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#1373356 - 04/13/10 05:29 PM Free and Reduced Lunch.....
Pale Rider Offline
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Anyone hearing from examiners that they will no longer accept more than 50% on FRL as evidence of an investment or an activity being community development.

We are getting this from the OCC. This after we have prioritized AVID type programs in schools with very high FPLs.

Good grief!
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#1373504 - 04/13/10 07:06 PM Re: Free and Reduced Lunch..... Pale Rider
bOaty Offline
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That's not good news. How frustrating considering the effort that you've put into this. Sorry...

Our exam keeps getting pushed back. I'm very anxious to find out if we are going to have similar comments from our regulators.

Hope not.
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#1373563 - 04/13/10 07:56 PM Re: Free and Reduced Lunch..... Pale Rider
Kathleen O. Blanchard Offline

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How far above 50% are you? This is still supposed to be an acceptable measure.
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#1375990 - 04/17/10 01:59 AM Re: Free and Reduced Lunch..... Kathleen O. Blanchard
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Some of my schools are more than 80% FRL KB. I just love how we are experts at changing horses in midstream.
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#1375992 - 04/17/10 03:23 AM Re: Free and Reduced Lunch..... Pale Rider
Kathleen O. Blanchard Offline

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I would challenge that. Are they saying no schools at all?
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#1375996 - 04/17/10 04:31 AM Re: Free and Reduced Lunch..... Kathleen O. Blanchard
Len S Offline
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I have not heard of this interpretation at all. The regulation and the Q&A's have always required that the beneficiaries of a "community service" must primarily be low- or moderate-income persons or families. This always has been understood to mean that a majority of beneficiaries would qualify. In fact, the explanation of the qualification to meet the "primary purpose" test for community development purposes explicitly uses the term "majority", as in beneficiaries of the activity or dollars used for the activity. See the Q&A's explanation of primary purpose test and show it to your examiner and then ask them to cite the authority for their interpretation.
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#1376073 - 04/19/10 12:50 PM Re: Free and Reduced Lunch..... Len S
Karen Tucker Offline
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Len is correct; the primary beneficiaries must be students from low- and moderate-income families. 12 cfr 25.12(g)(2). The OCC is saying that using free- and reduced-lunch numbers is not an automatic proxy for determing LMI. You will need to show the examiners that the free/reduced lunch criteria results in income levels that are the same (or lower) than the income level requirements for LMI for your AA. The examiners cannot use free/reduced lunch as an automatic proxy because neither the regulation nor the interagency questions and answers cite those as an automatic proxy.

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#1376128 - 04/19/10 01:55 PM Re: Free and Reduced Lunch..... Karen Tucker
Rie A Offline
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This should not be a problem. Contact your state or county school system and ask what the level is to qualify. Here the number is shockingly lower than what HUD lists as Low to Moderate income.

According to HUD our estimated median family income for 2009 is $82,100. Our local school system has a cutoff for families of 4 of $25,000 for free or reduced lunches. That is well below the 50% level eek Therefore many of our schools have supplementary non-profits and teacher driven programs to supplement this. On the up side, the programs do qualify for CRA as long as you keep them under the LMI levels as well.
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#1376238 - 04/19/10 03:33 PM Re: Free and Reduced Lunch..... Rie A
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Be careful Rie. Each student within a program, such as AVID or some other college access program, must have some other evidence to support that they are from an LMI family. You cannot simply use the FRL percentage for the school or the district as a proxy for obtaining individual student numbers.

That is my takeaway from the above discussion.

Heretofore, the FRL percentage for the district or say, a high school, was used as a proxy for a college access program at that school or ISD. Now we must get additional evidence, such as census tracts or individual family income metrics.
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#1376295 - 04/19/10 04:12 PM Re: Free and Reduced Lunch..... Pale Rider
Kathleen O. Blanchard Offline

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I will say that the last time I did this myself as a banker, we tied the school lunch numbers (which we had broken out into free and reduced) to the financial requirements for that program and the tract income of the area. We also explained how the school obtained family income data and what the department of agriculture requirements were.
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#1376309 - 04/19/10 04:22 PM Re: Free and Reduced Lunch..... Kathleen O. Blanchard
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that sounds about right Ms KB...it can be a lot of leg work to get those numbers....

AVID programs have worked so well in getting LMI students to consider college, it is a great program....
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#1376550 - 04/19/10 06:48 PM Re: Free and Reduced Lunch..... Pale Rider
Rie A Offline
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We have never used AVID. Here in this county they put ALL of the children that want to go to college in AVID.

Funny story, my daughter was "accepted" into AVID and was excited about it, as they really play it up, but then I got her into a really great charter school that scores at the top of the chart in the state. Now she is upset because there is no AVID program in the new school. The whole school is geared towards going to college! crazy
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#1380368 - 04/23/10 02:57 PM Re: Free and Reduced Lunch..... Pale Rider
JUST CALL ME CRA Offline
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Our examiner (OCC)took the same view. While he accepted it for most of our efforts, he said if we did any major undertaking that we wanted a lot of credit for, we would need to document the income of the census tracts that feed into the school. But, I totally agree that FRL number should be sufficient. I cannot find any authority that the OCC has for changing horses in the middle of the stream and I do not believe that they have any basis for doing so.
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#2040030 - 09/23/15 12:46 AM Re: Free and Reduced Lunch..... Pale Rider
Karen Tucker Offline
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Update: effective Nov 2013, Q&As indicate if the majority of students qualify for free/reduced lunch that you have met the threshold for LMI. ___ .12(g)(2) - 1.

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#2040031 - 09/23/15 12:55 AM Re: Free and Reduced Lunch..... Pale Rider
Kathleen O. Blanchard Offline

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Yes, slways refer to the revised Q and A. They brought " some" sanity.
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#2040444 - 09/24/15 08:07 PM Re: Free and Reduced Lunch..... Pale Rider
Live&Learn Offline
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I had the FR say the same thing as recent as August 2014 and showed them the Q&A and had no problems thankfully.
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#2043575 - 10/09/15 02:56 PM Re: Free and Reduced Lunch..... Live&Learn
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I had an examiner express the school must be 51% and over to qualify as FRL. I asked him if a school ends up in 50.47% free reduced lunch if they would round.. and his face expression was pretty much a Nope.. I still told my mgmt that I am going to fight for it to count.

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#2043577 - 10/09/15 03:10 PM Re: Free and Reduced Lunch..... Learning Compliance position
Kathleen O. Blanchard Offline

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Originally Posted By bankMO
I had an examiner express the school must be 51% and over to qualify as FRL. I asked him if a school ends up in 50.47% free reduced lunch if they would round.. and his face expression was pretty much a Nope.. I still told my mgmt that I am going to fight for it to count.


Hand them the Q and A.
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