For ED , Our Examiner is wanting proof that jobs were at a risk of loss. They're also saying that before....some examiners may have considered working capital loans to small businesses loans that help to retain jobs, but now they're implying that if that's the case the business in itself rather than the jobs was at risk and may indicate an unsafe loan to a biz in poor condition which would eliminate consideration under CRA. That WC loans are used to manage a biz's cash flow and do not have a primary purpose that supports CD. Only WC loans made in designated disaster areas, distressed or underserved nonmetropolitan geographies, or LMI geographies may be considered as having a CD purpose if they help to revitalize or stabilize these areas, so if like they were to rebuild/renovate in the same location rather than moving to a diff location outside of LMI is their example. But I'm thinking, we aren't going to issue a working capital loan for that purpose. It would be a loan for improvements or a construction loan. So their example is not a good one for working capital IMO.

So my question is how can I better prove or argue that WC loans in a Low CT for a small business that meets the size standards and is employing well over a majority of LMI individuals/jobs revitalizes an area and/or helps retain jobs for low to mod income individuals? Because that alone is apparently not good enough.

How do I prove a WC loan retains jobs?
How do I prove it attracts new biz or residents to the LMI area?
Does anyone have a good argument or examples?

I'm new at this, so factor that. But it seems to me that if the government mandated a requirement that to qualify for CD, the project must add at least one new LMI job (which I'm pretty sure that's what they say), then they would provide guidance on how to measure that standard. Otherwise, it puts banks in a position of always chasing after some Examiner's approval. It's sooooo subjective. Am I right? I would think that all you have to do is provide a document from the owner, showing the added jobs or planned added jobs.

Yes very subjective, and we have borrower documentation they plan to hire X amount of jobs that will be LMI. Apparently you need some crazy explanation how a working capital line of credit helps create or retain jobs now, this was not a problem last exam.

Years ago we had a bank client that financed the local ownership of a radio station that had an offer to be purchased and to relocae the station outside the bank's assessment area. The bank collected news stories about how their loan "saved" the local radio station and preserved local jobs. They got CD credit for economic development in their CRA exam.