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#821547 - 09/24/07 04:18 PM Loans to City or County
Tennismom Offline
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Tennismom
Joined: Jan 2004
Posts: 776
Are loans (Lease Purchase) to Cities or Counties for equipment such as Street Sweepers, Fire Engines, Police Cars, etc. considered Community Development Loans? I guess my logic was if the services of the city or county benefit LMI individuals or census tracts, it could be counted.

Please set me straight. Thanks.

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CRA
#821560 - 09/24/07 04:26 PM Re: Loans to City or County Tennismom
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
There have been cases in which banks did obtain credit for these types of loans when it could be shown that the equipment was for areas that were primarily low to moderate income. Hard facts would be needed to make the case for CRA credit.
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#821674 - 09/24/07 05:45 PM Re: Loans to City or County Kathleen O. Blanchard
bOaty Offline
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bOaty
Joined: Aug 2006
Posts: 4,266
Chillin an grillin
I have a line of credit that was just approved to a county to supplement cash flow until taxes are collected in December.

The county has 4 different tracts, 2 are moderate-income and the other 2 are middle-income distressed. The county is very rural and they have had trouble keeping basic services such as hospitals, school, police, fire up and running.

I am certainly going for CD credit on this one. I think this one will be an easy sell as I have lots of documentation on the county's woes. If I didn't have this information, I'm not so sure it would go over well.

Like Kaybee said, documentation is key to proving your case. If you can get that you might as well give it a shot!
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#826518 - 10/01/07 03:19 PM Re: Loans to City or County bOaty
Tennismom Offline
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Tennismom
Joined: Jan 2004
Posts: 776
Thanks to all.

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#828465 - 10/03/07 09:02 PM Re: Loans to City or County Tennismom
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
We have made loans to our city's Transity Authority for gaps between when they receive their funding from the city and when they run out of funds. Since the transit system in our city serves the LMI tracts...if we can document this, would this be eligible for consideration even though the funds don't go for a specific piece of equipment?

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#829412 - 10/05/07 12:09 AM Re: Loans to City or County MackenzieS
CRAatBOK Offline

Power Poster
Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
Is the transit authority a non profit or an actual part of the city? If the TA is neither but a for profit operation then it would probably be a reportable business loan. If it is a non profit that is not part of the city gov. then you could possibly claim CD credit if you can prove that it serves the LMI population.
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