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#1381840 - 04/27/10 01:07 PM CRA Donations

I need to clarify CRA Donations.

Will we get credit for donating to any institution - as long as they help LMI Individuals or they do activiies that revitalize LMI geographied, etc?

Also, does the institution need to be certified?

Finally, how much due diligence is needed for the examiners to give the bank CRA credit?

Thanks for you help.

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#1384891 - 05/03/10 03:05 PM Re: CRA Donations Anonymous
Karen Tucker Offline
Junior Member
Joined: Mar 2007
Posts: 39
Washington, DC
See Q&A excerpt; some things are "automatic" as listed in the Q&As. but not all.

§ __.12(t) – 4: What are examples of qualified investments?
A4. Examples of qualified investments include, but are not limited to, investments, grants, deposits, or shares in or to:
• Financial intermediaries (including Community Development Financial Institutions (CDFIs), New Markets Tax Credit-eligible Community Development Entities, Community Development Corporations (CDCs), minority- and women-owned financial institutions, community loan funds, and low-income or community development credit unions) that primarily lend or facilitate lending in low- and moderate-income areas or to low- and moderate-income individuals in order to promote community development, such as a CDFI that promotes economic development on an Indian reservation;
• Organizations engaged in affordable housing rehabilitation and construction, including multifamily rental housing;
• Organizations, including, for example, Small Business Investment Companies (SBICs), specialized SBICs, and Rural Business Investment Companies (RBICs) that promote economic development by financing small businesses;
• Community development venture capital companies that promote economic development by financing small businesses;
• Facilities that promote community development by providing community services for low- and moderate-income individuals, such as youth programs, homeless centers, soup kitchens, health care facilities, battered women’s centers, and alcohol and drug recovery centers;
• Projects eligible for low-income housing tax credits;
• State and municipal obligations, such as revenue bonds, that specifically support affordable housing or other community development;
• Not-for-profit organizations serving low- and moderate-income housing or other community development needs, such as counseling for credit, home-ownership, home maintenance, and other financial literacy programs; and
• Organizations supporting activities essential to the capacity of low- and moderate-income individuals or geographies to utilize credit or to sustain economic development, such as, for example, day care operations and job training programs that enable low- or moderate-income individuals to work.
See also Q&As § __.12(g)(4)(ii) – 2; § __.12(g)(4)(iii) – 3; § __.12(g)(4)(iii) – 4.
§ __.12(t) – 5: Will an institution receive consideration for charitable contributions as “qualified investments”?
A5. Yes, provided they have as their primary purpose community development as defined in the regulations. A charitable contribution, whether in cash or an in-kind contribution of property, is included in the term “grant.” A qualified investment is not disqualified because an institution receives favorable treatment for it (for example, as a tax deduction or credit) under the Internal Revenue Code.

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