Thread Options Tools
#1761 - 05/14/01 05:58 PM CRA
Anonymous
Unregistered

Does anyone know of any way to get community development credit for loans that are under
$1 million in size but meet one of the four
components of "community development", i.e.
affordable housing, etc.

We are a large bank with many small towns in our area which cover the pine barrens of NC.
Economic development often means bringing what business we can into an area, and keeping what businesses we can there. Water
and sewer projects, emergency services, etc. are needed as well as new roads. We would like to what is needed for these towns, however, as a large bank (just barely over the assets size from small)funds to assist these communities are limited.

Management will only approve these projects
if there is CRA credit.

Can anyone help with justifing CRA credit?


Return to Top
General Discussion
#1762 - 05/14/01 06:31 PM Re: CRA
Anonymous
Unregistered

If those loans do not meet the strict definition for CRA reporting as "community development" because they are less than $1 million, do they meet the definition of "small business" CRA loans? If they can be counted as small business loans, but have a "community development" purpose, I would report them as small business loans but keep a file on those kinds of loans and present that information to your examiners as "other information that the bank may provide concerning its lending performance". Even though these loans may be too small to be reported for CRA as community development loans, if they do have a community development purpose,I would not hesitate to provide that information to your examiners for their consideration at your next CRA exam.

Return to Top
#1763 - 05/14/01 06:36 PM Re: CRA
Anonymous
Unregistered

You can get community development credit for loans under 1 million (if they have a community development purpose) under the following circumstances:

1. Loans to non-profit organizations: When the loan is unsecured or secured by something other than commercial real property, it counts. -- For instance, a loan to the YMCA will not count if it is secured by the YMCA building. However, if the loan is unsecured, or secured by a vehicle or some other type of collateral, it can be counted as a community development loan.

2. Loans secured by residential real property: Any loan that is secured by residential real property and has community development purpose will count.

These types of loans can be reported as community development loans even though they are under 1 million. This is because of the way they are coded for the CALL report (9B, 1C, & 1D). They are not reportable as small business loans and therefore can be reported as community development loans if they qualify.


Return to Top
#1764 - 05/15/01 01:58 PM Re: CRA
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,977
Soaring over Georgia
The exception to MH's comments is if the loan secured by residential real property is HMDA reportable - then you're back to the situation of having to keep additional documentation to support that some of your loans for which you were required to report on HMDA had community development as their primary purpose. The only loans that can be reported both as HMDA and Community Development are loans secured by multi-family residential.

------------------
Opinions expressed are my own, and do not necessarily reflect those of my employer.

_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#1765 - 05/15/01 03:34 PM Re: CRA
Anonymous
Unregistered

Yes, jbedsole is correct. If the loan is HMDA reportable it only counts for community development if it is multifamily.

Return to Top
#1766 - 05/16/01 12:08 PM Re: CRA
Anonymous
Unregistered

The Federal Reserve Bank of Dallas has a CRA Data Collection Grid that is available in a PDF format from its website (www.dallasfed.org). The grid is a quick guide for identifying CRA loan data reporting categories, including CD loans.

Return to Top
#1767 - 05/16/01 01:45 PM Re: CRA
Sheila Steck Offline
New Poster
Joined: Oct 2000
Posts: 16
Winona, MN
Diane - that CRA Data collection grid sounds like something I could use but I couldn't find it on the site. I searched for CRA Data but it didn't come up. What section of the site is it in?

Return to Top
#1768 - 05/16/01 03:53 PM Re: CRA
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,977
Soaring over Georgia
It's available at http://www.dallasfed.org/htm/ca/pubs.html - go down to see CRA Data Collection Grid
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#1769 - 05/17/01 04:51 AM Re: CRA
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,468
On the Net
I wasn't able to get Jim's link to work. If anyone else has a problem, the PDF file is here, and if you right click you should be able to just save the file to your PC.

------------------
Andy Zavoina
Opinions stated are not necessarily that of my employer.

[This message has been edited by Andy Z (edited 05-16-2001).]

[This message has been edited by Andy Z (edited 05-16-2001).]

_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#1770 - 05/16/01 07:55 PM Re: CRA
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,468
On the Net
There must have been an error in the stream somewhere, but Jim's link is working fine now. His allows you to see other publications available as well as the one discussed.

------------------
Andy Zavoina
Opinions stated are not necessarily that of my employer.

_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top