Register for 2017 North American Windpower Print Buyer's Guide

[Editor’s note: The following was provided by the Office of the Comptroller of the Currency (OCC), a bureau within the U.S. Treasury Department. Per compliance requirements, the following article is intended for informational purposes only.]


National banks and federal savings associations (FSAs) have broad authority to make loans and extend credit. As a general rule, national banks are not permitted to invest in real estate, including wind energy facilities. However, the public welfare investment (PWI) authority permits national bank and FSA investments in wind energy facilities if the investment is “designed primarily to promote the public welfare, including the welfare of low- and moderate-income (LMI) communities or families.”

FSAs may make investments in wind energy facilities under PWI authorities similar to those of banks. Wind energy projects do not automatically qualify as PWIs. Federal regulations permit national banks and FSAs to make a PWI if the investment primarily benefits LMI individuals, LMI areas or other areas targeted by a governmental entity for redevelopment, or the investment would receive consideration as a “qualified investment” under regulations issued pursuant to the Community Reinvestment Act (CRA).

Using the PWI authority, national banks and FSAs may invest in wind energy-producing facilities, directly or indirectly (i.e., by taking interests in the entities themselves or in funds that hold wind energy facilities), if the beneficiaries or the location of the facilities is consistent with the requirements of the PWI authority.

One way to demonstrate benefit to LMI individuals under the PWI authority, for example, is to show a reduction in energy costs in an affordable housing development. Alternatively, a wind energy-producing facility’s location might provide a basis for permitting an investment in such a facility to qualify as a PWI because that authority allows national banks and FSAs to invest in projects that primarily benefit LMI areas.

Also, the facility could be located in an area targeted by a governmental entity for redevelopment. Most often, the designation will cover a neighborhood, district or other geographic area under a formally adopted redevelopment plan that includes special activities and benefits or funding from public and private resources. A governmental entity may include any legally incorporated town, city, county, tribal, or federal governmental agency or entity.

Examples of formally designated redevelopment areas include federal empowerment zones, brownfield sites, rural communities, state enterprise zones or city tax incremental financing (TIF) districts.

The final category involves a “qualified investment” under the CRA regulations. Some investments in wind-producing facilities may be considered qualified investments if the facilities revitalize or stabilize LMI areas or rural, middle-income, underserved or distressed communities.

Also, an investment that promotes economic development by financing small businesses may be considered a qualified investment.

This could include, for example, an investment that finances a small business, where the small business either installs wind turbines or manufactures the turbine’s components. When the location of the wind energy-producing facility forms the basis for qualifying under the public welfare authority, a national bank or FSA must also demonstrate that there is job creation in order to meet the public welfare standard.

For example, if a project is located in an LMI area and creates permanent jobs, the institution typically would be able to provide a sufficient basis for establishing the public welfare benefit. For wind energy-producing facilities, permanent jobs primarily involve maintenance and servicing.

The Federal Financial Institutions Examination Council’s website (ffiec.gov) can be used to find a list of distressed or underserved census tracts. Median family income statistics and a geocoding system to map census tract level information on area median income can also be found on that website, although a specific address is necessary to use the geocoding system.

For large wind energy arrays located in rural areas, where an address may be unavailable, other data sources may help pinpoint family or area income by county or census tract. Policymap.org is another data source for evaluating area income and includes mapping tools.

The U.S. Census Bureau also provides census tract maps by county (census.gov). Certain safety and soundness considerations and limitations apply to all PWIs. A national bank’s aggregate investments under the PWI authority cannot exceed 5% of the bank’s capital and surplus, although this limit may be increased up to 15% if the OCC approves a national bank’s proposal requesting regulatory permission to exceed the 5% limit for its aggregate PWIs.

Investment limits governing these activities for FSAs differ from those for national banks and vary depending on which legal authority is being used to make the investment. Finally, a PWI may never expose a national bank or FSA to unlimited liability.

The OCC has approved investments in wind energy installations under the PWI authority:

National banks seeking to invest in wind energy generation facilities under the PWI authority must either submit a prior approval notice to the OCC before making an investment or, if the national bank meets the eligibility standards, submit an after-the-fact notice to the OCC. Even if an eligible national bank meets the after-the-fact notification requirements, the national bank should consult with the OCC Community Affairs Department to discuss whether its proposed investment will qualify as a PWI.

The OCC currently is in the process of integrating the PWI requirements for FSAs into the agency’s regulations. In the meantime, FSAs seeking to make PWIs should comply with the former Office of Thrift Supervision’s PWI requirements. w


The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department that regulates, supervises and charters national banks and federal savings associations. The Community Affairs Department at the OCC can be reached at (202) 649-6420 or occ.gov.

Industry At Large: Project Finance

Little-Known Treasury Program Could Provide Financing Boost

By The Office of the Comptroller of the Currency

A U.S. Department of the Treasury legal authority may allow a greater number of national banks to participate in tax-equity financing of wind farms.





NAW_body hyperlink NAW_body_i NAW_body_bi NAW_body_b_i NAW_body_b








NAW_SH norule