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#2163145 - 02/05/18 08:31 PM LMI Job Creation/Retention
Norman Paperman Offline
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Howdy Folks,

I'm looking at a PE for a competing institution who received great credit for making a loan in a middle income (non distressed) tract that "helped retain 23 permanent LMI jobs (75% of the workforce)).

In preparing my CRA presentation for examiners, do I have to show that a "majority" of workers are LMI or can I simply get credit for a loan that retains LMI jobs? I can't find any reference to majority LMI workers in the Q&A.
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#2163191 - 02/05/18 10:39 PM Re: LMI Job Creation/Retention Norman Paperman
CompliantOkie Online
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Sending you a PM

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#2163307 - 02/06/18 05:58 PM Re: LMI Job Creation/Retention Norman Paperman
RR Jen Offline
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I've never had to show a majority of workers were LMI.
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#2163325 - 02/06/18 07:35 PM Re: LMI Job Creation/Retention Norman Paperman
CaseyJones Offline
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I had to do this with my last exam, typically if it was a small business in an LMI census tract that employed predominately LMI individuals there were few questions asked. But I did have a CD small business located in a middle income tract, and I was required to show proof of LMI employment/Impact. (FDIC)

The proof I gave was a report from the business's CFO, they provided a spreadsheet of the amount of hourly employees compared to fulltime and jobs not requiring increased specifications (college+). Included was a breakdown of their hourly wage.

Luckily this business was very proud of their community involvement and wanted the credit, but this is typically to much for the average joe to want to share. I would recommend contacting the business and working with them to get any supporting information they might already have (audits, HR report, etc.) instead of making them create data for you.

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#2163328 - 02/06/18 07:41 PM Re: LMI Job Creation/Retention Norman Paperman
Norman Paperman Offline
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Thanks to all and CompliantOkie for the PM. Thinking forward, do you think it may be a good idea to include a job creation section in the standard loan proposal form (the loan write-up accompanying every loan we do)? For any loan which creates new or retains existing LMI jobs, I'd like to have that information up front rather than piecing it together after the loan has funded.

Thoughts on this process? Anyone doing it?
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#2163334 - 02/06/18 07:49 PM Re: LMI Job Creation/Retention Norman Paperman
CRAzy_lady Offline
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Having a job creation section in the loan proposal would be a dream. I have asked for it to be added at my bank, but senior loan staff says they can't (won't) add it.

It's much easier to get that information up front, rather than after the loan has closed. I've been waiting over a month for some simple information on one loan. I have often waited much longer than that (if I get it at all). We do have a few lenders who think of the CRA impact up front and will call me to find out what information they should add, but most need to be prompted to ask for that information and the loan proposal is the perfect place.

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#2163493 - 02/07/18 05:58 PM Re: LMI Job Creation/Retention Norman Paperman
RR Jen Offline
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I'd love to get it added, but think I'd be in the same boat as wellscr. I've strongly suggested it in the narrative they prepare for loan approvals, but haven't pushed for a "required field".
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#2163497 - 02/07/18 06:10 PM Re: LMI Job Creation/Retention Norman Paperman
Princess Romeo Offline

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In the newest round of CRA exams, LMI job Creation/Retention will be very difficult to prove if our exam experience is any indication.
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#2163521 - 02/07/18 07:12 PM Re: LMI Job Creation/Retention Norman Paperman
RR Jen Offline
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I hope I never run across an examiner with similar methodology as the one you just had to deal with.
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#2163525 - 02/07/18 07:34 PM Re: LMI Job Creation/Retention Norman Paperman
Norman Paperman Offline
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Well, I'm going to keep this competitors PE close to me and have it available when examiners arrive. It'll be AN OCC PE vs. an FDIC Examiner, but geographically we are in the same boat.
Last edited by Norman Paperman; 02/07/18 07:35 PM. Reason: Ugh: An not A
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#2163618 - 02/08/18 02:14 PM Re: LMI Job Creation/Retention Norman Paperman
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I don't rely on the lenders for job creation info. Their eyes gloss over. If it it for construction of any kind of new retail I get estimates of how many jobs will be created and average wages from places like the BLS or payscale.com Through 2016, the FDIC examiners have consistently given us credit for this approach to qualifying a loan as community development.

Norm: In your original post, you did not seem to have any new LMI jobs, but retention. That is way more difficult to prove than job creation. It is more in the line of revitalization or stabilization of an LMI geography. I look for economic development opportunities rather than revitalize/stabilize.
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#2166860 - 03/06/18 04:25 PM Re: LMI Job Creation/Retention Norman Paperman
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I have found more difficult to get credit from the FDIC than when I worked at an OCC bank. Also, not all examiners follow the same rule, I had an FDIC examiner that did not give me issues, on my previous examination it was a nightmare and I was following all the same steps as before.

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