Hello - A local city government obtained a Section 108 loan from HUD, which the city will in turn lend the loan to a company for rehabilitation of an apartment complex that provides affordable housing. The bank I work at has been approached by this city government to serve as Custodian of various security documents, for which the bank may charge a fee. HUD requires this Custodian agreement. The bank would receive and store documents and would send them to HUD when received and also at any time they are requested.

We are a large bank. Has any other BOL user received CRA credit for this type of service? I think it may qualify for CRA credit under the Service Test, as a retail banking service, but I'm not so sure about that.

Any input would be appreciated.

Do you need trust powers to do something like that?

Not that I'm aware of. There is a custodial agreement between the bank, the borrower, and HUD, but that's all I know so far.

I only ask, because I am not sure, but it sounds like you would be executing fiduciary duties only. I would be running this past my legal counsel before signing such an agreement. Some of this might also depend on your charter.