Hello, I'm researching CRA data and I'm stuck on the "Economic Development by financing small businesses or small farms" qualification for community development loans. Assuming the borrower passed the size test, wouldn't every loan issued to a business located in low to moderate income area create/retain jobs and therefore qualify?

This seems like much too wide of a net and it's inconsistent with the examples given in the Office of Comptroller's CRA Q&A. For example, a $10k loan granted to a small boutique with three employees and located in a low to moderate area does create/retain jobs but it's a far cry from a loan made to a nonprofit that serves LMI housing needs. Any input is appreciated.

The problem is that a loan that is a small business loan that also has community development qualifications must be reported as a small business loan. However, if a bank is undergoing a CRA exam using the ISB standards the bank can elect, on a loan by loan basis, to have any such loan counted as community development for examination purposes only.

One of the many reasons we need CRA reform.