We have a $1MM+ loan to refinance a restaurant in a Moderate Income tract. I am thinking I can call this a CDL given that it will revitalize/stablize a moderate income area and also provide jobs for low-income hourly workers. We are a large bank.

Is my thinking on the right track?

I would shoot for it. Definitely document how many jobs the restraurant provides also, can you say that the presence of the restaurant helps to revitalize the area?

Something along the lines that there would be another empty storefront in an already distressed area? Or, is the restaurant quite popular? Does it bring people into the area just to eat and while they are there might visit neighboring businesses?

It all comes down to knowing your AA well. Talk to your LO and see what they have to add to the story.

Yes beegee, but it is a long track and you may have a ways to go yet. Your examiners may ask you to provide evidence how this restaurant is stabilizing the area.

Is this an enterprise zone recognized by the city?

Were there jobs created?

Can you get the average wage from your borrower for their employees?

Is the average wage at the restaurant less than 80% of the median family income for your MSA?

Your documentation may need to provide evidence on how the loan stabilized the area.

If you have this kind of info available when you present this to the examiners for their consideration, they should be inclinded to give you community development credit.

I agree with Pale. The fact that it is in a moderate tract is not sufficient. We have many loans to borrowers that are located in an EZ and a LMI tract. During our last exam we received automatic credit for these loans. This time they wanted additional information before they would give us credit. We received credit for any loan where the borrower took the new hiring credit. We also received credit for any loan where the bank took the lender interest income deduction.

Is it just me, or does anyone else see something wrong headed about only giving credit for creating cr@ppy paying jobs?

What is wrong with creating BETTER jobs that can help low and moderate income folks better their path in life instead of staying mired in poverty?

Just like when the regulators were only willing to consider a housing "project" if the majority of the units were low/mod rentals.

Really?
You wanted us to build more "projects?"
Like the ones built in the 60's and 70's that are now crumbling in decay at many urban centers?

But you DID'T want to consider the more intelligent urban planning of mixed income housing where the poor aren't segregated like steerage?

Brilliant.

I still remember the look on a regulator's face when I told him point blank at a CRA conference that economic segregation was tantamount to racial segregation and that I was appalled that the regulatory agencies were pushing for it.

Where's Andy Rooney when you need him?

The examiners only focus on income poverty, that is all their regs allow.

Social inclusion is not a concept the examiners get. Nor that there can be other dimensions of poverty, like services poverty when we herd the LMI into ghettos, or participation poverty, when our actions exclude the LMI from arts, culture, recreational and political participation because none of that is CRA eligible.

Where's the "like" button when you need it?!

All valid comments and well worth pursuing, but it needs to be a parallel effort as it doesn't help the banks trying to pass a CRA exam that is giving less and less credit for less and less activity. And no published rules to follow to know. It is all whisper down the lane.

We all know the process has become fragmented and broken. Unfortunately, there is no political will to fix it.

So we all keep a brave face and smile at our examiner and say "Thank you sir, may I have another" as we get soundly whipped after this examiner completely contradicts what the examiner said in the last exam.

And we go to conferences and talk positively about our CRA track records, and when we get home from the conferences and dump all of the handouts and brochures in the recycle bin and throw the conference tote bag into the closet or the Good Will collection bin, we grimly go back to work and count the days until retirement.

Or the next Lotto drawing.

And yes - I'm in a mood today folks. I'm. in. a. mood.