§__.22(c)(2)(ii)-2 Affiliate Lending Constraint
§__.22(c)(2)(ii) – 2 Q: Regardless of examination type, how is this constraint [“if an institution elects to have its supervisory Agency consider loans within a particular lending category made by one or more of the institution’s affiliates in a particular assessment area, the institution shall elect to have the Agency consider all loans within that lending category in…
§__.22(d) Equity Investments in a Third Party Loan Consortium
§__.22(d) – 1 Q: Will equity and equity-type investments in a third party receive consideration under the lending test? A1. If an institution has made an equity or equity-type investment in a third party, community development loans made by the third party may be considered under the lending test. On the other hand, asset-backed and debt securities that…
§__.22(d) Evaluation of Loans Made by Consortia or Third Parties
§__.22(d) – 2 Q: Regardless of examination types, how will examiners evaluate loans made by consortia or third parties? A2. Loans originated or purchased by consortia in which an institution participates or by third parties in which an institution invests will be considered only if they qualify as community development loans and will be considered only under…
§__.22(d) Community Development Loans Held in Common
§__.22(d) – 3 Q: In some circumstances, an institution may invest in a third party, such as a community development bank, that is also an insured depository institution and is thus subject to CRA requirements. If the investing institutions requests its supervisory Agency to consider its pro rata share of community development loans made by the…
§__.23(a) Indirect Investment in Community Development Fund
§__.23(a) – 1 Q: May an institution, regardless of examination type, receive consideration under the CRA regulations if it invests indirectly through a fund, the purpose of which is community development, as that is defined in the CRA regulations? A1. Yes, the direct or indirect nature of the qualified investment does not affect whether an institution will…
§__.23(a) Documentation of Assessment Area Impact from Nationwide Fund Investments
§__.23(a) – 2 Q: In order to receive CRA consideration, what information may an institution provide that would demonstrate that an investment in a nationwide fund with a primary purpose of community development will directly or indirectly benefit one or more of the institution’s assessment area(s) or a broader statewide or regional area that includes the…
§__.23(b) CRA Consideration Under Multiple Tests
§__.23(b) – 1 Q: Even though the regulations state that an activity that is considered under the lending or service tests cannot also be considered under the investment test, may parts of an activity be considered under one test and other parts be considered under another test? A1. Yes, in some instances the nature of an activity…
§__.23(b) Mortgage-Backed Securities Comprised of HMDA-Reported Loans
§__.23(b) – 2 Q: If home mortgage loans to low- and moderate-income borrowers have been considered under an institution’s lending test, may the institution that originated or purchased them also receive consideration under the investment these if it subsequently purchases mortgage-backed securities that are primarily or exclusively backed by such loans? A2. No. Because the institution received…
§__.23(e) Distinguishing Qualified Investments Based on Actual Community Development Purpose
§__.23(e) – 1 Q: When applying the four performance criteria of 12 CFR__.23(e), may an examiner distinguish among qualified investments based on how much of the investment actually supports the underlying community development purpose? A1. Yes. By applying all the criteria, a qualified investment of a lower dollar amount may be weighed more heavily under the investment…
§__.23(e) CRA Evaluation of Qualified Investment in a Fund
§__.23(e) – 2 Q: How do examiners evaluate an institution’s qualified investment in a fund, the primary purpose of which is community development, as defined in the CRA regulations? A2. When evaluating qualified investments that benefit an institution’s assessment area(s) or a broader statewide or regional area that includes its assessment area(s), examiners will look at the…