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October 29
Documenting an Applicant's Intent to be a Joint Applicant;
David Dickinson

November 4
Issues with Deceased Customers;
Mary Beth Guard and John Burnett

November 5
Vault Burglaries, Floods, Fires & Other Disasters;
Dave McGuinn

November 6
MLO v LO - Who Has to Do What?;
Jack Holzknecht and Mary Beth Guard

November 13
Domestic Violence & Workplace Violence: There Is A Link;
Shelly Collins and Dana Turner

November 18
Understanding USPAP and Regulatory Guidelines for Appraisal and Evaluation Compliance Reviews;
Eric Collinsworth



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#1080062 - 11/11/08 03:21 AM CDL - Tax, Bond, or Revenue Anticipation Notes
tennismom Offline
Gold Star

Registered: 01/14/04
Posts: 499
Lets say either is to a school district where more than 50% of the students are eligible for free or reduced meals or to a municipality that consists of distressed and LMI census tracts. Would these be CDL?

I thought I heard a regulator say "NO TANS, BANS, or RANS" for CDL credit. However, I did find a CRA PE on the FDIC website where the examiner gave the financial institution lending credit for a TAN.

Thanks.

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CRA
#1080069 - 11/11/08 08:08 AM Re: CDL - Tax, Bond, or Revenue Anticipation Notes [Re: tennismom]
Len S Offline
Diamond Poster

Registered: 10/14/04
Posts: 1339
Loc: Connecticut
You are correct. I have observed to my surprise that in several FDIC CRA Performance Evaluations, examiners have given credit for tax anticipation financing. The PE did not make it clear why the TAN was considered legitimate CD lending, but in the instances I have read, the municipality was in distressed or underserved areas and that may have been a consideration.
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CRA Exam Preparation, CRA Performance Evaluations, Key Performance Benchmarks, & maps

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#1080078 - 11/11/08 08:38 AM Re: CDL - Tax, Bond, or Revenue Anticipation Notes [Re: Len S]
tennismom Offline
Gold Star

Registered: 01/14/04
Posts: 499
The PE I read gave the financial institution CDL credit for a TAN to a school district.

We do a considerable amount of this type of lending, at least three or four during a quarter that I would give CDL lending consideration. I don't want to elevate my CDL numbers and dollars then have the examiners throw out the loans...wouldn't make me look real good.

Len, what would you advise your clients (include or not include these notes in CDL totals)?

Anyone else have experience with these notes.

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#1080304 - 11/11/08 09:40 PM Re: CDL - Tax, Bond, or Revenue Anticipation Notes [Re: tennismom]
Mrs. Rizzo Offline
10K Club

Registered: 03/07/06
Posts: 10385
Loc: Curled up by the fire...
I would include them.
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Take responsibility for your life.

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#1080311 - 11/11/08 11:54 PM Re: CDL - Tax, Bond, or Revenue Anticipation Notes [Re: Mrs. Rizzo]
Len S Offline
Diamond Poster

Registered: 10/14/04
Posts: 1339
Loc: Connecticut
If the loans are to a municipality that is within a LMI tract or group of LMI tracts or distressed or underserved tracts (many rural towns occupy only a part of one census tract) then I think you have grounds to claim the loan for CD credit and, if the examiner objects, show him/her the PE's that have given such credit for similar circumstances. Interpretations in the field can be inconsistent on issues when there is no official Agency position. However, I wouldn't heavily rely on these loans to get you to a satisfactory rating. Also, sometimes you can get CD credit for an activity that will count toward an outstanding rating only after you have achieved a satisfactory rating based on your other CD activity. This was a point of confusion regarding the Hurricane Relief back a few years ago and the Agencies had to clarify that banks outside those disaster areas could get credit for their efforts but only after they had established that they had satisfied their own AA CD needs.
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CRA Exam Preparation, CRA Performance Evaluations, Key Performance Benchmarks, & maps

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