My employees are resistant to asking businesses located in low or moderate income census tracts if they employ LMI individuals. What other means can we use to determine if a business has LMI employees?

Secondly, does the company have to employ more than 50% LMI employees in order for a loan to be considered a community development loan?

Can your employees ask for the average wage of certain jobs in those businesses? Then compare that to 80% of the FFIEC average median income for the MSA.

If you are looking to support a loan as creating low skill LMI jobs, then no, you do not need to prove more than 50% of all employees have LMI incomes.

They do not have to provide primarily LMI paying jibs.

The best thing to do is to be honest with the company, explain why the bank is interested, and ask for numbers of jobs by type and pay grade.

Appreciate the responses.

Kathleen you are spot on. The best thing to do is ask. I'm going to write them a script. I'm not so sure they even know why we want the information. LOL!

I always found customers willing to help the bank in this regard.

This post is exactly what I have been searching for however, when you say compare to the FFIEC average median income all I am seeing is the median family income. Where do I find the individual income?

SBA usually records jobs created--wages etc if you can get your hands on those docs. Otherwise, utilize the BLS data to determine wages for employees and compare those to the MFI

google average wages for the specific jobs, you will get all kinds of data

What kind of documentation do you suggest we get then to qualify a loan that employs LMI individuals for CD credit? I was given a form from an examiner that had the borrower signing verifying they had so many employees qualify as low to moderate income but that was ridiculed at a recent meeting from my lenders that their borrowers will not disclose that type of information nor would they ask. I did explain that per conversations on here that if we are open and honest as to why we are asking this information that borrowers can be forthcoming with this information but still got shut down. Are there any other options available? What do other banks get as far as documentation? I figured we could even do something like the lender having the conversation and just document the conversation. Do we have to have proof beyond that for credit like a W2 etc.?

The only info we obtain from the lenders and borrowers are job titles. Then we get industry data available from a number of sites like the BLS, payscale, etc., etc., etc., Now when you state "employs", I assume you are claiming revitalize/stabilize. For economic development, you will need to show newly created LMI jobs.

I guess I hadn't thought that far ahead but yes revitalize/stabilize. So are you saying just a conversation then to find out job titles and then research done on your part? Seems easy enough to me but lenders are always another story.

Is there a requirement that the loan the bank originates (to the business employing LMI individuals) must create new jobs in order to be considered a community development loan? Or can it be a loan to that business for working capital for example, that does not create new jobs, but does help keep that business operating.

Economic Development requires a loan to meet a certain "size" and "purpose" test. The main mission of economic development is to create jobs. So if it isn't creating, retaining, or improving jobs to LMI people than no--the best way around this is to lend to CDFIs. I would pull up the Q&As and CTRL+F for the term economic development.

The alternative route is Revitalization and Stabilization where if the loan goes to an employer that will attract residents to the area, or a grocery store in a food desert, etc. Often times if you can't pull at a loan from the economic development stand point then look through the lens of revitalization and stabilization.