Community Investment Cash Advance Programs

The Federal Housing Finance Board (Finance Board) is proposing a rule establishing a general framework under which the Federal Home Loan Banks (Bank) may establish community investment cash advance (CICA) programs in addition to their Affordable Housing Programs (AHP) and Community Investment Programs (CIP). The proposed rule does not require a Bank to establish CICA programs. It is intended to provide the Banks with an outline of what the Finance Board has determined will meet the statutory requirement that CICA programs support community investment. The proposed rule is intended to establish one set of general standards governing all CICA programs, including the Banks' CIPs. The proposed rule, however, does not apply to a Bank's AHP, which is governed specifically by part 960 of the Finance Board's regulations. In addition to establishing a general outline for CICA programs, the proposed rule establishes standards for two specific CICA programs a Bank may establish: the Rural Development Advances (RDA) and the Urban Development Advances (UDA) programs. The proposed standards for the RDA and the UDA programs are intended to create a safe harbor for programs that the Finance Board would consider to meet the statutory requirement that CICA programs support community investment. A Bank will not be required to obtain prior Finance Board approval of CICA programs the Bank may create. However, all such programs will be subject to review through the examination process to determine whether they support what the Finance Board considers to be community investment financing.