Community Reinvestment Act (CRA)

Grants to All Aboard Ohio Support Essential Community Infrastructure

 

CRA consideration is granted for activities that directly or indirectly meet requirements of the rule. All Aboard Ohio is an advocacy nonprofit that is actively pursuing changes and improvements to essential community infrastructure related to transportation. As such, it is indirectly supporting the creation/improvement of an essential community infrastructure. Such infrastructure is designed to ensure safe and efficient passenger ground transportation systems, which will help to revitalize and stabilize geographies while improving access to employment opportunities and other services for Ohio residents, including low- and moderate-income residents.

 

Grants and CRA consideration

 

Insured depositories that provide grants to All Aboard Ohio may receive positive consideration under the Community Reinvestment Act (CRA). CRA-related grants are evaluated as part of a bank’s CRA-related investments.

 

Grants to All Aboard Ohio indirectly support CRA-qualified activities and will help:

 

• Support transportation, which is essential community infrastructure

• Revitalize and stabilize geographies by supporting transportation infrastructure, which helps to attract new, or retain existing, businesses or residents in

  • low- and moderate-income geographies

  • underserved and/or distressed nonmetropolitan middle-income geographies

• Improve access to employment opportunities and other services for Ohio residents, including low- and moderate-income residents

 

 

Official Federal Guidance via the Interagency CRA Questions and Answers

 

Below are excerpts from official regulatory guidance1 that discuss CRA treatment and several examples of qualifying activities. The guidance makes clear that the list of examples is not intended to be exclusive, but illustrative. It discusses:

 

a.) activities provided directly by the bank or indirectly by nonprofits

 

b.) activities are not required to provide an immediate benefit to a bank’s assessment area

 

c.) activities revitalize or stabilize geographies

 

d.) activities result in positive CRA consideration for banks

 

 

1. Grants may directly or indirectly provide support to CRA qualifying activities:

 

Q&A ___ .23(a) - 1 states, in part: “ …the direct or indirect nature of the qualified investment does not affect whether an institution will receive consideration under the CRA regulations because the regulations do not distinguish between ‘‘direct’’ and ‘‘indirect’’ investments.”

 

Q&A ___.12(h)—6 addresses indirect benefit as it states, in part: “… an institution’s activity is considered a community development loan or service or a qualified investment if it supports an organization or activity that covers an area that is larger than, but includes, the institution’s assessment area(s). The institution’s assessment area(s) need not receive an immediate or direct benefit from the institution’s participation in the organization or activity, provided that the purpose, mandate, or function of the organization or activity includes serving geographies or individuals located within the institution’s assessment area(s). …”

 

Q&A ___.25(d)—1, states: “…Similar to the lending test for retail institutions, investments in third- party community development organizations may be considered as qualified investments or as community development loans or both (provided there is no double counting), at the institution’s option…”

 

 

2. Grants may help revitalize or stabilize geographies:

 

Activities that revitalize or stabilize low- or moderate-income areas:

 

Q&A ___.12(g)(4)(i)-1 explains that “…Activities that revitalize or stabilize a low- or moderate-income geography are activities that help to attract new, or retain existing, businesses or residents.”

 

Activities that revitalize or stabilize distressed nonmetropolitan middle-income geographies:

 

Q&A ___.12(g)(4)(iii)-3 explains that “…An activity revitalizes or stabilizes a distressed nonmetropolitan middle-income geography if it helps to attract new, or retain existing, businesses or residents.” …. “Qualifying activities may include, for example, providing financing to attract a major new employer that will create long-term job opportunities, including for low- and moderate-income individuals, and activities that provide financing or other assistance for essential infrastructure or facilities necessary to attract or retain businesses or residents.”

 

Activities that revitalize or stabilize underserved nonmetropolitan middle-income geographies:

 

Q&A ___.12(g)(4)(iii)—4 explains that “…activities revitalize or stabilize an underserved nonmetropolitan middle- income geography if they help to meet essential community needs, including needs of low- or moderate-income individuals.” These include the following examples: … financing for the construction, expansion, improvement, maintenance, or operation of essential infrastructure.…”