A final rule from federal regulators will give banks positive consideration in their Community Reinvestment Act examinations when they lend and invest in neighborhoods with high foreclosure rates. The rule changes the definition of "community development" in CRA regulations to include loans, investments and services in areas targeted by the Department of Housing and Urban Development's Neighborhood Stabilization Program. According to the final rule, high levels of foreclosures are expected into 2012 and beyond, which will continue to effect low- and moderate-income areas. For example, a bank can receive favorable consideration if it donates REO properties to nonprofit housing organizations. "There is a pressing need to provide housing-related assistance to stabilize communities affected by high levels of foreclosures," according to the final rule. The joint final rule was issued by the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision. It is effective 30 days after the rule is published in the Federal Register, which is expected shortly. HUD had allocated nearly $7 billion through three rounds of NSP funding to help state and local governments. HUD rolled out the first $4 billion round of NSP funding in September 2008. The $2 billion of in the second round of NSP funding arrived in January 2010., and Dodd-Frank allowed for $970 million more in a third round. "The agencies believe that the purposes of CRA can be served by providing CRA incentives to institutions to engage in community development loans, investments and services that meet the narrowly tailored requirements of the NSP," according to the rule. Write to Jon Prior.