Community Reinvestment Act - Community Contacts PDF

XI. Community Reinvestment Act — Community Contacts • Current partnerships and/or development projects in the area; and • The role of financial institutions in the assessment area(s). Secondary information available includes: • Feasibility studies; • Appraisal information on specific neighbor...

XI. Community Reinvestment Act — Community Contacts • Current partnerships and/or development projects in the area; and • The role of financial institutions in the assessment area(s). Secondary information available includes: • Feasibility studies; • Appraisal information on specific neighborhoods; Secondary information available includes completed questionnaires or surveys. • Local needs assessments; • Surveys of institution’s activities; TIP: School boards can update census information by providing demographic information on the makeup of their student body. This information is typically collected annually. • Surveys of financial practices of low-income clientele; and • Lending agreements by groups of local financial institutions. Community-Based Development or Financial Intermediaries Government Offices The primary aim of these organizations is typically to increase the economic standard of low-income individuals or areas. Thus they tend to be involved in technical aspects of development such as residential and commercial real estate ventures or financing. Though these groups encourage representation of low-income individuals, they are also likely to have a higher degree of staff or decision-makers that live outside of low-income areas that the organization is serving. Government offices include the following types of organizations: • Community-based development or financial intermediaries include the following types of organizations: Local branches of Federal agencies, such as: ° Department of Housing and Urban Development (HUD); ° Small Business Administration (SBA); ° Department of Commerce; ° Economic Development Administration (EDA); ° Farmers Home Administration (FmHA); ° Bureau of Indian Affairs (BIA); and ° U.S. Department of Agriculture (USDA). • Non-profit organizations such as Community Development Corporations (CDCs); • Church-based economic development programs; Local groups of federally funded or mandated programs, such as: • Community loan funds; ° Community Action Agencies (CAAs); • Small Business Investment Corporations (SBICs); ° Neighborhood revitalization programs; and • Specialized Small Business Investment Corporations (SSBICs); ° Office of Minority Business Enterprise (OMBE)’s business development centers. • • Low-income housing organizations; • Technical assistance providers; ° Mayors; • Low-income credit unions; ° Commissioners; • Development institutions; and ° Tribal chiefs; • Micro-enterprise groups. ° City council members; and ° Tribal council members. Available from these sources are the following types of information: • Low-income credit; • Service and community development issues at the neighborhood level; • Quantitative information on housing values and actual real estate projects; • Local elected officials, such as: • State and local housing agencies or authorities • Economic development agencies, such as: ° Industrial and redevelopment agencies or authorities; ° County or regional planning agencies; ° Transportation agencies; ° Utility companies; Qualitative information on financial institutions and financial practices of low-income individuals; ° Rural electric cooperatives; ° Economic Development Corporations (EDCs); • Technical details on financing and lending mechanisms for programs they offer; and ° Local planning or economic development directors; and • Information on other government and program resources or ventures in the community. ° School board superintendent and officials. • XI–9.4 FDIC Consumer Compliance Examination Manual — June 2006 XI. Community Reinvestment Act — Community Contacts Available from government offices are the following types of information: • Nature and extent of small business activity, level of referrals from financial institutions to SBDCs; Loan, grant, guarantee or other programs available for use by institutions and housing, community, and economic development groups; • The existence of active SBA 504 programs, SBIC or SSBIC programs; • • Amount of funding available through such programs in the institution’s assessment area(s); Perspectives on financial institution efforts to provide financing and services to small businesses/small farms; • • Extent to which local financial institutions participate in such programs and perspectives on barriers or issues related to their participation; The level of institution participation in other public/private programs for small business development and employment training; and • Other private and public sources of financing available for small businesses and small farms in the assessment area(s). • • Specific project opportunities in which institutions could participate; and • Information on underserved neighborhoods or areas. Secondary information available includes: Secondary information available includes mortgage interest rate sheets from financial institutions or mortgage companies obtained from realtors. • Housing, small business, agriculture and general economic conditions and trends in the assessment area(s); Civil Rights and Consumer Protection Groups • Publicly sponsored comprehensive or general development and redevelopment plans and maps; and • Other plans and studies, such as housing plans (for example, the Consolidated Plan), economic development plans and studies, and various community service needs in the assessment area(s). Business and Labor Groups Civil rights and consumer protection groups include the following types of organizations: • Open housing/fair housing organizations; • Local chapters of the National Association for the Advancement of Colored People ( NAACP), Urban League, Urban Coalition, and National Organization for Women; • Legal aid/legal services offices; Business and labor groups include the following types of organizations: • Human relations