CRA FAQs
» How does CRA investing work through a mutual fund like the CRA Qualified Investment Fund (CRA Shares)?
» How can an investment in the Fund earn my institution CRA credit?
» What does community development include?
» Do regulators differentiate between a direct investment and an indirect investment like the Fund?
» What considerations do examiners look for in qualified investments?
» How will the investments allocated to my institution be documented?
» What happens after my bank has gone through an exam?
How does CRA investing work through a mutual fund like the CRA Qualified Investment Fund (CRA Shares)?
The Fund seeks CRA qualified investments in each shareholder's assessment areas. These investments are allocated to each shareholder for CRA purposes only. Qualified investments are allocated per examination cycle for CRA consideration.
How can an investment in the Fund earn my institution CRA credit?
The Fund invests in securities considered "qualified investments," with community development as their primary purpose.*
*See 12 C.F.R. §§ 25.23(a), 228.23(a), 345.23(a), 563e.23(a)
What does community development include?
Community development includes: affordable housing (including multifamily rental housing) for low-or moderate-income (LMI) families; community services targeted to LMI individuals; activities that promote economic development; activities that revitalize or stabilize LMI areas, designated disaster areas, or non-metropolitan middle-income areas that have been designated as distressed or underserved by the institution's primary regulator.
Do regulators differentiate between a direct investment and an indirect investment like the Fund?
CRA regulations do not differentiate between "direct" and "indirect" investments. An institution's investment in a Fund whose primary purpose is community development would receive positive consideration as a qualified investment under the CRA regulations, provided the investments benefits one or more of the institution's assessment areas.
What considerations do examiners look for in qualified investments?
Examiners will look for the dollar amount of qualified investments; the innovativeness or complexity of qualified investments, the responsiveness of qualified investments to credit and community development needs, and the degree to which the qualified investments are not routinely provided by private investors.
How will the investments allocated to my institution be documented?
All of the underlying investments in the Fund are fully documented as to their qualifying status. All documentation serves to verify that a particular investment has as its "primary purpose" community development. Once an investment has been allocated to your institution, you will receive extensive documentation showcasing why the investment is a CRA-qualified investment.
What happens after my bank has gone through an exam?
After each exam, new investments will be identified and purchased on your bank's behalf for its next CRA exam.