Does a participation with a bank outside of our assessment area qualify for CRA? It qualifies for the other bank, and with our participation of over 2 million it would be nice.

-Chris

Qualify as What, Community Development?

If it meets the CD definations, yes you can take credit for it. You need to show you've served your assessment area first, then you can step out and serve "A broader statewide or regional area".

Thank You! I called our legal council the other day and they said we could not. After I received your response hope leaped into my soul and I called our FDIC examiner (not that I doubted you) and she concurred. This is wonderful news for us.

When you put in quotes: "A broader statewide or regional area", were you quoting something?

Thanks!

Chris

Yes, I'm quoting the reg as well as a Q&A addressing a bank's abilty to take CD credit for investments and loans provided outside of their assessment area.

You can only take credit for the amount you participated in, OR if you're the originating bank, and you have non-CRA participants, you can take their portion as well. (There can be no double reporting of any of the funds loaned).

Legal council heh heh where the heck did they pull that answer from?

I thought that the lead bank reports for the entire loan. In our situation, we participated $200,000 in a small business loan. We originally included it in our LAR, but our compliance officer had us remove it.

They can do that anon, but it's rare. Most of us enter into these deals with the CD value in our minds as well. Your bank may have entered into a participation with a bank that insisted on the entire amount. That is normally covered in your participation agreement. Did your compliance officer review that?

(Also, you don't report small business loans on the LAR...they're on the LR)

It's important to differentiate what we're talking about here. Taking Community Development Credit for a loan, verses reporting it on the LR. The originating bank would report it on the LR if it is reportable. If it's reportable, there would be no CD value to it. (well technically a little, but not much)