Rural Areas and NMTC

In a letter this month, leaders of the Senate finance committee urged the Treasury Department and the CDFI Fund to ensure that rural areas receive a proportional share of New Markets Tax Credits (NMTC). In the 2005 round, the Senators pointed out that only 10% of NMTC allocations went to non-metropolitan areas. The Senators then suggested that 25% should be the minimum amount awarded to rural areas.

How would such a change affect our large institutional investor clients? Would this be a welcome change, helping banks to attain their Community Reinvestment Act (CRA) goals? Or would this be viewed as a problem by institutional investors, who may prefer to invest in urban and suburban areas where growth is stronger?