We are a new ISB and I'm still second guessing myself on some things.

If there is a qualifying loan made outside our lending area by another bank, and we buy a participation in the loan. Can we count that loan towards CRA?

Thank you for your help.

You can have it considered as a Community Development loan if you can adequately demonstrate that you are currently meeting the community credit needs within your AAs. It will more than likely being considered as supplemental information, but non the less helpful. If you can prove that the loan is included in an area that includes your AA like an MSA or a greater area like Greater Atlanta for instance then you could say that it indirectly benefits your AA. Just make sure you adequately document your portion of the participation, and correctly input it into FFIEC when you submit your data.

Any small business, small farm and or CD loans no matter where extended will be included in a CRA exam if you've collected and scrubbed the data. Otherwise the examiners will do a sampling of your loans and base their CRA PE on that collection of loans. This is a very good reason why you should be collecting your loan data - so you will know what your performance is before examiners arrive. If you don't you will go into the exam without any ability to defend your bank's performance or anticipate examiners questions. Moreover, we highly recommend any ISB should voluntarily report its loans in the annual CRA filing in order to preserve their elective to be examined under large bank rules rather than ISB performance standards which place a much heavier emphasis on CD activity.