Hello, we have made some considerable toans to this foundation in the sense that we were told they would be CRA qualified loans. I just received a missive from them stating that we may or may not receive CRA credit now.

Has anyone had a CRA exam using SHCPF loans for CRA? What were the examiners' thoughts. We are OCC. Thanks!

What??!! I have a copy of a letter from an ADC of the OCC to a bank specifically stating that investment in or loans to the Senior Crimestoppers Program would qualify for CRA credit. The letter is dated in 2001, so perhaps the regulators have changed their position on this.

I have not used the lending option for the SHCPF, but I have used the investment option in the past, successfully receiving credit. I just learned, however, that the regulators are revisiting the credit that they are willing to extend.
From the investment perspective, we are being told that the underlying investment that we would purchase to fund the program needs to be CRA qualified. This new restriction, along with the other stipulations, make it very difficult to find a qualifying investment.
From a lending perspective, I believe that the facility you are funding would need to have a high percentage of Medicaid-eligible beds. This would give it the low-mod population spin needed to obtain CRA credit.
This is all new, and when we spoke to the President of the Foundation he told us that he was in constant contact with the regulators to try to work through this new requirement.
I am on hold right now until I receive further documentation that CRA credit exists.

Thanks, I am going to reach out to them. They kepe narrowing the margins for CRA credit. I think we should just give free mortgages and write them off.

SF, I will scan it and email you. OK?

There is a Webinar today by the Senior Housing CPF. It may not be too late to register:

http://www.telspanvenue.com/AccountManager/RegEv.aspx?PIID=EB50DB84824E

Al

My CEO has been saying that the regulators should just come up with a CRA assessment caluclation for each bank; bill us for the assessment; and give the money to some government program to waste spend.

Thanks Al.

I agree, SF. We shoudl just send them the money and let them do whatever the heck they want with it!

Oh no.

I've had an investment with them at my past FI but never any loans. I'm skeptical about the whole organization and try to stay away from them. Now here's another good reason.

I am waiting on their response.

Tell us how you really feel SF!

I've been in this for several years and the FDIC has never questioned it.. I don't think this new ruling makes this investment viable. I agree with SF...

OK, I found out the that regulators are drilling down to see what the qualifying collateral is for each loan; are they used by at least 50% LMI seniors?

SHCPF is conducting analyses 2Xs a year as of 2012 to determine the nursing homes/senior buildings/vet homes fall into the LMI area, and annually herreafter. Subsequently, these analyses will be provided to the lenders.

If your collateral is CRA qualified, full credit should be granted for the loan or investment, plus any annual interest given back to the SHCPF.

If the collateral is NOT CRA qualified, you may only get partial credit and that is for the interest only given up to the SHCPF.

The continued erosion of what qualifies for credit is making me sick.

For more info:

Their site: http://www.shcpfoundation.org/

Relationship Mgr: George.Clinard@schpfoundation.org

DeeQ
Thanks for the update. That's what I've been hearing as well. The investment credit would be limited to the 1% given to the Foundation, but only if was used for a facility that was either in a low-mod area or served a low-mod population. The population would be defined as a majority of beds being Medicaid eligible. Does that sound right?

I have to say that I have always defended the CRA regulation. I truly believe that many great programs have been established that probably wouldn't have been as successful were it not for CRA. That being said, I am finding it incredibly frustrating that most of the good things we do in our communities gain us no credit. We still do them because it is the right thing to do, but it would be nice if the reg would cut us a break and acknowledge our community work.

(I needed that venting moment!)

:applauds Care4: Exactly. We all do 'community reinvesting' and support our towns, but this is driving me over the edge.

Re question:
Medicare eligible and just basic LMI folk.

If you are interested in this, you need to lay out a letter, way in advance of the investment, as to exactly how it will be structured (collateral, security to be used for the investment, etc.) and get approval specific to your circumstances prior to investing. And you are still not guaranteed. Our examiner said, "Just because someone else counted it erroneously, does not mean I should."

Okay, I keep seeing more and more about this Senior Housing Crime Prevention Foundation and how it will be 'guaranteed credit'.

It sounds interesting, could be a good way to earn credit...
Is there anything I should know that I'm not reading from the pamphlets?

I suggest that everyone read the CRA Q&A that was publised last November. One questions was written specifically to clarify how an institution received CRA credit in a SHCPF type senario.

Here in Chicago, I believe that the FDIC took the position that if, say you made a $2MM investment, you would only get CRA credit for the interest that was earned on the investment. Also, I would suggest that you look into their financials, before you make an investment. (And I'm not talking about the "Annual Report" that they send out, which, IMHO, is nothing but a marketing piece with no financial information.)

Stay away from this organization. The most recent Q & A's clarified that unless the underplying pledged investment was CRA qualified, you would only receive the 1% used by the organization. This is a for profit entity that uses your funds to provide "services" that already exist for free (i.e. Crimestoppers). I would not recommend them at all.

We are a small community bank under CRA, recently received marketing type information from these folks. Has anyone been examined recently for CRA with SHCRF loans or investments used? We are an OCC bank. Also, is the November 20, 2013 FFIEC CRA Q&A issued the most recent regulatory guidance on this topic? Thanks.

Yes that Q and A is the most recent guidance.

my thoughts mirror those of the previous post. I would consider all other qualified investments (or at least purchase a MBS)rather than commit funds to this. The Guidance is clear that the loan/investment will only qualify if the pledged collateral is CRA. My bank had an multimillion loan with them that i could not claim as a CD loan, but instead used the proceeds (the 1%) as a qualified investment.

Sorry to hear that Flyboat. Out of curiosity who is your regulator?