What is a bank’s assessment area?
An assessment area is one or more geographical areas within which a bank is evaluated on its record of helping to meet community credit needs, including areas designated as low- or moderate-income. The assessment area generally consists of one or more Metropolitan Statistical Areas (MSAs) or one or more contiguous political subdivisions, such as counties,…
What is affordable housing?
Affordable housing is housing where the occupant is paying no more than 30% of his or her income for gross housing costs including utilities. This includes programs for individual homeownership, rental assistance, and multi-family development.
What is considered community development?
Community development is a general term used to characterize the various types of activities that may qualify for positive consideration under the requirements of the Community Reinvestment Act. These activities at the highest level include: Affordable Housing for low- and moderate-income individuals and families or in low- and moderate-income geographies Community Services targeted to low-…
What is community development lending?
Community development lending includes loans to: Construct or rehab of affordable housing including multifamily development or retail units Support nonprofit organizations serving low- and moderate-income people or areas Support community development needs or community facilities in low- and moderate-income geographies Local, state or tribal government community development activities Finance environmental clean-up or redevelopment of industrial…
What is a community service under CRA?
Examples of community services that benefit low- and moderate-income individuals and area include: Providing technical assistance on financial matters to nonprofit, tribal, or government organizations serving low- and moderate-income housing or economic revitalization and development needs Providing technical assistance on financial matters to small businesses or community development organizations, including organizations and individuals who apply…
What is economic development?
Economic development activities are generally those that promote commerce, trade and employment. Under the CRA, such activities may include: Lending to small businesses or farms that have less than $1 million in gross annual revenues Lending to small businesses or farms through government sponsored programs or entities including Community Development Financial Institutions, the Small Business…
What is financial literacy education?
Teaching or developing financial education curricula for LMI individuals to promote understanding of the banking and financial system. May also include providing other financial services education to promote community development or affordable housing such as, credit counseling, homeownership counseling, financial planning, foreclosure counseling, school savings programs, personal budgeting, small business financing, or tax preparation.
What types of financial products and services are CRA qualifying?
Financial products and services tailored to LMI individuals including initiatives focused on the unbanked or underbanked. These may include providing low-cost alternatives for financial services such as electronic benefits transfer, international remittance services, and checking and savings accounts.
What is a healthy community initiative?
Programs defined by the Federal Reserve as supporting healthier communities in areas that may not have access to healthy initiatives as a norm. Programs include providing access to healthy food or medical care, community aesthetic programs, environmental quality, building financial capacity, early childhood development, education, employment, entrepreneurship, personal/public safety, physical activity, public transportation, senior needs,…
What counts as a qualified investment?
Qualified investments under the CRA range from highly complex government-sponsored programs to simple community donations given to nonprofit organizations. Following are some examples of common financial investments that qualify for positive consideration during bank CRA examinations. Investments made to community development organizations and entities such as Community Development Financial Institutions (CDFIs), Community Development Entities (CDEs),…