We are a small bank for CRA purpose, however, although we do not have that many loans for small business we managed to book several miilions that are multifamily buildings and have affordable housing. In our prior exam, there was no mention of community development loans, how would you say this will help next time we are evaluated. I've always heard that having community development loans helps during the evaluation.

For a small bank, those loans, whether they qualify as CD loans or not, can be used to supplement your inside/outside of AA ratios. The regulators will look at your call report to see what are the primary lines of business and assess your CRA performance on those portfolios. Also, non-HMDA loans primarily secured by residential real estate can be presented as CRA Type 3, other small business.

For CD credit, you need to write up the loans explaining the purpose, the area benefiting, and why the loan meets CRA CD purposes. Multi-family loans can be both small business AND CD.

I have created a file for each of the CD loans I've identified. We have in both in/out of our assessment and the majority is for affordable housing.

The issue with being a small bank is that it is relatively easy to get a Satisfactory CRA rating (as compared to ISB or Large Bank) but almost impossible to obtain an Outstanding.

Your CD lending really doesn't help you as far as the Satisfactory goes unless you have a unique challenge in meeting your Assessment Area In/Out percentage. I know of one small bank with only one branch located in a very small, sparsely populated non-MSA county, so the majority of their loans were outside of that Assessment Area. Because of this situation, the bank's numerous community development activities were considered.

You can present these loans to the examienrs, and they will probably note them in your Evaluation, but unless it the number and dollar amounts are extraordinary, you'll probably still end up with a Satisfactory.