§__.12(t) Lost Income from Below Market Loan Rates
§__.12(t) – 6 Q: An institution makes or participates in a community development loan. The institution provided the loan at below-market interest rates or “bought down” the interest rate to the borrower. Is the lost income resulting from the lower interest rate or buy-down a qualified investment? A6. No. The Agencies will, however, consider the responsiveness,…
§__.12(t) Employee Wages and Contributions
§__.12(t) – 7 Q: Will the Agencies consider as a qualified investment the wages or other compensation of an employee or director who provides assistance to a community development organization on behalf of the institution? A7. No. However, the Agencies will consider donated labor of employees or directors of a financial institution as a community development service if…
§__.12(t) Prior-Period Investment Consideration
§__.12(t) – 8 Q: When evaluating a qualified investment, what consideration will be given for prior-period investments? A8. When evaluating an institution’s qualified investment record, examiners will consider investments that were made prior to the current examination, but that are still outstanding. Qualitative factors will affect the weight given to both current period and outstanding prior-period…
§__.12(t) Organization Re-Investments to Earn Income
§__.12(t) – 9 Q: How do examiner evaluate loans or investments to organization that, in turn, invest in investments that do not have a community development purpose, and use only the income, or a portion of the income, from those investments to support their community development purpose? A9. Examiners will give quantitative consideration for the dollar amount…
§__.12(u) Foreign Branch Assets
§__.12(u) – 1 Q: How are Federal and state branch assets of a foreign bank calculated for purposes of the CRA? A1. A Federal or state branch of a foreign bank is considered a small institution if the Federal or state branch has assets less than the asset threshold delineated in 12 CFR .12(u)(1) for small institutions….
§__.12(u)(2) Institution Asset Size Threshold Adjustment
§__.12(u)(2) – 1 Q: How often will the asset size thresholds for small institutions and intermediate small institutions be changed, and how will these adjustments be communicated? A1. The asset size thresholds for “small institutions” and “intermediate small institutions” will be adjusted annually based on changes to the Consumer Price Index. More specifically, the dollar thresholds will be…
§__.12(v) Loans to Nonprofits Classification
§__.12(v) – 1 Q: Are loans to nonprofit organizations considered small business loans or are they considered community development loans? A1. To be considered a small business loan, a loan must meet the definition of “loans to small businesses” in the instructions in the Call Report. In general, a loan to a nonprofit organization, for business or…
§__.12(v) Small Business Loans Secured by Commercial Real Estate
§__.12(v) – 2 Q: Are loans secured by commercial real estate considered small business loans? A2. Yes, depending on their principal amount. Small business loans include loans secured by “nonfarm nonresidential properties,” as defined in the Call Report, in amounts of $1 million or less. Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016
§__.12(v) Small Business Loans Secured by Residential Real Estate
§__.12(v) – 3 Q: Are loans secured by nonfarm residential real estate to finance small businesses “small business loans”? A3. Typically not. Loans secured by nonfarm residential real estate that are used to finance small businesses are not included as “small business” loans for Call Report purposes unless the security interest in the nonfarm residential real estate is…
§__.12(t) Credit Cards as Small Business Loans
§__.12(v) – 4 Q: Are credit cards issued to small businesses considered “small business loans”? A4. Credit cards issued to a small business or to individuals to be used, with the institution’s knowledge, as business accounts are small business loans if they meet the definitional requirements in the Call Report instructions. Source: Interagency Questions & Answers Regarding Community…