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#1875467 - 12/03/13 03:15 PM Assessment area
komply Offline
Gold Star
Joined: Apr 2008
Posts: 475
NJ
Not sure if this will come out right. Small community bank which had a mortgage sub. Most of the mort sub has been sold and now the bank will start originations in its name. However, the rub is they will be hiring MLOs which will cover a very large area for AA purposes. It appears that the assessment area would be very large for this small bank. However, I am not sure what the affect would be if they kept a small portion of the sub (which can lend anywhere) on our assessment area. Any thoughts?

If the sub is not be sold they want to explore the idea of keeping it. The only reason the sub was established was to assist the Bank with CRA. Most of our residential production was out of the assessment area and the same will be true today. So does it make sense to keep the sub and originate retail through the subsidiary as we have in the past. Additionally, keeping the sub would allow us to offer FHA loans…something we are not able to do through the bank.

At what point will we run afoul of CRA with the current plan to originate in Bank
Last edited by komply; 12/03/13 03:38 PM.
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#1875524 - 12/03/13 05:06 PM Re: Assessment area komply
B_F Offline
Power Poster
B_F
Joined: Nov 2006
Posts: 7,228
Cincinnati, OH
You run afoul of CRA when you begin to originate a majority of your loans outside your assessment area.

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#1876103 - 12/04/13 08:21 PM Re: Assessment area komply
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,966
Connecticut
You are addressing a very big and very growing problem. In the last year we have consulted with close to 10 banks whose loan origination strategy has created the dilemma to which you are referring. It is an issue to be taken seriously and will have very big CRA implications.
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#1876321 - 12/05/13 04:48 PM Re: Assessment area komply
komply Offline
Gold Star
Joined: Apr 2008
Posts: 475
NJ
Yes, agree

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