The Dallas Fed's CRA Loan Data Collection Grid (located at http://www.dallasfed.org/htm/pubs/pdfs/ca/craloan.pdf )states that a loan to a nonprofit would be reported as a small business loan if it does not exceed a $1 million and is secured by nonfarm, nonresidential real estate OR PRODUCTION PAYMENTS. What are production payments?

The same grid says that a loan to a nonprofit that is not secured by real estate or production payments must not be reported as a small business loan. So basically, unsecured loans to nonprofits are never SB loans. Is this correct?

Thanks.

I believe your statement is correct if the loan has been reported as a loan to a nonprofit organization on the call report and the primary purpose of the loan meets one of the four hooks for community development. It has been an on-going problem in my Bank to identify these loans in order to have them correctly coded on the LAR. We have a section on the CRA data collection form to identify the purpose, but the Loan Officers often fail to code it correctly.

I am not sure I understand your response. I am trying to determine when a loan to a nonprofit would be reported as a Small Business loan because that criteria must come first. Even if a loan meets one of the primary purposes of community development it must not be reported as community development if it meets the definition of small business. The grid from the Dallas Fed seems to be saying that an unsecured loan to a nonprofit could not by definition be reported as a small business loan, but a similar loan to the same nonprofit could be a small business loan if it was secured by nonfarm, nonresidential real estate. Am I correct in my interpretation of these collateral requirements?

I seem to remember from my days of working for a large bank that the call report code used played a big role in whether or not you reported it under CRA.
I am with a small bank now so I am a little "rusty" on CRA small business reporting.

BWest

Sorry, I think I completely misread your question. According to the Dallas Fed's CRA Loan Data Collection Grid, an unsecured loan to a nonprofit that does not meet the community development purpose definition, is not collected as a small business loan or a community development loan. I do not proclaim to be a call report expert, but I think this ties back to the call report instructions for reporting loans to nonprofit organizations.

Terry: A loan to a non-profit if secured by commercial real estate is reported as a small business loan even if it meets one of the 4 community develoment purposes. When we have one of these loans, and we frequently do, we report as small business, obviously, but also will present the loan to the examiners in our "Other" loan category for community development because it clearly has a community development intent.

We try to do the same. We present the examiners with a file of information on loans with "community development characteristics". Those loans often recieve some positive consideration in the exam process. However, I'm trying to make sure we are clear about which ones must be reported as SB loans, and which ones can't. As a training issue it is difficult enough to get everyone to understand the definitions of a SB loan, then we have to explain that the definition is slightly different if the borrower is a nonprofit. If unsecured loans to nonprofits are not allowed to be SB loans, we have the potential to misreport them as SB loans, and at the same time we miss an opportunity to indientify them as a community development loan.