Episode 65: CRA Tips: Revisiting the Fundamentals: A Community Development Loan Primer

Episode 65: CRA Tips: Revisiting the Fundamentals: A Community Development Loan Primer

This episode will lay the foundation for community development loans as it relates to your CRA program. 

Community development loans must have a primary purpose of community development. You will need to follow the loan proceeds to the intended primary impact that resulted from originating a loan to the borrower.

An “oldie but goodie” resource is the Office of the Comptroller of the Currency’s Community Developments Fact Sheet published by the Community Affairs team.
Within this resource, the primary purpose of community development is defined as follows:
Under the CRA, community development activities
  • Support affordable housing for low- or moderate-income (LMI) individuals, including multifamily rental housing. 
  • Target community services for LMI individuals. 
  • Promote economic development by financing businesses or farms that have gross annual revenues of $1 million or less or that meet the size eligibility requirements of the U.S. Small Business Administration’s (SBA) Small Business Development Company or Small Business Investment Company (SBIC) programs. 
  • Revitalize or stabilize LMI geographies; designated disaster areas; or distressed or underserved nonmetropolitan middle-income geographies designated by the OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation. [Source OCC publication linked above]
This guide from the Federal Reserve Bank of Dallas is an excellent resource and one I still use several times a month.
This publication is intended as a quick guide for identifying CRA loan data reporting categories. It is designed for bank CEOs, presidents, CRA and compliance officers, and others who have an interest in the CRA loan data collection process. Refer to Regulation BB, Regulation C, and the instructions for the preparation of the Consolidated Reports of Condition and Income for more detailed information. 
Copyright © 2023 by CRA Today LLC
(No claim to original U.S. government material)
All rights reserved. No part of this podcast may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.
This podcast is a periodic publication of CRA Today LLC and is intended to notify and inspire recipients of new developments in the Community Reinvestment Act. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.
Team Podfixer
Latest posts by Team Podfixer (see all)

CRA Podcast Episodes