What qualifies as a CRA loan?

What is considered a CRA loan?

Plainly said, according to regulators, businesses that make less than or equal to $1,000,000 annually are considered “small businesses,” and loans for less than or equal to $1,000,000 are considered “small loans.”

What type of loans qualify for CRA credit?

Generally, loans to small businesses with gross annual revenues of less than $1 million that create or retain jobs for low- or moderate-income individuals or in low- or moderate-income geographies, or that otherwise meet the economic development “size” and “purpose” tests, qualify as community development loans.

What makes a loan CRA reportable?

Aggregate Reporting

or equal to $250,000, and · more than $250,000. Institutions must also report loans to businesses and farms with gross annual revenues of $1 million or less, using the revenues that the institution considered in making its credit decisions.

What are CRA requirements?

Here are five basic CRA requirements:

  • Maintain a Public File. Institutions are required to maintain and update a public file that contains specific information about itsCRA performance. …
  • Post Public Notice (Lobby Poster) …
  • Data Collection and Data Reporting. …
  • Respond to Consumer Complaints. …
  • Determine Assessment Area.
IT IS INTERESTING:  Frequent question: What loans are covered by prepayment penalty rules?

Do SBA loans count for CRA?

No. Banks should neither report these loans on their CRA loan register nor will examiners consider the loans in their CRA evaluations of banks during the applicable time period, as these loans ultimately had no impact on the relevant business, its employees, or its community.

Do SBA loans qualify for CRA credit?

Loans to businesses, when made as part of the SBA’s 504 Certified Development Company program, automatically qualify for CRA credit as an economic development loan.

What are CRA credits for banks?

The Community Reinvestment Act (CRA) is a law intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound banking operations.

How do banks get CRA credit?

Under the Current CRA Rules, Banks Earn Most of Their CRA Credit through Community Development and Single-Family Mortgage Lending. Even though the banking industry has drastically changed since the CRA was enacted, the current regulations are working reasonably well.

Is the CRA still relevant to mortgage lending?

Our analysis points to a conclusion that the CRA continues to be relevant to maintaining broad access to mortgage credit. We find that the overall share of loans to low-or moderate-income borrowers has decreased compared to pre-2004, which we view as a reasonable benchmark period.

Can a loan be HMDA and CRA reportable?

Loans Reportable for both CRA and HMDA

A loan for multifamily affordable housing is unique because it is the only loan type that is reportable under both the CRA and HMDA data series. A multifamily affordable housing loan would be reported as a home mortgage loan for HMDA and as a community development loan for CRA.

IT IS INTERESTING:  You asked: Can a company write off a loan?

Are banks required to keep a CRA public file?

Your bank must maintain a public file, updated as of April 1 each year, that includes the following information: For the current year and two previous years, all written comments from the public about how your bank is helping meet community credit needs.