We are regulated by the OCC. In 2003 our bank made a substantial investment in a CRA Fund. We received credit for that investment when the examiners did a CRA exam in early 2004. My question is, will the examiners continue to give us credit at our next exam for that same investment if we leave it in this fund? Or would we only get credit if we reinvested those same funds into another CRA related fund? Thanks for any insight out there!!

You'll see the amount of the investment that is still on the books listed as a "previous period investment". When you provide your investments to the examiners, you should include this, but be sure to title it as noted above. They will include the balance on Table 14.

Be sure to factor in the value of the investment to the bank when considering holding it to term. It could be that the rate of return isn't worth hanging on to it. Or it could be a wonderful rate You can always invest in another one if you let this one go.

When you write your performance context, if you are low on investments, but this particular one was a substantial sum, be sure to specifically address it if you hold on to it. Sometimes a bank makes a significant capital outlay for an investment that lasts several exam cycles. As time goes on, an examiner might not feel that the investment represents enough qualify because it's old. You always want to address why it was significant, and why you haven't purchased more if that is an issue, so they know everything they need to when writing up the exam.

Thank you Dawnie!! I appreciate your help.

sugarbaby.....My bank is invested in the CRA Qualified Investment Fund, and we received credit for this on our last PE. This fund's policy, as I'm told, is to re-allocate investments (My bank has 6 AAs) after publication of the PE. We're going through this right now. As you accrue dividends that are re-invested, you should also see those funds allocated at some point. I would think that you should receive credit as "new" investments those allocations pertaining to accrued dividends. Could be wrong, however.

we asked our examiner about this fund and were told that it would only help us if the fund had active projects within our assessment area.

Becca.....Please look at this link:

http://www.crafund.com/mutual_fund.asp?PageID=37

The footnotes detail several interagency interpretive letters. I found two of them (Nos. 799 and 800) at the following:

http://www.occ.treas.gov/cra/craintrp.htm

The challenge I did have during my PE was to get the underlying investments for which we were allocated credited to particular AAs. We had three investments: Indiana Housing Finance Authority bonds and two Freddie Mac pools. For the Freddie Mac pools we received property addresses for the loans in the pool that were in our AAs. My examiner gave credit to the AA that contained most of the addresses on the list. For the IHFA bonds we had to accept credit for the broader statewide/regional area.

Hope this helps. My bank is OCC. Yours?

Becca the investment can be within your assessment area, or a broader statewide or regional area. Don't buy a fund that can't document they're specifically serving your area (or close to your area) in some way, either by property allotment, or % of deals in the pool.

I'm skeptical about any investment that asks me for funds up front, so they can go "find" the mortgages to fit in my AA. What happens if they don't find enough? I end up wasting my money on a fund that won't count for CRA purposes.

I instead purchase from programs that can document up front that they're alloting me enough value to take CD credit for the deal. It's cleaner, and safer (job wise) and you don't end up looking like an idiot because you bought funds in Florida, when your bank is in Alaska.