Maybe we can leave this thread open for posting Community Development screens?

This one's a stretch, but looking to see how many of you might put it up for consideration...

We renewed a LOC and increased it by a few hundred thousand dollars. The purpose of the loan was to facilitate with cash-flow and payment of payroll for a job-recruiting/placement company serving the "medical, administrative, and industrial sectors".

If I was able to get good data on the jobs typically placed, would you try to make a case for economic develoment?

Depending on the loan amount, I'd throw it against the wall and see if it sticks. Unfortunately, I've found that whether a CD activity is accepted or not is heavily dependent on the examiner reviewing them.

We have an annual donation to an organization that works with local colleges to create degree and certificate programs that prepare students for the jobs available in our area. This has always been accepted as CD for the last decade under the economic development hook. However, in our last exam, we had a CRA subject matter expert examine us, and they threw this out because the economic development hook requires the organization to either directly fund loans to small businesses or provide expert support for businesses.

The SME is technically correct based on the Q&As, but other examiners have been open to the reasoning that providing an educated workforce promotes economic development and counted the donation. So if we have a compelling argument, we submit it for consideration.

Thanks. Just wanted to get the BOL communities opinion on whether this was worth throwing against the wall.

BTW, I had the same thing happen with qualifying affordable housing. For about 3 exam cycles we had great success with one method and then a younger EIC came in and squashed it, disqualifying a number of large affordable housing deals. The next exam, they accepted the old method.

Another one as I dig deeper into these.

Couldn't the argument be made for most any working capital LOC that employes LMI employees that it benefits economic development through cash-flow management and, by proxy, supporting payroll for LMI workers?

In all my years of CRA, I've never looked at it this way. Shoot me down.

Creating or retaining LMI jobs would be something that could qualify a loan as CD. That's how we qualified most of our large PPP loans. The trick is getting the number of employees and proving they are LMI. Sometimes, the company type will be sufficient to prove LMI employees (i.e. fast food/retail). We had some PPP loans thrown out because they were for more white collar professions.

Thanks Matt. Generally my borrowers are okay with providing the information, but I've also had examiners go for Bureau of Labor Statistics numbers as well.

We will see what sticks.