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#1166086 - 04/17/09 09:32 PM CD qualified investments.
MyKidsMom Offline
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We have a local children's sports org that is a 501c3 non-profit. Their programs are open to all but they have scholarships available if needed. They don't have well defined criteria as to income qualifications for the qualifications and less than 50% of participants are on scholarship. A bank in our market received credit for their "donation" to this group. Even though, I don't think it meets the defintion, can I use their PE as support for CD qualified?

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#1166248 - 04/18/09 10:13 PM Re: CD qualified investments. MyKidsMom
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Yes, you sure should - but there is no way sports related activities are CRA eligible - they now get the same treatment as Arts and Culture - it should be an automatic rejection by the examiners.....

how old is this PE you are looking at?
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#1167848 - 04/22/09 02:10 PM Re: CD qualified investments. Pale Rider
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The PE was from 2007...hmmm.

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#1167892 - 04/22/09 02:53 PM Re: CD qualified investments. MyKidsMom
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I've never heard that about arts and culture. We just wrapped up a CRA exam in December. Ever year we make a sizable contribution to our local theater with the funds earmarked for tickets for low income individuals and matinee performances targeted at schools with a majority of low/mod income students. It's always been counted and they've never asked any questions on it - and they did question and throw out some other donations we had.
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#1167893 - 04/22/09 02:53 PM Re: CD qualified investments. MyKidsMom
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this sports organization does not have as its mission to serve LMI, does not have well defined criteria for proving that more than 50% of its clients are LMI, and yet a bank is given CD Investment credit ---

sigh............

I can't even see how this meets the definition of community development.... what are we missing?

mad at subjective examiner treatment
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#1167897 - 04/22/09 02:56 PM Re: CD qualified investments. Jaeger Schnitzel
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Originally Posted By: Jaeger Schnitzel
I've never heard that about arts and culture. We just wrapped up a CRA exam in December. Ever year we make a sizable contribution to our local theater with the funds earmarked for tickets for low income individuals and matinee performances targeted at schools with a majority of low/mod income students. It's always been counted and they've never asked any questions on it - and they did question and throw out some other donations we had.


We have the following in writing from our primary regulator:

"Arts/Culture related investments are NOT eligible under CRA, regardless of benefit to LMI individuals" -- this is an exact quote......
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#1167911 - 04/22/09 03:14 PM Re: CD qualified investments. Pale Rider
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Well humph (to your examiners, not you)! I don't see how providing cultural experiances isn't a community service. I guess we'll keep counting them until we get slapped down by our examiners. It always amazes me how inconsistant things are between agencies and regions.
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#1167989 - 04/22/09 04:27 PM Re: CD qualified investments. Jaeger Schnitzel
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Our examiners would give us credit for arts/cultural donations if the organization benefiting was located in an LMI CT. Is that the case with the original post perhaps??

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#1168002 - 04/22/09 04:35 PM Re: CD qualified investments. Bullseye
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Originally Posted By: Bullseye
Our examiners would give us credit for arts/cultural donations if the organization benefiting was located in an LMI CT. Is that the case with the original post perhaps??


the plot thickens!!!!!

here is the response from our regulators when the non-profit is located in an LMI census tract, again, I quote verbatim:

"Programs offered in an LMI area are not sufficient, unless related to revitalization (e.g., hurricane relief) or economic development of small businesses or micro-businesses; otherwise, the programs must benefit majority (>50%) LMI individuals."


cry

your shops are getting away with so much more than mine can!!!!
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#1168010 - 04/22/09 04:40 PM Re: CD qualified investments. Bullseye
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While at a former FI we received credit for donating money to help rehabilitate a theater that had fallen into disrepair in a downtown revitalization area. The theater was and restored began offering quality entertainment and help to revitalize and stabilize a declining downtown area.

We were able to help the arts and meet the definition of CD.

