Steps Taken by Regulatory Agencies To Implement Section 603 of the Housing and Community Development Act of 1980

GAO commented on a congressional request to ascertain what steps have been taken by various Federal regulatory agencies of financial institutions to implement a section of the Housing and Community Development Act of 1980. In undertaking the review, GAO confined its inquiry to interviewing officials at six Federal agencies and focused it around whether: the agencies discouraged financial institutions from lending for conversions that would adversely impact low-income, handicapped, and elderly pensions; the agencies informed various public organizations about the congressional action in the section; and the agencies assured that the section is being implemented by financial institutions which they supervise. In its investigation, GAO found that none of the regulatory agenices had developed, or is planning to develop, any specific regulations to enforce the section. The reasons that were given for not doing so were that the agencies considered the section to be unenforceable and that it was difficult to assess the potential effects of a conversion project on a community. Although most of the agencies were discouraging their institutions from making loans for conversions with adverse impacts by informing them of the congressional intent expressed in the section, none of the agencies had specific plans to inform various public organizations about the congressional action. Additionally, none of the agencies had developed procedures to assure that the section is being implemented by financial institutions.