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Improving Residential Area in Bank's Town

Answered by: 
Andy Zavoina | CRCM

Question: 
Our town wants to improve a residential area, they are asking local banks to offer a special equity product to this program. We would like to participate in the program and feel it is CRA related. Any discrimination issues? The area is not low income and is not minority.
Answer: 

I don't see how it would specifically help your CRA program if it is not a low- or moderate-income area. And if it is an area populated by the majority, vs. the minority, you do stand to be criticized if you provide special terms or pricing. This is a greater risk, in my opinion, if your assessment area includes a low- or moderate-income area that is also in need of revitalization. CRA focuses on this. If your program doesn't meet any of the criteria under Section 202.8(a), standards for special credit programs, I would participate but use your already competitive rates and terms.

First published on BankersOnline.com 8/15/05

First published on 08/15/2005

Filed under: 
Compliance
Filed under compliance as: 
CRA
Discrimination
IT

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