There is some confusion to me though about participations purchased and CD loans. If a loan is a Community Development loan for the originating bank, then is it automatically also a CD loan for the purchasing bank, or does it need to also qualify for Community Development status with the purchasing bank? I could see some issues based on having different Assessment Areas between the lead bank and the purchasing banks.

I guess you could purchase a loan across the country in a different State well outside your AA, and it would not be a CD loan for you, but could be for the originating bank. I always look at participation loans and determine if they are CD or not. Recently we purchased a participation within our CRA AA that the originating bank had not identified as CD. We let them know so they could investigate and possibly include that in their CRA records.

Yes, exactly. So, are you saying you analyze the participation loans to see if they would be a CD loan for your institution and make a separate decision from the lead bank?