We have a $2,800,000 loan to a church to refinance the existing loan and new money for roof repair at church.

The church itself is located in an Upper Income Area however the church makes an annual financial contribution to a cooperative of local churches that provides food and clothing to disadvantage and homeless people in the area. The church also organizes and provides church members who volunteer to collect and distribute the food and clothing. Another effort is the Mission Project. During the summer the church sponsors a group of teenagers who go into a rural area for a week and work repairing homes of poor families. The church, through contributions from several Sunday School Classes, makes a regular financial contribution to the Christian Community Care Clinic, a local free medical clinic for low income individuals and families in the community.

Does this make it over the CDL bar?

In my view, this is not a community development loan, even though some of the church's activities benefit LMI people. Under the CRA definition of community development, the loan, service or investment must go to one of the five stated purposes. The deal, as you described it, doesn't fall into any of those categories, particularly since the purpose of the loan appears to be capital improvements to the church building located in an upper income tract. I'm going to guess that the church probably serves mostly middle- and upper-income parishioners, who would be the direct beneficiaries of the loan.

If you had a written agreement with the church as to how it specifically used the loan proceeds, and that use met one of the five CD categories, then a case could be made for the loan being CD. Absent that, though, I would be hard pressed to attribue any CRA credit to your bank for this loan. AR.

Thanks AR.