We have a loan that qualifies as a community development loan but the location of the multifamily apartment complex is located outside the banks assessment area. We are in San Antonio and the property is in Houston. Houston can be considered within "broader statewide or regional area that includes the banks assessment area", correct? How do we determine if we have adequately addressed the community needs of our assessment area before we can include a CD loan outside the AA? What percentage of CD loans within AA to outside AA is adequate? more than 50% ? Should we just include it for credit and let an examiner decide.

from the Q& As

In addition, as long as an institution has adequately addressed the community development needs of its assessment area(s), it will also receive consideration for community development activities that benefit geographies or individuals located somewhere within the broader
statewide or regional area that includes the institution’s assessment area(s), even if those activities do not benefit its assessment area(s).

Thank You

Do you have internal goals for CD loans in San Antonio? How do you compare to peers in meeting community needs in old San Antone?

We do for all our AA's including San Antonio but at the end of the year sometimes we come up short or maintain the same number of CD loans from previous years. We don't get many CD loans in San Antonio but we do in other AA's. So we were wondering at what point can we include a CD loan (originated in San Antonio branch) that is outside our AA?

Thanks

Any loan that you extend that is qualified under one of the four CRA definitions of community development should be collected and reported and offered to examiners for consideration during a CRA exam. Even if the loan is outside your AA and not even a part of the broader area. The reason is that CD loans anywhere can count toward an outstanding CRA PE once you have attained a satisfactory level within or around the AA.

As with things currently with CRA (but not in the CRA NPR) there are no formulae that will allow a precise calculation of satisfactory activity. It's all driven by "performance context" which varies with each bank and each AA.