If you can get credit for an activity by all means do so, be sure to back it up with lots of information. On the other hand, (if it was me) and my regulator was the cranky type I'd still try and get credit, hit them with the same argument (I'm stubborn like that) and hope for the best. If your FI is going to give out the money anyway, might as well go to bat and try your best to make it count.
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#1168021 - 04/22/09 04:48 PM Re: CD qualified investments. Pale Rider
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Originally Posted By: Pale Wilson

here is the response from our regulators when the non-profit is located in an LMI census tract, again, I quote verbatim:

"Programs offered in an LMI area are not sufficient, unless related to revitalization (e.g., hurricane relief) or economic development of small businesses or micro-businesses; otherwise, the programs must benefit majority (>50%) LMI individuals."


cry

your shops are getting away with so much more than mine can!!!!


It seems to me that if you have something, say an arts program, in an LMI tract that you are fostering, this will help bring attention to the area, bring in people who will then be spending money in that LMI tract and helping with the revitalization and economic development of the area. mad

I wonder if they pick on the financial power houses more than the community bankers in this respect, as the giant mega-banks have more cash to throw at higher profile projects.

There there Pale...::offers shoulder to cry on::
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#1168070 - 04/22/09 05:14 PM Re: CD qualified investments. bOaty
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In all honesty, I did not submit the donation to them for CRA credit. It was to a museum in an LMI CT but had nothing to do with LMI individuals, nor did I think it met the definition of CD. They happen to run across the donation and "encouraged" me to submit it stating that if the museum didn't get the funds/donations necessary to operate, it would be another empty, deteriorating structure in a low-income area....exactly what the area did not need to happen. So, I took the credit and will resubmit it again next time as it is an annual thing we do.

I agree, and get similarly frustrated when I read things here & other places that detail CRA credit for something that wouldn't get us a second glance. Two recent examples - not allowing us to use HUD's fair market rents to determine whether or not housing can be classified as "affordable" and having to record the number of hours volunteered for qualified CRA CD Services when other PE's in our area have no mention of it.

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#1168087 - 04/22/09 05:29 PM Re: CD qualified investments. Bullseye
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Originally Posted By: Bullseye
It was to a museum in an LMI CT but had nothing to do with LMI individuals, nor did I think it met the definition of CD. They happen to run across the donation and "encouraged" me to submit it stating that if the museum didn't get the funds/donations necessary to operate, it would be another empty, deteriorating structure in a low-income area....exactly what the area did not need to happen.


That's my argument as well. If you are helping to keep something alive and thriving in an LMI area, whether or not it targets the LMI population, how can that not contribute to the economic vitality of the area?? Creating a vibrant, intersting place to go in so many of the rundown/slum areas in this country has been the key to turning neighborhoods around and bringing prosperity to those areas.
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#1168108 - 04/22/09 05:43 PM Re: CD qualified investments. bOaty
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I guess it could fall under the stabilization of an LMI area section of community development?? Not sure how it was classified. I was always trained more along the lines of that at least 50% had to benefit LMI individuals or had to focus on affordable housing, job creation or revitalization in the way of improvements to an LMI area.

Why then do you not get credit for loan on an apartment complex in an LMI area if it has higher than fair market rents? Wouldn't it be the same argument that without the loan it would be an empty building? I have gotten that rejected in that it is there to serve the "wealthier" residents of the neighborhood & provides no benefit to LMI individuals.

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#1168267 - 04/22/09 07:15 PM Re: CD qualified investments. Bullseye
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Back to my original question, I personally don't think it meets the definition but the FDIC examiner that did my competitor's PE did, so who am I to argue..?? I I can write it up to make it sound better but I doubt if I could ever get to "targeted" to LMI.. I think I'll just print out the PE in question and add to my documenation.

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#1168294 - 04/22/09 07:29 PM Re: CD qualified investments. MyKidsMom
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I think we can all agree with you tx.....

it can be instructive to your examiners what their peers are doing....

and it can't hurt submitting it either during the data integrity or exam period........
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#1170870 - 04/27/09 08:25 PM Re: CD qualified investments. Pale Rider
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We paid for LMI to go to an NAACP banquet and it did not count. Also, I provided PE's that showed lots of things counting that our examiner refused to count. I was told that just because other examiners did something wrong didn't mean he was going to.
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#1170918 - 04/27/09 09:06 PM Re: CD qualified investments. JUST CALL ME CRA
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Zactly!!!!!!!!!!!!!!!!!!!
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