Provides for the Louisiana Community Investment Fairness Act (OR INCREASE SG EX See Note)

HB 814 enacts Chapter 25 of Title 6 of the Louisiana Revised Statutes, establishing the Louisiana Community Investment Fairness Act and creating a regulatory framework for state-chartered financial institutions. The law requires the commissioner of the office of financial institutions to conduct community investment examinations of regulated institutions no less than once every three years. These examinations assess four specific areas: the institution's lending record to low-to-moderate income borrowers and in low-to-moderate income and majority-minority census tracts compared to lending in non-low-to-moderate income areas and peer institutions, investments in community development activities such as affordable housing and small business lending, provision of financial services accessible to low-to-moderate income and minority customers, and formal complaints alleging discriminatory lending practices. Following each examination, the commissioner assigns one of four ratings: Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance, based on whether the institution's community investment performance is exceptional, meets requirements, falls below peer benchmarks, or demonstrates a pattern of discriminatory lending.

The law impacts state-chartered banks, savings institutions, and credit unions with assets of one hundred million dollars or more. Regulated institutions must post their current community investment rating conspicuously in each branch, on their website, and in annual reports to depositors. Institutions rated Needs to Improve must submit a corrective action plan within ninety days, meet with the commissioner within sixty days, and undergo an accelerated examination within eighteen months. The commissioner shall consider community investment ratings when reviewing applications for new branch openings or closures, merger or acquisition approvals, charter type conversions, and other commissioner-approved actions. Institutions rated Substantial Noncompliance for two consecutive examination cycles face potential denial or conditioning of pending applications, possible divestiture of state-funded deposits held by state agencies, and referral to the attorney general for investigation of fair lending violations.

This law operates within the state regulatory framework governing financial institutions under Title 6 of the Louisiana Revised Statutes and operates in parallel with the federal Community Reinvestment Act of 1977, which the statute notes applies to federally chartered institutions but not to all state-chartered institutions. The statutory framework defines assessment areas as the parishes where an institution maintains branches, and relies on census tract data to identify low-to-moderate income areas and majority-minority areas. The law addresses a specific concern identified in the statute's findings regarding redlining practices historically documented in state-chartered institutions not subject to federal examination. The rating system creates consequences tied to regulatory approvals that the commissioner already possesses authority over, allowing the commissioner to enforce compliance through existing approval mechanisms while adding public disclosure and accountability mechanisms through website publication and branch posting requirements.