commissions; • State attorney general; and • Chambers of commerce; • Consumer protection office. • Downtown and neighborhood merchants associations; • Small and minority business advocacy groups; Available from these sources are the following types of information: • Realtors; • Minority and non-minority real estate agents; • Credit needs; • Local venture capital companies; • Issues or priorities for any protected classes; • SBA/college-supported Small Business Development Centers (SBDCs); • Complaints against specific financial institutions; and • General perspectives on financial institutions in the assessment area(s). • Feed stores; • Cattlemen’s associations; • Actual small business owners; and Secondary information available includes studies using testers in financial institutions, formal complaints or case write ups. • Small business technical assistance providers, such as business incubators and local union representatives. Other Potential Contacts Available from these sources are the following types of information: • Data and perspectives on local business, economic conditions, recent economic activity and trends in the community; FDIC Consumer Compliance Examination Manual — June 2006 The following types of organizations can also provide information: • Universities; • Research institutions; • Foundations; and • Hospitals or hospital extension programs. XI–9.5 XI. Community Reinvestment Act — Community Contacts The types of information available from these sources are many and varied. Specific community projects by universities or hospitals may be involved. • Is there a Board of Directors? What is the representation on the Board? Are there low-income neighborhood residents on the Board? Are banks/lenders or other financial institutions on the Board? • What projects or programs are you currently working on? Aside from programs are there other means in which the mission is carried out? • How many “clients” does this organization serve on a monthly or annual basis? If the organization is involved in development, how many real estate projects have been completed in the organization’s history? How many are on-going? • If direct loans have been provided through any programs, what type of loans are they? What segments of the community have benefited from these loans (low-, very low-, moderate-income, elderly, etc.)? What is the number and dollar volume of loans generated? • What are the amounts and sources of the organization’s funding? How is the funding disbursed (for example, what activities does it fund and how much of the budget is devoted to each activity)? • Could you list the organization’s major accomplishments in the past 5 years? Is there such a list that you may have for purposes of your funders or funding proposals that I may have a copy of? • What are some of the limits the organization is facing in serving its community? In what areas is it currently encountering opportunity? • Is the organization interested in expanding its program or project areas at this time? In what area? Is there a time-line in place to implement these activities or expected to be in place? Secondary information available includes: • Demographic and economic data; • Independent research studies or reports on community development topics; • Studies and data collection on development and economic trends or opportunities in the area; and • Automated “Conplans” may also be available. Conducting the Interview Having determined the groups and/or individuals to be contacted and the information to be solicited from each interview, the examiner must then plan the structure and content of questions prior to the interview. This section provides a sample list of questions that the examiner may wish to consider. The examiner should select and tailor questions from the list of sample questions that would be the most effective for each specific contact. The questions highlight the type of information that the examiner is seeking through the community contact process. They are meant to serve as a guide to assist the examiner in planning the substance and structure of the interview. Obviously, not all questions will be appropriate to each specific contact. The list is not all inclusive; particular questions may generate significant discussions and examiners are expected to probe and conduct follow-up questions appropriately. Examiners are encouraged to review the entire list before structuring their interview. As examiners gain experience, they are encouraged to engage in discussion with the community contact and not undertake a “question and answer” format. Background Information on Community Contact Specific to economic development agencies (including utility companies): Obtain Background Information • Are there empowerment zones (EZs), enterprise communities (ECs), or Foreign Trade Zones (FTZs) in your area? Where? What types of monetary incentives are offered? • What are examples of small business, small farm, and community-based development that the agency has been involved in? Has activity been concentrated in a few areas? Which ones? • Does the economic development agency also coordinate the housing program and monies for this jurisdiction? If not, is economic development coordinated with housing officials? What priority is accorded to affordable housing? What priorities, if any, are accorded to specific population segments (e.g., elderly, special assistance, female heads of households, homeless, other)? General: 1. The examiner should ascertain the organization’s area of expertise and the role that it plays in the community. The following questions apply. • What geographic areas does the organization serve? • How old is the organization? How was it started? How much involvement by local residents and/or lowincome residents was there initially? • Who does the organization represent? Roughly what percentage of your client base is very low- (defined as 25-50% of median area income), low-, moderate- or middle-income? • What is the mission and the primary goals of this organization? What are the goals for this year? XI–9.6 FDIC Consumer Compliance Examination Manual — June 2006