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#46897 - 12/04/02 08:14 PM CRA Investments
DeeQ Offline
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DeeQ
Joined: Dec 2002
Posts: 40,746
Turnpike Exit 10
I was reading a section of Kirchman's CRA, and came across a section that stated:
"one of the most favored investments" is the sale (below cost) or gift of a branch
to a minority or women's bank as long as it's located in a predominantly minority
neighborhood...

Has any one ever done this??
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#46898 - 12/05/02 04:15 PM Re: CRA Investments
Lucy Griffin Offline

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Lucy Griffin
Joined: Nov 2000
Posts: 1,544
It has been done, but I'm not sure I'd call it a "favored" investment. When a financial institution sells a branch in such a location, it loses the location for itself!

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#46899 - 12/05/02 04:21 PM Re: CRA Investments
DeeQ Offline
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DeeQ
Joined: Dec 2002
Posts: 40,746
Turnpike Exit 10
Lucy,
Thanks. What I meant by favored was by examiners, not banks.
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Get your facts first, then you can distort them as you please. - Mark Twain

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#46900 - 12/05/02 06:19 PM Re: CRA Investments
Lucy Griffin Offline

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Lucy Griffin
Joined: Nov 2000
Posts: 1,544
I know that regulators think that support through sales, rentals, and donations of facilities is generally a good thing, but I wouldn't put it in the "favored by examiners" class because of the quid pro quo. The bank is losing a branch in a low income area and is likely to lose points on the branch closing.

As for what investments examiners favor, the OCC has put out an updated directory of CRA investments that examiners believe are good CRA investments. Also, the San Francisco FRBank has issued a similar publication. These make good source material for ideas.

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#46901 - 12/05/02 08:13 PM Re: CRA Investments
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
These deals are always "favored" when they're new. But as investment ideas become old hat, they're of value...but lose their "favored" status. What's favored tends to be the new and innovative stuff. So your favored of the week might be a new "favored" next week when we all catch onto your nifty idea and copy you.

I'm inventing something new this year...hopefully I'll make the "favored" list But at least I'll get some creative credit. With little investment opportunity..I pretty much have to get creative every year!
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#46902 - 12/05/02 09:28 PM Re: CRA Investments
Lucy Griffin Offline

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Lucy Griffin
Joined: Nov 2000
Posts: 1,544
Dawnie -- I'm looking forward to hearing about your new creativity. Your previous efforts have been excellent!

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#46903 - 12/05/02 10:42 PM Re: CRA Investments
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Why thank you Lucy! Keep your fingers crossed! My regulator thinks I have a good chance and if approved this would have benefits for alot of banks in the U.S.
_________________________
Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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