The Affordable Housing Tax Credit Coalition (AHTCC), a TAAHP industry partner, is closely following implementation of the federal Public Welfare Investment (PWI) cap increase, which raised the limit from 15% to 20%. The increase was a key priority in the 21st Century ROAD to Housing Act, which became law on July 11.
With the new federal limit now in place, banking regulators are expected to undertake rulemaking to bring existing PWI regulations into alignment with the legislation. The AHTCC will continue monitoring the regulatory process and other implementation steps, including efforts to support an efficient process for banks seeking approval to increase their PWI caps.
State Investment Limits Also Under Review
In addition to the federal implementation process, the AHTCC is examining state laws that could affect how fully banks can utilize the increased PWI authority.
Although national banks generally operate under the federal PWI framework, approximately four out of five U.S. banks are state-chartered and must also comply with applicable state requirements. Many states either follow the federal PWI limit or do not establish a separate PWI-specific cap.
However, nine states — Arkansas, Indiana, Minnesota, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, and South Dakota — maintain PWI-specific limits below the new 20% federal ceiling. Other states may have broader restrictions governing bank investments that could also affect the ability of state-chartered banks to invest in affordable housing.
The AHTCC is continuing its nationwide review of these state-level requirements and is seeking input from members who have experience navigating state-specific investment restrictions. This information will help inform the organization’s understanding of how state rules may affect implementation of the expanded federal PWI cap.