Q: CRA Credit for Assistance Outside Assessment Area (AA). Will a bank receive CRA credit for assisting COVID-19 impacted businesses if those businesses are located outside of a financial institution's AA?
A: The agencies will provide favorable CRA consideration for retail banking services, retail lending activities, and community development activities in a financial institution’s assessment areas that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by the COVID-19 emergency and that are consistent with safe and sound banking practices. See March 19, 2020 Interagency Statement (Interagency Statement).
The agencies will also give favorable consideration to community development activities located in a broader statewide or regional area that includes a bank’s CRA assessment area and that help to stabilize communities affected by the COVID-19 emergency, provided that the bank is responsive to the community development needs and opportunities that exist in its own assessment area(s). See Interagency Statement.
Under the existing CRA regulations, a bank may receive community development credit for loans that have a primary purpose of community development (as defined in §345 12(g) of the CRA regulations) and that have not been reported for consideration in the bank’s assessment area as a home mortgage, small business, small farm, or consumer loan.
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time). This may be found on the FDIC’s website here: https://www.fdic.gov/Coronavirus/faq-fi.pdf.