with the largest number of underserved or distressed census tracts: Georgia, 147; North Carolina, 145; Texas, 144; Kentucky, 130; Michigan, 117; and Mississippi, 101.