Would a "Tax Anticipation" loan to our local borough/municipality be considered for CRA? A few years ago, I had a examiner say if the funds were used to keep the borough in the black and functioning, it may be considered. The thought was without the loan, many services would be temporarily put on hold, employees would laid off because payroll could not be met, causing negative impact to the community.

Has anyone included a "Tax Anticipation" loan for CRA credit?

Thanks.

Yes. I haven't done it recently but a few years back I searched CRA Performance Evaluations for this type of qualified Community Development Lending credit. Once we located examples we felt good presenting similar credits to our examiners and have received CDL credit..

Unfortunately as of recent, examiners have not been expounding CDLs, but rather making a blanket statement such as:
“The institution demonstrated excellent responsiveness to community development needs in its AA through community development loans, qualified investments, and community development services, considering the institution’s capacity and the need and availability of such opportunities throughout the AA.”
OR
"XYZ bank is a leader in community development lending in the AA. The bank made 93 community development loans totaling $54.4 million during the evaluation period. A significant portion of the lending focused on providing affordable housing and revitalizing and stabilizing underserved areas of the AA, which are the primary community development needs of the AA as highlighted above."

Although dated, the following examples were taken from FDIC PEs.

UNITED COMMUNITY BANK – “The bank extended a $7,400,000 tax anticipation note to the Union County Board of Education in 2006. The loan was needed because tax receipts were delayed for the current year. The school system is the largest employers, serves the entire county, including students from low and moderate income families…..”.

The bank extended a $4,385,000 tax anticipation note in 2005 to Rabun County, GA to keep a local hospital open after it filed bankruptcy and nearly closed. ….Rabun County is designated as a distressed nonmetropolitan middle-income geography….”.

COLONY BANK - In 2013, “the bank extended a $2.75 million tax anticipation note to Dodge County for the fiscal year. The funds were used to cover the daily operations of the county government and in essence provide for community services. Over 83 percent of the county’s census tracts were either moderate-income or designated as distressed middle-income census tracts based on high poverty rates.”

BATH SAVINGS INSTITUTION – in 2009, BSI made two tax anticipation loans to two towns located in either an “underserved” middle-income census tract or a moderate-income census tract. “….to continue to provide essential community development services and to provide funds for the completion of infrastructure project. Many of these services involve public safety initiatives that will benefit all residents, including low- and moderate-income individuals.” Also activities were noted in 2011 and 2012.

Thank you so much. I will be sure to document the files accordingly. I appreciate you taking time to share so many examples. This has been very helpful.