Joint rule supports Treasury program for CDFIs, MDIs

Federal bank regulators issued an interim final rule that supports the Treasury Department’s Emergency Capital Investment Program, which will provide $9 billion in capital to Community Development Financial Institutions and Minority Depository Institutions.

Background: Under the program, Treasury will purchase preferred stock or subordinated debt from qualifying institutions, with the corresponding dividend or interest rate based on the institution meeting lending targets.

Rule: To facilitate implementation, the agencies are revising their capital rules to provide that Treasury’s investments under the program qualify as regulatory capital. The rule is effective immediately upon publication in the Federal Register, and comments will be accepted for 60 days. Read more from FDIC.