Answer:
There is often confusion surrounding what does or does not qualify as a Community Development loan for your financial institution. To put it simply, a community development loan is a product that provides financing to support the credit needs and development of low- and moderate-income (LMI) communities. Community Development activities are generally defined as providing affordable housing to low- and moderate-income individuals or families, community services targeted to LMI individuals, and activities that promote economic development in your assessment area. If you are unsure of the loan’s CRA eligibility, refer to the OCC 2016 Q&A Illustrative List of Community Development Activities. Lastly, try having open communication with your regulator regarding CRA activities. Provide context of the area and make a case for why you believe the loan might qualify for CRA based on the regulation. Most regulators appreciate and encourage relationships with their partner financial institutions.
