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#1030975 - 08/29/08 04:47 PM Investment or CD loan??
bOaty Offline
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So we are considering committing money an affordable housing loan fund to what we originally thought would be an investment but the sturcture is going to be set up differently and now we are thinking that this won't actually get us investment credit.

We will be participating in the loan fund with several other banks and will hold our committed funds until a loan is made and then disburse a percentage of the funds to the borrower.

Can we still get investment credit for this or will it just be a CD loan?
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#1030996 - 08/29/08 05:01 PM Re: Investment or CD loan?? bOaty
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so this isn't one of those mutual funds type arrangement where your ownership is shares in the fund?

are your funds not used until a loan is made in your AA?

but you are not getting a mortgage and security agreement on the collateral are you?
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#1031045 - 08/29/08 05:19 PM Re: Investment or CD loan?? Pale Rider
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so this isn't one of those mutual funds type arrangement where your ownership is shares in the fund? No

are your funds not used until a loan is made in your AA? Correct, the loan goes before a collaborative committee and if approved then we would disburse our share of the funds.

but you are not getting a mortgage and security agreement on the collateral are you? Yes we are

Thanks for your help PR.
Last edited by Boatn Shasta; 08/29/08 05:19 PM.
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#1031264 - 08/29/08 07:27 PM Re: Investment or CD loan?? bOaty
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this is just my opinion, but it sounds like you would have a CD loan, but if its SFR you would report under HMDA

I am just talking out loud Shasta, I really don't know....

perhaps after Labor Day and folks get back you will get some more discussion going.....
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#1031265 - 08/29/08 07:28 PM Re: Investment or CD loan?? Pale Rider
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one more thing:

since you participate on the collaberative committee and I assume approve these, there is some Service credit you can get

and its sounds innovative and flexible too!
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#1031282 - 08/29/08 07:44 PM Re: Investment or CD loan?? Pale Rider
bOaty Offline
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True, probably a bad day to post....

I have thought about the service credit and the innovative/flexible thing.

I'll give this post a bump on Tuesday and see if we get anything.

Have a good weekend!
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#1031647 - 08/29/08 11:50 PM Re: Investment or CD loan?? bOaty
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thanks, we will be hunkering down with Gustav set for a visit on Monday
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#1034535 - 09/04/08 03:45 PM Re: Investment or CD loan?? Pale Rider
bOaty Offline
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bump

Can anyone else weigh in on this??
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#1034864 - 09/04/08 07:18 PM Re: Investment or CD loan?? bOaty
cra_guy Offline
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I think you've found the tri-fecta!

You get INVESTMENT Credit for the allocation
You get LOAN credit for the Participation Loan and
You get SERVICE credit for the time spent on the loan committee

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#1035388 - 09/05/08 02:57 PM Re: Investment or CD loan?? cra_guy
bOaty Offline
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Quote:
You get INVESTMENT Credit for the allocation
You get LOAN credit for the Participation Loan and
You get SERVICE credit for the time spent on the loan committee


That sounds wonderful but I'm still a little skeptical and I certainly hope you're right.

Does anyone else have an opinion??
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#1398901 - 06/02/10 11:12 PM Re: Investment or CD loan?? bOaty
EmilyAnn Offline
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Does anyone have any thoughts on this now old post? We are considering substantially the same kind of "investment" in a local affordable housing revolving loan fund, but don't know if it will qualify as a CD loan or CD investment (preferably it's an investment for our purposes).

Thanks!

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#1399096 - 06/03/10 03:08 PM Re: Investment or CD loan?? EmilyAnn
bOaty Offline
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We are getting ready for our CRA exam next month. We will see what the Examiners think of this and I'll post to let you know how it turns out.
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#1399153 - 06/03/10 03:58 PM Re: Investment or CD loan?? bOaty
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The answer is yes. If you book it as an investment you will get investment credit. If you book it as a loan you will get CDL credit.

IMO it is better as an investment.
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#1399196 - 06/03/10 04:34 PM Re: Investment or CD loan?? bubs63
Moman Offline
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We have a funds in a State organization that we include as "consortium" for CRA purposes on our year end CRA LR. The percentage of our ownership is included as a CDL at exam time.

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#1399572 - 06/04/10 01:36 PM Re: Investment or CD loan?? Moman
Karen Tucker Offline
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You need to check your call report instructions and book it accordingly. If the item is appropriately carried on bank's books as an investment, the examiners will consider it an investment.

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#1399810 - 06/04/10 05:22 PM Re: Investment or CD loan?? Karen Tucker
EmilyAnn Offline
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Thank you all for the input. And Boatn Shasta - I will be very interested to hear how your examiners treat it and look forward to your post on the issue. Best of luck on the exam!

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#1428555 - 08/12/10 11:12 PM Re: Investment or CD loan?? EmilyAnn
bOaty Offline
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No luck with lending credit, at least not yet....the fund has not loaned any money yet so next time.

We did get some service credit for those who put time in on the project.

I have asked for innvoative service credit for this since we were involved in creating and planning the fund since the beginning.

I got shot down so I asked again, this time giving a lot more detailed information.

It's being taken under consideration so I don't really know yet, I thought it best to leave the subject alone and stop pestering the examiners about it.
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#1428611 - 08/13/10 12:56 PM Re: Investment or CD loan?? bOaty
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Well, if it isn't innovative, it is flexible!!!!!

Unlike some of us.....
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#1429037 - 08/13/10 05:50 PM Re: Investment or CD loan?? bOaty
EmilyAnn Offline
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Boatn Shasta, thank you for the update. I hope you get all the credit deserved for the work your bank is doing.

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#1529613 - 03/31/11 05:05 PM Re: Investment or CD loan?? bOaty
rocky Offline
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So, we are participating in a similar affordable housing fund. I'm curious to know if we will get investment credit.

Boatn Shasta, did you decide to present it for investment credit? If so, could you please share with me what the outcome was? I really appreciate it. Thanks so much!

If anyone else have participated in similar funds, please share your thoughts. Thanks again!

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#1529627 - 03/31/11 05:16 PM Re: Investment or CD loan?? rocky
bOaty Offline
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Rocky, I think it IS the very same fund! wink

No, we did not ask for investment credit as we do not have it on our books as such.

The examiners didn't give us any flexible or innovative credit despite my documentation of our participation since well before the fund came to fruition.

We did get to claim CD service hours but no lending credit since no loans have yet to be made. frown
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#1529644 - 03/31/11 05:35 PM Re: Investment or CD loan?? bOaty
rocky Offline
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Most likely - a committment to an affordable housing loan fund:-)

Thanks for getting back to me so quickly, Boatn Shasta. I didn't think we will, but wanted to make sure. So far, I've been just keeping track of hours to be presented under CD services at our next exam. No loans have been made yet either. Thanks so much:-)

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