Does Your Bank Make Church Loans? I couldn't get the Poll to accept the last question which is

Does being able to take CRA Small Business Credit provide any additional incentive to make these loans?

We do not have an active marketing program for church loans but word of mouth has brought us a significant portfolio of them.

They are unique and must be treated likewise.

Then there is always the fear of what to do it one actually goes bad. We have only had real trouble with one church and we worked VERY hard to work it out with them. Now they are back on their feet. The last thing we want to do is ever foreclose on one. Re-sale would be no problem. Public opinion, on the other hand, would be horrible.

Now let's see the start up restaurant questionaire

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Then there is always the fear of what to do it one actually goes bad. We have only had real trouble with one church and we worked VERY hard to work it out with them. Now they are back on their feet. The last thing we want to do is ever foreclose on one. Re-sale would be no problem. Public opinion, on the other hand, would be horrible.

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It seems to me public opinion would be worse for the church than for the bank. And are you saying you tried harder to work out the church loan than you do for other borrowers? Wouldn't that be discriminating on the basis of religion?

Don, I'd be interested to see this in the Lending threads. Afterall, "Church Loans" are not CRA most of the time. Did you think of placing it there and decide here was a better idea? You'll certainly not find as many lenders here....

Our bank has several church loans and good experience in making them. With any specialized lending, we have had a few go bad. But all-in-all, the portfolio is a nice addition to the bank.

In making a church loan, you normally get the church account and a large group of their members to bank with you.

"Don, I'd be interested to see this in the Lending threads"

Dawnie Church Loans do qualify as CRA Small Business Loans if they meet the $1 mil and under criteria etc just like any other Small Business.

I was trying to find out if there was a market to originate the loans, and next to see if the CRA credit is an incentive is factor considered in making them. Except I screwed up the post and that question didn't take for some reason.

Yes, I will admit that we did try a little harder to 'workout' the church loan. And no, I don't think public opinion would have looked worse for the church than for us. We would have been made out to be the "big bad business" that put the church out of business. In fact, it was a dishonest building contractor that put them in that position. However, anyone with experience with local newspapers knows that the whole truth is not always revealed.

As for it being discrimination, it was simply a business decision. We did not want the negative attention of foreclosing on a church and since the church and the congregation were willing to keep trying to work this out, we helped them along.

We make a number of church loans, both loans that would and would not qualify for CRA. CRA is not a selling point if the loan won't stand on its own.

Don I guess I was reading the question as CRA CD credit, verses CRA credit. Sorry for the confusion. We don't do any loans just because they report on the LR so my mind wasn't working the same way yours was

We could care less of a loan reports on the LR, but do sometimes make an extra effort for approval if it meets CRA CD standards. Those are rarely church loans though.

And as KC points out, CRA reportability (CD or LR) never is a factor when a loan won't stand on it's own.