To Sell It You Have To Promote It - Community and Economic

Just the other day, I was in my local pharmacy getting a prescription filled and the pharmacist mentioned to me about the new shingles vaccine that was 97% effective versus the prior one with an effective rate of about 50%. Obviously she could tell I was over 50 and that I might be a good candidate for selling one of the vaccines.

Similarly I go online and make an online purchase of whatever. Right off, I get "You may also like.." or "Similar products you may be interested in.." and forever I get online ads because of that one purchase I made.

Then there is TV. I like classic TV. Hey, so do most folks of my age. We like it because it reminds us of our youth and the times when life was simple, less problematic and certainly less expensive. When Wally damaged his dad's new car, the bill was like $25 and the episode revolved around his not telling his father (if you are older you know right away the TV show I am referring to). Since older folks watch classic TV, all the commercials feature products for old folks as the target audience. They don't target youth, as youth today would not watch the same TV shows now we did in our youth.

Over and over we hear about (for an intermediate small bank whose CRA grading is weighted toward Community and Economic Development related Loans, Investments and Services) the importance of Community and Economic Development components as related to a bank CRA program. Yet, are we promoting it to our audience when the opportunity arises? Likely not, and likely front line lending personnel (as an example) don't even understand what is a Community and Economic Development qualifying loan. It is NOT as single family residence rental for a Low to Moderate income individual. That example falls under HMDA as a single family unit.

Examples of qualifying loans which need to be promoted in the financial institution assessment area include:

  • Muti-family rental property documented as serving low to moderate income individuals.
  • Loans to non-profits for housing or other services documented as serving low to moderate income individuals (a soup kitchen, medical clinic).
  • Loans to intermediaries that lend to, invest in, or provide other assistance to small businesses or farms.
  • Loans to a business to open a location and create jobs in a low income area.
  • Loans to finance environmental clean-up or redevelopment of a former industrial site in a low or moderate income area.
  • Loans to finance renewable energy, energy efficient or conservation projects in low to moderate income areas.
  • Loans for job training or for job transport services for low to moderate income individuals.
  • Loans to government entities for that which promotes the health and safely of low to moderate income areas, if such could not have been purchased without a loan from the financial institution (fire/ police/EMS facilities and vehicles).
To succeed in promoting Community and Economic Development qualifying lending relative to your CRA program, you must understand your product, target your potential audience, promote the product to that audience, sell it and document your results.

Success there should put the intermediate small bank well on the way to a successful CRA exam.

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